Piracy in the Middle East

By Taylor, Julian | The Middle East, December 1998 | Go to article overview

Piracy in the Middle East


Taylor, Julian, The Middle East


Julian Taylor reports from the Gulf.

Piracy and counterfeiting activities in the Middle East have increased considerably in the past few years. Until recently, most countries in the region had few, if any, intellectual property rights (IPR) laws. This lack, coupled with the extremely liberal trading policies of some states, has resulted in wide distribution of counterfeit and pirated material throughout the region.

Spending on information technology (IT) products and services in the Middle East and North Africa (MENA) region is expected to grow from $17.8 billion during 1997 to $34.9 billion in the year 2002. One of the major challenges facing the development of this industry is the absence of regulations governing copyright infringement, or piracy.

However, some governments are becoming more aware of the problems caused by piracy. Jordan, for instance, has been trying to clamp down on piracy and Saudi Arabia has been taking positive steps towards stopping computer shops from selling illegal software. The UAE has adopted similar measures.

Meanwhile, Kuwait has been formulating copyright legislation since 1989, but has, so far, not enacted it.

The Egyptian government has resumed raids since August 1997, underlying its commitment to enforcing IPR laws. Oman is also working to stop copyright violations and software piracy, and a new copyright law is under consideration in Lebanon.

Despite these efforts, the rate of computer software piracy in the MENA region remains the second highest in the world. According to the US-based Business Software Alliance (BSA), in 1997 the region had a piracy rate of 65 per cent, second only to Eastern Europe's 77 per cent.

On a worldwide level, software piracy costs the computer industry lost turnover amounting to some $11.4 billion, with 40 per cent of all software programmes pirated.

As far as the user is concerned, pirated software comes in bundles, and is a lot cheaper, costing up to 50 times less than the original.

Attempts to curb the illegal trade have paid off. In 1997 alone, regional losses incurred by software developers from illegally copied software have been reduced and piracy in the region is expected to recede by another five to 20 per cent this year.

This has encouraged several leading IT manufacturers to bolster their investments in the Middle East. Dell Computers, Hewlett-Packard and Western Digital all have regional offices now, and Compaq has plans to build a $2.5 million regional headquarters in the Gulf. IBM is also considering plans for an assembly plant, possibly in Egypt or the UAE, worth millions of dollars in investments.

Should these and other plans materialise, the IT sector in the Middle East will be given a big boost and its status as a leading world market will continue to rise.

Middle East-based pharmaceutical companies share similar problems with IT developers. Their estimated losses from piracy in the UAE alone stand at more than $10 million per year and losses in Turkey are estimated at $60 million.

In fact, the UAE, Jordan, Egypt and Turkey are among the countries in the Middle East which hardly provide any adequate or effective protection for pharmaceutical intellectual property rights. Independent data research based on estimates by pharmaceuticals manufacturers show that they are losing between 30 and 60 per cent of their market share in the UAE due to piracy.

The value of the pharmaceutical market in eight major Middle East purchasing countries, including GCC states, Lebanon and Cyprus, is estimated at around $1.5 billion. This figure is expected to reach nearly $1.7 billion in 1999. In the UAE, it is worth more than 400 million dirhams ($110 million).

In the past few years, the U.S. government has put a lot of pressure on Middle Eastern countries to adopt and implement laws that protect intellectual property rights. …

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