Research and Development in the Arab States: the Impact of Globalization, Facts and Perspectives
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Arab countries with significant oil and natural gas resources benefit from high incomes, thus standing in contrast with other countries in the region with limited or no such resources. Human resources, despite the endeavours to date, are insufficient and even lacking in several areas, especially in the scientific and technological ones. The Arab States have a low ranking in research development and technological innovation. The overall spending in R&D is about 0.15 % of the gross domestic product (GDP), compared with an average of 1.4% in the world, and 2.5% in Europe. This spending is provided by the public sector to a very large extent (97%). The awareness of the need to change this situation comes mainly from the effects of globalisation. This paper presents some case studies in the fields of biotechnology, the pharmaceutical industry and renewable Energy focussing on Morocco, Jordan and the United Arab Emirates.
The key factors that determine the successful development of biotechnologies in emerging countries include the following:
Strong political will expressed over the long term i.e. 20 years plus
Selection of biotechnology as a major priority sector
Design of a consistent strategy for short, medium and long-term policies, involving financial, educational and R&D institutions, as well as providing for the formulation and enforcement of laws, regulations and procedures
Setting up a strategy that enables focused R&D to lead to specific products that meet a demand in the local, regional or international market
Coordination of the whole R&D and production system at the highest level of the government so as to ensure effective coordination among all the institutions involved, to avoid duplication of efforts and to develop synergies
Mobilization of the private sector, which should find a good reason to be associated and should be convinced that it is crucial for its own interests
Collection of sufficient resources for investing in R&D and production
Among the Arab States, Egypt, Tunisia and, to some extent, Jordan and the United Arab Emirates, have tried to fulfil some of the above-mentioned criteria in the field of medical biotechnology. But this is far less than other developing countries such as Cuba (which invested more than $1 billion over 20 years in the development and production of biotechnology - derived diagnostics, vaccines and drugs, and keeps working hard on new processes of drug development), India, Brazil or the Republic of Korea.
Agricultural biotechnology, in its simplest techniques such as in vitro micro-propagation of crop species and their commercial scale clonal multiplication , is carried out in several Arab States, e.g. Morocco, Tunisia, Saudi Arabia and Gulf countries (particularly for the date palm). But, except for Egypt, no genomics work is being carried out, nor is there any development of transgenic crops which are more resistant to pests and tolerant to abiotic stress. However, the impact of globalization can be perceived through some multilateral or bilateral assistance programmes and cooperation, which include the advanced training of scientists so as to initiate more sophisticated R&D projects. The Pasteur Institute of Tunis and the Faculty of Medicine and Health Sciences (FMHS) of the United Arab Emirates (UAE) University are illustrative examples.
This is an area which is closely associated with R&D in the biomedical sciences and biotechnology and on which globalization has a profound impact. In Jordan, the pharmaceutical industry occupies the second rank in the country’s economy. About 16 factories, including eight private and six public, have a turnover ranging between $4 million and $40 million, which is far below the minimum efficient scale in Europe or the US (around $500 million). Invested capital is about $400 million and the number of workers totals 5,000. The pharmaceutical sector has become the second largest export earner ($193 million) behind textiles ($673.5 million). Among the Arab States, Jordan is the first exporter of pharmaceuticals. The main importers are Arab countries (90%), especially Algeria, Saudi Arabia, Sudan, Iraq and the United Arab Emirates. Jordan’s pharmaceuticals are registered in more than 60 markets worldwide, including Europe and the USA. It is expected that Europe will be Jordan’s main export destination and North America the second, thus shifting the balance away from the traditional Arab markets.
However, despite the registration of 40 patents by the Jordanian pharmaceutical industry in Europe, the USA and Japan, R&D corresponds to only 2% of total sales, compared with over 17% in industrialized countries. The limiting factors are the financial resources and the infrastructure for clinical testing. The owners of Jordan’s pharmaceutical industry try above all to satisfy the shareholders by giving dividends of more than 50% of the annual net profit, although they do not spend more than 2% on R&D itself. This is generally the case for all Arab countries.
Morocco’s pharmaceutical industry is another good example of a sector that is striving to develop locally and, at the same time, to adapt itself to globalization. In addition, it is an example of an incipient collaboration between the private sector and the academic one in R&D. The Moroccan pharmaceutical sector is considered one of the most mature in the Maghreb, the Arab World and Africa. In 2006, it included 27 industrial sites where national laboratories and multinationals are manufacturing their products under certification by French regulatory bodies and by Canadian and British bodies in several cases. The sector plays an important socio-economic role: 35,000 persons employed directly or indirectly, including 20% managers and executives; 10% of the whole production is exported, mainly to French-speaking African countries; drugs represent 37% of health care expenses by households.
About 80% of national needs are met by the pharmaceutical sector. The antibiotics share of the market value is 16.5 %, followed by anti-inflammatory and anti-hypertension drugs. About 40 million euros are invested annually by the sector, mainly for improving production and quality. R&D is incipient and illustrates the pioneering activity of some national laboratories. Current challenges are the following:
How to cope with the small size of the national market? One solution is to expand the business internationally and so to be in tune with globalization How to anticipate the impact of the compulsory illness insurance set up in Morocco in October 2005?
How to support the growth of generics locally? Generics made up 23% of Morocco’s pharmaceutical market in 2004, compared with 18% in 2000
How to benefit from globalization through playing a more active role in the international market, e.g. drawing on the free-trade agreements concluded in 2004 with the USA, the European Union (to be in place in 2010), or with Turkey which is an important and promising market
Even if it is true that the size of the Moroccan pharmaceutical market and the profits generated, both locally and internationally, cannot support the costs of developing new drugs, some R&D work can still be carried out nevertheless.
Abu Dhabi, the capital of the UAE, the fourth largest OPEC oil producer with about 10% of known reserves, is seeking to become a centre for the development and implementation of clean energy technology. In 2006, the Emirate launched the Masdar initiative (masdar is the Arabic word for source), which has signed up major oil and technology companies and universities around the world, as well as UAE ministries, so as to help develop and commercialize renewable energy technologies backed by heavy funding from Abu Dhabi.
The UAE has been singled out as one of the world’s highest per capita emitters of carbon dioxide and other greenhouse gases. The UAE has an especially high energy demand to maintain a luxurious life of air conditioning, cool swimming pools and even an indoor ski slope in Dubai. But the UAE is the most serious among Persian Gulf oil-producing countries whose consumption for electrical power has spawned efforts to find other sources of energy to save high value fossil fuels for export. Masdar has drawn up a $250 million Clean Technology Fund and begun construction of a special economic zone for the advanced energy industry. In February 2007, Abu Dhabi announced plans to build a 500-megawatt solar power plant in the area – one of the most ambitious of its kind in the world. It should be operational in 2009, either as a stand-alone plant or as part of a desalination project.
Abu Dhabi is undoubtedly a front runner, but other Arab countries (oil rich and exporters of oil and natural gas) have also dabbled with renewable energy. The Bahrain World Trade Centre project includes wind turbines that, developers say, will meet up to 35% of the project’s power needs. Solar heating in houses is encouraged, while desalination of sea or brackish waters is benefiting from technology advances aimed at saving energy. Last but not least, Saudi Arabia and other Gulf States have begun research programs to look into nuclear energy.
Scientific research, development and technological innovation in the Arab States needs a major push to become closer to the world average indices, this push can be measured by changes in:
Expenditure as a percentage of GDP
The number of scientists, engineers and technicians per million inhabitants
The number of scientific publications in peer reviewed journals
The number of patents filed and of technological innovations that improve the quality of manufactured products
It should be recognised that foresight and political acumen will play a key role in changing the higher education landscape in the region.
Successful examples of this acumen should be considered. These include Abu Dhabi launching the Masdar initiative; Education City in Doha, Qatar; the area of information and communication technologies in Jordan, as well as Morocco and Tunisia, which are striving to undertake good and relevant research aimed at supporting social and economic development (with almost no support from oil revenues) in health care, medicine and pharmacy, as well as in agriculture, forestry and fisheries.
Research, development and innovation should be understood as key factors that enable countries to adapt to the changes brought by globalisation. This may include developing industries not just to meet local needs and demands but also to move towards the international arena.
Keywordsresearch, research policy, Arab states, Arab countries, United Arab Emirates, higher education policy, Arab World, research productivity, pharmaceutical, market, drugs, pharmaceutical industry, pharmaceutical sector, patents, pharmaceutical market
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