Jay Dubashi
(Contd. from last issue)
National interest
What do we do then? There are people in this country who argue that it does not matter who owns and runs industries, as long as consumers have a choice and stand to benefit. This is, of course, the free-market school, which has been brain-washed into thinking that it is not nations who have or should have economic rights but consumers, as if consumers have no nationality and their rights and interests take precedence over national rights and interests.

Nations and national Governments matter because there is such a thing as accountability and only Governments can be held accountable for what happens in a country. This does not mean that everything should be owned and run by Governments or its various agencies. But there are certain things which the people expect their Government to manage and control, and rightly so, especially basic needs like food, energy and medicines. Even in the United States, these are tightly controlled sectors, and its Government does anything, even going to war, in order to safeguard national interests, as it did in Kuwait eight years ago. Globalization is all very well, but where is the guarantee that it will bring the benefits its authors say it will? Not all economic ideas turn out to be successful. The Soviet system did not last and collapsed all of a sudden. The Chinese gave up their Mao-type communism and have taken to what they call social capitalism. Globalization too may fall by the wayside after a few years, bringing misery to millions of people who have been forced to adopt it under compulsion from wealthy nations.

It is now almost certain that drug prices will shoot up once the Patent Law is revised to replace process patents by product patents, as required under the WHO agreement. There is not much we can do since the government is legally bound to bring a new Patents Act. Whereas Indian critics have no objection to process patents (for which fee may be paid to foreign drug companies) they strongly object to product patents which would enable foreign drug companies to charge exorbitant prices for medicines patented by them. The critics also argue that patenting products will unreasonably restrict trade and affect international transfer of technology. The fear is legitimate, but, at the same time, since there is not much we can do about it at this late stage we must ready ourselves to fight western abuse of TRIPS, whether on price front or technology transfer front. We must make use of every provision in the TRIPS agreement itself for safeguards against the abuse of patents regime by the rich countries.

One such provision is in Article 7 which says that intellectual property rights should "promote technological innovation and the transfer of technology in a manner conducive to social and economic welfare." There is also the Article 8 which allows measures to "protect public health and nutrition and to promote public interest in sectors of vital interest and importance." India can therefore insist that the Exclusive Marketing Rights (EMRs) will not be absolute but conditional upon commitments to technology transfer. Such commitments should be written into the new Patents Bill, and in fact, the IDMA should ask the Government to do so. This is something the IDMA and other organisations can take up, if they have not already done so.

A swadeshi model
India must go beyond TRIPS and Patent Laws to the much bigger issue of safeguarding its national interests through self-reliance. This is what I call the swadeshi model. Earlier models have failed, first the Nehru model and now the Manmohan model, which is just an offshoot of the global model. What we now need is a swadeshi model, for greater the pressures on the economy, more vigorously should we assert ourselves and refuse to be gobbled up by multinationals.

There are three special areas in which self-reliance or swadeshi is called for, if only because these are the areas for which the government is held or must be held ultimately accountable. Large countries like India—and China and Russia—cannot afford to depend on foreign countries for, say something as basic as food. The world simply cannot produce surpluses to take care of the food needs of such vast countries. I would add medicines and energy to food, as three basic sectors in which swadeshi is a must. As far as food is concerned, there are already danger signals galore. What happened to onions and potatoes, can happen to wheat and rice if we are not careful. We are not investing enough in agriculture—in fact, real investment in agriculture has been going down for the last several years—as a result of which foodgrain output is unable to keep pace with demand. At this rate, we are almost certain to run into a famine ten years from now, if not earlier. And when we do so, we shall find that there is simply not enough food in the world, and if there is, we cannot afford to buy it.

This is what happened in Indonesia last year when, at the height of its economic crisis, following the flight of foreign investors, the country simply ran out of rice, its staple food, and cooking oils, both of which had to be imported at heavy cost, at a time when foreign exchange reserves were going dry. There were large-scale riots and disturbances which ultimately brought down the Suharto Government, the same Government, which used to be held up as a model for the entire Third World by agencies like the World Bank and the IMF. Suharto has gone, but the World Bank and the IMF are still there.

The ultimate responsibility for providing basic necessities, including medicines, lie with the Government, not international organisations like the WTO. If prices of foodgrains or drugs leap beyond the reach of people, the Government will not be able to evade responsibility by pointing fingers at the WTO or similar organisations who are not answerable to India or any country. It is therefore the Government's duty to draw up plans for self-reliance in healthcare (along with food and energy) in conjunction with organisation like the IDMA.

Unless there is a long-term plan for the development of the drug industry on the basis of self-reliance, that is, a swadeshi plan for the drug industry, we shall have nothing to fall back upon in times of crisis, when pressures from multinationals will mount and cheap medicines will disappear from the shelves.

Facing global challenge
The drug industry must take steps to face challenges from multinationals in the new highly cut-throat world of competition in which they will have to function-or perish. They must spend more on R&D and also be more aggressive in dealing with the new Patents regime, which will not favour them. They must also exert pressure on the Government not to yield to WTO and foreign companies at every step. At the same time, they must try and develop an international outlook and be ready to exploit opportunities wherever they arise.

As far as globalization is concerned, we need to keep a wary eye on the system and not go by the sweet assurances of free market experts, who tend to be generous with advice on such matters.

We have to do three things:
1. We must slow down the rate at which we are ceding sovereignty to global markets, at least in important sectors like healthcare and food.

2. We must keep a close check on international agencies like the WTO and others, and demand greater public, as opposed to just governmental, participation. As we have seen in the case of insurance, the political class in India and the bureaucracy on which it relies, are sold completely on the global system and cannot always be relied upon to safeguard national interests. There is, therefore, a need for greater and more continuous participation of non-government agencies like the IDMA in the working of international bodies, especially during negotiations.

3. We must have a truly international system of checks and balances under the control of United Nations, not just a western system like the WTO, which is under the control of multinationals. In short, we must have faith in swadeshi, instead of grand-sounding global solutions and systems that are accountable to none. While we cannot ignore the fact that the world is getting smaller and smaller and globalization is a fact of life, we must also realise that nobody can solve our problems for us, and only we can deal with them. In matters of life and death, which is what drugs and medicines are, we must be our own masters. (Concluded)