WORLD ECONOMY: No technofix for Third World poor

August 15, 2001
Issue 

BY SEAN HEALY

Humans have made all kinds of nifty things — the axe, the wheel, the spinning jenny, the aeroplane, the pill, the Pentium III computer chip — and achieved all sorts of things with them. But these inventions have not freed society. There is no technofix to end poverty, inequality or subjugation.

Instead, worldwide divisions in power and wealth have consolidated into a growing technology gap, which in turn ensures that the poor and powerless can never catch up.

However, the official orthodoxy we hear from politicians, economists and technocrats is that, given enough time and the right policies, these gadgets will bring prosperity and happiness.

This is the view of the authors of the United Nations Development Program's latest Human Development Report, Making New Technologies Work for Human Development.

The internet, the icon of the information and communication technology revolution, is the ultimate symbol for those who believe in the technological potential of the late monopoly capitalism.

Of course, for many people the internet has brought enormous changes. It has democratised access to information and opened up vistas of communication otherwise difficult or impossible. In 1930, a three-minute phone call from New York to London cost more than US$300 (in today's prices); now its costs 20 US cents.

The changes continue to roll on: in 2001 more information can be sent over a single cable in a second than was sent over the entire internet in a month in 1997.

Yet this technology is a private preserve. Access to it is limited to the First World and the privileged classes of the Third World. In the high-income countries of the Organisation for Economic Cooperation and Development, 28.2% of people are internet users; in the US, it's 54.3%. However, in east Asia and the Pacific, just 2.3% of the population uses the internet, while in the Arab states it is 0.6%, and in sub-Saharan Africa, it's a tiny 0.4%.

The OECD countries, which account for 19% of the world's population, are home to 79% of the world's internet users.

Diffusion

This is not just a problem of not enough time for technology to diffuse, to simply spread of its own accord. In a world dominated by capitalism, technology does not simply flow to those who need it most.

Oral rehydration therapy, a simple and cheap salt-and-sugar solution, has been mass distributed since the 1980s and has greatly reduced child deaths from diarrhoea — but even though it only costs 10 cents a sachet, it is still unavailable for 38% of diarrhoea cases in Third World countries.

Penicillin was discovered in 1928 and first marketed in 1943, but there are still 2 billion people who do not have access to it.

The telephone was invented a century ago. But today, while there is one mainline connection for every two people in the OECD, in the Third World, there's only one mainline connection for every 15 people. In the least developed countries, there is only one for every 200 people. Most people on the planet have never made or received a phone call.

Electric power generation and grid delivery were first available in 1831. In the First World, electricity is now so universal that no-one even thinks about where it comes from. Yet, electricity has not reached some 2 billion people, a third of the world's population. In 1998, per capita electricity consumption in South Asia and sub-Saharan Africa was less than 10% what it was in OECD countries.

'Techno-imperialism'

So why is this? Call it "techno-imperialism".

The control of the world's technology is in the hands of a small number of giant multinational corporations. In it only for the bucks, these corporations see little point in directing resources and products towards poor people. They see only mortal danger in providing the techniques and the capital that allow poor people to create and control technology themselves.

New inventions are a monopoly venture. In 1998, the OECD countries spent US$520 billion on research and development, more than the total economic output of the world's poorest 30 countries.

The OECD countries accounted for 86% of the 836,000 new patent applications on technology filed in 1998 and 85% of the 437,000 scientific and technical journal articles printed worldwide. Of worldwide royalty and license fees paid in 1999, 54% went to the US and 12% to Japan.

Between 60-70% of all new research and development is carried out by corporations or other private institutions, only 15-20% by public universities (and even that is increasingly for private sector advantage). Corporations are even more dominant in the most cutting-edge areas of research, such as information and communications technology and biotechnology.

Giant companies direct research at products for which they can find easy markets — and those are not found in poor countries.

In 1998, global spending on health research was US$70 billion — but 90% of it addressed 10% of the disease burden, namely those diseases most prevalent in the First World.

Only US$300 million was dedicated to research for vaccines for HIV/AIDS and only US$100 million to malaria research, both diseases which ravage the Third World. Of the 1223 new drugs marketed between 1975 and 1996, only 13 were developed to treat tropical diseases — and only four were directly the product of pharmaceutical industry research.

Even when big corporations produce goods of direct use in the Third World, they often deliberately price poor people out of the market.

The giant pharmaceutical companies have long resisted "differential pricing" on their US$12,000-a-year courses of anti-AIDS drugs, which would allow a course to cost less in Cameroon than in Canada (let alone allowing countries to produce cheap, generic versions of brand-name drugs).

While they claim that differential pricing would allow re-importing, pharmaceutical corporations' real fear is that cut-price drugs in one part of the world would make it obvious where they get their abnormally high (around 19%) returns: they have a patent-protected monopoly and can charge outrageous mark-ups.

Monopoly over invention

Corporations and rich-country governments conspire to ensure that, even while the world economy becomes more interconnected, technology transfer is kept to an absolute minimum.

When they were industrialising, France, Germany, the US and others felt free to take others' (mainly Britain's) technology and adapt it. The US didn't recognise copyrights held by foreigners until 1891.

Such a path is no longer open to the Third World today. The strict enforcement of "intellectual property rights" have become the main way that corporations maintain a monopoly over invention and high technology.

The number of patents claimed has risen dramatically over the past 15 years — in the US from 77,000 in 1985 to 169,000 in 1999. The promulgation of the World Intellectual Property Organisation's Patent Cooperation Treaty means that a patent accepted in one country is automatically valid in most others. The advent of the World Trade Organisation's Trade-Related Aspects of Intellectual Property Rights (TRIPs) agreement has made enforcement of patents near universal.

Under TRIPs, the validity of a patent has been extended to 20 years, from 10 or 15 years. This has handed corporations an enormous weapon to ensure their monopoly. US chemical giant DuPont, secure behind its "intellectual property rights" fortress, has refused manufacturers in countries like India and South Korea the right to produce substitutes for ozone-destroying chlorofluorocarbons — it holds the patents on substitutes and doesn't want competitors.

The threat of fines or trade sanctions has been enough to deter poor countries from using mechanisms of technology transfer which are legal under TRIPs, such as "compulsory licensing", through which governments can declare exceptions to intellectual property rights for particular reasons. Not a single compulsory license has been issued south of the equator, for instance, not even to combat the AIDS pandemic.

TRIMs

Patents are not the only measures in force to clamp down on technology transfer.

The newly industrialising countries of East Asia used all kinds of mechanisms to ensure that foreign direct investment would lead to some technology transfer, such as regulations that required local content or the involvement of local partners in manufacturing. Many of these are now restricted by another WTO agreement, the Trade-Related Investment Measures (TRIMs) agreement, and will be outlawed altogether if the rich countries get their way in a new WTO agreement on investment.

In the "export-processing zones" sprouting around the Third World, the lack of such technology transfer measures is one of the big attractions for Western capital.

With such firm control over technology, even when high-tech methods of production are used in the Third World they can be enclaved and kept away from the rest of the domestic economy.

The southern Indian city of Bangalore, for example, has, thanks to Western companies' passion for outsourcing, grown into one of the world's premier technology hubs and is the centre of the India's growing IT industry (its export revenues rose from US$150 million in 1990 to $4 billion in 1999).

While Bangalore's IT industry might be high-tech, the areas surrounding it is anything but. In Karnataka, the state it is the capital of, by 1999 there were still only 2.73 internet connections per 1000 people; in even poorer states (like Orissa), that rate dropped to 0.12 connections per 1000 people.

Much the same applies for other Third World countries, like Malaysia and Mexico, which have built "high-tech export sectors". Western companies import pre-manufactured inputs, cheap domestic labour assembles them, then the products (and the techniques and profits) are sent back to the West.

What counts is not the "gee-whizness" of the gadgets, but who controls them. If private corporations control technology, these gadgets are but chains. Break apart "techno-imperialism", however, and whole new horizons open up.

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