Future Economic Growth

FUTURE ECONOMIC GROWTH

Throughout the world, about 35,000–70,000 species of plants have been used at one time or another for medicinal, neutraceuticals and cosmeceuticals purposes. In India, about 1,000 plant species, in Nepal about 700 species, about 700 species in Peninsular Malaysia and its neighbouring Islands and in Chinese medicine about 9,905 plant materials are used but only a relatively very small number of them are used in any significant volume. According to the Interna-tional Trade Centre (ITC) report, there is generally upward trend except for 1990, when it dipped slightly before rising again to US$ 1.08 billion in 1991. The world trade in medicinal plants and raw material from plants parts aver-aged US$ 1.28 billion during 1995–1999. Thus, there is lot of scope in future for new plant-based drugs that are still to be introduced, and the economic significance of these plant-based pharmaceuticals is considerable which is based on the following two aspects:

1.     The value of the current plant-based pharmaceuticals, and

2.     The value of potential plant-based pharmaceuticals, which are yet to be introduced.

The values of these drugs are described both in terms of their market value and their economic value.

Market value is a subset of economic value, which includes all benefits to society. Market value of the drugs is attributable to the plants raw materials, development and manufacturing costs as well as the incorporation of research cost for the failed efforts and above all the existence of consumer’s surplus.

Economic value represents all the social benefits of par-ticular type of product including market value. Economic value can be viewed as an expression of the total benefit of a product.

The relationship between the economic value of a medic-inal plant species and market price of the drugs derived from it, is not a direct one. However, it is true that the market prices are minimum valuations assuming that:

·  the demand for the drug is inelastic,

·  that it is appropriate to value an essential input as its own cost plants, and

·  the economic rent obtained from it plus the associated consumer’s surplus.

For example, the market value of a stand of forest could be measured by translating the wood volume there in into an equivalent quantity of paper and then taking the market value of the paper. In contrast, economic value to society includes not only the value of the paper (or whatever the other commodity is selected), but also what may be referred to as the in situ benefit of trees as forest that is the contribution as:

·  The forest checks the soil erosion, stabilizing the water table, converting carbon dioxide into oxygen (environ-mental effects);

·  Providing protection to wild life, and;

·  Providing recreational opportunities; hence, the eco-nomic value is much larger in magnitude but also much more difficult to quantify.

For example, an economic value for medicinal plant species would be examining the current cost to society of a disease whose impact might be diminished in the future by drug derived from plants, e.g. in the case of cancer disease which is the major cause of about 5 lakh deaths per year in the United States and cost about US$ 14 billion annually in treatment, whereas the value of each life estimated to be about US$ 8 million, then the total value will be about US$ 4 trillion annually. Anticancer drugs save about 75,000 lives annually in the United States (an estimated 15% of 500,000 lives), and plant-based drugs comprise about 40% of total group of anticancer drugs. Combining those estimates, approximately 30,000 lives are saved annually in the United States as result of the use of plant-based drugs. Multiplying the lives saved by the value per life, the annual economic value of plant-based drugs in the United States alone is estimated to be about US$ 250 billion. Since this estimate reflect only a part of the total economic value of all plant-based pharmaceuticals; moreover, these values include none of the nonpharmaceuticals benefits provided by the plants responsible for these drugs. The above mentioned data is on the basis of information by Violette and Chestnut 1986, in EPA-230-06-86016 Feb. 1986, and information available from the economic value of biological diversity among medicinal plants. These values would be tripled to US$ 750 billion annually to account for anticancer appli-cation in all Organization for Economic Cooperation and Development (OECD) countries.

This reflects that medicinal plants and their products have taken an increasing medical and economical impor-tance with respect to product categories like health food, cosmetics and personal care products containing natural ingredients—the demand for medicinal plants is growing exponentially. The fastest growing world market in herbal products is opening up new opportunities for the develop-ing countries to benefit from the rising green consumer-ism, trend to develop their export potential. However, this requires a grand strategic plan, which takes a holistic view of the entire situation to boost the export.