13.34. The representative of the Plurinational State of Bolivia said that it was undeniable that innovation was important for development. However, IP was definitely not synonymous with innovation, and if it was treated that way it would be sending out the wrong message. Innovation transcended merely promoting monopolistic rights for potential inventors. A country's capacity to innovate depended on many other factors, for instance its research infrastructure, its level of industrial development, its capacity to absorb professionals and scientists, as well as technology transfer, none of which was achievable by simply promoting IP.
13.35. History had shown that innovation preceded IP. Paradoxically, the current discussion appeared to be the opposite: first strict IP regulations were promoted in the hope that innovation would follow, in a context where access to information was limited or very costly, particularly for SMEs. Many of the developed countries began applying IP rules only after they had reached a certain level of development. For example, a well-known country that today advocated strict patent rules did not allow chemical or pharmaceutical patents until the middle of the 1970s; another country only adopted multilateral copyright rules in the 1980s; and there were plenty of other very interesting cases worth looking at.
13.36. Contrary to expectations, instead of improving over the past few years, innovation in developing countries had effectively deteriorated. One needed only look at the WIPO Global Innovation Index for 2012, as mentioned by the delegate of Egypt at the Council's last meeting. Among other things, the Index mentioned that the innovation gap between countries and regions and between different levels of development among them had widened rather than narrowed, and that had a negative impact on the SMEs in many developing countries.
13.37. In the field of health as well, it was apparent that, over the past few years IP, based on market mechanisms, had failed to meet the innovation needs of the developing countries, for example as regards medicines for what the WHO had described as the "neglected" diseases diseases which predominantly affected developing countries and, because they were of no commercial interest, did not provide motivation for the kind of innovation promised by IP. To address that problem, Bolivia together with a group of developing countries had sponsored a WHO initiative to seek different incentives to motivate innovation where the IP system was unable to do so, and he hoped that it would be approved at the next world assembly in May 2013.
13.38. In his view, clarification of the impact of IP in developing countries was needed and above all, how the payment of royalties affected the balance of payments and, in particular, how much the SMEs in the developing countries paid in royalties and how much they received should be examined in order to determine the real economic impact of IP on their economies in the short and medium term and to see whether the overall result was positive. The IMF has produced some numbers for 2011 which would undoubtedly be useful in that respect.
13.39. He concluded that Bolivia considered it would be more useful to discuss how to narrow the innovation gaps and address the innovation problems attributable to IP, and examine the problems caused by IP for the SMEs in developing countries.
