Mr. Rolf W. Boehnke
at the International Conference for Financing for Development
This International Conference for Financing for Development is an encouraging event towards the fulfilment of the multilaterally agreed development goals - including the Millennium Declaration. It is an important step towards redressing the asymmetries and imbalances in the distribution of costs and benefits which prevail in the current international economic system. The Conference has brought together all members of the international community in a partnership for economic decision making at the global level.
The Conference provides a unique opportunity to co-ordinate and consolidate the approaches for a fully responsive financial system and the attainment of the strategic goals of growth and poverty alleviation in developing countries.
The vast majority of Developing Countries are dependent on commodities for more than half of their merchandise exports. It has been estimated that at least one billion people depend on export commodities for a substantial part of their livelihood. Commodity production and primary processing remain the mainstay of Developing Countries' economies. Many Developing Countries are endowed with rich natural and human resources, which can be harnessed to diversify the production base and to generate needed domestic savings for investment and foreign exchange from exports. Success stories of a number of countries that have achieved high levels of growth and diversification affirm that high total merchandise export and per capita income growth can be achieved through the development of the commodity sector. It is necessary to unlock and develop the vast potential embedded in the natural endowments of Developing Countries. Given that the commodities sector is the single most important employer of the populations of Developing Countries, any development strategy directed towards significant reduction of poverty and raising income levels must include the transformation of the commodities sector.
In financing development, we face the dual challenge of providing, on the one hand, sufficient external funds, either ODA sources or as direct foreign and domestic private investment; and on the other hand to assure that these funds are efficiently employed. It will be necessary to concentrate on strategic areas of intervention and their interrelationship in order for financing to have a lasting and sustainable impact on economic growth and development of society as a whole. We consider addressing generic problems in the commodity sector, that is problems which affect producers in a number of countries, as such a strategic area.
Suitable measures include those addressing supply-side constraints through vertical diversification into value-added products and exports as well as horizontal diversification including supplying growing niche markets. In general, any measure, which will increase productivity and thereby enhance better use of the physical and human resources, should be supported. This includes technical assistance and capacity building.
The persistent decline in real terms of trade due to the perpetual fall of prices of commodities exported by the Developing Countries and the instability caused by price fluctuations is also a critical problem faced by many Developing Countries, particularly by the poorest and most indebted ones. Among others, it will be necessary to identify support measures to effectively manage commodity risk, an area in which the Common Fund is active.
The Common Fund for Commodities was established in the framework of the United Nations to provide financial support for commodity development measures aimed at improving the structural conditions in markets and at enhancing the long-term competitiveness and prospects of particular commodities. In this respect, the Fund aspires to play an innovative and unique role to provide “seed money” and be a catalyst in mobilizing other sources of finance for economic growth. The Common Fund will continue to make every effort in this regard and will co-operate with all relevant institutions to maximum impact on development.
Thank you, Mr. President.
Statements at the Conference