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UNCTAD - The Commonwealth webinar on harnessing intellectual property rights for innovation, development and economic transformation in LDCs

Statement by Rebeca Grynspan, Secretary-General of UNCTAD

UNCTAD - The Commonwealth webinar on harnessing intellectual property rights for innovation, development and economic transformation in LDCs

29 January 2024

Your excellency, Patricia Scotland, Secretary General of the Commonwealth: Dear friend, really thank you very much for your words, for this fantastic cooperation with the Commonwealth. We are fostering synergies and knowledge between our organizations to support countries in their path to development and their right aspirations. Thank you for your leadership, thank you for the great work of your team, and we hope that this is only an example of what we can work together in the years and times to come. Dear Daren Tang, Director General of WIPO, thank you so much for being here. You have really infused a new energy to WIPO and into thinking about the innovation and how IP can serve the most vulnerable that have a lot of capacities, and a lot of talent that is not recognized by the system. You have really pushed on that direction, so, thank you so much for being with us. And dear Paul Akiwumi, director of Africa and LDCs division at UNCTAD, thank you and your team for the great work. Dear colleagues at UNCTAD, ladies and gentlemen, dear friends, It is my great pleasure to be at the publication of what is, without a shadow of doubt, an excellent paper, co-produced jointly with our friends at the Commonwealth Secretariat as Secretary General, Scotland has already said. This paper tackles a very important aspect of the discussion around structural transformation in Least Developed Countries: intellectual property rights. IP rights are the recognition of the power of ideas and innovation and the importance of protecting and fostering them as already was said in the excellent introduction by Patricia. There is this implicit bias that may make some believe that IP rights are not at the top of the ‘Development of pyramid’s needs of the LDCs, and that LDCs have much more pressing issues to worry about – access to electricity, eradicating hunger, ensuring universal education and health. Indeed, in the last three years, these pressing needs have become even more pressing in LDCs, which have yet to fully recover from COVID and the recent food and energy price shocks and also from the debt problem that is burdening many of the LDCs and shrinking their fiscal space.   But one of the achievements of this paper is to discuss this belief and dispel some of the common myths around IP rights in LDCs. I would highlight  two of these because I think that the framework has been brilliantly put already by Patrica Scotland. First, is to debunk the idea that LDCs highly informal economic structures do not innovate enough to get value from their IP, and that the incentives to invest and innovate are weaker. Past research suggests that the most common innovations in LDCs occurs mostly precisely through small, gradual improvements to existing products, services, or processes, mostly in small and medium-sized enterprises (SMEs) looking to adapt foreign technologies to local contexts, as well as in the informal sector where innovation naturally as Daren has said many times goes unpatented. Our paper highlights dozens of real-life cases where LDCs where successful in leveraging IP to their advantage. In Cambodia, for example, a Geographic Indicator (GI) was created for its Kampot peper, a fine variety of paper cultivated in the Kampot province, and immediately farmers many of them informal tripled their income. In ten years Kampot pepper exports grew-tenfold. Ethiopia, as another example, started trademarking its coffee exports in the early 2000s, and in less than a decade this had increased export prices by 275 per cent and brought more than $ 100 million in new export income to the country. Uganda, Musana Cart Ltd created the Musana Cart for food vendors, which comes with an in-built solar panel to power a small stove, a fridge, and light bulbs. Musana patented their product and then open source its IP open source, its IP so that vendors in Africa can freely use it, modify, and share the innovation. I know that there are a lot of other examples but what these cases show is that IP policies, when designed correctly, like you were very rightly saying Patricia, can unlock value that was already present, even within informal markets such as farming communities. The second myth that our paper dispels is the idea that leveraging favorable international IP treatment to LDCs may not help, for example under WTO TRIPS, since it is difficult -given the low-productive capacities- to take advantage of these international possibilities. This is indeed a big challenge. Our recently updated Productive Capacity Index that has been developed by UNCTAD, shows that LDCs have the lowest level of productive capacities of all country groupings, as indicated in their score of the overall what we call PCI, Productive Capacity Index, and  they also have a low performance on the Frontier Technology Readiness Index. What this means, put simply, is that for example a country may have a pharmaceutical waiver from the WTO, but if it doesn’t have the manufacturing capacity, the human capital to take advantage of it for example to produce the medicine,  the waiver is like having the cherry without having the cake. Indeed, we saw this in many countries during COVID. But then, we have a massive counter example like Bangladesh. In stark contrast with other LDCs, Bangladesh meets nearly 98 per cent of its domestic demand for pharmaceutical products via local production, with a market size of approximately 3 billion dollars. Bangladesh is also a major exporter of pharmaceuticals, generating close to $200 million in export revenue. Bangladesh pharma has taken off thanks in part to the flexibilities that the country enjoys as an LDC. A special transition period for pharmaceuticals under the TRIPS Waiver, which exempts LDCs from protecting patents and undisclosed information for pharmaceutical products, means Bangladesh can produce generic versions of patented pharmaceuticals. This has enabled Bangladesh to serve the pharmaceutical needs of poorer countries with no or limited manufacturing capacity by supplying cheap generic versions of patented drugs. The majority of the country’s pharmaceutical exports are directed to developing country markets, what we call South-South trade, and this is very important because let me tell you that South-South trade has shown to be the most dynamic part of trade in the last decade. South-South trade has really helped energize many of the sectors in the South. The special transition period that was provided under the TRIPS Waiver has helped keep medicine prices in Bangladesh among the lowest in the world. Now, it is true that as Bangladesh is expected to graduate from the LDC category, this will bring  challenges to its pharma industry so, we have to be very aware and try to support Bangladesh in this transition. Our paper talks about that, with a full discussion on the IP rights in the context of the LDC graduation and our goal of how to achieve “graduating with momentum”. So, you can turn to the paper for many in-depth analyses on this issue. But more generally, what the Bangladesh example shows is that IP rights can be an integral part of an LDC structural transformation strategy. Bangladesh saw an opportunity, and over many years invested in it – but it too started mainly from zero at the beginning. So, perseverance a vision for the future, the right policies can go a long way. Our paper mentions precisely key economic sectors, beyond pharma, where other LDCs can do something similar and here again Patricia and Daren we can work together to really help these countries not only in pharma but also in mining, tourism, Fintech, just to mention a few. Excellencies, dear friends, Once all the myths have been dispelled, there can be no question that IP has a central place in LDCs holistic development strategies. Now, it is true that most LDCs have IPR laws at the national, regional, and subregional level and they have increasingly complied with international treaties. 35 LDCs having ratified the WTO TRIPS agreement. The real challenge is knowing how to leverage them effectively. Furthermore, legal fees, and the need for expert advice can make it too expensive for countries, for SMEs and individuals to trademark and protect their IP. So, these are challenges that can be overcomed, with the right policies in place, the use of digital solutions in many cases  the paper mentions a few but it will need also real international support for this effort and our organizations can be a big support for these countries in this journey. In this regard, for African LDCs, the AfCFTA represents an opportunity to strengthen the IP enforcement mechanisms. Specifically, the protocol that the AfCFTA did sign on IP and that was adopted precisely in February 2023, one year ago. And this protocol aims at harmonizing the Intellectual Property Framework within Africa and aligning it with the continent’s overall development agenda. Lastly, it cannot be stressed enough that the decision as to whether or not to adopt IP policies and which kind to implement depends on the LDCs, on the basis of their technological absorption capacity, their level of productive capacities, their competitive strength and innovation potential. Not all IP policies will work in all LDCs; there is no one size fits all. But all LDCs can do and can implement successful IP policies. Our paper makes sure to dispel any remaining doubts around that. In closing, let me emphasize that the essence of our journey is not merely about adopting IP rights, but about revolutionizing the way we perceive and utilize them. Our discussions today, enriched by the insight of this joint paper with our friends at the Commonwealth, beckon us to a future where IP rights are not distant, lofty ideals, but tangible tools in the hands of those striving for development and progress. Thank you very much to the great Commonwealth team, to our team at UNCTAD and I am really honored to be here with these two great friends, with Patricia Scotland and with Daren here with you. Thank you very much.
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