The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

What if we held a private sector initiative and nobody came?

April 19th, 2012 | by

This blog post was written by Porter McConnell, Oxfam America policy and advocacy manager for aid effectiveness.

G8 leaders will meet in Camp David in a month’s time. In 2009 at the L’Aquila summit, they took a bold step forward on food security, committing to resources and a promise to be better partners. Fast forward to 2012, and many of them are cutting their aid to poor countries.

The Obama administration has put food security on the agenda at the Camp David G8. There are proposals circulating for what a Camp David Food Security Initiative should look like. It’s all the rage for donor governments to emphasize the need to entice the private sector to get engaged in promoting growth that fights poverty. One of the models cited often is a public-private partnership in Tanzania called the Southern Agricultural Growth Corridor of Tanzania, or SAGCOT.

The private sector has not invested in any significant way in SAGCOT.

The private sector has not invested in any significant way in SAGCOT.

In some ways, Tanzania is the perfect “donor darling.” The Tanzanian economy has been growing at 6-8% per year over the past 10-15 years, and budget allocations to agriculture, education, health, roads, and water are on the rise. But at the same time, low growth rates in agriculture, which provides 74% of Tanzania’s jobs, and continuing high population growth, have pushed at least one million more people under the poverty line. Research suggests that investments in agriculture and other productive sectors have failed to benefit small scale agriculture producers or to produce jobs in sufficient numbers, especially in rural areas, so poor people still aren’t feeling Tanzania’s growth.

Yesterday, the German Marshall Fund’s Translatlantic Experts Group released a report on partnerships in food security which digs deeper into the story of the SAGCOT in Tanzania. SAGCOT is intended to be a hub of international partnerships to develop the potential of a formerly marginal region through infrastructure projects like dams and roads, export market zoning, and smallholder access to inputs and agriculture extension through “hub and out grower” relationships with commercial agribusinesses.

While the report is optimistic about SAGCOT, the authors point out some problems with the model. First and probably most damning: the global corporate partners that donors and the Tanzanian government are anxious to recruit have not yet invested in any significant way. SAGCOT’s model is based on private sector investment coming through, in addition to the public resources committed. The lack of investors calls into question the effectiveness of the public money that has been contributed to the partnership. The report also outlines more troubling concerns that agribusiness will dominate at the expense of the region’s small scale agriculture producers, the partnership will encourage land grabbing by investors, and SAGCOT’s governing body leaves little room for small scale producers to participate or influence the partnership’s direction.

These findings mirror Oxfam research in Tanzania in 2011, which also investigated the promise of SAGCOT for poverty reduction through agriculture and found similarly that smallholders seemed to be missing out in the focus on large commercial farms, and the partnership posed a significant risk of land grabs and environmental abuse irrigation, drainage, salination of land, and loss of wildlife habitat and poaching. It was unclear whose role it was to conduct oversight over SAGCOT.

While generally supportive of the partnerships with the private sector, the GMF report acknowledges that donor-private sector partnerships are of limited use for meeting the needs of small scale agricultural producers. And since smallholder farmers, especially women, make up the majority of the world’s poor, it’s tough to argue that these partnerships will be the ticket out of poverty for most.

The private sector can play a supportive role on food security if it invests in ways that strengthen sustainable small-scale production. But there needs to be a high bar: using scarce public resources for private finance may be worth the risk only if it has clear poverty reduction purposes and proven benefits to the neediest. Unfortunately, donors have been taking steps to create an “enabling environment” for private sector investment in agriculture for decades, and there are still a billion hungry people in the world. A recent report by the World Bank’s Independent Evaluation Group pointed out that less than half of IFC’s projects successfully reached the poor. If the private sector is to play a productive role, there needs to be better evidence that these kinds of partnerships can actually deliver for the poor.

All of this begs the question: is Tanzania’s SAGCOT the model for a new G8 food security initiative, or is it more like a cautionary tale?

Time to resend the memo to ATT negotiators

April 18th, 2012 | by

On Monday April 16, I attended an event in Washington, DC where senior State Department officials gathered with representatives of the US arms industry, NGOs like Oxfam, and members of the public to discuss the US position on the Arms Trade Treaty. The event provided the US government with an opportunity to lay out its positions on the Treaty in anticipation to the negotiations at the United Nations in July. You can watch the event here.

For years Oxfam has been calling for a robust Arms Trade Treaty (ATT) that will help to stem the flow of weapons to irresponsible end users. A robust and comprehensive ATT can help save innocent lives, contribute to economic development, promote regional stability, and protect human rights.

Private sector, NGO, and State Department representatives at a panel discussion following Assistant Secretary of State Thomas Countryman’s speech as part of Monday’s event on the Arms Trade Treaty.

Private sector, NGO, and State Department representatives at a panel discussion following Assistant Secretary of State Thomas Countryman’s speech as part of Monday’s event on the Arms Trade Treaty.

At the event, the Assistant Secretary of State for International Security and Nonproliferation, Thomas Countryman, made a speech outlining the US position on the treaty negotiations. The speech contained very positive elements but also some positions that I have a hard time understanding. On the positive side, Assistant Secretary Countryman stated that the US is open to suggestions from other countries on ways to include ammunition within the treaty’s scope. This is a major shift in the right direction; prior to this speech, the US position was that ammunition must not be included in the treaty in any circumstance.

However, I am left confused and dismayed over one thing that the Assistant Secretary said. The most important part of the treaty from my perspective is the part detailing what countries should do when it is determined that an arms sale will likely contribute to war crimes or human rights abuses. The US position is that the treaty should require states to consider before transferring a weapon to another country whether the particular transfer would facilitate serious human rights violations or war crimes (among other things). Mr. Countryman said:

“We want the Treaty to tell each State Party what factors it must consider before authorizing a transfer—that is, criteria to keep in mind to review seriously and decide whether the transfer in question is responsible or not.”

Factors to consider? Keep in mind? This position is unacceptable.

The US seems to hold the position that as long as a government “considers” the impact of the arms transfer and “keeps it in mind,” the treaty should allow states to transfer weapons to war criminals or human rights abusers. Such an Arms Trade Treaty would significantly lower the current international standards on respecting human rights and the laws of war, and it runs contrary to the US position on human rights and international humanitarian law at the United Nations.

International humanitarian law, as established by the Geneva Conventions, requires that all state parties “undertake to respect and to ensure respect for the Convention in all circumstances.” Ensuring respect for the laws of war is a far cry from “considering” or “keeping in mind” the laws of war when providing war criminals with the tools to commit their heinous crimes.

The UN Charter (which is international law) contains an obligation on all members to promote and respect human rights. How would a treaty that gives states the right to transfer weapons to human rights abusers as long as the exporting state “keeps in mind” their obligations under international law be reconciled with the obligation to promote respect for human rights?

One week after being confirmed by the Senate as the US Ambassador to the United Nations, Ambassador Susan Rice went to the UN Security Council to give her first address as Ambassador. In her speech she pledged US support for a “new era in support for international humanitarian law.” She said:

“The United States is steadfast in its commitment to safeguard human rights and end violations of international humanitarian law, both in conjunction with the United Nations, and through our other efforts throughout the world. Beyond this commitment, however, is a pledge by the United States to work together with the United Nations…in a new era in support for international humanitarian law.”

After hearing Assistant Secretary Countryman’s speech, I am left asking how the US position on the ATT can be reconciled with Ambassador Rice’s vision for using the US voice and vote at the United Nations.

I think the answer must be one of the following:

First, I misunderstood the US position. If this is the case, I hope to hear from the negotiators where I am wrong.

Second, maybe Ambassador Rice’s strong call for a new era of support for international humanitarian law was just empty rhetoric. Yet, given Ambassador Rice’s strong efforts in support of civilian protection at the UN since she arrived, I do not think her words were empty rhetoric.

Third, maybe the new era of support for international humanitarian law is over, and we are in the era of “keeping in mind” international humanitarian law.

Or fourth, those leading the development of the US position on the Arms Trade Treaty didn’t receive the memo and are still operating in the old era.

I can understand if Assistant Secretary Countryman and the others designing the US position on the ATT didn’t get the message that the Obama administration is operating under a new era and that the US will work to safeguard human rights and humanitarian law at the United Nations.

Yet, with less than three months until the negotiations of the ATT commence, someone better resend the message…Quick!

How to keep score when donors make promises

April 18th, 2012 | by

Last November, in Busan, Korea, donors reaffirmed their past promises to make their aid more useful to people developing countries. They also agreed to measure themselves so the world could track how well they were implementing these promises. But the debate over *how* they are willing to be measured is still raging—and won’t be decided until June. At the World Bank on Friday, Oxfam will be hosting an event to talk about progress towards implementing the Busan Partnership. New research by Oxfam and others provides new data as to how important keeping score is for driving political change—as well as suggesting how to best measure the promises made at Busan.

Bureaucracies are hard to move; they seldom ever move when bureaucrats feel comfortable. So, one of the key components of forcing political change is being able to make policymakers uncomfortable enough with the status quo that they make hard changes.

One thing that gets policymakers’ attention is being compared to one another. A government that is shown to be falling behind its peers can be shamed into making changes to catch up. But that shaming requires good, comparable data that governments cannot hide from. Naturally, governments are often reluctant to endorse effective scorecards because it shines a light on their behavior.

This new research affirms that keeping score on implementation of the Paris Declaration helped push implementation of Paris principles. Signatories to Paris instituted a global monitoring framework to measure and account for how well governments were living up to their promises. A review of donor peer reviews conducted by the OECD’s Development Assistance Committee indicates that the global monitoring system was a success in incentivizing policy changes in donor capitals.

The Busan Outcome Document emphasizes that the focus of work to make aid more effective should be “global-light, country heavy”; in other words, the emphasis should be on progress made at the country level. And development progress indeed happens at the country level. Nonetheless, accountability for such progress requires comparing the progress of different countries against one another. In fact, the research shows that Global Monitoring is a huge guiding factor in determining the strength of national results frameworks. To quote one partner country respondent, “The Paris framework was crucial to getting donors to agree that they should be monitored.”

Of partner countries who are successfully implementing National Monitoring Frameworks (NMFs):

Paris Framework
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Some research respondents went so far as to argue that the biggest constraint to a national framework was the lack of political commitment on the part of their donor partners. In fact, some respondents said most donors were not willing to increase their national level obligations beyond what Paris called for.


So from this evidence
, what conclusions can we draw about what the Busan monitoring system look like? Here are some thoughts:

You need globally comparable indicators to drive country level change. A key feature of the Paris monitoring framework was the ability to hold stakeholders accountable by comparing them with their peers.

The framework needs to monitor all major Paris, Accra, and Busan commitments, in line with the Busan Partnership Declaration. Rule #1 of development strategy is, “what’s measured is meaningful.” If any particular commitment is left out of the final monitoring framework, it will inevitably be deprioritized by stakeholders.

Civil society stakeholders should be included in the design, implementation and accountability of the global monitoring framework through a transparent and representative process. If civil society isn’t actively engaged and does not have the space to hold their government accountable, the monitoring framework won’t push those changes that poor people most need.

The new monitoring framework must integrate cross-cutting gender equality and women’s empowerment targets in all commitments measured, as stated in the Busan Partnership Declaration. Again, without measuring against these criteria, gender issues could be neglected.

Bless these shrimps and crabs and pass the RESTORE Act

April 17th, 2012 | by

This post was written by Jeffrey Buchanan, senior domestic policy advisor at Oxfam America.

Faith and fishing: two central parts of Louisiana’s vibrant coastal culture. Every April, going back generations, you can see them intersect in a celebration of bayou life at the annual Blessing of the Fleet in Chauvin, LA. Families welcome the opening of the year’s first shrimp season by coming together to pray for family and friends who depend on the seafood industry and for a healthy ecosystem that yields a bountiful catch.

“We pray for the safety and welfare of all fishermen,” said Fr. Frederic Brunet, pastor of St. Joseph Catholic church who has presided over the event for many years. “Bless the shrimp and crabs and help us to catch a lot of them.”

Fr. Frederic Brunet of St. Joseph Catholic Church at the annual Blessing of the Fleet. Photo by Bayou Grace.

Fr. Frederic Brunet of St. Joseph Catholic Church at the annual Blessing of the Fleet. Photo by Bayou Grace.

This year saw the second blessing since the BP Oil Spill shut down the Gulf fishing industry in 2010. Since then, many shrimpers have reported problems: poor catches and startling irregularities (such as shrimp with no eyes). Fishers working in commercial oyster beds say the harvests are down as much as fifty percent. Many people believe these changes are related to the spill. While scientists question what may be causing these issues (research into the impact of the spill on fisheries is still ongoing), the fears, and the difficulties, remain.

For many years, communities of faith have provided a safety net to fisher families impacted by bad seasons or disasters like Hurricane Katrina and the BP spill. They have also seen firsthand the vital connection between the health of natural resources and the life of the community. When Louisiana’s coastal wetlands, the key nursery of seafood across the Gulf, suffer from erosion and pollution, the whole community suffers.

Bayou Grace Community Services in Chauvin (an Oxfam partner) was founded as a disaster relief group, first operating out of a local church, after the 2005 hurricanes. The group later refocused on the biggest issue facing the future of their community: coastal land loss.

“This is an area that has lost 1,900 square miles of coastal land, more man-made land loss than anywhere in the world. How do we change that? It will take national will, the will for a national investment, and a decision that this place is worth saving,” said Rebecca Templeton, director of Bayou Grace, which debuted a photo series highlighting why it is worth saving the coast at this year’s Blessing of the Fleet.

Other Oxfam partners—like Zion Travelers Cooperative Center in Phoenix, LA, led by Rev. Tyronne Edwards, BISCO in Thibodeaux, LA led by Sharon Gauthe and Mary Queen of Vietnam CDC in New Orleans East led by Diem Nguyen—share similar stories of founding within faith institutions and evolving missions to protect communities and livelihoods along the coast in the face of multiple economic and environmental threats.

This week, these community leaders joined together to send a letter to leaders in the U.S. House of Representatives urging support for the RESTORE the Gulf Coast Act. This bill would invest fines from the BP oil spill into restoring natural resources along the Gulf, and helping create local jobs on restoration projects; the goal is to put fishers harmed by poor catches back to work restoring these resources to protect their communities and help ensure future generations can continue fishing and living along the coast. Rebecca, Sharon, Rev. Edwards, and Diem united their voices with over 140 faith leaders, including national figures like Rev. Jim Wallis of Sojourners, Mitch Hescox of Evangelical Environmental Network, and Rabbi David Saperstein, Religious Action Center for Reform Judaism. As we noted earlier, The U.S. Senate passed the RESTORE Act as a part of their long-term transportation bill in March.

“We urge you to do what is best for the Gulf Coast—and for all Americans—by working to guarantee that the RESTORE the Gulf Coast Act is signed into law by the President, ensuring a response to the oil spill which is effective, and just, meets the needs of those suffering today while laying a foundation for long-term restoration and renewal,” the leaders say in the letter.

In a breaking development, the Rules Committee in the US House of Representatives today will consider a US House version of the transportation bill (H.R. 4248), which includes the RESTORE Act. The full House could vote on the bill as early as Wednesday, leading to a conference committee, with both chambers passing transportation bills which include the RESTORE Act.

Passing this legislation in the House will be a critical step towards helping to restore coastal communities and support the livelihoods in the aftermath of our nation’s largest oil spill and the long-term devastation of coastal land loss along the Gulf.

Food games and advocacy tactics

April 12th, 2012 | by

Today, Oxfam America launches a new video. The goal is to draw attention and interest in an important issue that we plan to push hard this year and next: reforming the way the USA does international food aid. See the video here:

The video is a gamble, trying something new. It’s not a typical style for Oxfam. And it’s very atmospheric, rather than explanatory.

We think the waste and corruption in the US international food aid program is an outrage and fundamentally means that desperately poor and vulnerable people do not get the assistance they should. But getting attention to this problem and—even harder—getting policy reform has been a big challenge.

So, we’re trying. What do you think?

To learn a bit more about the issue, see here.

Food aid for 17 million

March 29th, 2012 | by

When it comes to debates over policy, it’s easy to find yourself deep in the weeds. Discussions over how to save lives quickly devolve into symposiums on tendering procedures and assessments of equivalent expenditures. But if you can hack your way through the complex thicket of jargon, sometimes you find yourself with a number that just makes sense.

In our efforts to articulate why food aid reform is worthy of support in the Farm Bill, the number that makes the most sense to me is 17.1 million. That’s the number of additional people the US could reach with life-saving food aid if two basic reforms are pursued by Congress. And all this without costing taxpayers a single extra penny. We make the case for these reforms in a new report with American Jewish World Service.

But sometimes a report isn’t enough to make a number sink-in; even one as a staggering as 17.1 million. That’s why we’ve produced a food aid infographic, in the form of a receipt, which shows Americans what they’re getting for their food aid dollars. Like most receipts, ours comes with an easy cost-saving opportunity to help drive home the very simple point: reforming food aid saves money and lives. Check it out and let us know what you think.

No more Etch-a-Sketch on climate: Let’s rebuild, not rebrand

March 29th, 2012 | by

Politico ran a story last week highlighting what they called the “rebranding” of global warming. Organizers and pollsters from across the country have concluded that the terms “global warming” and “climate change” have been politicized. The case pollsters and communicators make is that campaigners working on these issues need to know their audience – they need to get savvy and avoid the polarizing politics of climate change.

But the key question needs to be: what are the implications of this approach? Are organizations working on issues related to climate change sacrificing the long-term fight for short-term wins? (By the way, the group of organizations in the climate community continues to expand despite the political setbacks of recent years. The most recent members of the US Climate Action Network are the NAACP, Population Action International, and the Humane Society.) Are we perpetuating the myth that there is a debate out there about the science?

The pollsters and communicators are only getting half the story right. Yes, we need to know our audience, but we also need to know and cultivate our messengers and I don’t see that happening at levels necessary to combat catastrophic climate change. A clean air campaign focused on healthy air makes sense to defend and promote EPA carbon pollution standards—it will deliver near-term wins that are critical for the US to meet our international climate commitments— but it will not set the stage for transformational change and that is what is needed to address this issue head on.

Sustained and adequate investments need to be made in movement building organizations (e.g., 350.org) that are unafraid to talk climate change and that are unequivocally talking about the implications of climate change on communities, especially those most vulnerable who lack the resources to prepare for and respond to climate shocks. New leaders need to be cultivated (see Climate Reality Project) who are willing to get real with the American public (and those people are most likely not scientists).

We need to spend more time, energy, and money rebuilding this movement and speaking the truth to those who will listen. In the words of KC Golden, a leader in the national climate movement at Climate Solutions: “If we won’t tell more than a small fraction of the truth, how can we expect our leaders to have the political space to act on the truth? How can we even believe in ourselves enough to have any power? We can’t just be an Etch a Sketch, running from jobs to health to whatever we think will get us a little bump in the polls.” Amen to that.

Really, THIS is your plan to balance the budget?

March 27th, 2012 | by

Everybody loves to pick on foreign aid. After all, unlike oil companies or defense contractors, poor people in developing countries don’t have high powered lobbyists making their case. But for that very reason, foreign aid offers some pretty slim pickings for budget cutters.

Last week, the Chair of the House Budget Committee, Paul Ryan, unveiled his budget for Fiscal Year 2013. Ryan’s budget cuts less from foreign aid than last years’ budget; in fact, the Ryan budget plan wouldn’t even balance the budget until after 2040. Yet it would still cut 15% from what the Obama administration said is needed to meet foreign affairs needs.

Many of these cuts would come from long-term investments in fighting poverty—the kinds of investments America needs to make now if we want to help countries solve their own problems and save us money down the road. Not only that, but these sorts of cuts pull the rug out from under people who want to work with the United States as partners to solve problems we care about, like poverty, violence, hunger, disease, and corruption.

April fool

But even more damning than the penny-wise and pound-foolish nature of the cuts is the fact that they barely put a ding in the budget deficit. Check out the chart below: it shows that Ryan’s foreign affairs cuts would reduce the budget deficit by exactly 0.2%. In fact, if Congress eliminated the entire foreign affairs budget, they would have to do it more than thirty-two times in order to get anywhere near tacking the deficit. As Dr. Mike Tierney of The College of William & Mary says, “Cutting foreign aid to address the budget crisis is like getting your hair cut in an effort to lose weight.”

Small potatoes for Washington deficit math—yet devastating for poor people in the field who are grappling with poverty and injustice. Oxfam doesn’t take US government money, but we want the money US government invest in fighting poverty to do the most good. But the cuts Ryan proposes undermine those very programs designed to help poor people help themselves. How ironic that the advocate of the “opportunity society” has written a budget that focuses our small investments on feeding programs rather than investments to fight poverty.

But Ryan has already had trouble getting this budget even out of his committee; chances are, it’s going to be hard to get Members of Congress to endorse a budget blueprint that hurts poor people, hurts American interests, and doesn’t balance the budget until 2040. Ask your Representative to oppose these cuts and ensure that we balance our budget, our values, and our interest in helping make the world safer, fairer and less poor.

Chart

Businesses speak out about extreme weather and climate resilience on Capitol Hill

March 27th, 2012 | by

At the tail end of one of the most dramatic spring heat waves in US history, businesses from across sectors addressed a bipartisan audience on Capitol Hill to discuss escalating risks to their global supply chain resulting from shifting climate patterns and severe weather events. The forum comes at a time when more companies are identifying climate change as a risk that needs to be managed and an opportunity for new market investment.

Greg Douglas, Director of Business Development for Earth Networks, a company specializing in weather and environmental observation (they’re best known for their “WeatherBug” app), highlighted the need for data and information to help local industries around the world anticipate and respond to changing weather patterns. Governments are turning to companies like Earth Networks to provide the systems necessary to collect and disseminate new weather and climate observation information and to help support disaster risk management in communities.

PREP

Earth Networks recently joined the Partnership for Resilience and Environmental Preparedness (PREP) a group of companies that have joined together to promote practices and economic growth that help both vulnerable communities and business adapt to the impacts of climate change, and to promote public policies that facilitate efforts to prepare for and respond to the consequences of a changing climate. The companies currently engaged in PREP include: Calvert Investments, Earth Networks, Entergy, Green Mountain Coffee Roasters, Levi Strauss & Co, Starbucks, and Swiss Re.

The forum was cosponsored by BICEP—Business for Innovative Climate and Energy Policy. BICEP is an advocacy coalition of businesses committed to working with policy makers to pass meaningful energy and climate legislation.

Anna Walker, Senior Manager of Worldwide Government Affairs at Levi Strauss & Co. and Claude Fontheim, CEO of Fontheim International LLC, representing Limited Brands, highlighted the impacts of extreme weather events and climate change on cotton supply chains. Both retailers rely heavily on cotton to produce clothing like blue jeans and lingerie and are concerned about price volatility in the global cotton market, volatility which is at least partially driven by extreme weather events in vulnerable cotton producing regions. Some of the countries, such as Vietnam and Cambodia, where companies like Levi Strauss and Limited Brands manufacture their products, are also “hotspots for climate migration” and other climate-related impacts such as flooding and disease.

These companies are not just waiting around for government support to take action, although they are calling for strengthened public investment in climate resilience. Levi Strauss, for example, has launched the new Water< Less collection in 2011, which reduces the water used in the product finishing process for jeans from an average of 42 liters per pair to as little as 1.5 liters for some products. PREP is also developing guidance for companies on risk management throughout the corporate value chain. This guidance will be the first of its kind to advise companies from multiple industries on how to manage climate risks in a way that simultaneously builds community preparedness.

Bennett Freeman, Senior vice President of Sustainability and Research Policy at Calvert Investments, concluded the event by noting the risk to investors regarding the costs of physical damage associated with climate change, estimates at around $4 trillion by 2030 according to a recent Mercer analysis, and the potential benefit to investments in technologies and services that improve climate resilience.

One important step forward for access to medicines in India, but are two giant steps backwards just around the corner?

March 23rd, 2012 | by

Cross posted from Global Health Check and written by Rohit Malpani and Mohga M Kamal-Yanni. Rohit Malpani is a campaigns advisor at Oxfam and leads the organization’s access to medicines campaign. Mohga M Kamal-Yanni works for Oxfam as a Senior Health & HIV Policy Advisor.

Last week, the Indian Patent Office took a major step to decrease the price of a previously unaffordable life-saving medicine by issuing a ‘compulsory license’ on Sorafenib, a medicine used for the treatment of kidney and liver cancers. But such welcome action is unlikely to be repeated if the EU and Novartis have their way.

Up until now Sorafenib has been sold exclusively by Bayer, the German drug firm, at a very high price that nearly no one in India could afford. The new compulsory license permits Indian pharmaceutical manufacturers to make and sell low-cost copies of the medicine while paying royalties to Bayer, the patent owner.

The Indian Patent Office stated that Bayer had failed to make the medicine “available to the public at a reasonable price”. Through the manufacture of generic versions, the price of the medicine will fall drastically and ensure it is more affordable. News reports suggest that only about 49 patients were placed on treatment last year. So the impact will be significant.

A compulsory license is a basic safeguard, enshrined in global trade rules, whereby a country can override a drug patent to enable production or importation of a generic medicine needed for public health purposes in the country (and to a limited extent, for export). Although drug prices have been shown to be consistently too high in developing countries, and in spite of the increased public health demand for new medicines to address diseases, very few countries have issued compulsory licenses to date. This is due mostly to political and corporate pressure placed on developing country governments.

For example, Thailand issued a number of compulsory licenses for medicines to treat HIV, cancer and heart disease in 2006 and 2007. In response, both the EU and the US sent strong messages to the Thai government requesting they cancel its compulsory licenses. At the same time, Abbott, a drug company, withdrew registration of seven medicines, including a critical, heat-stable version of an HIV and AIDS medicine, to retaliate against the Thai Government. It was an unprecedented action.

Pharmaceutical companies, supported by rich nations, have tried to also stem (or even abolish!), the use of compulsory licensing to very limited circumstances (e.g. only to address an epidemic or emergency or to only treat HIV and AIDS). Yet WTO rules make clear that compulsory licensing should be a tool available for all medicines needed for the benefit of public health. With an ever growing burden of cancer and other non communicable diseases (NCDs) in developing countries [about 70% of all cancer deaths in 2008 occurred in low- and middle-income countries and NCDs are responsible for 53% of all deaths in India] it is crucial to ensure that effective new treatment is available and affordable to patients in these countries.

Given the disappointing number of compulsory licenses issued to date, India has clearly made an important step in the right direction. Yet the good fortune for India’s people may be short-lived. Through the rest of 2012, the Indian government will face at least two serious challenges from rich countries and drug companies that could threaten the country’s ability to manufacture affordable generic medicines. Firstly, the EU is putting enormous pressure on India to introduce new IP rules through a free trade agreement whose negotiations should be completed this year.

At the same time, and for the second time since 2005, the drug company Novartis has hauled the Indian Government through its own court system to force changes to the country’s intellectual property law – alleging that in its current form it is not compliant with global trade rules. The Indian law being challenged was introduced in 2005 and plays a critical role in keeping down the price of medicines by discouraging the practice of ever-greening. To take action on the Novartis case visit: http://sumofus.org/campaigns/novartis-lawsuit/

Despite meeting all its obligations under global trade rules, India faces tremendous pressure to tighten its intellectual property rules. If either the EU or Novartis gets its way the impact will be catastrophic, blocking access to affordable medicines for millions of people in India and across other developing countries.

India’s actions, whether it be issuing a compulsory license, or pushing back against the aggressive pressure of the EU and Novartis, are especially important because India is considered the ‘pharmacy of the developing world’. Since India has stuck out its neck to issue a compulsory license, hopefully others will follow suit. Conversely, if the Indian government cedes to the pressure of the EU and Novartis it will be a huge set back to other countries fighting for affordable medicines.

Let’s hope India keeps taking steps in the right direction.

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