* This is my article in BusinessWorld on March 05, 2019.
“The natural effort
of every individual to better his own condition…is so powerful, that it is
alone, and without any assistance, not only capable of carrying on the society
to wealth and prosperity, but of surmounting a hundred impertinent obstructions
with which the folly of human laws too often encumbers its operations.”
— Adam Smith, Book IV, Chapter V, The Wealth of Nations
(1776).
The ideas of Adam Smith, John Locke and other classical
liberals were indirectly discussed in the various panel discussions during the
Asia Liberty Forum (ALF) held in Hilton Colombo, Sri Lanka last week February
28 to March 1. The ALF was mainly sponsored by Atlas (USA) and Advocata (Sri
Lanka), with co-sponsorship by the Friedrich Naumann Foundation for Freedom
(FNF) and other groups. FNF is a German foundation whose main work around the
world is to help promote the value of economic freedom, free markets, human
rights and political diversity.
The last panel on Day 2 was on “IPR for Innovation and
Economic Growth” and speakers were Lorenzo Montanari of the Property Rights
Alliance (PRA, USA), Philip Stevens of Geneva Network (UK), and Rainer Heufers
of Center for Indonesian Policy Studies (CIPS). The panel was moderated by
Harith de Mel of Advocata.
Mr. Montanari showed the three components of the
International Property Rights Index (IPRI) — legal and political environment,
physical property, and intellectual property — and the results of the 2018
Report. He emphasized the role of institutional arrangements and property rights
protection in building a free, productive, prosperous and inclusive societies.
Mr. Stevens presented “The knowledge economy as a driver
of sustainable economic development.” He showed data on the components of
S&P 500 market value, the rising share of intangible assets vs tangible
assets as follows: 17% vs 83% in 1975, 68% vs 32% in 1995, and 84% vs 16% in
2015. He further observed that “One third of the value of manufactured products
sold around the world comes from ‘intangible’ capital.”
And Mr. Heufers observed that “For Indonesia to be free
and prosperous” in the agriculture and food sector, the adoption of modern rice
varieties protected by IPR has contributed significantly to greater food
production in the country.
Let us review some numbers. Data below are from three
sources. (1) IPRI Report http://internationalpropertyrightsindex.org/, (2)
Global Innovation Index (GII) 2018 report, produced by the World Intellectual
Property Organization (WIPO), INSEAD, and Cornel SC Johnson College of Business,
http://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2018.pdf, and (3) IMF World
Economic Outlook (WEO) October 2018.
Notice the top seven countries and economies — they have
higher global ranking in property rights protection, also in innovation index,
and higher per capita income of at least $8,600 in 2017, higher sustained
economic growth.
The Philippines has low rank in both IPRI and GII and low
per capita income. Improving the country’s global ranking and score in at least
these two reports will send a good signal to both local and foreign investors
and traders, that their investments and branding here will be respected and
protected.
There are efforts in Asia though to circumvent IPR
protection. Like moves to issue compulsory licensing (CL) and kill the patents
of newly-invented and successful medicines. Or impose plain packaging and kill
trademarks and brands of certain products deemed “unhealthy” like tobacco, soda
and sugary foods.
These anti-IPR moves downgrade the fact that people in
general are living longer, healthier and freer. Life expectancy at birth keeps
rising, mortality rate across ages keeps declining, and people engaged in
“dangerous” hobbies and sports like sky jumping, downhill cycling and
motorcycle stunts is rising. Threat on companies’ IPR on their invention and
corporate branding is also a threat on the overall investment environment.
Governments should avoid such populist and anti-liberal policies.
See also:
BWorld 297, The economics of coal, March 03, 2019
BWorld 298, Trump-Kim summit, implications for ASEAN and China, March 04, 2019
BWorld 299, Capitalism and freedom in Asia, March 06, 2019
