Quarterly Review 2009.12

Quarterly review

October – December 2009

IPR Indaba 2009

This year’s IPR Indaba, the third annual Intellectual Property Rights conference hosted by the Foundation, was a great success. Sponsored by Microsoft, International Policy Network (IPN), Business Software Alliance (BSA), and supported by the Information Technology Association (ITA), it was held at the Indaba Hotel on November 19 and 20; 170 delegates attended on Day 1 and 115 delegates on Day 2. The programme comprised seven speakers, including Science & Technology Minister Naledi Pandor and the new US Ambassador Donald Gips, and 20 panellists. The panels, which dealt with a wide-range of issues, demonstrating that IP rights impact every aspect of the economy, were entitled: Open innovation and mixed source; Realising the potential of publicly financed research; Towards quality health care for all; Reducing hunger in Africa: The role of technology; and Protecting software and the arts: Piracy is theft.

Dinner speaker, Dr Cheick Diarra (Interplanetary navigator who worked on five NASA missions | UNESCO’s Goodwill Ambassador for Science, Technology and Enterprise | Vice-President of the UN’s World Commission on the Ethics of Scientific Knowledge and Technology | Microsoft Chairman for Africa), enthralled 160 dinner guests with his presentation: From Mali to Mars: The experiences of an African interplanetary navigator.

IPR Indaba 2009 sparked enormous media interest. Speakers, local and international, were interviewed on numerous occasions by a wide range of media including News International TV, Brainstorm (aimed at CEOs in the IT industry), IT Web, Engineering News (in their special feature on intellectual property law), Classic FM radio, SABC News Current Affairs radio, The Star Business Report, Beeld, Randburg Sun, Sunday Independent, News 24 (an internet based publication with 1,4 million readers), CNBC Africa TV, ETV News, Kaya FM radio, Health Review, Radiosondergrense and De Rebus. The pre-conference press release was prominently published in Business Day and Minister Naledi Pandor’s participation was noted beforehand on the South African Government Information website.

Three stalls were set up on the perimeter of the confererence where delegates could obtain additional information from Business Connexion, the Department of Trade & Industry, and the FMF. The FMF offered free copies of its publications and gave away almost 1,000 books covering a vast range of subjects such as education (eg, Unchain the Child: Abolish Compulsory Schooling by Eustace Davie), privatisation and the supply of natural resources (eg, The Cost of Free Water: The Global Problem of Water Misallocation and the Case of South Africa by Roger Bate and Richard Tren), and finance and taxation (eg, Damage by Debt by Symond Fiske).

Prizes were drawn at the end of each day so some lucky delegates carried away with them bottles of South African port, wine in beautiful cases, keyboards and X-Boxes with games.

One delegate wrote later, “I would like to congratulate and thank you for holding such a fantastic event. This is the first Free Market Foundation event I have been to and I was so impressed. The vast majority of the topics, speakers and presentations were thought provoking, motivating and relevant. The event was balanced and informative…”

Africa Resource Bank (ARB) meeting

In mid-November Temba Nolutshungu attended the Africa Resource Bank meeting in Tanzania. ARB is a network of organisations and individuals promoting concepts that will enhance economic freedom and wealth creation in Africa. Launched in 2003, the annual event brings together academics, policy makers, economists, business people, and civil society and think tank representatives from all over the world to deliberate on how to bring about increased productivity in Africa. The overall theme of this year’s meeting was Probing governance and prosperity in Africa. The sub-themes asked the following questions: a) How has political leadership in Africa affected governance and prosperity on the continent? b) What role have foreign countries played in the governance and prosperity dilemma facing Africa? c) What impact will the current global economic slowdown have on Africa’s governance systems? … and identified guidelines for good governance and prosperity in Africa.

Health Policy Unit (HPU)

Numerous articles have been published by the Foundation’s HPU on the impracticalities and pitfalls of the proposed National Health Insurance (NHI). One major impediment: The cost. The state has not released any official data on what the NHI would cover. However, as Jasson Urbach demonstrated, if we assume a basic benefit package at a modest R400 per person per month, and a population of 49 million people, the NHI would cost R235 billion per annum. When one considers that total income tax collections amount to only R206 billion per annum, we get some idea of the futility of this ambitious proposal. To fund the NHI through income tax would require the top marginal tax rate to increase from 40% to 74%.

In this quarter, the FMF published and launched the study, Paying for intervention: How statutory intervention harms South African health care in which Jasson Urbach analyses the effects of changes in South Africa’s medical scheme legislation and regulations that have occurred during the past decade and discusses the potential consequences of recently proposed further changes. The author argues that these policies involve a conflicting mix of social and efficiency objectives that are likely to have dramatic and far-reaching implications for the delivery of health care. He argues that a poor developing country such as South Africa would not be able to sustain a nationalised system of health care given the increasing burden on the small tax base, the antiquated infrastructure within the public health sector, the country’s aging population, the inevitable increased demand that will arise from promised “free” health care, the inadequate number of medical personnel being trained, and the loss of skilled personnel to other countries that will probably accelerate if a NHI system is adopted. He proposes that if government instead were to amend the legislation to remove prescribed minimum benefits, community rating and open enrolment, and revise the statutory solvency requirements, medical scheme actuaries would be able to devise schemes to suit a much larger percentage of the population, including those with low incomes. He also points out that the private health insurance market would have a significant role to play in alleviating the burden on the public sector by increasing the number of individuals enrolled in private medical schemes. And the skills shortage would be alleviated if government were to relax the restrictions on foreign skilled medical personnel entering and practising in South Africa and allow the private sector to train prospective students.

Black Advancement Monitor

The FMF launched Phase I of the Black Advancement Monitor, written by Vivian Atud, in October. Vivian is a researcher and policy analyst at the Foundation. She is currently studying aspects of education, economics, health and politics. She holds a B.Sc double honours (economics and gender studies) from UNIBU, Cameroon, and a postgraduate diploma in marketing management from UNISA, and is a master’s student at Wits (M.Com–MMIT).

The aim of the Black Advancement Monitor project is to measure in an accurate, comprehensive and objective manner, and to continue to monitor, black advancement (African, Indian and Coloured) in South Africa resulting from changes brought about by democracy. Black advancement, since the onset of a free and democratic South Africa, is not reported in a way that promotes further personal and national growth. This project will uncover additional data on this subject.

Phase I examines the stratified (top, middle, lower level) data showing the representation of various racial groups in government, the financial product penetration of Blacks, and the disaggregated empirical data of who (Blacks, Whites, Indians, Coloureds, foreigners, corporate bodies, etc) owns what on the JSE as a percentage of the GDP. For copies of the report, email Gail Day on lyn.fmf@mweb.co.za.

Templeton Freedom Award

In October the Atlas Economic Research Foundation announced that the Free Market Foundation had been awarded a $10,000 prize in the category Free Market Solutions to Poverty for its book Jobs for the Jobless by Eustace Davie, which proposes a workable solution to South Africa’s mass unemployment problem.

The Templeton Freedom Awards for Promoting Liberty, managed by Atlas, is the largest international awards programme for think tanks. The sixteen organisations recognised in the 2009 programme represent four continents and twelve countries – Brazil, Chile, Egypt, India, Paraguay, Peru, Poland, the Republic of Georgia, South Africa, Sweden, Slovakia, and the United States. Winners were selected from more than 130 applications from 47 countries, by an independent panel of judges.

One of the independent judges who adjudicated the Free Market Solutions to Poverty category said about Jobs for the Jobless, “One single idea can be much more powerful than one thousand actions and this is a perfect example”. The single idea referred to by the judge is the proposal that unemployed people should be allowed to decide for themselves what amount of wages and conditions of employment they find acceptable and to negotiate with prospective employers on that basis.

Jobs for the Jobless proposes that anyone who is unemployed for six months or more should have the right to a Special Exemption (SPEX) Certificate, valid for two years, that exempts the certificate holder from statutory labour laws. An important condition of the exemption, contained in the proposal, is that written contracts specifying the most important conditions of their employment agreements, be entered into between SPEX holders and their employers. At the expiry of the stipulated contractual period, the employee can then renegotiate with the employer as to whether the SPEX proposal should fall away and be supplanted by working conditions in terms of existing labour legislation.

Small firms are the most likely potential employers of the young, inexperienced, unskilled, old or otherwise disadvantaged jobless people. Government should grant Special Exemption Certificates to the unemployed thus encouraging such firms to employ the jobless and thereby reduce unemployment.

This is the second time the FMF has been honoured by the Atlas Economic Research Foundation: In 2004 it won a similar award for “institute excellence”.

Media coverage

The FMF’s feature articles continue to be republished in the local and international media. Leader page articles between June and November 2009 include:

  1. One teaching method not enough, Eustace Davie, The Star
  2. Pragmatic way to create jobs, Temba Nolutshungu, The Star
  3. NHI no silver bullet for system, Jasson Urbach, The Star
  4. A step in the wrong direction for SA, Jasson Urbach, Cape Argus
  5. The price of feeling righteous, Eustace Davie, The Star
  6. Meaning well does not always turn out that way, Eustace Davie, Pretoria News
  7. Misguided mantras – it figures, Johan Biermann, The Star
  8. Government should leave it be, Eustace Davie, The Star
  9. Populists abuse us by forcing a few to pay for all, Eustace Davie, Business Report, Pretoria News & Natal Mercury
  10. NHI: A bad prescription, Eustace Davie, Daily News
  11. NHI is an inequitable system, Eustace Davie, The Star
-      Choose the right road for SA, Eustace Davie, The Star
A great liberal is gone

It is with sadness that I report the passing of Dr Jim Harris, who died on Sunday [Nov 29] after a short illness.

Jim was a prolific writer of letters and over the years filled columns for Business Day, The Citizen and The Star. He was a man of great conviction and believed personal liberty and markets were far better at helping people than well-intentioned governments.

A Scotsman, he moved to SA as a young man and worked for Sasol for several years as a chemical engineer. He joined the Free Market Foundation in 1977 and contributed for over 30 years, writing and editing books, papers and articles.

He was a man of frightening intellect and with the moral compass of an honest man he spoke truth to power, whether on apartheid, AIDS, black empowerment, the war on terror, or misguided economic policies.

Jim was one of SA’s great liberals and will be sorely missed.

Neil Emerick, Hout Bay

[From 2002 Jim was responsible for the FMF’s Regulation Updates, which can be read at http://www.freemarketfoundation.com/regulation.asp.]

35th anniversary & longstanding members

The FMF, Africa’s oldest and most influential independent economic policy institute, celebrates its 35th year in 2010. The Foundation was created in 1975 by pro-liberty, anti-apartheid businesses and civil society including Nafcoc, Assocom (now Sacob/Busa), the Consumer Union and the Chamber of Mines. The FMF was recently ranked 4th in the list of Top 25 Think Tanks in Sub-Saharan Africa by The Think Tanks and Civil Societies Programme of the University of Pennsylvania and also among the 407 think tanks nominated as “One of the leading think tanks in the world” out of a total of 5,465 included in the study. The FMF’s aim (in 1975 and 2010) was/is to persuade government to adopt proven pro-market policies that ensure sustainable prosperity for all.

Fact… Some of our individual and corporate members have been with us since 1977! Thirty-three years of support! That’s amazing – thank you.

Energy Policy Unit (EPU)

On November 7, the Free Market Foundation and others arranged a Private Sector Energy Policy workshop that was attended by 70 delegates. The workshop aimed to get greater consensus on what the private sector considers to be the most appropriate long-term energy policy and, armed with this, to subsequently contribute constructively to government policy formulation. The workshop focussed on grid supplied electricity and liquid fuels, which cover 90% of the total energy supply. The FMF presented an international energy scan comparing energy policy in a number of countries, which was researched primarily by its new intern, Gavin Ray. Gavin is studying Postgraduate Economic Science at Wits University. At the FMF he is focussing primarily on Energy Policy and the Land Reform Project. He is passionately pro-free market because of his love for South Africa and his desire to see it succeed.

Academic Research Programme

The Foundation has received sponsorship to support academic interest in, and increase academic awareness of, intellectual property rights, including the rights emanating from the Intellectual Property Rights Act and the potential benefits to universities, academics, and other institutions that carry out publicly funded research.

The Foundation will raise awareness within and outside universities regarding the value of IPR in the economy.

This work will be tied in with future annual IPR indabas.

Networking lunches

Lunches were hosted this quarter by FirstRand and Citi – for which our grateful thanks.

Happy Holly-daze

We wish you all a festive holiday season and a peaceful and productive 2010.

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