UNAIDS wrong about local production
Thursday, April 23, 2009
Exactly one month ago we reported on WHO head Margaret Chan’s somewhat confused pronouncement on the global economic crisis—and now her equivalent at fellow bureau UNAIDS (which shouldn’t really exist) has issued a similarly misguided rallying call.
Governments must somehow create profitable businesses in Africa that make drugs for treating HIV / AIDS!
This is Michel Sidibé’s message, to paraphrase. In his own words, he wants to “facilitate a discussion around how we can build a business case.”
Good luck with this, Mr Sidibé. You’ll need it, because I’m struggling to think of a prosperous pan-continental industry that was planned and created by governments or the UN.
The most basic economic principles tell us that industries emerge organically due to sufficient demand and comparative advantage. Sufficient demand for HIV / AIDS drugs clearly exists in Africa—so why does only one African country produce their own drugs? That’s right, because there’s no comparative advantage.
There are all manner of reasons for this. In many African areas, for example, electricity supply can be erratic, making pharmaceutical product near-impossible.
Predictably, the UNAIDS head’s motivations are mixed. This isn’t just about AIDS, it’s “important politically” he says, and “important economically”, and “important for the integration of Africa in the global market.”
He’s wrong. African people need the freedom to trade in products and services where they hold comparative advantage, leading to prosperity and better health.
According to the article, Michel Sidibé “expressed concern that the global financial crisis might hamper his efforts”. On this point alone let’s hope he’s right.