 Mr. Francis Garry, Director-General of the World Intellectual Property Organization, Ambassador Alberto Pedro Dalotto, Ambassador of the Republic of Argentina and Chair of the Committee on Development and Intellectual Property. Excellencies, distinguished delegates, ladies and gentlemen, good morning. It's a great honour to be invited to address this WIPO International Conference on the important and timely theme of intellectual property and development. This gathering is taking place at a time when many developing countries are either formulating or reviewing their intellectual property policies and it therefore offers a timely and important opportunity to reflect on how the intellectual property system can best assist developing countries, including least-developed countries, to achieve their wider development objectives. We applaud WIPO for taking this step in its continued efforts to implement the 45 recommendations of its development agenda. I want to start by situating my remarks on IP protection in a wider historical view, and that is that all countries that have succeeded in breaking out of poverty and underdevelopment, starting with the Principality of Venice in the Middle Ages, through to Britain during its Industrial Revolution in the 18th and 19th century, to the Asia-Newly Industrialising economies in the 1970s and to China and India today, all of them without exception, have done so by nurturing a cluster of industrial activities characterised by increasing rather than diminishing returns. Nurturing these activities has involved the identification and targeting of appropriate value-added activities, the deployment of public and private resources to support innovation, entrepreneurship and infrastructure development, as well as the judicious use of tariffs and other forms of protection to emerging infant industries. This understanding has informed South Africa and indeed the African continent's recognition that its sustainable development will in great measure be dependent on pursuing structural transformation of our economies through industrialisation and moving up the value chain. Let's step back a moment. Over the last decade or so, Sub-Saharan African countries have shown impressive rates of economic growth, in particular GDP growth, outpacing in many cases the growth rates recorded in advanced economies. This growth rate has also been above the average for emerging and developing economies, with only Asia having recorded higher growth rates and the differential between Africa and Asia has been narrowing. Seven of the world's top 10 fastest growing economies are in Africa and Africa now offers among the highest returns on investment of any region in the world economy. Africa's abundant natural resources, the growing consumer power of its middle class and the favourable demographics offer enormous potential for sustainable economic growth and development across our continent. While all of this has been possible and suggests prospects for future growth and development are much improved, Africa's growth path has in fact been primarily based on the production and export of primary commodities, mineral and agricultural commodities, the sale of these and export of these to countries around the world and strong consumption based on the rise of middle class consumers which is to a very large extent being driven by the import of finished process products. There is now a widening consensus among African government and business leaders that this growth path is not any longer sustainable, will not be sustainable in the longer term and that if we are going to place our continent on a firmer footing towards sustainable development Africa will need to pursue structural transformation of its economic base and build a more diversified productive capacity through industrialising. The recent dramatic decline in the range of commodity prices, many of which have been the mainstay of Africa's productive economies for exports should be a signal that we need to redouble our efforts at industrialisation and economic diversification. In South Africa our government has chosen a growth and development path that prioritises industrial upgrading in more labour intensive sectors with the aim of generating sustainable decent employment. Upgrading South Africa's industrial base in this way and encouraging the production and export of more sophisticated, higher value added products requires purposeful intervention in the industrial economy aimed at achieving dynamic competitive advantage. Our national industrial policy framework, our trade policy and strategic framework depart from the view that deliberate policy interventions are necessary to address impediments to economic diversification and that specific measures are considered on a sector by sector basis dictated by the needs and objectives of sectoral strategies. Two dimensions of this process may be instructive for the remarks I want to make later directed more specifically on IPR and economic development. First our sectoral work is grounded in self-discovery, a process of engagement between government, business and labour through which we collectively identify the specific measures and programmes needed to advance industrial development. Second our approach to tariff policies, one in which we make no a priori assumption of the benefits or costs of maintaining either high or low tariffs. Instead tariff setting is assessed on the basis of evidence obtained at firm and sector level through detailed investigations to consider the impact of proposed tariff changes on among other things economic output and employment across a value chain. In short, tariff setting is evidence based and the product of intensive consultations between affected stakeholders. Of course the upper limits for tariffs are set by the binding obligations that we've undertaken in the WTO as well as in bilateral trade agreements. If the proposition that industrial development and structural transformation are necessary for sustainable development in many developing countries if this is correct a relevant question is whether and how IP protection can be designed to support these objectives. Considerable work has been undertaken on the relationship between intellectual property regimes and economic development including excellent work under the aegis of WIPO. In our reading this literature it seems clear that the international community is far from reaching a convergence let alone a consensus on the question. Indeed this field of work remains a site of considerable contestation. While few policy makers commentators or academics deny the importance of intellectual property protection and enforcement the questions revolve around the nature of the standards that should be implemented and enforced and whether this changes over time as countries industrialize and develop. That's the issue as we see it. Strengthening and extending IPR regimes and enforcement are strongly advanced by countries at the cutting edge of innovation globally. One may recognize that for those countries it is of strategic value to use IP protection as a mechanism to preserve the rent generating and other advantages that arise from the technological capabilities built up by their firms. In this sense such an approach could well be understood as a de facto industrial policy and there is a compelling argument to be made that this should be balanced by appropriate diffusion policies in catching up countries. In any case in the history of development and catching up successful strategies always appear to have involved emulation that requires measures that are targeted at acquiring knowledge and increasing return activities. Furthermore all successful catching up episodes have occurred under conditions of weak IPR regimes that permitted easier knowledge acquisition and imitation. During the 19th century today's advanced economy has used an IP system and a flexibility accorded in a judicious manner as they pursued the industrialization. This allowed those countries to strengthen their IP regimes at their own pace and in support of the overall progress of their economic development. We may recall in this context that Switzerland did not institute a national patent law until 1888. When that law was introduced it was narrowing scope and did not provide protection to chemical inventions. It is argued that this allowed domestic chemical industries to develop imitative capacity. Today of course Switzerland boasts some of the most innovative and accomplished chemical and pharmaceutical companies in the world. Similarly countries like Germany, France and Japan as well as Switzerland only introduced pharmaceutical product patent protection in the 1960s. Only a handful of countries have in fact made the transition from developing to developed. If one looks at the performance of the Asian Tigers it's clear that they relied on a heterodox mix of policy measures to achieve their industrialization. For example Korea relied less on foreign direct investment and initially acquired most of its technology through trade, reverse engineering and technology licensing. When it became competitive its own companies began to invest heavily in R&D to develop their own innovative technology. Singapore followed a different model. Singapore's long had an open trade regime and depended very much on FDI for its technology. While generally working with market principles the government was heavily involved in attracting the kind of foreign investment that it believed would bring cutting edge technology that would underpin wider economic development. The development story of Singapore may be characterized as one of moving quickly from cheap unskilled labor to a knowledge based economy. The government continued to invest heavily in education and skills in time, research and development. It has now become an important regional hub for many knowledge based in service industries. More recently we see that India has pursued an alternate path in so far as it has taken advantage of the transitional provisions in the trade related intellectual property regime of the WTO to develop a globally competitive pharmaceutical industry. By doing so India has been able to increase global output and competition thereby enhancing economic welfare in the process. The industry in that country has become increasingly innovative and then has begun to seek to make greater use of the patent system. The essential point of drawing on these examples is simply to reiterate that countries have taken different paths in pursuing economic development and they have used IP protection in different ways at different times to support their developmental efforts. Opponents of strong IPR typically raise concerns that stronger IPR raises the costs of protected goods and reduces the accessibility of innovations. They often argue that a stronger IPR regime is costly including with respect to the fact that stronger patents confer greater degree of monopoly power on patent holders that are often foreign based multinationals. Opponents also contend that stronger IPR regimes can retard industrial development as weak IPR and function as a kind of infant industry policy allowing indigenous firms to learn from, absorb and experiment with foreign technology at low cost. Said differently establishing a strong IPR regime prematurely limits the diffusion of innovative technology more widely by imposing high prices for patent protected goods and lowering consumer welfare. The role of patent protection in promoting innovation has also been controversial. There are arguments that patents are unlikely to foster innovation in developing countries at early stages of industrialisation. The evidence on the extent to which patent protection contributes to encouraging innovation is at best inconclusive. This point is of particular relevance to industrial policies that some studies contend that other factors notably first mover advantage are more decisive in promoting innovation. The prevalence of stronger IPR regimes by contrast suggests that IPR protection fosters innovation in reforming countries. They also argue that stronger IPR facilitates transfers of technology to reforming countries, increases foreign direct investment and spurs industrial development. They point to the growing literature that shows a correlation between IPR reform and industrial development and argue that the concerns that are shifted to stronger IPR would undermine the development or overstated. As the policy debate unfolds there nevertheless seems to be a wide acceptance that research on these and related topics must be extended and deepened if we were to have a better grasp of the complex relationship between IPR reform and FDI flows, technology transfer and industrialisation. While generalised conclusions can offer insightful guidance, it may not be applicable at all times to all countries. If that is the case it is vital that research is undertaken in a manner that is context specific, taking account of the level of development of the country under consideration with a clear focus on its industrial profile and capabilities. In countries at an early stage of industrialisation where technology, technologically mature technologies may be embedded in equipment, strong IPR regimes may be unnecessary. As the manufacturing production of a country becomes more diversified and higher value added is sought for example chemicals, electronic equipment, consumer goods IPRs may growingly narrow down the freedom to operate in the absence of a license authorising the use of protected technologies and designs. Where countries begin to develop their own innovation through great investment in R&D the demand for strong IPR protection is likely to grow in tandem. What do we to make about these complex varied and sometimes divergent accounts of the historical, theoretical and empirical dimensions of the question of IPR and industrialisation? I would summarise the answers follows. First historically different paths have been taken to promote economic development and the IPR protection provided. Second IP protection has been strengthened and evolved in different countries over time. Third, there is no unambiguous evidence that stronger IPRs foster industrial development and countries may require different approaches and policies depending on their level of industrial development. This all suggests the need for a cautious approach to the reform of intellectual property regimes. It also suggests the need to strengthen capacity to assess the costs and benefits of IPR reform in the specific context where the reform is being considered or undertaken. Reform should be based on robust evidence and should be the product of extensive consultations with affected sectors, industries and firms. There are no simple answers and there are no shortcuts. Having made all of these points it's also clear that as many industrialising as many developing countries pursue industrialisation they do so in the context of an international IP regime that is more constrained than it was at the 19th century where many of today's developed countries underwent their industrialisation. The agreement on trade related aspects of intellectual property rights trips establishes extensive standards of IP protection that are almost without exception legally binding on all WTO members. While developing countries are committed to implementing and enforcing these standards it is also clear that the trips agreement does contain flexibilities that can be exploited to craft a greater developmental role for IP protection in respect to industrialisation. Patents are likely to impact technologically dynamic sectors where domestic value added is higher as compared to sectors where more mature technologies predominate. Therefore as countries pursue industrialisation we need to explore how best patent regimes can be designed to expand the opportunities for access and diffusion of technology. As noted whether or not IPRs in fact generate net benefits or costs to any particular country will depend on its productive profile, its R&D infrastructure and the extent to which policy space is preserved to adapt the IPR regime to local conditions and need. In that context governments retain an important role in ensuring the patentability standards such as the requisite level of inventiveness are appropriate and rigorous in order to avoid the production of patents that unnecessarily stifle local innovation and production. Compulsory licences are another avenue of policy flexibility permitted under the trips agreement that may be used as an instrument to promote domestic production where voluntary licences are not available on reasonable commercial terms. There are several examples around the world where compulsory licences were issued and employed successfully to ease access to affordable medicines. In South Africa our national development plan calls for greater emphasis on innovation, improved productivity and more intensive pursuit of a knowledge economy. We regard the IP system as an important policy instrument to promote innovation technology transfer, research and development, industrial development and more generally inclusive economic growth. South Africa has a long history of IPR protection and the signatories of the WTO we have adopted and implemented all our obligations under trips. As we review our IP policy we are seeking to ensure the appropriate balances are struck in providing protection for innovation and ensuring that the benefits are shared in society. In particular we are interested in ensuring that the IPR regime in South Africa supports our wider developmental objectives and underpins our efforts at industrial development. In doing this we aim to harness the capabilities across the government and draw in expertise across society through a strengthened national consultative process. We have taken this approach in two recent initiatives. First follow in many delays we have now ratified the WTO paragraph 6 mechanism that allows the issuance of compulsory licences for export of medicines to countries that lack pharmaceutical manufacturing capability. As part of future work to give great effect to this effort we will engage with our regional partners to make effective use of the regional waiver contained in paragraph 6 to augment what are relatively small markets by harnessing economies of scale. Second we are now engaged in a process to strengthen the capacity of the Companies and Intellectual Property Commission to enable it in due course to undertake substantive examination of patent applications. For reasons of allocation of scarce resources South Africa has up to now used the depository system in terms of which patent applications are examined to determine whether they meet patentability criteria only if those patents are challenged in litigation. The work being done to capacitate our registry to conduct substantive examination is crucial if the patent system is truly to fulfill its intended purpose of effectively promoting and protecting genuine innovation and avoiding the registration of evergreen applications. As I move to make my concluding remarks it's appropriate that we reference the work we are doing with our partners on the African continent. South Africa has been an active in the African Union in working towards the establishment of a Pan African Intellectual Property Organization PAIPO. Key objectives of PAIPO include encouraging harmonization of IP systems establishing platforms for policy discussions on how IP can serve as a tool of economic, cultural, social and technological development of the continent. In a region exclusively comprised of developing countries and least developed countries, PAIPO aims to pursue a pro-development and balanced approach to IPR protection. Sub-regional configurations on the African continent have done significant work in integrating IP into the development policy mix. The Common Market of Eastern and Southern Africa Commessa has a comprehensive IP policy while the East African Community and the Economic Community of West African States ECOWAS have policies on IP that include trips flexibilities. As for IP institutions, the African Regional Intellectual Property Organization, a repo, and the Organization African Property Intellectual AWAPI, serve as registration offices for much of the continent and together with international partners provide policy support. The key challenge for the African continent is to improve coordination of the different initiatives to promote efficient use of resources and ensure alignment in approaches to IP pursued by a repo and AWAPI and sub-regional policies. Such collaboration should give rise to a convergence of standards. A repo and AWAPI have recognized the need to align their approaches and have begun working towards integrating their functions into the broader African Union vision on intellectual property. South Africa will continue to work with regional partners to strengthen these efforts. At WIPO, African countries have consistently strived for the promotion of IP regimes that are balanced and supportive of their public policy objectives. In recent years, there's been much debate on the extent to which the WIPO development agenda recommendations have been effectively implemented as well as reservations over the extent to which the development dimension has been mainstreamed in WIPO's work. The implementation of some of these recommendations remains a work in progress, particularly when it comes to the delivery of technical assistance to poorer countries and the promotion of innovation and access to knowledge. Recommendation one of the WIPO development agenda underlines that, quote, WIPO technical assistance shall inter alia be development-orientated, demand-driven and transparent, taking into account the priorities and specific needs of developing countries as well as, especially LDCs, as well as the different levels of development of member states, end quote. Africa has also been a strong advocate for the conclusion of legally binding global norms for the protection of genetic resources, traditional knowledge and traditional cultural expressions against misappropriation, particularly in the context of WIPO's main body dealing with these issues, the IGC. Clearly this is a vast agenda and requires enormous efforts. We therefore want to be in a position to continue to call on WIPO through the committee on development and intellectual property and pursue into its development agenda to support our ongoing efforts to craft IP policies that support the objectives of African industrialisation. We look forward to continued dialogue and to hearing the advice and learning from the experts that are attending this particular conference over the next two days. I wish this conference every success and I thank you for your attention.