The real McCoy

 Lately customs in some European countries, such as France and the Netherlands, have stopped import of generic drugs manufactured in India. This has been done after complaints about counterfeiting from large pharmaceutical companies, with competing drugs. Generic drugs are "copies" of drugs that can be manufactured legally after the patent has run out. Thus these drugs are not illegal and stopping them should be in violation with World Trade Organization policies. What makes the holders of the expired patents worried, is that the generic manufacturer can provide the drugs without the very expensive drug development process, thus selling the same drug at a lower price. A typical drug development process is often estimated to cost around $2 billion and take around 10 years.

Now this problem has been resolved, at least for now, and Indian generic drugs can be imported again. However, Indian officials are still worried about coming developments in this matter. India is currently a leading location for manufacturing of generic drugs, much due to relatively low wages and high competence.

[Pharmaceutical] [Generics] [Free Trade] Share on Facebook

Strike!

What is with the french and their willingness to go on strike?

News reports about french workers on strike are quite frequently heard, often for reasons that may seem rather small to foreigners. This time the strikes are against a new pension reform, which most controversial part is an increase of the retirement age from 60 to 62 years old. To many outside french retirement at 60 seems to be a luxury, and at this time something they cannot afford. An aging population need a larger working force for support, obviously reform is needed. 

The usual example of french strikes are french farmers dumping various farming products on the street and blocking streets with farm machines. This tend to center around insufficient government support or against European Union ideas about decreasing import tariffs on agricultural products. These protectionistic policies are often criticised and would need reform to create a better market.For some reason these french farmers are allowed to have a too large influence on the European community; the french government bows and their large influence in the European Union often enough to block suggestions "threatening" the french farmers.

This strike is however spread to more sectors and seem to be more widespread. The current strike has been estimated to cost, the already strained french economy, 200 to 400 million euros ($280 to $560 million) every day. The costs include fuel shortages, lost foreign investment, and damage to the country's reputation.

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CSR and the Global Market

The market has become increasingly globalised, in the sense that product and services are bought and sold in a global context. As value chains span over border, often several borders, regulating it becomes more difficult and a single state is not enough to ensure responsible business practise. This shows a need for other actors to help promote CSR, in the form of companies or international organisations,. Thus CSR work is perhaps even more important in the globalised world of today.

However, some countries with developing economies are critical to international CSR standards, for example India. In this case CSR is considered a concept developed and defined by developed countries and not fit for developing countries. In the global market place developing countries generally have their main advantage based on the low costs of labour, and by implementing a CSR standard this advantage is believed to diminish due to the cost of CSR. Therefore a standard giving companies importing from developing countries incentives to choose suppliers that are compliant with the standard, could give developing countries a disadvantage, at least at first. If this would force business out of the developing countries, investments would decrease and the standard of life would likely decrease; what would be beneficial for workers on the surface, could lead to adverse effects.


The (economic) reasons for CSR work are often stated by a few assumptions:
• Customers favour product and services by responsible companies
• Investors favour investments in responsible companies
• Potential employees would rather work in a responsible company
• Engaging the stakeholders of the business leads to larger opportunities for innovation
• Reduction of risks in regard to environment, labour and society

However, according to Knox and Maklan these assumptions seem to be hard to measure and the results so far seem to be ambiguous at best. To get a clear idea on the relationship between CSR and beneficial results further research is needed, in doing so new ways to measure and explore this issues need to be developed.

[The Firm] [CSR] [Corporate Social Responsibility] Share on Facebook

Protectionism

Protectionistic policies from the US is nothing new, there has long been a conflict with the European Union regarding tariffs for imported goods. In a similar way the US tariffs has resulted in similar tariffs in the EU. The chinese government has long been criticised for keep the exchange rates for the yuan artificially low. The reason for this policies is obviously to protect the domestic industry. The problem with this is that it helps industries that otherwise have lost their competitive advantage, and would need to develop. Protectionism may help in the short term, but for long term gains free trade would is preferable.

Isn't it ironic?

The US house of representatives is criticising the chinese protectionistic policies regarding the yuan by adopting extra fees for chinese products.

[Free Trade] [Protectionism] [USA] [China] Share on Facebook

Free Trade & Market economy

Basically there are many problems with giving foreign aid. The foreign aid is often short-sighted and not creating sustainable improvements. There need to be a shift from shipping food to developing countries to a foreign aid for a long term improvement. I am not saying catastrophy aid is not needed; it is very much needed. But an economy cannot be built around foreign aid.

The first mission should be free trade. The most efficient way for developing countries to develop is by letting them trade their goods with the rest of the world, without traid barriers. This will create an increased prosperity and incentives for technological development. Furthermore, the industrialized world needs to stop dumping goods in developing countries, destroying the domestic market and companies.

When this is done, important steps towards market economy have been taken. But this need to be followed up by creating a transparent and reliable market. This is the responsibility of the local government, creating the prerequisites for this development. The market economy will drive economical and technological development, thus reinforcing itself.

With the increased prosperity brought by the market economy, an efficient educational system need to be created. This is creating a workforce suited for jobs in a knowledge intensive industry and incentives for multinational companies to establish operations here.

This will create a growing educated middle class, which most probably will create a demand for democracy and decreased corruption. These systems, market economy and democracy, are reinforcing themselves and each other by their existence and interaction.

[Free Trade] [Market Economy] [Democracy] [Development]

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