IPR and Innovation 38, Recent IP developments in some ASEAN countries

Property rights protection of both physical and non-physical/intellectual -- trademark/logo, copyright, patent, etc. -- is among the cornerstones of dynamic, mature and market-friendly economies. Individuals and enterprises develop new products and services via innovation and they create new value, new wealth for society.

I am reposting some developments on IPR in the ASEAN. Thanks to the Property Rights Alliance (PRA) for the bi-weekly IP updates.
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Intellectual property protection a 'key element of Thailand 4.0'

The Nation, October 02, 2017 

There's a role for intellectual property protection in the Thailand 4.0 vision and initiative, and the national government's Intellectual Property Department sees a role for itself promoting innovation through offering increased knowledge sharing and more convenient services.

"We are a key mechanism in protecting new technology and innovation vital to economic development, and we do this by motivating new developments," said Thosapone Dansuputra, director-general of the department.

Thailand to accede to the Madrid Protocol

Lexology, October 04, 2017

As of November 2017, Thailand will accede to the so-called Madrid Protocol as member no. 99. This entails cost savings compared to previously when trademark proprietors are to register their trademarks in Thailand. The Madrid Protocol is an international system through which trademark proprietors may apply for protection in several countries through one basic registration.

Website blocking in Malaysia has reduced online piracy, says film makers body

The Edge Markets, October 10, 2017 

Website blocking in Malaysia has significantly reduced online piracy, with a 74% fall in traffic to pirate websites recorded in the six months after the government initiated its sixth effort to block such sites in June 2016, says the Motion Picture Association (MPA). As pirate websites generate income through advertising revenue, a disruption to their business model can help stop online piracy, said Oliver Walsh, regional director at the Asia-Pacific hub for Motion Picture Association International (MPA-I).

Trademark protection awareness, registration remain low in Laos

XinhuaNet, September 19, 2017

The number of trademark registrations is lagging in Laos as many businesses lack understanding of their rights and fail to register to protect their intellectual property, according to the Intellectual Property (IP) Department under Ministry of Science and Technology on Monday.

Laos Struggling with Trademark Protection

PRA, October 6, 2017 

According to a study by the Intellectual Property (IP) Department of the Ministry of Science and Technology, only about 40,500 trademark applications have been filed in the Southeast Asian country since 1991. This is a relatively low number of applications for trademark protections for a country of 7 million and an economy with a GDP of $37.3 billion.

Brunei's Patent Examination System to Increase Efficiency Through Agreement with Japan

Lexology, October 11, 2017

On August 28, 2017, the Brunei Intellectual Property Office (BruIPO) signed an agreement to introduce a new patent examination initiative - the Patent Prosecution Highway Plus (PPH+) - with the Japan Patent Office (JPO), which commenced on October 1, 2017. Using this PPH+ system, patent prosecution procedures in Brunei are accelerated by allowing BruIPO to reuse the search and examination results of corresponding patent applications filed in Japan - thus reducing examination workload and time, minimizing costs, and improving patent quality.

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See also:

IPR and Innovation 35, Letter to WIPO on World IP Day, May 06, 2017 

IPR and Innovation 36, Plain packaging from tobacco and soon to soft drinks, alcohol, ice cream products, May 31, 2017 

IPR and innovation 37, US-China dispute on IP, September 17, 2017

BWorld 153, Property rights, trademarks and consumer protection

* This is my article in BusinessWorld last September 18, 2017.

Private property rights that people and businesses enjoy are among the cornerstones of a free and dynamic society. People have exclusive rights on what to do with their private properties — use them, sell, rent out, or donate.

However, when rights to private property — both physical and intangible assets — are unprotected, society can quickly degenerate into disorder. As a result, consumers will be unable to recognize which among manufacturers and service providers are trustworthy and which are suspicious.

Measuring the extent of property rights protection across many countries is done annually by the Property Rights Alliance (PRA), a Washington DC-based think tank. It produces the International Property Rights Index (IPRI) annually and partners with independent, nongovernment, and market-oriented think tanks and institutes from many countries.

IPRI is derived by getting the score (1 to 10, 10 being the highest) of each country covered in three major areas:

1. Legal and Political Environment (LP), covers judicial independence, rule of law, control of corruption, and political stability of a country or economy.

2. Physical Property Rights (PPR), includes registration and protection of physical properties, access to loans.

3. Intellectual Property Rights (IPR), includes protection of patents, trademarks and brand, and copyrights.

Countries with high scores in two or all three of these areas will have a high IPRI overall score and global rank (see table).

Among the important insights in the above numbers are: One, the more developed the economies are like Singapore and Japan, the higher the IPRI score and global rank. Which implies that as private property is better recognized and protected, there are more economic activities and innovations that occur.

Two, the Philippines experienced some improvement in its global rank, from 77th out of 131 countries in the 2013 report. It rose to 64 out of 127 countries in 2017. Its low score in legal and political environment was compensated by its high score in physical property rights.

One emerging issue in IPR non-protection is plain packaging (PP) of tobacco products purportedly for health reasons. Besides being slapped with high taxes, tobacco products also feature graphic warnings on packaging. Advertising tobacco products have also been restricted and smoking in may areas have been disallowed, which are part of several moves to deter people from lighting up.

These have been tried in many countries but smoking incidence does not seem to significantly decline as people shift to cheaper and often, illegal, illicit products. So the next step is to prohibit the use of a tobacco brand, logo, or trademark. This has been done in Australia and there are plans to introduce legislation in Singapore, Malaysia and Taiwan.

This plan does not appear to be right because a brand or logo of a company represents how effective it is in developing consumer loyalty and service. Imagine also if all ice cream, all soft drinks, all beer, all wine, etc. will simply be labeled as “ice cream,” “soda,” “beer,” etc. with no brand recognition of who produced or manufactured the products.

Or all government departments and agencies (DoH, DoF, DPWH, NEDA, etc.) will lose their logo and will simply have a generic brand “Philippine government,” it would not seem right.

I have never been a smoker nor have I been a fan of smoking but was once a fan of tobacco ads in cycling or in the F1 race. But I will not recommend the scrapping of a brand or trademark of companies in a particular industry. People who hate the companies should attack them as such and they may even use the company brand for their attacks.

Intellectual property rights like medicine patents, song copyrights, company brand or trademarks, play an important role of recognizing efficiency and innovation. Consumers look up to these brands and decide which ones to support and patronize and which ones to reject based on their specific needs and interests.

Governments therefore, should respect and protect these IPRs the same way it should respect and protect physical private properties. Moreover, people own their bodies and not the state nor NGOs.

After rising taxes, health warnings, and business regulations are in place, governments should leave individuals and allow them to seek their own happiness without harming other people.

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers, which is a member of EFN Asia and the Property Rights Alliance (PRA).

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See also:

BWorld 150, Rising state-inspired murders and budget 2018, September 18, 2017 

BWorld 151, Mining taxes per hectare of land, September 22, 2017 
BWorld 152, Cronyism in Renewable energy, gas sectors? September 23, 2017

IPR and Innovation 36, Plain packaging from tobacco and soon to soft drinks, alcohol, ice cream products

I am reposting this good interview of my friend, PRA Exec. Director, Lorenzo Montanari, published in The Financial last May 29, 2017. State nannyism is wrong, there will be too much state intervention to "protect people from 'harming' themselves", the state semi-own people's body and mind.


“We are really worried about the new regulations,” Montanari commented. “Plain packaging - removing all signs of the brand from the packaging of cigarettes - is a direct attack on the trademark system. The first plain packaging was implemented in Australia in 2012. We were against it and criticized it of course. As a reaction to that we have already published an International Coalition letter against plain packaging. We collected more than 40 think tank signatures from around the world; New Economic School is also amongst them. We claim that if one wants to reduce smokers’ numbers then that’s fine, but it can be done in another way, for example educational campaigns can help. The countries that have approved the law on plain packaging, for example France and Ireland, are also considering moving on to another sector, like wine, soft drinks, junk food, etc. I want to say that it is not about the tobacco itself, we care about the trademark. This is our mission because it’s intellectual property.”

Q. At present, in terms of Georgia, does it only affect the tobacco sector?

A. It has started with tobacco. It is very easy to attack this sector. In Thailand and Indonesia for example they have already started to talk about plain packaging in the wine sector too. The point is to think about the Georgian wine producer. At the moment Georgian wine is famous throughout the world. Local producers have invested so much money in building brand identity. Imagine what would happen if they weren’t able to show their label. I have heard that the Ministry of Economy, the Ministry of Finance, and even the Prime Minister of Georgia are against it. If parliament decides to implement the new law, what will happen hereafter to Georgia wine? This is the point we are strongly criticizing.

Since we analyzed the 128 country index, Georgia held 90th place. In terms of the legal political environment Georgia is not performing too badly. By registration of property Georgia is the best country in the world. The problem in Georgia is the protection of intellectual property rights. In this case we discovered the score is 2.4 - the lowest in our ranking. A policy like plain packaging will not help to improve the protection of intellectual property. I had the pleasure to speak to the Chairman of Sakpatenti. He is against this new regulation about plain packaging. We want to collaborate with them also.

Q. Can you tell us more about the experience of foreign countries which have already implemented the law?

A. The Australia National Drug strategy household survival has shown that in 2014 the daily smoking use rate was 2.5 and 1 year after the implementation was 3.4. Plus, according to the dates, afterwards a 20% increase of contraband cigarettes can be seen. Since there is no trademark it’s very easy to fake, they don’t need to reproduce the logo of the brand or label.

Even if plain packaging will reduce the number of smokers, we are still against it, because of the policy being against the principle of the trademark. I have seen interesting research by IPM. According to it, 81% of Georgians don’t have information about plain packaging. 54% of Georgians think that it will simplify the reproduction of fake cigarettes.

The Georgian Government is doing everything to make Georgia the best performing in terms of economic freedom. We are worried that parliament is moving in the opposite direction. Even in the EU, the European directive of tobacco has been approved, for example Germany is completely against plain packaging.

Q. You mentioned the EU. Georgia has signed an EU Associate Agreement which requires some changes to tobacco regulations. They also have some recommendations for approaching European standards. Do you think that this might be the reason for these regulations?

A. Germany, the leading country in the European Union, is not implementing it. This demonstrates perfectly, that even if the EU gives a recommendation, the country can still disagree. Italy and Greece are against the implementation also. If you want to cut down on the number then it’s better to hold educational campaigns. We believe that an attack on the trademark system is bad for the economy.

Q. Due to the law the tobacco industry will not have the right to conduct any philanthropy hereafter. They won’t even have the right to conduct any ads or marketing action. What do you say to that?

A. My mission isn’t to judge a law, it’s up to the Government to decide. In general, since I believe in a free market economy, if you have legal activity you can advertise. If you are legally working why should someone forbid advertising? This type of banning is against freedom of speech and expression. Removing one’s brand is the same. You can’t describe your product anymore.

Q. How can the new regulation affect the tobacco business in general and the economy as well?

A. I think that in the future if any company thinks that plain packaging will touch them they won’t invest in Georgia anymore. I honestly don’t know what tobacco companies are going to do in the future. I understand that they aren’t happy. I don’t know what will happen afterwards. What I do know is the law is violating trademarks. If we take into consideration foreign countries’ examples, in France ex-president Nicola Sarkozy criticized the plain packaging law for wine. It’s impossible to survive without brand identity.

Q. What do you think, if the Parliament of Georgia passes this new regulation, will it force some tobacco companies to leave the Georgian market?

A. I honestly don’t know. It could cause this too. For sure it is not going to be a positive signal to other companies who want to invest. Afterwards these companies might ask for help from the World Trade organization. They might find themselves in a very bad situation, because they have put millions into advertising and creating brand awareness which they now might lose.

Written By Tamta Kldiashvili

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See also:

IPR and Innovation 33, More on the panel on property rights, ALF 2016, March 09, 2016 

IPR and Innovation 34, When 95% of WHO's EML are off-patent, May 08, 2016 
IPR and Innovation 35, Letter to WIPO on World IP Day, May 06, 2017

IPR and Innovation 35, Letter to WIPO on World IP Day

On April 28, 2017, the World Intellectual Property Day was celebrated. The Property Rights Alliance (PRA), publisher of the annual International Property Rights Index (IPRI), sent a letter last April 25 to the head of WIPO, below. MGT is one of four ASEAN-based free market think tanks that signed the letter.

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Celebrating the 2017 #WorldIPDay

Open Letter To

WIPO DirectorGeneral Dr. Francis Gurry

We the undersigned are proud to celebrate World IP day with the World Intellectual Property Organization (WIPO). Intellectual property (IP) rights play a crucial role in growing economies, driving innovation, and saving lives. Robust IP systems provide the greatest incentives for innovators to create the next generation of goods and services, artists to produce original works, and entrepreneurs to enter the marketplace. They also allow for the sharing of knowledge and technological advancement. Invention comes out of the shadows with good intellectual property protections.

IP Rights Grow the Economy

IP-intensive industries are the cornerstone of modern economies. Between the U.S. and E.U., IP-intensive industries employed between 30%-38% of their workforces—more than 127 million jobs. As a matter of fact, these industries are responsible for generating nearly 40% of the combined US & EU gross domestic products.

IP-intensive industries in these economies paid workers 46% higher wages than those employed in comparable jobs in non-IP-intensive industries. Similarly, per capita income in countries with robust property right is 21 times more than per-capita income in countries with weak protections.

IP Rights Drive Innovation

Human ingenuity is boundless, and IP rights create an environment where human creativity can be unleashed. In 2015, a record 2.9 million new patents were filed worldwide—ranging from groundbreaking technological processes to cures of catastrophic disease to modernizations of everyday conveniences.

To thrive, innovation must be protected. Enforcement of IP rights prevent production of counterfeits that undermine economic growth and finance criminal organizations. This underground economy is responsible for nearly 2.5% of global imports, threatening iconic retail brands and next-generation medicines alike. Copying is not the same as inventing.

IP Enhances Lives

Each patent offers an innovative approach to solving a human problem. Around the world 1.2 million people die in traffic accidents, and commuters waste years of their lives on the road. Now, over 33 companies around the world are investing billions of dollars, hiring thousands of researchers and

engineers, and inventing new driverless car technologies aimed to reduce traffic deaths and save time, a truly non-renewable resource.

However, the intellectual property that delivers these benefits and many others has never been more at risk. Even within the United Nations system, initiatives such as the High-Level Panel on access to medicines threaten to undermine the very protections that are so necessary to solve today's global challenges. WIPO must play a more active role in informing international debates.

Therefore, the undersigned call on WIPO to 1) review the ways that IP enhances economic development and access to new products; 2) proactively work with countries to stabilize, grow, and enhance their IP regimes and protections; 3) support IP as a property right and a right to enhancing human growth and development, and oppose adoption of policy to the contrary such as the UN High-Level Panel report. 

World IP Day is an opportunity to celebrate that which is uniquely human: constant innovation, reinvention, and curiosity. Intellectual Property fuels the economy, drives innovation, and saves lives. We look forward to working with WIPO to advance this understanding of intellectual property rights,

and to produce complimentary efforts aimed at accelerating the adoption of robust IP protections across the world that make intangible futures tangible.

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See also:

IPR and Innovation 32, On TPP, medicines patent and tobacco trademark, February 29, 2016 

IPR and Innovation 33, More on the panel on property rights, ALF 2016, March 09, 2016 

IPR and Innovation 34, When 95% of WHO's EML are off-patent, May 08, 2016

BWorld 26, IPRI 2015 in APEC economies, November 19, 2015 

BWorld 45, Asia Liberty Forum and property rights, February 29, 2016BWorld 81, Property rights are human rights, September 30, 2016.

BWorld 81, Property rights are human rights

* This is my article in BusinessWorld last August 25, 2016.

Private property and its protection is among the cornerstones of a free society. It bestows upon the individuals, households and enterprises exclusive rights what to do with their private property like a car or a piece of land -- use it, sell it, rent it out, or donate it.

When private property rights are unprotected, society can quickly degenerate into chaos and disorder. Gangs and bullies can confiscate other people’s houses, cars, or shops, and the enterprising people will flee and escape such society and only the lazy, bullies, and opportunists will stay.

Measuring property rights protection across many countries has been done by the Property Rights Alliance (PRA), a Washington DC-based think tank. It produces the International Property Rights Index (IPRI) annual reports and partners with independent, nongovernment and market-oriented think tanks and institutes from many countries around the world in spreading the philosophy and measurement of protecting private property rights.

The IPRI 2016 Report was released in partnership with 102 independent think tanks from 70 countries and it was launched on Aug. 10, 2016 in Delhi, India.

PRA Executive Director, Lorenzo Montanari summarized the value of this exercise:

“Property rights are the linchpin of a prosperous society. They say what is yours, what is not, and how to exchange with others in order to create value... that is why they are human rights and essential to individual liberty.”

IPRI is derived by getting the score (1 to 10, 10 being the highest) of each country covered in three major areas:

(1) Legal and Political Environment (LP), which covers judicial independence, rule of law, control of corruption and political stability of a country or economy.

(2) Physical Property Rights (PPR), which includes registration and protection of physical properties, access to loans.

(3) Intellectual Property Rights (IPR), that includes IPR protection, especially patents and copyrights.

Thus, countries with high scores in two or all three of these areas will have a high IPRI overall score and global rank.

Below are the scores and global rank of ASEAN (Association of Southeast Asian Nations) countries and their neighbors in the region. Three ASEAN countries -- Brunei, Cambodia, and Laos -- were not included in the IPRI annual reports, mainly for lack of reliable data for comparative purposes. Myanmar was included only starting 2015.

The table show the following:

1. The more developed the economy is (Singapore, New Zealand, Japan,...), the higher the IPRI score and global rank. Which implies that as private property is better recognized and protected, there are more economic activities that occur.

2. Emerging markets of the ASEAN except Thailand have improving global rankings: Malaysia, Philippines, Indonesia and Vietnam. The decline in Thailand’s ranking coincided with the rise of the military leadership there.

3. The Philippines experienced the biggest improvement among the emerging markets in the region, from 77th in 2013 it rose to 64th in 2016. Its overall score of 5.15 in 2016 is a result of its low score in LP of only 4.15 but compensated by its high score of 6.07 in PPR, while its IPR score in IPR was a modest 5.23.

The continuing uncertainties in human rights protection due to the ongoing extrajudicial killings (EJKs) related to the drugs war of the Duterte administration may have some negative repercussion in the country’s future low scores and position in rule of law and judicial independence. These two are part of the Legal and Political environment (LP). There is danger of a possible decline in the Philippines’ overall IPRI score and global rank if these uncertainties continue for long.

The main functions, the raison d’etre or reason for existence of governments are to enforce the rule of law, to protect the citizens’ right to life (against aggressors, murderers, rapists, etc.), right to private property (against thieves and destroyers of properties), and right to liberty (against censorship, bullies and despots).

Private property rights as human rights are good incentives for the people to become productive citizens and stay away from being dependent on state welfare. Governments should stay the course in securing this philosophy and veer away from forcing equality by penalizing the hard working with high, multiple taxes, fees and permits.

Bienvenido S. Oplas, Jr. is the President of Minimal Government Thinkers and a SEANET Fellow. Both institutes are among the 102 independent organizations and partners of PRA in producing the IPRI 2016 Report. minimalgovernment@gmail.com

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See also: 

BWorld 26, IPRI 2015 in APEC economies, November 19, 2015 

BWorld 45, Asia Liberty Forum and property rights, February 29, 2016

BWorld 78, If the US becomes protectionist, who loses? August 11, 2016 
BWorld 79, Brownouts, coal power and the electricity market, August 21, 2016 

BWorld 80, Declining share of agriculture in GDP, September 11, 2016

Fat-Free Econ 5: Property Rights and Policy Lefts, April 04, 2012

IPR and Innovation 30, More on IPRI 2015 launching in KL last year, February 01, 2016

BWorld 45, Asia Liberty Forum and property rights

* This is my article in BusinessWorld yesterday.

 The classical liberal philosophy of more individual freedom and more personal/parental responsibility, free market and less government intervention and taxation is not a popular personal and political philosophy in Asia yet, at least compared to similar movements in the US and Europe.

So annual events like the Economic Freedom Network (EFN) Asia conference, and now the Asia Liberty Forum (ALF), are very helpful in asserting the virtues of classical liberal, aka “libertarian” or “free market” philosophy. This concept is vastly different from other labels like “neo-liberal” and “US conservatism”.

The three-day 4th ALF event is held here in Renaissance Hotel Kuala Lumpur, Malaysia. This is a huge international event from Feb. 18-20 with many participants from Asia, US, and Europe. The main sponsors of this year’s conference are the Atlas Economic Research Foundation in Washington DC, the Center for Civil Society (CCS) in Delhi, India, and the Institute for Democracy and Economic Affairs (IDEAS) in Malaysia.

Among the important panel discussions in the conference will be on “Protecting Yourself Against Daylight Robbery -- Current Challenges to Property Rights” on Day 3. The session will be chaired by Wan Saiful Wan Jan, CEO of IDEAS Malaysia. The speakers will be (1) Barun Mitra of Liberty Institute, India; (2) Kriengsak Chareonwongsak of the Institute of Future Studies for Development, Thailand; (3) Julian Morris of Reason Foundation, USA; and (4) Lorenzo Montanari of Property Rights Alliance (PRA), Washington DC, USA.

The protection of private property rights is among the hallmarks of a free and dynamic society. If other people can say that “Your car is also mine; your house is also mine; your farm is also mine. I can enter and use them anytime I want,” then society can easily degenerate into chaos and disorder. No meaningful economic growth and social development can happen in this type of environment.

The PRA has developed the annual International Property Rights Index (IPRI). The index is composite for a country’s performance in three areas: (a) legal and political environment, (b) physical property rights protection, and (c) intellectual property rights (IPR) protection. The scores range from 1 (poorest) to 10 (best).

I made a short study about the performance of some ASEAN countries in terms of property rights protection covering eight years from 2008 to 2015. Singapore and Malaysia continue to have high scores overall in property rights protection. The Philippines made a modest improvement in its global ranking, from 87th in 2011 and 2012 (out of 130 countries), it jumped to 77th in 2013 and 65th out of 129 countries in 2015.

If we observe the Philippines, the bulk of property rights protection -- in malls and shops, hotels and restaurants, banks and condos, schools and universities, airports and seaports, etc. -- is heavily privatized through the tens of thousands of private security agencies. It is not the police or army or barangay security personnel who guard and protect these businesses and residential, commercial areas, despite the huge and multiple taxes and fees that people pay to the government annually.

And this is an indicator that governments often forget their main purpose, their raison d’etre, which is the protection of the people’s right to life (against bullies and murderers), right to private property (against thieves, vandals and destroyers of property) and right to self-expression (against dictators). To have a rule of law.

When governments are busy giving away endless welfarism and subsidies, collecting endless taxes and fees, imposing endless regulations and restrictions, running banks, casinos, TV stations, and other businesses, there is a tendency to set aside its rule of law function and it is unfortunate.

Government should be big enough in enforcing laws on private property and citizens protection, and it should be small enough in intervening too much in the people’s daily lives, hence requiring small and few taxes to sustain itself.

Bienvenido S. Oplas, Jr. heads the Minimal Government Thinkers, a member of Economic Freedom Network (EFN) Asia, and a Fellow of the South East Asia Network for Development (SEANET). minimalgovernment@gmail.com

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See also:

BWorld 42, World inequality, Oxfam and bad mathematics, February 11, 2016

BWorld 43, More on WESM, PEMC and DOE, February 14, 2016

BWorld 44, Why the Philippines should join the TPP, February 19, 2016 
ALF 5, Meeting of Property Rights Alliance in KL, February 19, 2016

ALF 5, Meeting of Property Rights Alliance in KL

The 4th Asia Liberty Forum (ALF) started last night here at the Renaissance Hotel Kuala Lumpur, with an opening dinner, keynote speech given by Tom Palmer of Atlas. Earlier, the Property Rights Alliance (PRA) headed by Lorenzo Montanari held a short meeting for its Asian partners.

Lorenzo discussed what the International Property Rights Index (IPRI) is all about,  its contents and ranking of countries, the value of property rights protection, etc.

From left: Arpita  Nepal of Samriddhi, Nepal; Wan Saiful Wan  Jan of IDEAS, Malaysia; Bican Sahin of Freedom Research Association, Turkey; me; Tricia Yeoh of IDEAS, Malaysia; Lorenzo; Barun Mitra of Liberty Institute, India; Baladevan Rangaraju of India Institute, Dhananath Fernando of Advocata, Sri Lanka; and John Humphreys of PRIME, Cambodia.

See my article today in BusinessWorld, "Asia Liberty Forum and property rights".
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See also:

ALF 2: Opening Dinner Program, January 09, 2015 

ALF 3: Photos with Friends, Kathmandu Conference, January 20, 2015 

ALF 4, Conference 2016 in Kuala Lumpur,January 09, 2016

BWorld 26, IPRI 2015 in APEC economies, November 19, 2015

Free Trade 57, Growth, IPRI 2015 and the TPP, November 28, 2015 

IPR and Innovation 30, More on IPRI 2015 launching in KL last year, February 01,2016

Free Trade 57, Growth, IPRI 2015 and the TPP

Two weeks ago, I attended the launching of  the International Property Rights Index (IPRI) 2015 Report in Kuala Lumpur, then I also gave a short presentation on IPR and the Trans Pacific Partnership (TPP) Agreement.

I showed portions of Dr. Ramon Clarete (University of the Philippines School of Economics, UPSE) paper during the UPSE-Ayala forum, Going Regional: Which Mega Trade Deals Should the Philippines Join? last February 2015.

He used the Gravity model of trade in estimating the level of bilateral exports or imports between two trading partners.

* Dependent variable: flow of trade between and among countries studied

* Independent or explanatory variables, their expected signs or relationships: GDP (+), population (+), dist. between two countries (-), commonality of language (+), shared borders (+), landlocked state (-).

* In addition, TPP and RCEP indicators or dummy variables are introduced: (a) TB1, 1 if both trading countries are TPP or RCEP members, 0 otherwise, (b) TB2, 1 if exporting country is a TPP or RCEP member, 0 otherwise; (c) TB3, 1 if importing country is a TPP or RCEP member, 0 otherwise. For overlapping memberships, a dummy variable where TPP*RCEP =1 if both trading partners are members of the two trade blocs.

And here are some results.

Then I briefly discussed my article in BusinessWorld that day, Property rights protection in APEC economies. Then I discussed the IPR on medicines aspect of the TPP.

And showed actual texts in the TPP agreement....

Below, from left: Lorenzo Montanari, Exec. Dir. of the Property Rights Alliance (PRA); Dr. Sary Levy, author of IPRI 2015, and Wan Saiful Wan Jan, CEO of IDEAS and Director, SEANET.

Concluding Notes:

1. Joining the TPP has more gains than pains for member-countries, especially in exports and overall GDP expansion.

2. IPR health provisions in TPP are not scary, they do not reduce access to cheaper generic drugs. Existing TRIPS flexibilities are maintained.

3. It seems that the generic pharma lobby + the anti-capitalism, anti-globalization NGOs created more noise and fear than what the TPPA actually provides.

4. There is more to fear in government taxation of medicines, in mandatory drug price discounts and price controls, than IPR protection.

“IPR create incentives for businesses to invest in ideas, to develop new products, and to earn a profit from the sale of those products. This in turn leads to improved customer satisfaction, improved profitability, and greater employment opportunities.”
– Prof. Sinclair Davidson, RMIT Univ. (Econ Dept.), Melbourne, Australia.

The full presentation is posted here.

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See also:

Free Trade 53, TPP "final push" this September + paper by Dr. Clarete, September 19, 2015 

Free Trade 54, Eco-protectionism at APEC 2015 meeting, September 28, 2015 

Free Trade 55, TPP Agreement, finally, October 06, 2015

Free Trade 56, Trade, investments and taxes in APEC countries, November 08, 2015

BWorld 26, IPRI 2015 in APEC economies

* This is my column in BusinessWorld last Monday, November 16, 2015.

KUALA LUMPUR -- The protection of property rights and promulgation of the rule of law are the cornerstones of peace and order in society. When such property rights are removed and unprotected, society can quickly degenerate into chaos and disorder. For instance, your house or car is also somebody else’s house and car, and he/she can take and occupy it anytime, anywhere.

Measuring property rights protection across many countries has been done by the Property Rights Alliance (PRA), a network of 74 independent, nongovernment, and market-oriented think tanks from 57 countries around the world and is based in Washington, D.C.

PRA produces the International Property Rights Index (IPRI) annual reports, which is a measurement of how governments in the countries covered promulgate the rule of law and protect property rights, public and private, physical and non-physical or intellectual.

The IPRI 2015 Report is launched today here at Park Royal Hotel in the capital city of Malaysia. The event is jointly sponsored by the PRA and the South East Asia Network for Development, which is a regional project of the Institute for Democracy and Economic Affairs in Malaysia.

The event’s theme is “Protection of Property Rights, Economic Growth, and the TPP.” The Trans-Pacific Partnership (TPP) is included in the theme because of its recent approval by the original 12 member-countries including Malaysia. TPP of course will not be implemented unless each member-country ratifies the agreement.

IPRI is derived by getting the score (one to 10, 10 being the highest) of each country covered in three major areas:

1 Legal and Political Environment (LP), which includes judicial independence, rule of law, control of corruption and political stability;

2 Physical Property Rights (PPR), which includes registration and protection of physical properties, and access to loans; and

3 Intellectual Property Rights (IPR), which includes protection of IPRs, in particular patents and copyrights.

As a result, countries with high scores in two or all three of these areas will have a high IPRI score and global rank.

In the 2015 Report, the top 10 from 1st to 10th places are: Finland, Norway, New Zealand, Luxembourg, Singapore, Switzerland, Sweden, Japan, Canada, and Netherlands.

For this piece, the focus will be on Asia-Pacific Economic Cooperation (APEC) member-countries that are covered in the IPRI annual reports. Only 19 countries are in this table because Brunei was not included in the IPRI 2014 and 2015 Reports while Papua New Guinea was never included in all IPRI reports, past and present. (See Table)

APEC countries that were not included in the 2014 Report because of some incomplete data were given this observation in that report:

1 Philippines: Between 2010 and 2014, the Philippines IPRI score increased by +2.9%. In 2014 IPRI increased by +0.2 due to slight increases in all components. LP increased by +0.2 points due to all four of its items increasing in 2014. In particular, item Political Stability improved by +22.7% between 2013 and 2014.

2 South Korea: Over the 2010-2014 period of analysis, the South Korea IPRI score fluctuated around the value of 6.3. PPR data is missing from the analysis completely and IPR is missing for 2010 and 2011... In general, the overall IPRI value for South Korea is good and stable.

The Philippines’ jump in global rank from 77th in 2013 to 65th in 2015 is somehow impressive despite the flat score of 5.1 and 5.0, respectively. The reason for the big jump is because many countries have suffered significant decline in their scores from 2014 to 2015.

Within the Association of Southeast Asian Nations-6 that are also APEC members and covered in this annual report, there is a mixture of results over the years. The bad news is that (a) the gap in overall score between high-ranked Singapore and low-ranked Vietnam was very wide, with the average score of the former almost twice that of the latter; (b) Thailand and Vietnam suffered significant declines in scores and global rank, both falling by at least 19 notches in ranking from 2014 to 2015; and (c) Indonesia global rank also fell significantly from 59th in 2014 to 70th in 2015.

The good news is that Singapore and Malaysia have managed to retain their high scores and global ranking.

The results of this annual study should prod the governments of the Philippines and other East Asian economies to remember the main function, the raison d’être or reason for existence, of governments: to enforce the rule of law, the protection of the citizens’ right to life (against aggressors), right to private property (against thieves and destroyers of properties), and right to liberty (against bullies and despots).

There is a positive relationship between economic development and economic freedom, and the strength of property rights protection. Civil society leaders should keep reminding governments of this reality, and dissuade the latter from enacting and implementing various programs that directly or indirectly erode the respect of private property. 

Bienvenido S. Oplas, Jr. is the President of Minimal Government Thinkers, Inc., which is one of the 74 think tank-members of PRA. He is also a SEANET Fellow.

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See also:
BWorld 22, WESM, PEMC and search for competitive electricity prices, November 05, 2015 
BWorld 23, ASEAN trade bureaucracies and Doing Business 2016 Report, November 07, 2015 
BWorld 24, Traffic and Newton's 3 laws of motion, November 12, 2015 
BWorld 25, Feed in tariff means expensive electricity, November 14, 2015

Inequality 26, Pew survey result on support for free market, July 27, 2015 
Inequality 27, ADR Institute forum on poverty and growth, August 18, 2015

Property Rights 6: IPRI 2013 Report

The International Property Rights Index (IPRI) 2013 Report was released last week. Our think tank here in Manila, Minimal Government Thinkers, Inc. is the Philippine partner of the Property Rights Alliance (PRA, USA) in producing the annual IPRI.

There are many annual studies and reports measuring economic freedom, economic competitiveness and related concepts of countries, and ranking them. IPRI incorporates many of those factors and indicators, but it is focused on studying property rights and their protection worldwide.

IPRI is composed of three main indicators, which themselves have their own sub-indicators. And this makes the IPRI unique and useful.


For many governments that are stuck in the welfarist and central planning philosophy, they are characterized by soft or implicit disrespect, or less protection of private property rights. Since private property is among the cornerstones of a free society, disrespect of property rights is the path to socialism and dictatorship.

Here is the result of the 2013 IPRI, the ranking of 131 countries covered by the study. I separated the East and Southeast Asian economies for easier identification.

The Philippines ranked 77 out of 131 countries covered by the study. Not good for us.
 

And here's the score for the three components of IPRI by country. The Philippines scored poor in legal and political environment (LP), pulling the overall IPRI score.

The report made this observation:

... there is a positive relationship between economic development and strength of property rights regimes. In addition,this finding is also confirmed when looking closer to specific groups, such as different regions or different average household income groups.

Kudos to PRA for persistently producing this annual report.
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See also:
Property Rights 1: IPRI 2009 Report, March 02, 2009
Property Rights 2: IPRI 2010 Report, February 27, 2010
Property Rghts 3: IPRI 2011 Report, March 29, 2011
Property Rights 4: Trees, SM Baguio, Henry Sy and Twitter, April 12, 2012
Fat-Free Econ 5: Property Rights, Policy Lefts, April 04, 2012 
Property Rights 5: IPRI 2012 Report, April 18, 2012

Fat-Free Econ 5: Property Rights and Policy Lefts

Note: This is my article today in TV5's news portal,
http://www.interaksyon.com/article/28670/fat-free-economics-property-rights-policy-lefts

FAT FREE ECONOMICS: Property rights, policy lefts
04-Apr-12, 4:58 PM | Nonoy Oplas

Protection of private property rights and promulgation of the rule of law are the cornerstones of peace and order in society. Remove such property rights and society can quickly degenerate into chaos and disorder. For instance, if your house or car is also somebody else’s house and car, then they can take and occupy it anytime, anywhere.

There is one free market think tank, the Property Rights Alliance (PRA) based in Washington DC that conducts an annual study of how governments in the selected countries promulgate the rule of law and protect property rights. This annual report is called the International Property Rights Index (IPRI).

The study gives a particular score, then ranks those countries globally based on three major factors: (1) Legal And Political Environment, which includes judicial independence, rule of law, control of corruption and political stability; (2) Physical Property Rights, which include protection of such rights, registering property and access to loans; and (3) Intellectual Property Rights, which include protection of IPRs, such as patents and copyrights.

Our think tank here in Manila, Minimal Government Thinkers Inc. is among the nearly 70 independent and free market institutes, and the only Philippine-based think tank, that co-sponsored the publication of this annual study.

The 2012 Report has been released this week. Please note that while it was released this year, the basis of comparison were 2010 to 2011 data. Of the 130 countries covered by the study, the top 10 positions were garnered by developed economies with small populations. The first five, in order, are Finland, Sweden, Norway, Singapore, and Switzerland. The next five are Denmark, Luxembourg, New Zealand, Netherlands and Canada.

The Philippines ranked 87th out of 130 countries. While it performed fairly in Physical Property and Intellectual Property protection, it performed badly in the Legal and Political Environment. The culprit is the political instability, the bad state of corruption in government, poor observance of the rule of law and lack of judicial independence.

The country’s global rank in previous IPRI reports were 74th out of 115 countries in 2009, 80th out of 125 countries in 2010, and 87th out of 129 countries in 2011. So there was no change in the Philippines’ global ranking this year and last year.

Aside from Singapore, other Asian economies that performed well in the IPRI 2012 Report were Hong Kong in 12th place; Japan, 15th; Taiwan, 21st; Malaysia, 36th; South Korea, 40th; China, 57th; India, 62nd; Thailand, 69th; Indonesia, 86th; and Vietnam, also at 87th place.

The continued low ranking of the Philippines does not look good. If we need to attract more investors, grow the economy and create jobs, we need to assure entrepreneurs and employees, the average folks, that the fruits of their hard work and persistence in life are properly respected and protected. One should not toil hard abroad or in this country to buy a modest house and lot, only to find out later that the land is also being claimed by other people, resulting in additional costs and emotional stress in going to the courts and law enforcement agencies.

Populist and left-leaning policies - such as protection to squatters who illegally occupy private lands and an agrarian reform program with no final deadline and timetable - result in uncertainties.

These plus the weak rule of law end up in weak property rights enforcement for certain properties. These things must change if we want to retain the pool of talented entrepreneurs, as well as attract foreign professionals and investors, to come to the country.

Category		Score	Global Rank	Regional Rank (AO)
Legal and Political Environment		3.4	108 of 130	16 of 19
Judicial Independence		6.2	46 of 130	8 of 19
Rule of Law		6.4	40 of 130	7 of 19
Control of Corruption		5.9	40 of 130	7 of 19
Political Stability		7	13 of 130	3 of 19
Physical Property Rights		5.8	76 of 130	16 of 19
Protection of Physical Property Rights		6.5	50 of 130	10 of 19
Registering Property		6.8	117 of 130	16 of 19
Access to Loans		3.9	64 of 130	15 of 19
Intellectual Property Rights		4.9	73 of 130	11 of 19
Protection of Intellectual Property Rights		5.3	54 of 130	12 of 19
Patent Protection		0
Copyright Piracy		6	27 of 130	6 of 19

Source: http://www.internationalpropertyrightsindex.org/profile?location=philippines

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See also:
Property Rights 1: IPRI 2009 Report, March 02, 2009
Property Rights 2: IPRI 2010 Report, February 27, 2010
Property Rghts 3: IPRI 2011 Report, March 29, 2011

Fat-Free Econ 1: Macroeconomics for Micro Concerns, March 08, 2012
Fat-Free Econ 3: Mining and Environmentalism, March 15, 2012
Fat-Free Econ 4: Unemployment, Good and Bad News, March 22, 2012