UNITED
NATIONS  GENERAL
ASSEMBLY
SUMMARY
BY THE PRESIDENT OF THE
FIFTY EIGHT SESSION
OF THE UNITED NATIONS
GENERAL ASSEMBLY
OF THE OPEN-ENDED PANEL ON COMMODITIES OF 27 OCTOBER 2003
TO THE SECOND COMMITTEE
3 NOVEMBER 2003
Thank
you Mr. Chairman. Delegates:
General
Assembly decided, in resolution 58/2, that a report should
be presented to the Second Committee on the outcome of the
Open-Ended Panel on Commodities, convened on 27 October
2003. Having opened and presided over the Open-ended Panel
on this issue of critical importance, particularly for developing
countries, I am now pleased to present that Report.
The
Report of the Meeting of Eminent Persons on Commodity Issues
(A/58/401) convened in Geneva on 22-23 September 2003 under
the auspices of UNCTAD, and the summary of the discussion
at the Recent Trade and Development Board on the Report
of the Eminent Persons (A/58/15 [Part V], provided invaluable
input into the deliberations of the Open-ended Panel.
In remarks
made at the opening of the Panel, your Chairman, Ambassador
Iftekhar Ahmed Chowdhury, underscored the link between the
deliberations of the Panel and the consideration of Item
91(g) on commodities by the Second Committee. His remarks
placed the commodities issue into perspective, in the context
of the development of commodity-dependent countries in the
global economy. Mr Rubens Ricupero, Secretary-General of
UNCTAD, gave a summary of the findings of the Meeting of
Eminent Persons.
Four
of the fifteen Eminent Persons who participated in the important
UNCTAD commodities exercise - Ambassador Jorio Dauster,
Mr. Roman Grynberg, Mr. Irfan ul Haq and Mr. Martin Kohr
- were the Panellists. The Panellists provided details of
the results of their deliberations set out in the Report,
as their initial input into to the interactive discussion
that followed. Mr Mark Ritchie, President of the Institute
for Agriculture and Trade Policy, was invited to open the
Panel's interactive discussion.
As the
Report of the Meeting of Eminent Persons was important to
focussing the deliberations of the Panel, it would, I believe,
be useful to recall some of its pertinent elements. The
Report contains fifteen recommendations for action. These
are arranged in three groups - those to be addressed in
the short-term, those to be addressed in the medium term,
and those to be addressed in the long-term. The Report also
makes five specific recommendations to which the Eminent
Persons attach the highest priority, particularly in the
context of follow-up by the General Assembly. These are:
a) Enhanced,
equitable and predictable market access for commodities
of key importance to developing countries;
b) Addressing
the problems of oversupply for many commodities;
c) Making
compensatory financing schemes user-friendly and operational;
d) Strengthening
capacity and institutions; and
e) Pursuing
the possibilities for the creation of a new International
Diversification Fund.
The
presentations of the Panellists and the interactive discussion
that followed covered a broad range of issues relating to
the commodities issue. Among the interesting and notable
perspectives emerging from the presentations of the Panel,
and taken up in the course of the interactive discussions,
was that the commodities issue is, at the same time, an
"old" issue and a "new" issue. In this
context, the Panellists emphasised the longstanding dependence
of numerous developing countries on a few commodities for
a major part of their income and export earnings. For these
countries, the performance of commodities markets has a
major impact on their macroeconomic stability, capacity
to meet foreign debt obligations, balance of payments performance,
success in poverty reduction, and overall sustainable development
efforts.
Increased
and sustained efforts to solve problems associated with
commodity markets, including price declines and volatility,
over dependence on a handful of commodities for export revenues
and oversupply was regarded as critical action that had
to be taken. In this context, improving competitiveness
and ensuring better participation in global supply chains
was considered to be key.
Panellists
and participants identified a number of macro-economic patterns
of central importance, that make the commodities issue a
'new' one, requiring renewed attention by the international
community. Pertinent "new" matters, together with
comments/issues raised in the context of the Panel discussion,
and which are particularly important to the deliberations
of the Second Committee were:
a)
Commodities and Sustainable Development: A new regime
for commodity dependent countries was considered to be essential
to long-term sustainable development.
b) Commodities
and Millennium Development Goals (MDGs): Attaining the
objectives of the MDGs would continue to be a serious challenge
in those countries contending with widely varying or declining
income due to over dependence on the export of a single
commodity, and had to be addressed.
c) Commodities
and reduction of market participants: The Panellist,
in particular, noted that that the structure of the commodity
markets of most developing countries is now marked by a
significant reduction in market participants, and because
of that change, there has been a strengthening of the relative
position of multinational firms in each commodity sub-market.
d) Commodities
and HIPC: For many HIPC countries, the completion point
and other markers of the HIPC debt initiative are crucially
dependent on accurate forecasts for national revenues from
the export of commodities. When the forecast is not met,
the entire HIPC programme is undermined.
e) Commodities
and the WTO: The Doha Programme of Work contains but
a single paragraph on commodities. There was only one explicit
commodity item - on cotton - on the Agenda of the recent
WTO Ministerial held in Cancun, Mexico. Regrettably, that
the WTO process was not even able to address the urgent
demands of these West African countries on this single commodity.
f) Commodities
and vulnerabilities: ECOSOC is now grappling with the
definition of vulnerabilities in the context of LDCs; Every
indication is that one key component of that definition
might well be the vulnerabilities of countries to the external
structural realities in the commodity markets;
g) Commodities
and SIDS: This session, the Second Committee is preparing
for the review of the Barbados Programme of Action for SIDS,
and for the event for conducting that review, now scheduled
for August 2004. A crucial matter for the economic viability
of the SIDS is in many cases their dependency on a single
commodity for export, a matter that should be addressed
in the preparatory process and in the Conference.
h) 'Newer
commodities': In earlier consideration of the commodities
issue, it was taken by Governments that commodities referred
to trade and processing of natural products, minerals and
agricultural goods. Today, 'commodities' could now include
industrial products and services that are marketed as if
there were 'old' commodities. Such is the case in with commodities,
such as computer chips and commodity service providers.
Panellists
and participants went beyond noting newer aspects of the
commodities issue to flag new ways that intergovernmental
cooperation could contribute to a resolution of challenges
in this area. They emphasised, in that context, that developing
countries alone could not solve the problems in commodities
markets arising from global market imperfections. A viable
and long-term solution requires action by individual countries,
as well as joint actions by consumers and producers of commodities,
from developing and developed countries alike.
Suggestions
for future action in the commodities area and for enhancing
the visibility of the issue included the involvement of
a range of international organizations and possible action
these organizations could take. Concerned organisations
and proposed courses of action, as well as action that might
be taken in the context of the MDGs and UN Global Compact
include:
(a)
The WTO: calls were made for the resumption of the
Doha negotiations, and for giving special attention in the
negotiations for cotton and other commodities;
(b)
The IMF: the connection between structural adjustment
programmes and commodities and the importance of a well
functioning compensatory finance systems was noted, and
it was urged that these matters be considered;
(c)
UNCTAD: the need to enhance capacity building initiatives,
establish new multi-stakeholder partnerships on commodities,
and examine in detail the inter-relationship between national
development and the global market, was stressed by panellists
and participants alike. These are important themes for UNCTAD
XI, to be held in Brazil in 2004;
(d)
The MDGs: it was proposed that commodity-dependency
matters should be considered in the implementation of the
MDGs
(e)
The UN Global Compact and individual commodity firms
and their trade associations: Panellists and participants
alike identified as a matter for urgent action incorporating
a commodity focus into on-going corporate social responsibility
efforts.
A member
of the Panel, additionally, stressed that a long-term solution
might be to take a new look at the establishment of an international
export diversification fund. Regarding keeping the commodities
issue under long term consideration, it was proposed that
the Open-Ended Panel on Commodities might be maintained
as a standing advisory group on commodity matters.
The
Commodity issue is of importance to millions of people around
the world. There is an urgent need, now more than ever,
to address it. Importantly, one Head of State commented
in his address to the General Debate that there is a "conspiracy
of silence" on the commodities issue. It is instructive,
in that regard that the sub-item on commodities, discussed
under the topic of macro-economic issues, is a biennial
topic in the Second Committee.
Also,
in the Doha programme of work for the WTO, the commodities
issue is mentioned in one paragraph only. Cotton received
attention at the Cancun Ministerial Meeting because of the
insistence of four African producers. Over the years, the
work of UNCTAD, which established in the 1960s in part to
deal with the commodities issue, has been severely curtailed.
Now, public understanding of the commodities issue needs
to be strengthened, resources allocated to the work on commodities
need to be increased, and the visibility of the commodities
issue needs to be enhanced through international dialogue.
These were courses of action which Panellists and participants
alike highlighted.
A comprehensive
programme of action by all relevant parties, including the
private sector and NGOs, is critical. The objectives of
such a programme could include action for enhanced, equitable
and predictable market access; solutions to the oversupply
of commodities; user-friendly compensatory finance schemes;
and technical assistance to strengthen national capacity
and institutions - including assistance in dealing with
the problems arising from commodity market imperfections
The
expert opinions and recommendations of the Eminent Persons
were very much appreciated, as was the Secretariat support
provided by the UNCTAD and the Financing for Development
Office in DESA. I take this opportunity to once again thank
them for their contribution.
Let
me now conclude by emphasising the importance that I personally
attach to cooperation in the commodities area, and particularly
to practical solutions to address, as a matter of urgency,
the plight of commodity-dependent countries. Our deliberations
at this Fifty-eighth Session of the General Assembly have,
I believe, raised the profile of our work in this area.
It remains for us to sustain these efforts.
You
will now move to the next stage of your deliberations of
sub-item 91(g) on commodities, and particularly translating
the deliberations of the Open-ended Panel and other relevant
reports and discussions into what I hope will be an action-oriented,
implementable resolution. Your Chairman has assured me that
he will give this matter his personal attention. Let me
assure you that I stand ready to work with your Chairman
and to assist in any way I can to forge consensus on the
resolution, and on any other issues in the area of commodities.
I thank
you.
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