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Morocco: Derb Ghalef Valley

Derb Ghallef is an iconic permanent flea market in the city of Casablanca. This is the kind of places in Morocco (there are many of them in every major city) people visit to buy everything from smart phones to furniture, to laptops, to counterfeit sportswear to pirated DVDs. It is often bustling with people from all walks of life.
In recent years some people started calling the place “Derb Ghalef Valley,” as it became the hub of a creative new breed of IT wizards, high-tech hackers, iPhone jail-breakers, skilled handypersons, many of whom are unemployed graduates.

Derb Ghallef is somehow the symbol of Moroccan informal economy, but it is also a byword for a flourishing counterfeiting industry. It’s a tolerated black market operating in the open–a haven for pirates and counterfeiters.

Everybody seems to enjoy it though. Why indeed buy a patented operating system in the regular market for example when you can have the exact same copy at a 500 time  lower price in Derb Ghallef?

Morocco has been steadily opening its market to global competition recently. It has already signed a number of treaties regarding intellectual property (IP) and at some point down the road it will have to comply with regulations imposed by the World Intellectual Property Organization (WIPO), the United Nations’ body administrating international treaties on IP.

What would happen should the TRIPS (Agreement on Trade-Related Aspects of Intellectual Property) requirements, ratified by Morocco, be fully implemented (as they should have been 7 years ago)? Will places like Derb Ghalef simply vanish? What would happen to the people who make a living out of counterfeiting and piracy? Would the Moroccan consumer be better off without Derb Ghallef? Is there a way to strike a good balance between a restrictive intellectual property rights (IPRs) regime and a complete laissez faire policy?


In an article published in 2003 titled Intellectual Property in the Arab World, authors E. Gardeno and F.J. Pietrucha contend that what keeps Arabs from advancing is not the legacy of colonial rule nor the lack of natural resources but it is mainly the poor development of human capital. The future economic status of the region, they argue, will depend more on the ability of the Arab countries to utilize the intellectual resources they possess, rather than on their natural wealth or the level of advancement of their manufacturing industries. A “shifting of sources of economic prosperity” must then occur rapidly in favor of a knowledge-based economy, at the basis of which lies a wealth of intangible forms of property.

Derb Ghallef epitomizes a surplus of human capital in a region plagued by underdevelopment. Souks like Derb Ghallef are very common across the region and employ talented young people who can’t find jobs in the regular economy despite their undeniably useful scientific and technical skills.

The region suffers from an enormous “brain drain” because the political and economic environment is not yet conducive for creating incentives for a real knowledge-based economy.

It is no surprise then that many skilled Arabs want to emigrate. In fact “the employed, entrepreneurial and educated are the ones most likely to express a desire to migrate,” according to a 2010 cross-regional Gallup poll (31% of respondents working full time compared with 17% who are not in the workforce).

Arguably, one way to create that environment would be to put in place an intellectual property rights regime that would be beneficial for both the creators and consumers, building an incentive to creativity and invention.

What is intellectual property?

Intellectual property is a concept that can be traced back centuries ago. It covers three different sets of rights regarding patents, copyrights and trademarks. These are intangible properties as opposed to tangible assets (which comprise real estate and private property). Intellectual property rights are meant to foster creativity and protect creators, inventors and innovative businesses.

The term intellectual property has a fascinating history. The struggle between proponents and antagonists of IP laws in the late 18th century during the struggle for the reform of the patenting regime in Great Britain. Even today, it still raises criticism among activists and scholars.

According to the Electronic Frontier Foundation the controversy stems from the inaccuracy of the term, as it covers different sets of rights for different sets of assets, and also because it can be misleading as it it suggests that patents, copyrights and trademarks can be treated as real property.

Morocco as a member of the WIPO is signatory of many international agreements and treaties meant to standardize and enforce the implementation of an internationally coherent IPRs system, most notably the TRIPS agreements.

The official page of the Moroccan Permanent Mission to the WIPO boasts that…

The Kingdom of Morocco is one of the first developing countries to fully meet all its obligations under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and this, since the promulgation in December 2004, of the enforcement Decree of the Act 17-97 on Industrial Property.

A short visit to Derb Ghallef will convince anyone that actually the Kingdom of Morocco is nowhere near meeting any of its obligations under the WTO. There are many reasons for this lack of compliance that I will be touching upon later.



Moreover, Morocco has ratified a Free Trade Agreement (FTA) with the US in 2004. It came into effect in 2006. The agreement provided assurances for U.S. businesses with regards to intellectual property. Under the agreement, Americans could lobby for Morocco to conform with existing international standards for the protection of intellectual property rights, consistent with U.S. law.

Moroccan daily L’Economiste published a series of detailed articles in 2006 raising many concerns on the impact of the agreement on the Moroccan economy.

One area where concerns seemed the more pressing was health. Moroccan pharmaceutical companies have expressed concerns over increased penalties for intellectual property and patent violations, saying the agreement could undermine access to cheap medicines for Moroccans citizens.

NGOs and human rights organisations warned that the agreement could seriously undermine measures taken by the Moroccan government to ensure access to affordable medicine, calling on the Moroccan government to undertake “independent human rights impact assessment of the effect of trade-related intellectual property rules on access to medicines and the enjoyment of the right to health.” It is not clear whether the Moroccan government has responded to such calls and whether an estimation of the risk has indeed been undertaken.

Another important area is the software market. While Americans recognize that the Moroccan authorities have made ​​commendable efforts to strengthen IPRs protection in the software industry, they lobbied for sweeping reforms covering Import duties, communication, distribution, the duration of the protection for the copyrighted work, in addition to technological protection measures in accordance with a controversial U.S. 1998 law called DMCA (Digital Millennium Copyright Act) that criminalizes any circumvention of the measures that control access to copyrighted work.

The Moroccan government, however, has been dragging its feet. There are many reasons for that:

The fear of the loss of monopoly over key sectors of the economy by certain powerful “oligarchs” who benefit from the status quo by tapping into the informal economy. They would rather keep things unchanged;
The genuine perception associated with strong IP protection regimes often perceived as a tool designed to create monopolies that are only beneficial to powerful industrial nations. Some argue it is a modern form of economic imperialism;
The strong belief that piracy is an immediate and affordable tool for acquiring advanced technology and creating jobs;
The fear that a strong IPRs system would increase prices well above what most of the Moroccan population can afford;
The asymmetrical nature of such regimes: An exporter from a developing country who wants to protect his product internationally is compelled to file patents, trademarks, copyrights in all parts of the world, which implies a large budget and therefore limits the protection to some confined geographical areas, leaving the creator vulnerable to theft anyway.
While some of these concerns are well founded, studies do not give a clear answers as to alternatives. Between a strict IP regime and a laissez faire system, opinions are divided.
According to a study commissioned by the Office of the US Trade Representative and conducted in 2003 by the Business Software Alliance (BSA) (not without an obvious conflict of interest), reducing software piracy would create billions of new wealth while adding hundreds of thousands of new high-tech jobs and generating billions in new tax revenues, benefiting mainly local economies. The study concludes urging governments to conduct “a concerted action to ensure strong protection for IP and to reduce software piracy…— sooner rather than later.”
Other studies point out the dangers for consumers of using unwarranted goods and products and explain that government condoning or ignoring piracy miss out on foreign investments opportunities.
While the FTA gives very powerful incentives for the Moroccan government to modernize itself and implement an effective IPRs system, many still question the benefits the Moroccan economy will eventually reap from such an asymmetrical accord.

A certain number of fa-reaching questions are still a matter for concern:

- Is the State ready for the transition at the speed with which it is taking place?

- What about the thousands of young people working in the informal sector, who despite their skills lack formal qualifications to enter the labor market?

- What are the expected political, economic and social consequences of such a transition?

- Will access to medicine, education or knowledge be undermined?

- Is the judiciary ready to face the challenges ahead of the major changes to come?

- Has the legislation been adapted?

Striking the right Balance…

According to economist Mark A. Lemley, it is “highly probable that intellectual property increases innovation and creation relative to a world without intellectual property rights, though it is hard to say by how much. Economic theory tells us that we must balance those rights if we are to achieve efficiency, granting intellectual property rights only to the extent necessary to enable creators to cover their average fixed costs. Anything more does harm and no good.”

The author also explains that an extensive literature review could not find a consensus on the scope, strength or duration of intellectual property protection, which probably depended more on the context of each market and the particular nature of each product, invention, innovation.

That is to say that scholars themselves are divided over the notion of an internationally calibrated intellectual property law.



On October 4, 2004, the General Assembly of the WIPO agreed to adopt a proposal offered by Argentina and Brazil. It is a step forward in recognizing that the whole approach to intellectual property as it has been framed under the auspices of the World Trade Organization was somehow wrong. The very concept of intellectual property ought to be revisited.

The proposal, also called “The Geneva Declaration“, calls on WIPO to focus more on the needs of developing countries:

Enormous differences in bargaining power lead to unfair outcomes between creative individuals and communities (both modern and traditional) and the commercial entities that sell culture and knowledge goods. WIPO must honor and support creative individuals and communities by investigating the nature of relevant unfair business practices, and promote best practice models and reforms that protect creative individuals and communities in these situations, consistent with norms of the relevant communities.

Delegations representing the WIPO member states and the WIPO Secretariat have been asked to choose a future. We want a change of direction, new priorities, and better outcomes forhumanity. We cannot wait for another generation. It is time to seize the moment and move forward.

Some have gone so far as to call for the abolition of the WIPO altogether, like the Free Software Foundation Europe, which suggested its replacement by a new entity it called the “World Intellectual Wealth Organization” (WIWO):

A World Intellectual Property Organisation will always, understandably, lean towards applying the pre-selected tool-set of monopolisation that it refers to as Intellectual Property; a term that we find to be ideologically charged and dangerously oblivious to the significant differences that exist between the many areas of law that it tries to subsume. While it may look at better, possibly more socially sustainable ways of granting ownership-like monopolies over different forms of knowledge, WIPO will not have an easy time looking for alternative solutions. WIPO is not what we need.

We need a World Intellectual Wealth Organisation, dedicated to the research and promotion of novel and imaginative ways to encourage the production and dissemination of knowledge. Granting limited monopolies and limited control over some kinds of knowledge may be part of this new organisation’s tool-set, but not the only one, and maybe not even the most important one.

Resistance to old models is emerging, communities are organizing outside of the corporate realm to create new wealth of creative intangible assets. Creative Commons has been leading the battle by expanding the range of creative works available for others to build upon legally and to share. The Pirate Parties have been leading struggle on the political front, advocating reform of laws regarding copyright and patents, the right to privacy, and the transparency of state administration.

Derb Ghallef, which is as much a place for counterfeiting and piracy as it is a breeding ground for creation, is also an allegory of the Moroccan way of life. Inventions are not created in a vacuum. They build on existing technology and ideas. No one knows who invented the processes of making couscous, preparing mint tea, manufacturing djellabas or Belghas (Moroccan distinctive slippers). We came to believe that these were common unintelligible assets that anyone can make use of and benefit from. Invention and creativity should be rewarded of course but to the extent that that reward does not impinge on general public good.

We are on the verge of a defining crisis between commerce and creativity. A crisis that may reconfigure the market of ideas in the years to come. Adrian Johns, author of “Piracy: The Intellectual Property Wars from Gutenberg to Gates” (P. 498) has an interesting take on that crisis. He writes:

Measures adopted against piracy can sometimes impinge on other, equally valued, aspects of society. Indeed, it is possible that they must do so, given the nature of the task. When that happens, however, they can trigger deeply felt reactions. The result is a crisis, with the potential to create a moment of genuine transformation. We have seen that such moments have arisen before. But the change is liable to be all the greater when the scope of antipiracy action has been so enlarged. We may therefore be about to experience a profound shift in the relation between creativity and commerce. It will be the most radical revolution in intellectual property since the mid-eighteenth century. It may even represent the end of intellectual property itself.


Article first published at 
almiraatblog


 

Comments (10)  

 
Ussef
0 #1 COMMENT_TITLE_R E Morocco: Derb Ghalef ValleyUssef 2011-08-15 12:19
For someone who has obviously researched seriously his subject, you exhibit a somewhat incomplete vision.

Simply put, Morocco has actually fully complied with the provisions where it does count: the industrial sector. Morocco's industry doesn't manufacture counterfeits or use patented processes illegally. The other important point to mention is that you must have a plaintive for counterfeiting to be brought to court. Both aspects have mostly to do with the size of Moroccan economy.
For example, the chaabi casette market is virtually free of counterfeiting because it actually makes economic sense for the producers to combat piracy. For Universal or EMI, Morocco is worst than a marginal market, it isn't worth even mentioning as long as it doesn't touch the Spanish market for example. It can be said for all the "Iconic" derb ghelelf merchandise: clothing, media and software.
The simple answer to this problem is an adequate pricing policy. It's clear that for a software to be marketed in Morocco at the same price as Paris is moronic, however that is what's happening. But making a different pricing policy for developing countries can prove to be problematic, and/or simply not worth the trouble.
When you want to buy a French Roman, you pay it the same price as in the Euro sticker, and a bit more, but our revenue is 7,9 times less than in the Eurozone. The volumes at which books are printed in France make the cost of it very small, the publisher could charge a reasonable surplus and sell thousands of novels instead of a hundred or two, but it doesn't happen because the publishers would be petrified at the thought of a tourist buying his books in Marrakech.
And finally, I do not mean to injure anyone's national pride, but "Derb Ghellef Valley" is waaaaaaaay overrated. It's just a consumer of techniques that are developed mainly in Asia and made global through Internet. The actual output is very minimal.
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Paul
0 #2 COMMENT_TITLE_R E Morocco: Derb Ghalef ValleyPaul 2011-08-15 17:13
"For Universal or EMI, Morocco is worst than a marginal market, it isn't worth even mentioning as long as it doesn't touch the Spanish market for example."

This is simply not true.
People in Europe are continually hounded and prosecuted by these studios (and other companies) who are in pursuit of their correct share of their royalties from movies, music and software etc.

When you combine the piracy levels of the whole of Morocco and the whole of Tunisia and Algeria and Libya etc, plus other countries who's governments have not initiated intellectual property rights laws (let alone actually police it), it becomes a significant loss of earnings to studios, actors, producers and associated companies.

However, i do agree with you ussef that charging the same amount to a person in countries such as Morocco as you would for a person in France or England etc for a DVD or piece of software is a ludicrous idea.

I am a big believer that products should be priced to the level at which the market can sustain.

After all if Coca Cola can do it, then why not the software makers, the movie studios etc?

We have a global customs infrastructure that could handle the rules for the importing of "cheap legitimate items" such as DVD's etc in the same way that it currently handles the importing of Cigarettes and Alcohol between tourists visiting countries.
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Aziz El Alami
0 #3 COMMENT_TITLE_R E Morocco: Derb Ghalef ValleyAziz El Alami 2011-08-15 22:51
Derb Ghalef and all the other underground markets do more harm than good in morocco… While they do provide the local consumer with cheap alternatives; they do deprive our government of the much needed tax revenues. They also represent unfair competitions to those retail establishments who have to play by the rules… Derb Ghalef and the likes need to be controlled first and then slowly phased out to allow for legitimate business to strive. You argued that these markets stimulate innovation, (breeding ground for creation) you called them… I would argue the opposite: as in the old cliché that necessity is the mother of creation … the overabundance of knockoffs and pirated goods leads nowhere by to complacency.

Great Article though… I enjoyed reading it. Thanks Hisham G.
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Ahmed Tijani
0 #4 COMMENT_TITLE_R E Morocco: Derb Ghalef ValleyAhmed Tijani 2011-08-16 02:00
Ussef
Quote:
Derb Ghellef Valley" is waaaaaaaay overrated. It's just a consumer of techniques that are developed mainly in Asia and made global through Internet.
Agree. It makes me laugh when Moroccans refer to Derb Ghellef merchants as scientists for the simple reason that breaking of encryption algorithms cannot be done with Mtarka (the hammer is the first thing used to fix anything in Morocco) and requires Major education in mathematics, computer programming languages and electronics. Like you said, Asia and Eastern Europe do the brain-work and share it with every one over the internet. A simple google search can get you anything you want.


Derb Ghellef causes me to have two conflicting feelings. On one hand, my free market beliefs and my convictions in upholding the laws and the regulations that govern the market place as the best way to create a solid economical model are in contention with the humanitarian relief derb ghellef presents. Derb Ghellef is a major economical hub in Casablanca, it offers simple poor Moroccan opportunities to make a decent living and allows middle class and poor Casablanca to consume products that were previously out of reach and only available to rich Casabanca. Though quality is mediocre and the supply process of how products make it into derb ghellef is questionable at best, there’s no denying that demand is strong. Doing away with this shadow economy is not clear as to how it would affect our society economically and politically.
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man en blanc
0 #5 HANDS OFF DERB GHALEF!man en blanc 2011-08-16 02:05
First CNN disappeared, followed soon by french movie channels. I asked my brother to check the box or the dish. His reply was : Derb Ghalef.
50 Dirhams and an hour later, I had my channels back. Try that with your local cable/satellite company.
I don't care about what impact, if any, Derb Ghalef has on the economy. Certain members of a certain infamous inner circle loot more in a week that the poor vendors of Derb Ghalef do in a year.
For me, Derb Ghalef is more of a cultural experience than a mundane flea market outing. I grew up in L'Oasis after all, the weekly pilgrimages to the "Joutia" were and remain sacred journeys.
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Aziz El Alami
0 #6 COMMENT_TITLE_R E Morocco: Derb Ghalef ValleyAziz El Alami 2011-08-16 05:27
@man en blanc

I can’t believe you are in favor of preserving Derb Ghalef and the other countless “jouteyats” in Morocco… I sympathies with your emotional attachment… but I can't help but think of them as a sign of mediocrity and backwardness! The only thing they excel at is offering inferior knockoffs with mediocre services. If we were to advance as a society, updating and modernizing our retail modus operandi is a must… but that’s only one out of a thousand other aspects in a dire need for immediate improvement.
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Ahmed Tijani
0 #7 COMMENT_TITLE_R E Morocco: Derb Ghalef ValleyAhmed Tijani 2011-08-16 07:06
@Aziz,

Derb Ghellef is bad for the economy when subjecting Morocco's economy to western standards. It is quite easy for us to see major IP infringements in Derb Ghellef but most of us can't even imagine the scale of corruption in the real Moroccan economy. I was told that there's no way to conduct business in Casablanca stock market without solid insider information. My point is that we should hold all participants in the Moroccan economy to the same policies and standards, not just derb ghellef.
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man en blanc
0 #8 Advance this!man en blanc 2011-08-16 11:35
Get off you high horse Aziz. I will be the first one to admit to my "emotional attachment" to Derb Ghalef. Simplistic and corny as it may sound, I tend to value the core of what made many areas of Casablanca an amazing and almost on par with certain "luxuries" that only select few privileged neighborhoods used to to enjoy.

Derb Ghalef leveled the playing field by providing cheap access to a world that million Moroccans thought was only accessible to the "Ruling Class". I vividly remember the first satellite dishes springing up like mushrooms on rooftops from the villas of Franceville to the douars of Bouskoura!
you are learned enough to gauge what Derb Ghalaff mean to countless Casablancais et Casablancaises!
AlJazeera flourished thanks to Derb Ghalef, and who knew that Bosnia-Herzegov ina produced some of the finest porno this side of the San Fernando Valley?

I would hate to see another misguided, Makhzen-planned project targeting JOUTIA.
The record of the Makhzen speaks for itself!
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nation of rats
+1 #9 derb sultan always and for evernation of rats 2011-08-17 10:54
yes definitely, see i got to ask my dad about derb ghalef in casa , to tell you the truth the usual answer , the best market in town for the poor and rich, see my dad was born in deb sultan and moved to pollo before he came out to the us to continue his studies, any how i'm gonna have to stick with my old man's origin though DERB SULTAN , ALWAYS AND FOREVER.
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Saidy
0 #10 Please!Saidy 2011-08-18 18:42
Aziz, I can assure you that Derb Ghalef is the last thing you need to worry about if you want to improve the Moroccan economy (if that's what you are after). My dog Boubby knows that! your tax revenue comment is somewhat laughable ;-) Do you really want to focus your energy on collecting tax from these poo folks where the elite (pick anyone you want) continue to make grazillions tax free. phuuuleeeeze!
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