COMMON FUND FOR
COMMODITIES
THIRD UNITED
NATIONS CONFERENCE ON
THE LEAST DEVELOPED COUNTRIES
Plenary Statement
by
Managing Director
of the Common Fund for Commodities
Tuesday, 15 May
2001
Mr. President,
Excellencies,
Ladies and Gentlemen,
This Third United Nations Conference on the Least Developed Countries has before it a Programme of Action for the current decade containing a number of commitments. From the Common Fund’s point of view, Commitment 5: “Enhancing the Role of Trade in Development” is of particular interest. I quote from the draft introduction to Commitment 5: “Trade will increasingly continue to be relied upon by LDCs to generate the resources for financing growth and development .... However, the participation of LDCs in international trade is severely limited by a number of factors, in particular demand and supply-side constraints, ....: “..... LDCs themselves, as well as their development partners will therefore ... [have] to overcome these constraints and transform trade into a powerful engine for growth and poverty eradication.”
Some facts need to be taken into account such as that the large majority of export trade of LDCs is in commodities. According to the World Bank, “more than 50 developing countries depend on three or fewer leading commodities for more than half of their export earnings.” This is particularly true for the Least Developed Countries.
The draft Action Plan recognizes this interrelationship between commodity exports of LDCs and development. Commodities provide employment to a large part of the population in LDCs and are also a major source of foreign exchange earnings. Commodities are also the main source of income, savings and government revenues.
Strengthening the production and marketing capacities of LDCs need a coherent and comprehensive approach. A range of measures need to be taken with a view to building complementary capacities which should encompass enhancing the production and processing capabilities along with the improvement of the institutional and regulatory framework, building human capacities and addressing export related infrastructure, particularly transport bottlenecks.
LDCs should be assisted to identify where their new opportunities are and take advantage of them by enhancing their commodity export potential. A primary condition for the successful pursuit of diversifying their exports is their competitiveness in terms of their natural resource endowment, the existence of appropriate human capital as well as the accessibility of appropriate technology that will constitute a comparative advantage on a regional or international scale. Evidently, additional factors such as political stability, the availability of essential physical infrastructure as well as transport and communications systems are critical for success. Many LDCs are endowed with rich natural and human resources which can be harnessed to diversify the production base and to generate domestic savings for investment.
Poverty eradication is the most pervasive challenge that the international community is faced with at the beginning of this new millennium. The commitment to reduce poverty by half by 2015 is a firm indicator of the resolve of poor and rich countries to achieve tangible progress in the shortest possible time frame. This goal can be attained both by means of creating the capacities to provide goods and services to meet the essential needs of populations as well as by raising the purchasing power of these populations, particularly in the Least Developed Countries.
We fully support the actionable measures on commodities given in the draft Action Plan which are:
- Capacity building in the areas of research and development, production, processing and marketing of commodities, including addition of non-traditional commodities where market niches offer fresh opportunities;
- Diversification programmes including adaptive research and development (R&D) on production and processing aimed particularly at smallholders and small and medium-sized enterprises in these countries;
- Provide technical and financial support to enhance the productive capacities of LDCs through stimulating investment, human resources development and enhancing technological capacities with a view to increasing the commodity exports of LDCs;
- Providing assistance, to create essential infrastructure to facilitate the functioning of liberalized domestic and regional markets;
- Technical assistance for the implementation of multilateral trade agreements as well as Sanitary and Phytosanitary Measures;
- Building institutional and technical capacities to gain access to and make use of modern risk management techniques and tools; and
- Encouraging private sector initiatives and supporting the establishment of partnerships with foreign companies.
Economic progress of LDCs is inextricably linked to the strengthening of the commodity sector, including horizontal and vertical diversification. Through its targeted multi-country projects, the Common Fund for Commodities is committed to giving particular attention to the advancement of the Least Developed Countries.
Thank you, Mr. President.