Intellectual Property and Development

Recently, intellectual property rights have become a major issue in international law. As technology increases and the movement of information is facilitated, businesses will need to protect their innovations. Some argue that this protection must be guaranteed by governments in order to encourage creativity and foster growth.

The 2008 Intellectual Property Rights Index was recently released, and VOANews.com wrote an article yesterday, analyzing the results. According to the survey of 115 countries, there is a correlation between property rights and development. This supports the argument of Hernando de Soto, which we discussed on Tuesday, that developing countries must protect property rights — both tangible and intangible — in order to grow economically. Finland, Norway and Denmark are the three highest ranked countries. The U.S. is nineteenth. Bangladesh and Zimbabwe are the two lowest.

India is tied with South Korea for 36th and China is tied for 62nd. India, who’s economic growth is largely a product of technological innovation, has relatively effective intellectually property laws compared to other developing nations. Its score has increased by almost an entire point since last year (countries are rated on a scale of 1-10). China, however, trails a number of Latin American, Eastern European, and other Asian countries, and its score has dropped since 2007. According to the arguments of de Soto and the Intellectual Property Rights Index Committee, these two emerging economies will have to continue to strengthen their property rights if they hope to sustain growth. With this argument in mind, is India more poised to sustain economic growth than its Asian neighbor? Or, will China disprove de Soto’s theory?

http://www.voanews.com/english/2008-02-26-voa21.cfm

http://www.internationalpropertyrightsindex.org/

http://www.internationalpropertyrightsindex.org/UserFiles/File/Results.pdf

Nationalism in China, Taiwan, and the Indian Subcontinent

As we saw in class, the partition of India in 1947 caused an outbreak of religious and nationalist violence. Radical, violent Indian nationalists, Hindus and Muslims clashed in response to the announcement of partition. In the northwestern and eastern parts of the subcontinent, Hindus and Muslims clamored to be on the right side of the new, religious fault line. Today, ethnic, religious, and class tension still exist in India. As recently as 2002, violent riots between Muslims and Hindus broke out in Gujarat – ironically, Gandhi’s homeland.

Chinese nationalists, like their Indian counterparts, hope to reunite all of the former Chinese lands, including Taiwan. So far, they have been relatively successful, regaining Hong Kong and Macau. However, Taipei still is a chronic headache for the Chinese government and nationalists.

In last month’s Taiwanese parliamentary elections, the nationalist party, known as the Kuomintang (KMT), won a landslide victory, securing three-fourths of the seats. Surprisingly, given its name, the KMT hopes to ‘bridge’ the Taiwanese straight. Although they do not support reunification, the party hopes to improve economic and diplomatic relations with the mainland. The election outcomes greatly hurt the ruling Democratic People’s Party and their leader, Chen Shui-bian, who have pushed for greater economic and even titular separation from the People’s Republic. Taiwanese presidential elections are scheduled for next month, and it is likely that Ma Ying-jeou of the KMT will win.  Chen removed himself from the presidential race following his parties defeat in the parliamentary elections.

As David Lague, of the New York Times, argues, the election results show that most Taiwanese prefer the pragmatic platform of the KMT to the aggressive approach of the Chen’s party. This argument supports the idea from last week’s readings that nationalism is based or feeds on economic interests. With the rise of the Chinese economy and its overall influence in East Asia, the Taiwanese voters seem to realize that it is better to cooperate with, rather than antagonize, the People’s Republic.

http://www.nytimes.com/2008/01/14/world/asia/14taiwan.html?st=cse&sq=taiwan&scp=2

http://www.nytimes.com/2008/01/12/world/asia/12taiwan.html

http://www.youtube.com/watch?v=Qx5YgbOUa7A

Rational Choice and Economic Liberalism

In our semester long analysis of the economic development of both China and India, our recent discussions of rational choice theory help facilitate an analysis of the economies in these two emerging markets.

Rational Choice Theory states that behavioral patterns which exist in societies are the product of choices made by individuals of the state in order to maximize profits and minimize costs.

An analysis of the Chinese economy proves this. China has the fourth largest GDP globally and has sustained an economic growth rate of 10% per year for the last 25 years. Prior to the late 1970’s China had a Soviet-influenced economy that did not promote trade and international commerce. The Chinese government began to reform the economy and since those revisions China has enjoyed above-average growth. It is in these revisions that we see how the Chinese people have been able to become successful domestically, but it is China’s role in the global economy that is so impressive.

China sees newly founded entrepreneurial endeavors occurring at record rates. The Chinese citizen understands the opportunities made available since government reform of the economy. We now see widespread enthusiasm and interest in creating personal wealth in China. Chinese Citizens are working hard and through the individual progress, the state now has adopted a new economic profile on an international scale. The society appreciates the efficiency of markets and China has many more years of economic prosperity ahead.

India’s economic history has followed very closely to that of China. For the majority of it’s history, India has operated under a Socialist-inspired economy. Since the 1990’s India has opened it’s closed economy and has become an international presence just like China. India is now widely known for the strength and intelligence of it’s work force. Thousands of U.S. firms outsource work to China every year. More recently India has become a global investment powerhouse, much like the United States. We are seeing burgeoning investment into India. On the other end India is pledging funds and capital to foreign economies and governments.

Since the economic reforms of the 1990’s, India finds itself in a time of rapid economic progress. The same values and dreams of achieving success and personal wealth exist in India. Indian citizens are now involved in a capitalist system in which profits are maximized. The once socialist driven economic ideology is in the past, and citizens find themselves pursuing profits through international trade and commerce