UNITED
NATIONS  GENERAL
ASSEMBLY
INTRODUCTORY
REMARKS BY THE PRESIDENT
OF THE
FIFTY EIGHT SESSION
OF THE UNITED NATIONS
GENERAL ASSEMBLY
AT THE OPEN-ENDED PANEL OF THE GENERAL ASSEMBLY
ON COMMODITIES
27 OCTOBER 2003
Excellencies,
ladies and gentlemen,
Commodities,
the issue to which this open-ended panel of the General
Assembly will address itself, is an essential part of the
larger issue of development, and as such, is a mater of
critical importance, particularly for developing countries.
It is, I believe, timely that this panel should be convened
on the eve of the High-level Dialogue on Financing for Development.
This permits insights the Panel will provide to be taken
into account in the overarching framework of financing for
development. It should also provide substantive and practical
input into UNCTAD XI.
Given
the mandate of the United Nations Trade and Development
Board (UNCTAD), and its work in the area of commodities,
I am pleased that the Secretary-General of UNCTAD, Mr Reubens
Ricupero, is here for the Panel Discussion. The commodities
issue comes before the Second Committee of the General Assembly.
Leadership in that Committee is significant to ensuring
an outcome that is balanced, and above all, implementable.
Therefore, I am pleased that the Chairman of the Committee,
Ambassador Iftekhar Ahmed Chowdhury, is here, and thank
him for his personal efforts in this area. We have been
ably assisted in our organisation of the Panel by the New
York Office of UNCTAD and the Financing for Development
Office. I wish to express my appreciation to them.
A review
of available data on commodities indicate that the economies
of fifty states - more than one quarter of the United Nations
191 member states - rely on commodity exports for more than
fifty per cent of their export earnings. In forty of these
states, less than four commodities account for the export
earnings. About sixty per cent of the total export earnings
of least developed countries come from primary commodities,
a problem that also extends to many Land Locked Developing
Countries and Small Island Developing States.
This
data underscores the impact of commodities issues on developing
countries, most of which remain dependent on them for a
majority of their hard currency earnings. It is also evident
that of the countries affected, most are grouped among the
least developed countries, or countries affected by special
circumstances, as is the case of landlocked and small island
developing states.
Commodity
dependence is a challenge to development planning, because
volatility in sales volumes and prices have both a cyclical
and secular nature, and result in uncertainty over revenues.
Price volatility is not a recent phenomenon. There have
been significant fluctuation in commodity prices, for example,
coffee, as early as the 1800s.
It is
understandable, therefore, that commodities should be a
key issue for the United Nations. Initially, focus was placed
on declining terms of trade. The high point of the effort
to combat the declining purchasing power of commodity exports
came with the adoption of the Integrated Programme for Commodities,
approved by the UNCTAD IV Conference in 1976. It was not
until 1989, however, that the Programme was effectively
implemented, in the form of the Common Fund for Commodities.
By this time there had been a radical change in the accepted
approach to development.
This
Panel provides the framework in which we may review many
of the issues concerning commodities, including dependence
on commodities, the impact of the free market on that dependence,
the use of commodities as vehicles for investment and speculation
in deregulated and free capital markets, and the impact
of these phenomenon on the natural volatility of commodity
earnings due to climate disturbance and production cycles.
As most commodities are priced in US dollars, the increased
instability of exchange rates against the US dollar is also
a key issue for consideration. These issues have no doubt
made volatility in prices and production of commodities
an increasingly important question in financing for development.
Global market conditions, and, in particular, relative to
market access bear centrally on questions of cyclical and
secular trends in prices and supply of commodities. Even
if market access for commodities were to be improved, however,
it would not offset the loss to developing countries caused
by restriction on the import of processed commodities. It
is instructional to note, in that regard, that major developed
countries export more coffee by value than most producing
countries, even though they have no domestic production.
Producers are therefore finding themselves faced not only
with declining trends in the terms of trade, but are also
facing a continuous decline in their share of the value
added generated by commodities, due to increased concentration
in market structure.
It was
suggested at both the Doha and Cancun Ministerial meetings
of the World Trade Organisation, that there was much more
to be gained in levelling the playing field in international
commodity markets. Indeed, the matter of increasing the
share of the final product price received by commodity dependent
countries is a question that seems better dealt with at
the intergovernmental level. We certainly look forward to
comments that might be made on these issues, by participants
or panellists.
Last
year the General Assembly called upon the Secretary General
of UNCTAD to convene a group of independent eminent persons
to examine and report on commodity issues. UNCTAD has carried
out its mandate, and the report of that eminent persons
group will form the basis for our discussions here today.
Our
distinguished panellists, drawn from among the independent
eminent persons, will no doubt provide invaluable insight
into the issue of commodities. I wish to thank them all
for agreeing to participate in these discussions. May I
say, Panellists that I look forward with interest to hearing
your perspectives on this crucial issue.
I also
urge delegations to engage the panellists in a frank and
open exchange of views. I ask you to bear in mind that the
presentations, comments and observations are intended to
provide crucial and substantive inputs into the summary
of this dialogue that I will be preparing for transmission
to the Second Committee. It is my hope that my summary will
inform and complement the deliberations on the commodities
issue when it is taken up in the Second Committee.
I thank
you.
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