UNCLAS SECTION 01 OF 03 ISLAMABAD 003254

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD EFIN EINV KIPR PGOV PK
SUBJECT: PAKISTAN'S NATIONAL BOOK FOUNDATION


1. (SBU) Summary: This cable contains an action request, see
paragraph 9. The National Book Foundation (NBF) has the mandate of
providing affordable textbooks, reference books and research books
to university students as well as promoting the growth of a domestic
book industry. This mandate has developed into a successful
non-profit government enterprise which promotes Pakistani authors,
literacy, information dissemination and the domestic printing and
publishing industry. Amendments to Pakistan's copyright laws
provide for compulsory licensing of textbooks to a government entity
on a not-for-profit basis, allowing the NBF to translate and reprint
textbooks of foreign origins without obtaining reprint rights or
paying license fees or royalties. The NBF paid royalties to foreign
publishers from its inception until 1984 when it stopped paying fees
due to a severe shortage of funds. The NBF now says that it would
like to restart a royalty payment program for foreign books that it
has reprinted in Pakistan, but they also say they are encountering
some resistance from book publishers. In view of the NBF's
activities promoting literacy and education, Post believes that it
would be advisable to find an equitable solution rather than attempt
to curtail their activities. End summary.


2. (U) On October 7, Econoff met with NBF Managing Director Javed
Akhtar and Secretary Aslam Rao to discuss the NBF's reprinting of
foreign books without permission or royalties and to better
understand NBF's work in Pakistan in general. In response to
requests from the Department of Commerce (DOC) to explore the
possibility of a digital video conference (DVC) between the American
Association of Publishers (AAP) and the NBF, Econoff visited NBF to
pursue the issue of compulsory licensing, to discuss a meeting
between NBF and the American Association of Publishers (AAP), and to
seek the NBF's views on copyright in general in comparison to the
book publishing industry's views.

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PAYING THEIR DUES
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3. (SBU) Javed Akhtar told Econoff that he is very much in favor

of
"doing the right thing" and restarting royalty payments to foreign
publishers for books reprinted in Pakistan. They were also very
interested in potential co-publication arrangements in cooperation
with foreign publishers. Aslam Rao said that he had been contacting
foreign publishers regarding reprint rights and license fees, but
had had a very low response rate. He said he hoped to meet with
representatives of the Publishers Association of the U.K., the
American Association of Publishers (AAP) and the International
Publisher's Association (IPA) during an upcoming visit to the
Frankfurt Book Fair in October. They were of the opinion that the
NBF actually had a damping effect on book piracy because few
booksellers could afford to undercut the NBF's low prices. (Note:
Industry has previously reported that NBF sold its product at or
above the legitimate price.) Both assured Econoff that they would
be open to audits of their printing runs by third parties and that
they maintained internal checks to prevent unauthorized print
overruns. In addition, they said, the NBF is empowered to take
action against illegal copies of their own books, an added benefit
in a co-publication arrangement. The NBF receives requests for
reprints of foreign books directly from a university, and it then
polls other universities to determine the actual demand for that
book and thus the number of copies needed. The NBF is part of
Pakistan's Intellectual Property Task Force, which includes the
Intellectual Property Organization (IPO), the Federal Investigation
Agency (FIA) and Pakistan Customs.


4. (SBU) When asked to offer an opinion on why publishers in the
United States are not interested in granting print licenses to NBF,
Rao and Akhtar told EconOff that the publishers think that Pakistan
is a small market that can be catered to from India. Rao and Akhtar
highlighted the rollercoaster political relations between the two
countries and stressed that the arrangement cannot be sustainable
until the two countries sort out their bigger issues. Pakistan
today is a country of 170 million people with 45 percent of the
population aged between 18-24 (i.e. school and university age), and
not a negligible market. They suggested that perhaps the US
publishers could form another region comprising Pakistan, Sri Lanka,
Nepal and the Central Asian countries. Printing and publishing
partnerships could also be created in Pakistan where the cost of
printing is lower than India.

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HISTORY OF THE NBF
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5. (U) Aslam Rao provided a detailed history of the NBF and its
mandate in Pakistan. The NBF was founded in 1972 with the purpose

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of providing affordable textbooks to Pakistani students, after
shortages of textbooks led to unrest on university campuses. At
that time, all textbooks used in Pakistan came from outside the
country and were beyond the means of most Pakistani students to
afford. The 1972 devaluation of Pakistan's currency raised prices
by over 100 percent when the exchange rate went from PKR 4 per
dollar to PKR 9.9 to a dollar. One of the NBF's primary functions
was to provide textbooks and academic books through local
production. An amendment in 1973 to the Copyright Ordinance of 1962
allowed for compulsory licensing of textbooks. In 2000, the
Copyright Ordinance was amended again and the section regarding
compulsory licensing of textbooks was revised to specify that it
could only be done by a government entity and on a non-profit basis.



6. (SBU) Nonetheless, from its foundation until 1984, the NBF paid a
royalty of two percent of the foreign listed price to foreign
publishers. According to Rao, the NBF has never had a funding grant
from the GOP, and Ali alleged that the corruption during Zulfikar
Ali Bhutto's tenure as Prime Minister ate through what capital the
NBF did have. Thus in 1984 it was decided that, ostensibly to
reduce the NBF's costs, it was not necessary to pay royalties since
Pakistani law authorized the reprints without them. From the
mid-nineties on, after Pakistan joined the WTO and the Trade Related
Aspects of Intellectual Property Rights (TRIPS) agreement came into
effect for WTO members, the NBF began to experience increasing
pressure from foreign publishers and their local agents regarding
royalty payments.

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A SUCCESSFUL ENTERPRISE
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7. (U) The NBF earned PKR 250 million (USD 3.2 million) in
FY2007-08, primarily from the sale of textbooks. According to Rao,
it is the biggest single distribution channel for books in Pakistan,
with twenty-two outlets, including their main headquarters in
Islamabad, provincial headquarters, branch offices and stand-alone
bookstores. It has worked with Pakistani authors to develop its own
line of primary and secondary school textbooks, approved by the
Ministry of Education. In addition, the NBF runs several literacy
promotion programs, including Braille books which it distributes
free of charge around the world, translation of children's books
into Urdu, promotion of children's books authors and a very popular
reader's club which enables members to buy books for half price.
Akhtar and Rao highlighted Wah Cantt (a town 35 kilometers from
Islamabad), which has a 99 percent literacy rate, and Islamabad
Capital Territory which also has a very high literacy rate, as areas
where the NBF's programs and textbooks have been particularly
successful.

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ALTERNATIVE VIEW
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8. (SBU) Ameena Saiyid of the Oxford University Press, for one
industry example, remains steadfastly hostile to the National Book
Foundation's activities saying, "They should not be printing books.
They should promote book sales and publishers and not be in
competition with them." This view lends some credence to Rao's
claim that foreign book publishers have been unresponsive to NBF
offers to pay license fees. The American Association of Publishers
has offered the view that their priority in Pakistan is law
enforcement and public awareness issues before discussing print
licensing arrangements or joint ventures. The Pakistan Publishers
and Booksellers Association, a domestic publishing trade
organization, has collaborated successfully with the NBF to organize
international book fairs in Lahore and Karachi.


9. (U) Action Request: Post has learned that DOC and the U.S. Trade
Representative (USTR) are no longer interested in pursuing a Digital
Video Conference (DVC) between the stakeholders, but Post requests
that DOC and USTR facilitate a meeting between the NBF and the AAP
at the Frankfurt International Book Fair from October 15 to 19 where
the NBF is maintaining a booth.


10. (SBU) Comment: While it is possible that Akhtar and Rao were
being disingenuous and self-congratulatory about the NBF's
achievements, the offer to begin paying royalties or print license
fees appears legitimate. While the payment of licensing fees does
not address the issue of compulsory licensing as allowed in
Pakistani law, it can be seen as an effort to improve the situation
and mend fences. In view of the NBF's activities to support and
promote Pakistani authors, literacy and education, Post does not
believe it is advisable to advocate any action that would curtail

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these efforts. Post recommends working toward a collaborative
solution between the NBF and the international publishing community,
which could include joint publishing ventures and partnerships. End
comment.


FEIERSTEIN