| Keywords: | Technology transfer; Egypt; Public institute; Cell-/Tissue culture; Genetic engineering; US Agency for International Development (USAID). |
| Correct citation: | Hoop, B. de (1996), "The Effects of External Funding on Biotechnology Transfer. A case study on Egypt." Biotechnology and Development Monitor, No. 28, p. 18-22. |
Biotechnology receives increasing attention in special development projects of international donors. External funding of biotechnology research could, however, adversely affect the sustainability of national research, national research priorities and relations between the different research institutes. To fully benefit from external sources, developing countries need to develop a strategy based on a thorough understanding of the relationship between the transfer of foreign technology and the development of a local technological capability.
Biotechnological innovations have become more protected due to changing
intellectual property rights, the interests of the private sector, and
the increased technical complexity of advanced biotechnologies. The consequent
privatization of the benefits from biotechnological R&D requires new
mechanisms of technology transfer. External funding of biotechnology research,
as part of a cooperation agreement with the donor agency, might assure
access to more advanced technology which would otherwise be inaccessible
to researchers in developing countries.
External funding of research activities typically involves interference
of the donor to some extent. Apart from the obvious positive effects, however,
this can also have considerable negative consequences, as the Egyptian
case shows.
ODA to Egypt
Worldwide, Egypt is the largest recipient of Official Development
Aid (ODA). The aid of the member countries of the Organisation for
Economic Co-operation and Development (OECD) to Egypt reached a total
of US$ 3.7 billion in 1992-3. 35 per cent of this amount was provided by
one donor: the USA.
Egypt’s R&D expenditure is among the highest in the Middle East,
amounting to a total of US$ 142 million, or 0.34 per cent of its gross
domestic product in 1992. R&D in Egypt is almost exclusively publicly
funded: less than 1 per cent of the R&D expenditures comes from the
private sector. Foreign donors are important contributors, as is illustrated
by Egypt’s National Agricultural Research Project (NARP). This project
is coordinated by the Egyptian Ministry of Agriculture and entirely funded
by the United States Agency for International Development (USAID).
From 1989 to 1995, NARP annually provided US$ 40 million, i.e. 28 per cent
of Egypt’s entire research budget, to various agricultural research institutes
in Egypt. Approximately US$ 10 million of the NARP budget was spent on
15 biotechnology sub-projects
.
External funding of biotechnology research
In Egypt, activities in biotechnology can be found in virtually all
relevant sectors: agriculture, fermentation industry and medicine. Egypt’s
human resources in biotechnology are considerable, as 14.5 per cent of
the total of 27,500 scientists are active in biotechnology-related fields,
of which many have been educated at European and US universities. Conventional
biotechnologies, such as fermentation and plant tissue culture techniques
are well mastered in Egypt.
Many foreign donors, of which USAID is the most important, support
biotechnology research projects in Egypt. Next to funding NARP, which is
the largest US-supported project in Egypt, USAID has also been a major
donor of biotechnology projects in other sectors than agriculture, including
medicine (DNA diagnostics for cancer) and the fermentation industry (biotreatment
of agro-industrial wastes and enzyme production).
Technology development and transfer mechanisms are dependent on the
nature of the technology. Established technologies are more easily turned
to benefit than advanced technologies. The influence of external funding
on the development of an established biotechnology (plant tissue culture)
and a more advanced biotechnology (genetic engineering of plants) will
be explained in more detail below.
Plant tissue culture research
One of the projects funded by NARP proved to be extremely beneficial
for the emergence of two private Egyptian companies working on plant tissue
culture. Both companies were established in 1990, which coincides with
the start of this NARP project conducted from 1990 to 1994. The project
was executed by the Plant Cell & Tissue Culture Department of the
National Research Centre (NRC). It consisted of establishing protocols
for the production of virus-free seed potatoes through tissue culture techniques.
Viral diseases constitute the most notorious problem of potato production
in Egypt. The financial assistance of USAID and technical support of the
International
Potato Centre (CIP), Peru, ensured the international technology transfer
of the required set of techniques. Subsequent adoption of the biotechnology
by the two private companies took place because of the individual initiatives
of staff members of NRC, who were hired as private consultants by both
companies. One private company also established plant tissue culture protocols
for the micropropagation of banana, strawberry and ornamentals. Sale figures
of this company exceeded US$ 2.5 million in 1995.
Apart from the removal of financial barriers by USAID, the development
and domestic transfer of the technology was successful mainly because of
factors outside the control of the involved donor agency, notably:
Genetic engineering of plants
The influence of foreign donors’ aid on biotechnology development and
transfer becomes more apparent with advanced biotechnologies such as plant
genetic engineering. Only a few countries in the Middle East have established
facilities for molecular biology research. Of those countries, Egypt and
Kuwait have undertaken genetic engineering research for crop improvement,
whereby only Egypt succeeded in genetically transforming a plant by transferring
virus resistance into potatoes in 1992.
In Egypt three public research institutes are active in attempting
genetic engineering of plants (see box). All three institutes have been
dependent on financial and technical aid from foreign sources. The Agricultural
Genetic Engineering Research Institute (AGERI), which is part of the
Agricultural
Research Centre (ARC), has received most support, currently provided
through the Agricultural Biotechnology for Sustainable Productivity
(ABSP) project of the USAID. As well as to providing funding for equipment
and building, the ABSP project ensured training of Egyptian researchers
at US universities, visits of US scientists to AGERI, the involvement of
US private companies, and an international workshop on intellectual property
rights and biosafety, held in Egypt in 1993.
The involvement of USAID guaranteed access to more advanced molecular
biology techniques and even to proprietary technologies through USAID mediated
collaborations with patent holders in the USA. USAID stimulates AGERI to
seek patent rights protection on its research findings in Egypt. Because
of the involvement of USAID, AGERI has become the most reputable biotechnology
research institute working on genetic engineering in the Middle East. In
addition, the project has made a considerable impact on Egypt’s biotechnology
network, as AGERI’s 17 senior scientists are affiliated with other institutes
of the ARC and with six Egyptian universities.
The involvement of USAID resulted in such an expansion of AGERI’s research
capacities that the institute has been discouraged from collaborating with
other national research institutes in order to achieve its objectives,
as several examples demonstrate. The most illustrative case is about transferring
Bacillus
thuringiensis (Bt) endotoxin genes to fight the major pest of cotton:
bollworm. All three research institutes active in genetic engineering of
plants are working in this research area without collaboration. AGERI can
tackle this research well on its own, but the other two institutes may
benefit considerably from AGERI’s expertise. In addition, alternative strategies
for controlling the cotton bollworm or biotechnologies for producing Bt
endotoxins sprays by fermentation, have not been considered by any of the
Egyptian research institutes due to fixed collaboration agreements with
the respective donor agencies.
A second example is a programme on genetic improvement of lentils for
which AGERI received US$ 30,000 from the International Center for Agricultural
Research in the Dry Areas (ICARDA), Syria in 1993. In this programme,
AGERI failed to establish a wide cross between short- and long-season lentil
varieties. The failure could have been prevented if AGERI had made use
of the services of the Crop Research Institute, which is also part
of the ARC and located near AGERI. The Crop Research Institute employs
Egypt’s most experienced plant breeder of wide crosses in lentil. The donor
ensured the growth of AGERI resulting in a position in which it was self-reliant
in financial resources and research capacities covering different scientific
disciplines related to biotechnology. Because of this position, AGERI preferred
to execute the project entirely by itself.
A third example of problematic collaboration, is that AGERI depletes
other institutes of staff by hiring their talented researchers working
on genetic engineering. One of the examples is the Genetic Engineering
and Tissue Culture Center of the Menoufiya University, of which
the only one researcher trained in molecular biology left to AGERI. The
Menoufiya University is working on the incorporation of Bt endotoxin genes
into cotton as well. The project also receives a (small) grant from USAID,
but through a different programme. The centre’s main difficulty is to find
and keep trained manpower.
Egyptian public research institutes
working on plant genetic engineering
|
Involvement of other actors in priority setting
In the case of genetic engineering research, the downstream effect
of technology transfer within the country is even more significant as the
relevant actors have not been involved in priority setting of research
when AGERI started its operations. These actors include technology producers
(industry), technology distributors (marketing channels) and technology
users (farmers). For instance, the Egyptian private companies that are
mass-producing virus free potatoes have made no attempt to make use of
the genetically engineered virus free potato lines, developed by AGERI
in 1992.
Early 1996, USAID committed itself to support AGERI for an additional
three years. During this period relations are to be established with other
Egyptian research institutes, private companies, seed distributors and
end-users to assure national technology transfer. However, genetic engineering
research at AGERI is already well underway, leaving little room for participation
of the other actors in the technology transfer process. The available expertise
of AGERI thus provides "supply-push" biotechnology instead of reacting
to problem demands from the agricultural sector in Egypt.
Conclusions from the Egyptian case
The cases above are illustrative of the effect external funding can
have on biotechnology transfer and development in Egypt. Whether the following
observations can be extrapolated to other developing countries depends
on many factors, such as the proportion of received external funds; national
research policies; national scientific and technological capabilities;
and the role of recipients (e.g. industry, farmers, consumers) of the technology.
In the case of Egypt, external donor support of research activities affects
biotechnology development and transfer in four ways:
Firstly, foreign donors can facilitate access to technology
and assist in establishing contacts with counterpart institutions in industrialized
countries, especially in case of more advanced biotechnologies like genetic
engineering.
Secondly, research depending on the support of foreign donors
is in danger of being unsustainable for two reasons: (a) As long as donor
funds are available, the level of research is reasonable or even high in
the case of AGERI. However, as soon as donor support ceases at the end
of a project cycle the level of research tends to decrease because of reduced
funds. The Plant Cell & Tissue Culture Department of NRC finds itself
in this position. The USAID-AGERI project aims at future financial self-reliance
by the sale of their research results. Revenues from both products for
sale at present, ELISA test kits and DNA primers, are not sufficient to
reach this goal. In between two project phases, when financial support
was suspended for two months, AGERI staff indicated their concern about
falling back to common government support; (b) Despite the generally high
level of training of Egyptian scientists in biotechnology, institutions
cannot rely on their human resources, as they move from institution to
institution within the country, depending on the available external financial
resources.
Thirdly, local researchers tend to copy topics of international
advanced research onto the situation in Egypt, because of considerable
say of the foreign donors in the direction of research. The interference
of donor consultants into the research agenda of recipient research institutes
may increase the technological soundness of a project, but will also interfere
with the identification of the "problem" as experienced by domestic researchers.
Local researchers easily comply with the suggestions of these consultants
as in most cases they cannot compete with their impressive data and the
potential they offer for access to additional financial resources. An example
is the transfer of Bt genes to crops of economic importance in Egypt. The
dominance of one major donor, in this case USAID, and the sponsoring of
several biotechnology projects through different programmes, has resulted
in duplicated research agendas.
The relevance of AGERI’s research agenda for Egypt has not been open
to debate for other interested actors of the technology transfer chain
in Egypt. Therefore, the likelihood that AGERI’s current research topics
will be relevant for Egypt is small. Instead of copying fashionable research
topics, research institutes should try to explore research niches that
are relevant to Egypt. In order to stimulate equal links with international
research, national institutes should encourage researchers to publish in
international journals.
An example of a more daring research agenda is the attempt to transfer
Bt to Egyptian clover, planned by the Genetic Engineering Center of
Cairo University. If successful, this would reduce the number of cotton
bollworms at the beginning of the cotton season, as they feed on clover
in the absence of cotton. Seemingly, this different research agenda is
the result of the involvement of a different donor, in this case the Japanese
International Cooperation Agency (JICA).
Fourthly, there is no fair competition between research institutes,
because of the created disparity among institutes regarding the amount
of support and conditions. Some research institutes, such as the Genetic
Engineering and Tissue Culture Centre of Menoufiya University, receive
small grants for which they had to fight hard in order to win the tender.
Other institutes, such as AGERI, receive complete financial and technical
support, including salary incentives for many years. Obviously, this results
in the absence of national competition which would stimulate research institutes
to develop their own research agenda.
Bram de Hoop
Associate Expert at the Economic and Social Commission for Western Asia, United Nations, c/o Ministry of Foreign Affairs/DGIS (ESCWA, Amman, Jordan), PO Box 20061, 2500 EB The Hague, the Netherlands. Phone (+962) 6 672963; Fax (+962) 6 694981/2.
Sources
A. Postlewait and D.D. Parker (1993), "The Advent of Biotechnology
and Technology Transfer in Agriculture." Technological Forecasting and
Social Change, No. 43, pp. 271-287.
United Nations (1996), Inter-Agency Task Force Meeting Biotechnology Applications and Technology Transfer: Survey of biotechnology activities in Egypt. Mission Report Egypt visit 16-21 December 1995. Amman, Jordan: Technology Section - SIPD, ESCWA (restricted).
C. Brenner and J. Komen (1994) International Initiatives in Biotechnology for Developing Country Agriculture: Promises and problems. Paris: OECD.
Personal communications with Taymour N. El-Din (Deputy Director AGERI), Hanaiya A. El-Itriby (Head of Research AGERI), John H. Dodds (Managing Director ABSP Project), Hamdy A.A. Moursy (Vice-President Academy of Scientific Research and Technology, Egypt), Nabiel A.M. Saleh (Vice-President for Research, NRC, Egypt), Michael Baum and Franz Weigand (Research staff, ICARDA, Syria) and Kathleen Abdalla (ESCWA).
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