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Alcue conference

Cooperation towards development

Latin America, the Caribbean and the European Union widen investments in R&D

Latin America, the Caribbean and the European Union (EU) are searching for ways to widen their investments in the area of science and technology (S&T) and to redefine cooperation policies in order to expand research and development (R&D) among the member countries. The huge challenge is to reduce the technology gap that is deeping economic and social inequalities and jeopardizing competitiveness of the nations in the international market. The two blocks of countries have historically maintained relationships of partnerships in the form of bilateral agreements that, nonetheless, need to be reformulated so that they can bring an efficient interchange with concrete gains for all society.

The forum for this new dialogue about scientific and technological cooperation is the Alcue – Ministerial Conference on Science and Technology of Latin America, the Caribbean and the European Union -, initiated in Rio de Janeiro, during June of 1999, and which had its continuity in Brasilia between the 22nd and the 24th of last March. Ministers and representatives of forty seven countries made their proposals for bi-regional cooperation, which is written into the Brasilia Declaration, which will be submitted for the approval of the heads of States and governments during the 17th and 18th of May at the second Summit Meeting of Alcue in Madrid.

The expectation to come from the Alcue meeting is that this new partnership model wiil quickly produces result. And the haste is justified: the United States annually invests 2.7% of its Gross Domestic Product (GDP) in science and technology, equivalent to US$ 216 billion, which explains its world leadership in research, development and innovation and in relation to the number of patents for processes and products registered.

In Japan, the percentage is even higher: above the level of 3% and reaches the total of US$ 126 billion, guaranteeing an outstanding position in the restricted group of innovating countries. The European Union is also wagering high in science and technology: the average investment of the fifteen member states in this sector was 2.4% of their GDP in 2001, something in the range of 150 billion Euros or US$ 133 billion. However, this result is due to the contribution of countries such as Germany, Sweden, Finland, the United Kingdom and France, who invest as much as 4.84% of their GDP in R&D.

According to the Eurostat (the statistics commission of the European Union), twenty one of the two hundred and eleven centers for the production of technology in the countries, account for more than half of the 10,500 applications for patents in high technology registered at the European Patents Office during 2000. The spotlight goes to Germany, which during the period in question produced 42% of the high technology patents. The performance of countries such as Portugal and Spain, who add up investments respectively 0.9% and 1.7% of their GDP in S&T, or even Italy and Greece, who also registered low standards of investment in research, makes it clear that the EU is seeing a strong regional concentration in the production of knowledge and consequently with an enormous disparity of technological development between the countries.

Political agenda
The regional inequalities are even more shocking when one observes the performance of Latin American and Caribbean countries. Last year the average spending on S&T in a large number of the countries of this region oscillated somewhere between 0.4% and 0.6% of their GDPs. With total investments lower than US$ 15 billion, the vast majority of the Latin American and Caribbean countries are part of the group of nations qualified as techno-excluded. The good news is that the majority of the governments have already made it clear that science and technology have a strategic role to play in development and include on their political agenda plans for boosting investments in this sector.

However, the major problem lies with their financial structure: at least 80% of these resources have their origin in public coffers, since the private sector contribution towards research and development is still low. For example, Brazil managed to raise its spending on S&T from 0.6% to the current 0.9% of its GDP over the last two years, putting together the budgets of the Ministry of Science and Technology (MCT), resources from the sectorial funds to finance scientific and technological research in strategic sectors. The MCT hopes that the National Congress will approve, during this semester, the bill of the Innovation Law which intends to spur entrepreneurship and bring universities closer to the private sector. The expectation is that by 2010 the country will be able to count upon resources to the order of 2.4% of its GDP for this sector, with an increment in private sector participation.

Mexico, facing similar problems, intends to reach the level of 1.5% of investments in S&T over the next two years, with a group of measures of fiscal incentives to widen private participation. As well, Chile bets on company support to widen its investments in S&T from the current 0.7% to 1.2% of its GDP by 2006. “The crucial aspect in this context is to make sure that the private sector plays its part, and not only public money resources”, stresses Eric Goles Chacc, the president of Chile’s National Commission on Scientific and Technological Investigation (Conicyt).

The situation is no different in Costa Rica, a country that invests 0.5% of its GDP in S&T. “During the last four years we have created a special fund with the objective of strengthening the research units, and, at the same time, creating a new culture in the business sector”, Fernando Gutierrez, Costa Rica’s vice-minister of Science and Technology tells. The fund, made up of governmental and private resources, is financing projects in the research units regarding the needs of companies. “We had to create a new culture in the business sector, in its majority formed from small to medium sized companies.”

The proportion between public and private investments in R&D is only on a more equal footing in Cuba. “We invest US$ 120 million in the sector, or 1.68% of our GDP. Last year 60% was public spending and 40% was put up by private companies”, reports América Santos Rivera, the Cuban vice-minister of Science, Technology and the Environment. “We have no doubt that the future of scientific investigation is in the strengthening of the relations between industry, the universities and the investigating centers”, he concludes.

Fiscal incentives
The low private sector participation in investments also worries the European Union countries. While in the United States they contribute with 69% of the investments in R&D, in the European Union the average of private participation is some 56%. But, once again, this performance is not homogenous. For example, in Portugal the business portion in research financing is in the order of 30%. “This places upon the public funds the greater part of the investigative efforts that it is necessary to promote”, says Armando Trigo de Abreu, president of the Institute for International Scientific and Technological Cooperation, of the Portuguese Ministry of Science and Technology.

In an attempt to change this scenario, the European Council of Barcelona, who met during the 15th and 16th of March, has suggested that the member countries should not hold back in their efforts over the next ten years to reach the level of investment in S&T of 3% of their GDP, which would then create conditions – read fiscal incentives – for the expansion of company investments in R&D. “Of the 3% of desired investment, more or less two thirds should be put up by the private sector and one third by the public sector, on average”, explains Ana Birulés i Bertran, Spain’s minister for Science and Technology. Since Spain, until June, occupies the presidency of the European Union, the minister accumulates the position of president of the Research Council of the EU, president of the Industrial Council of the EU and president of the Telecommunications Council of the EU.

The Brasilia Declaration, which put together the Alcue proposals, does not establish goals for investments in S&T. The director-general of Mexico’s National Council for Science and Technology, Jaime Parada Avila, went as far as suggesting that the document would establish minimum levels for investment in this sector – between 1% and1.5% of the GDP – over the next ten years, a proposal that was backed by Panama, Ecuador, Chile, Cuba and Colombia, as it dealt with a form of “tying down a commitment from governments”, as it was explained.

However, the diplomatic arguments won the day, and in the document the conference’s participants applauded the decision of the European Council of Barcelona and expressed “the hope that a parallel effort would take place in the Latin American and Caribbean countries to attribute the maximum possible priority to the policy of S&T and to significantly increase the resources dedicated to the development of research and technology”.

The question of funding technological development, as it can be seen, is a common problem in the two blocks of countries and a challenge towards consolidating scientific cooperation. “It’s necessary to think about a financing model to be adopted in an international plan. We’re studying some proposals”, says Ronaldo Sardenberg, Brazil’s minister of Science and Technology. The World Bank and the Inter-American Development Bank, which already have resources for this sector, could be partners in this project, but for that to happen, it would be necessary to review support systems considered to be “obsolete”.

Spain’s minister of Science and Technology believes that the cooperation between countries, in the context of Alcue, may also have an thrust from the agencies such as the European Investment Bank and resources coming from agreements from private companies. “I believe that this is a trend that we can see growing between organisms, banks and financial entities dedicated to development”, she explains. For Ana Birulés, the financing of S&T will be a “key element” at the Summit Meeting of the heads of State and governments, to take place in Madrid.

The Brasilia Declaration
In May, the Heads of State and Governments Summit of forty five Latin American, Caribbean and European Union countries, meeting in Madrid, is bound to transform into a political decision the recommendation of the Alcue Conference to create “specific space” for scientific and technological cooperation between the two economic blocks. This is the essence of the Brasilia Declaration, approved at the end of the Ministerial Conference on Science and Technology. The relationship between these countries has been historically bilateral.

The intention now is to create an inter-regional mark of cooperation in priority areas for working together: health and the quality of life, information society, competitive growth in a global environment, sustainable development and urbanization, and finally cultural heritage. The partnership will also contemplate questions linked to the capacity of innovation of the countries, such as education and the training of human resources, transnational mobility and interchange of researchers and students in appointed research areas. A working group with eighteen members is going to detail, by the end of the year, suggestions of concrete measures to put this decision into practice.

The conference also defined an action plan that recommends the mobilization of all the resources necessary, national and regional, with the participation of bilateral and bi-regional public and private sectors, for scientific and technological cooperation between countries. Also, it is also forecast the support for networks of transnational centers of excellence, with the involvement of the scientific, academic and technological institutions of all of the partner countries.

Agreement with Argentina

At the same time as it was participating in a multi-regional dialogue in the ambit of the Alcue, Brazil is intensifying its bilateral political cooperation with Latin American and European Union countries. The Ministry Science and Technology closed a wide agreement with the Argentine through which it guarantees to make available R$ 1.5 million for the South American Program for the Support of Cooperative Activities in Science and Technology (Prosul) to finance the exchange and formation of human resources.

The partnership foresees Brazilians and Argentineans making bilateral visits, with periods of duration from fifteen days to six months, and to receiving doctorate and post-doctorate scholarships. The cooperation agreement also includes joint action in the sector of genomics with the training of human resources in the areas of molecular biology, bio-information technology and gene sequencing. The idea is to form a genomic and protein studying network that could incorporate Argentinean laboratories into the National Network of Structural Molecular Biology.

Brazil and the Argentine even intend to submit to the Inter-American Development Bank (BID) a proposal for financing a cooperation project in S&T within a span of five years. The projects will be defined over the next few weeks. “We understand this to be a strategic partnership, since without it the Argentine will not be able to sustain itself in the globalized world”, says the Argentinean secretary of Science, Technology and Productive Innovation, Júlio Luna.