According to Piotr Stryszowski, the OECD’s senior economist of public governance and territorial development, the trade in counterfeit goods is also causing huge revenue losses for governments across the region.
And it is a “disaster” for developing countries that are trying to move away from manufacturing to become centres of product development and innovation.
Speaking to The Edge Financial Daily at the recent Global Illicit Trade Summit in Malaysia, he further warned that the scale of the problem is growing in the region.
“These days counterfeit goods can range from branded consumer products, spare parts, batteries and business-to-business goods to common consumer goods such as toothpaste, cosmetics and food,” he said.
“If there is a product where people are willing to pay more for its brand name or for any other reasons such as safety and quality, this product can become a target for counterfeiters,” he added.
The OECD has estimated, based on data from 2013, that counterfeit goods accounted for 2.5% of total global trade, or the equivalent of US$461bn. “That’s equivalent to more than twice the annual revenue of Apple Inc – and the number is growing,” said Stryszowski.
Not only does the illicit trade hit economic growth, he added, it also poses a serious threat to the health of consumers because counterfeit goods are produced and distributed without any standards or norms.
The solution, he explained, is for governments to enforce regulations properly. “Of course, regulations are important, but only if they are enforced. The best rule of law that is not in place is basically useless.
“You can have soup, but without a spoon you cannot eat it. What we see in many countries, there are regulations, they are enforced, but not to the extent that [is enough].”
Sourced from The Edge Financial Daily; additional content by WARC staff