UGANDAN PRESIDENT CALLS FOR TRANSFORMATION OF COMMODITY-DEPENDENT COUNTRIES IN ADDRESS TO GENERAL ASSEMBLY

3 November 2003
GA/10201

UGANDAN PRESIDENT CALLS FOR TRANSFORMATION OF COMMODITY-DEPENDENT COUNTRIES IN ADDRESS TO GENERAL ASSEMBLY

03/11/2003
Press ReleaseGA/10201

Fifty-eighth General Assembly

Plenary

52nd & 53rd Meetings (AM & PM)

UGANDAN PRESIDENT CALLS FOR TRANSFORMATION OF COMMODITY-DEPENDENT COUNTRIES

IN ADDRESS TO GENERAL ASSEMBLY

Assembly Also Hears from IAEA Director General;

Adopts Resolutions on Sport for Peace and Development

Calling for a revised understanding of the term “donors”, Ugandan President Yoweri Kaguta Museveni, in a special address to the General Assembly on “Commodities and Development”, said that his country had been ignorantly and persistently “donating” to others –- effectively giving money and jobs to other countries that processed their raw material exports.

That situation arose, he continued, from the fact that commodity-dependent countries received only one tenth the final value of the raw materials they exported.  Recalling Adam Smith’s emphasis on “specialization”, which had revolutionized economic thought, he added that Africa was currently trapped in the past, still focused on the sheer production of raw materials as the path to growth.

Thus, while he agreed that diversification had its place in addressing the problems of commodity-dependent economies, the real way to solve the problem was through “transformation” of countries dependent on commodity exports.  That meant cutting out the middleman and linking commodity-dependent countries directly to consumers by completing the processing –- by adding value –- to raw materials before their export.

Deputy Secretary-General Louise Fréchette acknowledged that commodity price declines had deprived developing countries of large amounts of revenues, which contributed to poverty and made it more difficult to reach the Millennium Development Goals.  To respond to that, developing countries should implement policies that reduced their vulnerability, the most important of which, from her point of view, was diversification.  Many developing countries had made great strides in the area of diversification of exports, thanks to policy reforms, education and investment in skills.

Affirming that President Museveni had rightly stressed diversification as one of the keys to solving the problem of commodity-dependence, General Assembly President Julian R. Hunte (Saint Lucia) agreed that such expansion alone was not enough.  Small countries must diversify with a view to transforming their economies.  That was a sure way to ensure that commodity-dependent countries could eventually “get out of the box” that so many found themselves in.

Among the other issues considered by the Assembly today was the report of the International Atomic Energy Agency (IAEA), whose Director General, Mohamed ElBaradei, acknowledged this morning that the past year had been a period of significant challenge and achievements for the Agency.  On its verification activities, it was clear that concrete steps to strengthen the nuclear non-proliferation regime were urgently required, especially regarding the Democratic People’s Republic of Korea, Iraq, the Middle East and Iran.

Looking forward, he said the international community must continue efforts to achieve the universality of the regime.  In addition to greater assertiveness in resolving the root causes of global insecurity, a system of collective security that did not depend on nuclear weapons must be established, and the process of nuclear disarmament accelerated.

The Assembly also adopted two resolutions on sport for peace and development.  The first, on the Olympic ideal, urged Member States to observe, individually and collectively and within the framework of the Charter of the United Nations, the Olympic Truce during the Games of the twenty-eighth Olympiad, to be held at Athens, Greece, from 13 to 29 August 2004.

Introducing the resolution, George Papandreou, the Minister for Foreign Affairs of Greece, host of the 2004 Olympics, said, “We have no illusions as to what we can achieve though the Olympic Truce”.  While limited in duration, it could offer an invaluable opportunity for reconciliation and provide respite for those suffering in the world’s many war zones.

With the adoption of the second text, the Assembly decided to proclaim the year 2005 as the International Year for Sport and Physical Education as a means to promote education, health, development and peace, and invited governments to organize events to underline their commitment and to seek the assistance of sport personalities in this regard.

As Tunisia’s Minister of Sport, Abderrahim Zouari, observed in his introduction of the text, sports could be an influential societal factor, a “school of life”, whose beneficial impact was not confined to health and physical promotion, but encompassed values necessary for social cohesion and enriching dialogue among various races, cultures and civilizations.

Also addressing the Assembly today was the Vice-Minister for Foreign Affairs of Cuba and the Crown Prince of Monaco.  In addition, the representatives of Switzerland, China, Israel, Cyprus, Egypt, United States, Spain, Italy (on behalf of the European Union), Peru, Iran, Republic of Korea, Russian Federation, Pakistan, Japan and Kenya also spoke.

The President of the Trade and Development Board of the United Nations Conference on Trade and Development (UNCTAD) also spoke during the Assembly’s session on commodities and development.

Also today, the President of the International Olympic Committee addressed the Assembly during an informal segment, immediately following the adjournment of the morning session.

The Assembly will reconvene at 10 a.m. tomorrow, 4 November, to consider the necessity of ending the economic, commercial and financial embargo imposed by the United States against Cuba.

Background

The General Assembly met today to consider several items, including sport for peace and development, the report of the International Atomic Energy Agency (IAEA) and support by the United Nations system of the efforts of governments to promote and consolidate new or restored democracies.

On the IAEA, the Assembly had before it a note by the Secretary-General (document A/58/312) transmitting the Agency’s report, which states that major developments since the report’s submission –- it covers the period 1 January to 31 December 2002 -- would be covered by the Agency’s Director General, Mohamed ElBaradei, in his statement to the Assembly.  It also states that due to limited availability, it was impossible to make a full distribution of the comprehensive report.

According to the annual report, 45 years on, the United Nations nuclear watchdog agency continued to serve as the focal point for worldwide cooperation in the peaceful uses of nuclear technology, for promoting global safety, and, through its verification activities, for providing assurances that international undertakings to use nuclear facilities and materials for peaceful purposes only are being honoured.

The report goes on to provide a comprehensive survey of worldwide nuclear-related developments in 2002, and how they affected the Agency’s work.  It highlights, among other things, the links between nuclear technology and development in the wake of the Johannesburg World Summit on Sustainable Development (WSSD), and cites the Agency-driven partnership initiatives that emerged from the meeting, including on “Indicators for Sustainable Energy Development” and “Designing Country Profiles on Sustainable Energy Development”.

The report concludes that 2002 had been an exceptionally busy year for the Agency, particularly in the field of verification.  Acting under the authority provided by its safeguards agreements and additional protocols, the Agency continued to provide assurance of the peaceful use of nuclear energy.  The IAEA also achieved many successes during 2002, initiating and supporting radiotherapy services, extending the tsetse fly eradication programme in Africa, and exploring new methods of detecting landmines.  There are many challenges ahead for the Agency and its member States, the report notes, citing the need to strengthen the safeguards and non-proliferation regime and extend its application, and to upgrade nuclear safety around the world.

The Assembly also had for its consideration a report of the Secretary-General on support by the United Nations system of the efforts of governments to promote and consolidate new or restored democracies (document A/58/392), submitted in compliance with General Assembly resolutions 54/36 (1999) and 56/96 (2001), in which the Secretary-General had been encouraged to continue to improve the capacity of the Organization to respond effectively to the requests of Member States by providing coherent and adequate support for their efforts to achieve the goals of good governance and democratization.

The report provides an analytical overview of the assistance given by the United Nations system in recent years and notes that the past decade has seen an increase in support for new and restored democracies in Eastern Europe, Africa, Latin America and Asia, many of which are countries emerging from civil war and conflict.

Also submitted pursuant to resolution 56/269 (2002), in which the Assembly invited the Secretary-General, Member States, the relevant specialized agencies and bodies of the United Nations system and other intergovernmental and non-governmental organizations (NGOs) to support and collaborate in the holding of the Fifth International Conference of New or Restored Democracies, held in Ulaanbaatar, Mongolia, from 10 to 12 September 2003, the report notes the final report, Declaration and Plan of Action adopted by consensus at the Conference and concludes by recommending that the Assembly support the actions proposed at the Conference.

Drafts

The Assembly also had before it three draft resolutions, including one on building a peaceful and better world through sport and the Olympic ideal (document A/58/L.9), by which it would urge Member States to observe, individually and collectively and within the framework of the Charter of the United Nations, the Olympic Truce during the Games of the twenty-eighth Olympiad, to be held at Athens, Greece, from 13 to 29 August 2004.  It would also call Member States to cooperate with the International Olympic Committee in its efforts to use the Olympic Truce as an instrument to promote peace, dialogue and reconciliation in areas of conflict during and beyond the Olympic Games period.

By the draft resolution on sport as a means to promote education, health, development and peace (document A/58/L.2), the Assembly would invite governments and international sport bodies to assist developing countries in their capacity-building efforts in sport and physical education, stress the need for all parties to cooperate closely with international sport bodies to elaborate a “code of good practice”, and invite governments to accelerate the elaboration of an international anti-doping convention in all sports activities.  It would also decide to proclaim the year 2005 as the International Year for Sport and Physical Education as a means to promote education, health, development and peace, and invite governments to organize events to underline their commitment and to seek the assistance of sport personalities in this regard.

Also before the Assembly was a draft resolution on the Report of the International Atomic Energy Agency (document A/58/L.10), by which it would affirm its support for the Agency’s indispensable role in encouraging and assisting the development and practical application of atomic energy for peaceful uses and in technology transfer to developing countries and in nuclear safety, verification and security.  The Assembly would also appeal to Member States to continue to support the activities of the Agency.

Introduction of Drafts

ABDERRAHIM ZOUARI, Minister for Sports of Tunisia, introducing the draft resolution on the International Year of Sport and Physical Education, read out a statement by his President, Zine El Abidine Ben Ali.  Sports could be an influential societal factor, he stated, as a “school of life”, whose beneficial impact was not confined to health and physical promotion, but encompassed values necessary for social cohesion and enriching dialogue among various races, cultures and civilizations.  The present draft constituted a tool that would contribute to the achievement of internationally agreed development goals, including those laid out in the Millennium Declaration, which aimed at increasing solidarity and cooperation and disseminating the culture of peace.  Moreover, the education dimensions of the draft reflected the objectives set by the International Olympic Committee (IOC) when it called for the observation of 2003 as a year of “culture and Olympic education”.

His country, he said, had always made sports and physical education a fundamental aspect of the educational system and had endeavoured to anchor sports values and the Olympic spirit in new generations at the educational, professional and civil levels.  The noble concept of sports further prompted Tunisia to join its efforts to those of the international community to make sports a tool for the promotion of peace and development, including through ensuring the right to practice sports and physical education to children and youth of all ages and in all countries; and making sports an effective tool for expanding peace and development, especially in least developed countries where the basic infrastructure and sports facilities had not been sufficiently developed.

GEORGE PAPANDREOU, Minister for Foreign Affairs of Greece, host of the 2004 Olympics, introduced the draft on “Building a peaceful and better world through sport and the Olympic Ideal”.  He declared the Athens Olympics this summer would be a celebration and a “homecoming of the greatest peace gathering of our time”, as well a chance to rekindle the ancient Greek tradition of the Olympic Truce.  Promoting peace had in fact been why the Olympics had been established, with the implementation of the Truce in antiquity ending hostilities so that thousands could travel to and from Olympia and the games in safety.  The Truce had been upheld for over 1,000 years, making it the longest peace treaty in history.

Reviving the Truce offered a constructive new approach to conflict resolution.  Since 1993, the Assembly had unanimously adopted six resolutions championing the ideal, and the Millennium Declaration included a paragraph on the promotion of peace and mutual understanding through the Truce.  The text before the Assembly was a symbolic call to break the cycle of violence for the 16 days of the Olympic Games -- and beyond.  He said that today, that message could not be more relevant, given the current climate of global insecurity.  In “our increasingly interdependent yet fractured world”, the Truce could be a useful tool for diplomacy and the promotion of peace through dialogue and education.

“Making the Olympic Truce a reality in the modern world is a challenging endeavour”, he said, adding that, to some, it might even seem like a utopian dream.  “We have no illusions as to what we can achieve though the Olympic Truce:  it is not a universal remedy that will miraculously heal the rifts that ravage so many regions of the world.”  But surely, if even one single act of conflict could be halted, it was worth the effort.  While limited in duration, the Truce could offer an invaluable opportunity for reconciliation, as well as providing respite for the suffering populations in the world’s many war zones.

Prince ALBERT of Monaco said the Tunisian initiative for the International Year of Sport and Physical Education was particularly opportune; it came just after the report of the Working Group, charged by the Secretary-General in 2002 to examine the role of sport in the activities of the United Nations system, had been published.  That report presented sport as a human right and emphasized the place of sport in efforts for peace and development.  It emphasized the essential nature of the practice of sports for the development of the individual.  However, sport was also a means by which social barriers were knocked down; it brought into contact those of different languages and cultures and made them the communicators and sharers of the essential values of tolerance and perseverance.

Sport was also the mirror of society, he said.  The Human Rights Commission’s Special Rapporteur on Contemporary Forms of Racism, Racial Discrimination, Xenophobia and Other Related Intolerance had recently denounced the increase in physical and verbal racial violence in sport.  It was essential to combat attitudes contrary to the spirit of sports, in which context, the decision of the Union of European Football Associations to distribute an anti-racism guide was welcomed.  Another issue that must be dealt with was the practice of doping.  It was to be hoped that the United Nations Educational, Scientific and Cultural Organization (UNESCO) would be able to adopt the draft international convention against doping in all sporting activities before the twentieth Winter Games, to be held in Turin, Italy, in 2006.  He also called on all combatants to lay down their arms and respect the Olympic Truce during the 2004 Athens Games.

JENO C.A. STAEHELIN (Switzerland) said the two texts before the Assembly were in the same spirit:  if Member States encouraged their citizens to take greater part in physical activities, humanity would not only be in better physical condition, but the world would certainly be a more peaceful place.  Sport actually offered an ideal means for developing discipline, self-confidence and leadership qualities.  Sport also taught the fundamental principles of humanity, such as tolerance, cooperation and respect.  His country had organized the Macolin Conference last year at the initiative of the Secretary-General’s Special Adviser on Sport for Peace and Development and former Swiss President Adolf Ogi.  That Conference had mobilized partners from different sectors supporting the new idea of “sport for development” and increasing public awareness of the important role that sports could play in cooperation towards development and peace.

He said that the “Macolin Declaration” had subsequently been adopted by over 380 representatives from 55 countries.  Switzerland welcomed that document as an appeal to governments, the United Nations family, sport-related institutions, non-governmental organizations, the media and the wider public to encourage human, social, political and economic development through sports.  The Declaration had also been a source of inspiration for a relevant United Nations Inter-agency Working Group, which had since presented its final report, “Sports for Peace and Development:  achieving the Millennium Development Goals”, to the Secretary-General.

ZHANG YISHAN (China) urged nations of the world to continue to uphold the purposes and principles of the United Nations Charter and actively advocate the Olympic spirit to enhance the dialogue and exchanges among civilizations and promote steady economic and social progress throughout the world.  Sport and physical education -– activities undertaken in mankind’s pursuit of the Olympic ideal –- not only built one’s physique, but also taught communication, cooperation, respect for others, and acceptance of failure.  As such, it was an important medium of strengthening ties among different civilizations and values.

China, itself currently preparing to host the 2008 Olympics in Beijing, had always admired the purposes and principles of the Olympic spirit and supported the promotion of world peace through the Olympics, he said.  The country thus hoped to make the 2008 Games “a grand gathering” that would carry forward the Olympic spirit, promote world peace and enhance friendship among peoples of the world so that the Olympic spirit would flourish once again.  He added that it was significant that next year’s Olympic Games would return to their place of origin after more than 100 years.

ARYE MEKEL (Israel) recalled the horrific act that tarnished the 1972 Olympic Games in Munich, when gunmen from the terrorist group Black September broke into the Olympic Village disguised as athletes and killed 11 Israeli athletes, coaches and referees.  For the people of Israel, the notion of the Olympic Games could not be separated from the memory of that terrorist event.  That act of terrorism and murder -- unprecedented in the history of the Olympics -- was the very antithesis of the Olympic ideal.  That was because rather than allowing the Games to transcend politics and conflict, they were used as a vehicle for the expression of hatred and the perpetration of murder.

He noted that the Olympic Games, as the world’s premier sporting event, had long been one of the primary meeting points for nations divided by politics or geography.  In that respect, Israel supported the observance of the Olympic Truce, as an expression of a common yearning for peace and reconciliation, and hoped that all Member States would unite to ensure that peace and security prevailed for the duration of the Games in Athens next year.  He urged the nations of the world not to forget the blemish on the history of the Games caused by the 1972 terrorist attack as they strove to ensure that future Olympic events served to broaden understanding, tolerance, respect and peace.

In that regard, he stressed that the prominence of a movement was reflected not only in its endeavours but also in its capacity to mourn those of its members who had perished for the principles it wished to promote.  It was unfortunate, he went on, that until today the International Olympic Committee had not yet found an appropriate way to officially observe the memory of the Israeli victims.  As one of the world’s only truly global events, the Olympic Games presented the international community with an extraordinary opportunity to focus the world’s attention and utilize the goodwill that the Games inspired for building a more peaceful and more harmonious world.  In its own region, Israel had tried to harness the power of sports to forge relationships and to build bridges across what he termed “the dark waters of conflict”.

ANDREAS D. MAVROYIANNIS (Cyprus) supported the concept of the Olympic Truce, which could be the prelude to a world free of hate, armed conflict and acts of aggression.  Tunisia’s draft resolution was also welcomed, and particularly auspicious were references to the contribution of physical education to the welfare of children, the need to intensify efforts to combat doping and the need to utilize sport as a medium to enhance health awareness and to building a culture of peace.  Sport, peace, culture, humanism and respect for universal ethical principles were the quintessential ideals of the Olympic spirit.

He called for the observance of the Olympic Truce as a matter of tradition, adding that each country organizing the Olympic Games would thus make it an imperative for the Truce to be honoured in every Olympiad.  While the rationale of the draft resolution was aimed at conflict conditions different from those in antiquity, the aspiration of humanity remained remarkably similar:  the termination of acts of hostility and the peaceful settlement of international conflict.

MANUEL AGUILERA, Vice-Minister of Foreign Relations of Cuba, said sport and the Olympic ideal was a key tool in promoting peace, cooperation and development.  He welcomed the holding of the upcoming Games in Athens, the birthplace of the original Olympiads, and hoped that the Games would take place without cheating, doping, excessive commercialization or the abduction of athletes.  Cuba’s athletes were working with dedication to participate in the Games.  Therefore, he regretted that some might not be able to attend for reasons that had nothing to do with sport.  That had been true for Cuba’s archery team, which had not been able to participate in the world championships this past summer in New York, when the visas of two of its members had been denied by the United States.  They had been among some 39 athletes whose visas had been denied by that country recently.  It appeared that the sporting sphere had not escaped the net of the economic blockade that had been placed on Cuba by the United States.

Sport in Cuba was a national right, he said.  More than 1 million children had access to physical education in schools.  Over the years, more than 30,000 teachers of physical education in sports had graduated, and thousands of sports medicine specialists and professionals worked inside and outside the country.  Cuban President Fidel Castro had noted that sport and promoting the Olympic ideal were key ways to counter the ills that befell so many youth today.  Equity must prevail, not the globalization of inequality and injustice.

AHMED ABOUL GHEIT (Egypt) said that the Greeks, like all ancient civilizations, had offered inspiration for the uniting of peoples in peace; the Greeks did so through sport.  Today, more than ever, the gap was increasing among poor and rich, diseases were devastating the poor, and civilizations and religions were diverging, not converging.  Amidst all that, sport would remain the area in which all enmities were dropped.  Every four years, hatreds were forgotten during the Olympic Games; it was a symbol of humanity’s capacity to achieve peace.

Because it valued a civilization based on peace and justice, Egypt had co-sponsored the draft on the Olympic ideal and offered its support to the Tunisian initiative for the International Year of Sport and Physical Education, he explained.  When competition loomed large and countries sought athletic glory, the value of peace was entrenched.

BENJAMIN GILMAN (United States) said the draft resolution before the Assembly, and today’s consensus, reinforced the scope and power of the Olympic movement, linking athletes of the twenty-first century with those of ancient Greece.  The Olympic ideal noted international understanding among youth through sport and culture, and went beyond sports competition to embrace intercultural and humanitarian activities.  The goal of the Olympics was to place sport at the service of the harmonious development of man, with a view toward encouraging the establishment of a peaceful society.

People who are involved in sports better themselves and society, he stated.  Young people who played sports were more likely to join a team than join a gang; they were more likely to stay in school and make responsible decisions in favour of clean lives away from drugs and other dangers.  The United Nations system had partnered with the IOC to promote, through sports, the quality of life and well-being of those living in the most disadvantaged circumstances.  Further, the IOC’s International Cooperation Department had begun programmes for worldwide youth, for example, addressing stress in refugee camps through organized basketball tournaments.  Today’s resolution enabled the Assembly to underscore that good sportsmanship promoted a culture of peace, tolerance and understanding.

The Assembly then unanimously adopted both drafts under the agenda item “Sport for peace and development”.

Statements on Report of International Atomic Energy Agency

MOHAMED ELBARADEI, Director General of the IAEA, said the past year had been a period of significant challenge and achievements for the Agency.  In the area of nuclear non-proliferation, the Agency had been at the centre of attention and had demonstrated its ability to perform objective and credible verification, while in the nuclear technology field, it had contributed to sustainable development through its technical cooperation programme.  The benefits of nuclear applications were increasingly recognized.  However, although nuclear power continued to hold great potential as an environmentally clean source of energy, it remained in a holding pattern due to a number of associated concerns.

Elaborating on various aspects of nuclear technology, including nuclear power, non-power nuclear applications, human health, water resources managements and plant mutation and breeding, as well as the Agency’s technical cooperation programme, he acknowledged that the safety and security of nuclear activities around the globe remained a key factor for the future of nuclear technology.  In addition to continued international efforts to improve safety standards at nuclear powers plants worldwide, the Agency’s efforts to help Member States improve their protection against nuclear and radiological terrorism also continued at an exceptionally fast pace on multiple fronts.

Turning to verification of nuclear non-proliferation, he said that recent events had placed the nuclear non-proliferation regime under stress on multiple fronts, and had made it clear that concrete steps to strengthen that regime were urgently required.  With regard to the situation in the Democratic People’s Republic of Korea, the Agency had performed no verification activities in that country since December 2002, and could not, therefore, provide any information about the non-diversion of nuclear material.  Having continued to emphasize the need for a comprehensive settlement of the Korean crisis through dialogue, it was his hope that the six-party talks would lead to such a settlement.  Any future settlement must ensure the return of the Democratic People's Republic of Korea to the nuclear non-proliferation regime and give the Agency the authority necessary to fulfil its responsibilities under the Nuclear Non-Proliferation Treaty (NPT) in a credible manner.

On Iraq, he said the Agency had striven to determine if any changes relevant to nuclear activities and capabilities had occurred upon its resumption of verification activities between November 2002 and March 2003.  At the time the Agency again ceased its verification activities, no evidence of the revival of nuclear activities prohibited under relevant Security Council resolutions had been found.  However, given its four-year absence, the time available for the renewed inspections was insufficient to complete an overall review and assessment.  The Agency’s mandate in Iraq under various Council resolutions still stood.  While awaiting further guidance from the Council, he felt it would be prudent for both the United Nations and IAEA inspectors to return to that country, to bring the weapons file to closure and, through implementation of a Security Council approved plan for long-term monitoring, to provide ongoing assurance that activities related to weapons of mass destruction were not resumed.

In the Middle East, he said, he had continued to consult with States on the application of full scope safeguards to all nuclear activities in the region, and on the development of model agreements.  It was regrettable that, due to the prevailing regional situation, it had not been possible to make progress on the implementation of that important mandate.  A comprehensive settlement in the Middle East must be accompanied by a regional security structure including the establishment of the region as a zone free from weapons of mass destruction.

As for the situation in Iran, he said the Board of Governors had given considerable attention to the implementation of the NPT safeguards agreement in that country.  In September, the Board adopted a resolution urging Iran to show proactive and accelerated cooperation, and to demonstrate full transparency by providing the Agency with a declaration of all its nuclear activities.  The IAEA had recently received what Iranian authorities had said was a full and accurate declaration of its past and current nuclear activities, and was in the process of verifying that declaration, which was key to the Agency’s ability to provide comprehensive assurance.  Iran had also expressed its intention to conclude an additional protocol to its safeguards agreement.  He would report to the IAEA Board later this month on the status of safeguards implementation in Iran.

Looking forward, it was clear the Agency must have the required authority, information and resources to provide the international community with the credible non-proliferation assurances required under the NPT.  In that context, the international community must continue efforts to achieve the universality of the regime.  There must be greater assertiveness in resolving the root causes of global insecurity such as longstanding conflicts that provided incentives for the proliferation of nuclear and other weapons of mass destruction.  Moreover, a system of collective security that did not depend on nuclear weapons must be established, and the process of nuclear disarmament accelerated.  It might also be advisable to limit the processing of weapon-usable material (separated plutonium and highly enriched uranium) in civilian nuclear programmes, as well as the production of new material through reprocessing and enrichment, by agreeing to restrict those operations exclusively to facilities under multinational control.  Multinational approaches to the management and disposal of spent fuel and radioactive waste should also be considered.

ANTONIO NUNEZ (Spain) introduced the draft resolution on the IAEA’s annual report, saying the text had included changes, which attempted to harmonize the Assembly’s work with various aspects of the work under way in Vienna.  The draft struck a middle ground between procedural texts of past years and substantive concerns, providing an overall picture of the Agency and the importance of its work.  It also proposed that the Assembly take note of the IAEA’s resolutions and decisions on nuclear safety, technology transfer and verification of safe use.  He highlighted the subject matter of some of those decisions, including declarations on the Democratic People’s Republic of Korea and nuclear safety in the Middle East.  Two declarations listed were not on substantive issues but were nevertheless topical as they dealt with, respectively, the Agency’s staffing, and women in its Secretariat.  He welcomed the Agency’s cooperation and hoped that the wide support shown for the draft by Member States would lead to a consensus adoption later today.

CARLO TREZZA (Italy), on behalf of the European Union and associated States, said the draft resolution on the IAEA, reflected a broad agreement among IAEA member States and was the result of intense consultations in Vienna.  He fully supported its content and considered a nuclear non-proliferation regime of universal character, supported by a strong system of international safeguards, an essential prerequisite for collective security.  The NPT was the cornerstone of that global non-proliferation regime and the IAEA’s safeguards system represented its essential international instrument.

He reaffirmed the European Union’s full commitment to the NPT, saying that it would continue its efforts to maintain the authority and the integrity of the Treaty.  The universal adoption and implementation of safeguards agreements, and additional protocols to them, was the key to an effective and credible safeguards system.  He recalled the Union’s concern regarding the continued existence of unsafeguarded nuclear facilities and material in States not party to the Treaty, and called on those States to accede to the NPT and to place all their nuclear activities under IAEA safeguards.

Continuing, he said the fight against terrorism and the proliferation of weapons of mass destruction represented a challenge of paramount importance for the international community.  The Union was strongly supportive of all measures aimed at preventing terrorists from acquiring nuclear weapons.  While the primary responsibility for the necessary nuclear security rested with Member States, the Agency clearly had an essential role in combating nuclear terror.

He said technical cooperation, together with international safeguards and nuclear safety, were the three pillars of the activities of the Agency.  He underlined that funds for technical cooperation should be used in the most cost-effective, efficient and transparent way.  The IAEA, through its technical cooperation programmes, contributed to tangible, social and economic benefits and to the scientific advancement of Member States.

He repeated the European Union’s grave concern over Iran’s nuclear programme and expressed full support for the IAEA’s Board of Governors resolution of 12 September.  The Union expected Iran to fully cooperate with the IAEA in its implementation.  Furthermore, the EU was alarmed that it had not been possible for the Agency to verify the completeness and correctness of the initial report of the Democratic People’s Republic of Korea on its nuclear materials.  He welcomed the two meetings held in Beijing to find a possible negotiated solution to the question and encouraged all the sides involved in those meetings to pursue negotiations actively and in good faith.  He strongly urged the Democratic People’s Republic of Korea to unconditionally comply with all its relevant international commitments, in particular its IAEA safeguards agreement under the NPT.

OSWALDO DE RIVERO (Peru) said that strengthening nuclear safeguards and the effectiveness of the non-proliferation regime were among the greatest challenges of the day.  Therefore, he was concerned that the report stated that progress in establishing the safeguards systems had been poor.  That situation had been compounded by the current situation on the Korean Peninsula, which could threaten international peace and security.  He hoped that upcoming diplomatic talks on that particular situation yielded some progress.  He urged all States to abide by international agreements on nuclear non-proliferation issues.

He said that with Cuba’s signing of the NPT, Latin America had become the first nuclear-weapons-free zone in the world.  However, the exemplary situation in that region was now the exception to the rule.  Peru and the region had always worked to support the NPT and other non-proliferation instruments.  But it was clear that today’s non-proliferation regime was being overwhelmed and, indeed, was perhaps failing.  It was increasingly easier to get hold of nuclear technology, and information about such technology was now readily available.  As the number of nuclear-weapons States increased, all should recognize that the number of nuclear scientists -– out-of-work or poorly paid -– was also increasing.  Their expertise could easily fall into the wrong hands.

It was time for a new nuclear regime, he continued, one that worked towards the disposal of fuel and radioactive waste, and a ban on the production of fissile material for military uses, with a view to the overall reduction of nuclear weapons.  Indeed, such weapons served no function today.  What could they do in the face of terrorism, financial crises, drugs and small arms trafficking, global pollution or poverty?  Absolutely nothing.  He said that the development of air, transport and digital communications technologies would produce greater connectivity among individuals and cultures, giving rise to the perception that all humankind was one civilization.  That view would bring about an end to the ethnocentric ideas that had led to nuclear proliferation of the past two decades.

Statement by International Olympic Committee President

JACQUES ROGGE, President of the International Olympic Committee (IOC), said the world of today faced many problems and had many needs.  Perhaps because of those troubles, there was a need to take time out and celebrate unity through sport.  That was the essential message of the resolution on the “Olympic Ideal”, adopted this morning.  Throughout their history, the success of the Olympics had been to prove that people could live side by side in peace, if they so desired.  The tradition of the modern “Olympic Truce” resolution dated back to 1993, when a resolution on the observance of the Truce had been adopted, so as to allow the athletes of the war-torn Balkan republics to participate in the 1994 winter games.

Sports played a key role in society, he said, as it united people and taught them tolerance.  And although the Olympic movement’s capacity to improve the lives of people worldwide was limited, it made use of all possible opportunities.  The IOC had implemented programmes in the areas of education, health care, peace and human rights.  In the most disadvantaged parts of the world it sought to enhance people’s well-being through sport.  Those efforts included working to establish sports projects for victims of conflict in cooperation with the United Nations Office of the High Commissioner for Refugees (UNHCR) and other organizations such as the Red Cross.  It also worked in areas where conflict had come to an end to redevelop sports structures.  Special programmes in that context had been implemented in Timor-Leste, Afghanistan and Iraq.

Moreover, urban crime, disease and poverty also negatively impacted populations, especially children, he added.  The IOC thus worked to initiate programmes on the well-being of youths, in cooperation with the World Food Programme (WFP) and the Food and Agriculture Organization (FAO).  It also worked with United Nations Development Programme (UNDP) to have athletes communicate messages against drugs and the spread of HIV/AIDS.  The IOC was convinced of the positive role that sport must play as a catalyst in today’s society.  It would continue to contribute to United Nations efforts for the eradication of poverty.  He concluded by asking Member States to recognize the contributions of the IOC and by commending Tunisia on its promotion of the resolution on the International Year of Sport and Physical Education.

JAVAD ZARIF (Iran) said that the inalienable right of all States parties to the IAEA’s statute on nuclear technology for peaceful purposes without discrimination was the very foundation of the NPT.  That inalienable right emanated from two broader propositions.  The first was that scientific and technological achievements were the common heritage of humanity.  They must be used for the benefit of humanity and not abused as instruments of terror and domination.  The second general proposition was the requisite balance between rights and obligations, which was the basis of any sound legal instrument.  That balance guaranteed the longevity of the legal regime by providing incentives for membership and compliance.  It was necessary to guard against furthering the impression that the NPT and the IAEA safeguards regime were in fact impediments for the peaceful use of nuclear technology, while non-membership was rewarded by acquiescence, as in the case of development of one of the largest nuclear-weapons stockpiles in the Middle East.

If anything, he continued, failure to accept the NPT and safeguard obligations should have made the only outsider to the NPT in the Middle East the subject of the most severe restrictions and not provide it with impunity, he said.  “The international community as a whole has the right to be assured that the nightmare that [had been] visited upon the people of Hiroshima and Nagasaki will never happen again.”  That could be done through ridding the world of nuclear weapons as stipulated by the NPT and the advisory opinion of the International Court of Justice (ICJ), and, in the interim, ensuring universality of the non-proliferation regime and IAEA safeguard mechanisms, and vigorously pursuing a balanced and non-discriminatory application of their provisions.

But he said that those who pursued and had even used the destructive terror of that technology could not be allowed to undermine the very foundations of the non-proliferations regime by reversing the very logic on which the principle had been founded.  Attempts to deprive members of the NPT and IAEA safeguards from the peaceful use of nuclear technology, while actively supporting the nuclear weapons programme of a non-member, would only impede the ability of the IAEA to conduct its responsibilities in an orderly fashion.  Like all other members of the NPT, Iran considered the pursuit and development of nuclear technology for peaceful purposes to be its inalienable right and had, thus, invested extensive material and human resources in the field.  Nuclear and other weapons of mass destruction had no place in Iran’s defence doctrine.

Yet, illegitimate sanctions had targeted not only Iran’s legitimate nuclear programme but, in fact, the entire industry and all possible sources of supply of material and equipment, he said.  Regrettably, a “politically charged atmosphere” had been generated around that limited peaceful capacity, having little to do with the objectives of non-proliferation.  Following consultations in which Iran’s right to peaceful use had been recognized, it decided that other measures were necessary to remove doubts, and, on 23 October, had provided a full and consistent picture of its activities in the past.  That would certainly enable the Agency to verify that not only had all of Iran’s activities been exclusively within the peaceful domain in compliance with the NPT, but also that necessary corrective measures had additionally been adopted to meet every technical requirement of the safeguard system.  Further confidence-building measures had included an agreement to suspend uranium enrichment activities, to sign the Additional Protocol and continue to cooperate with the IAEA in accordance with the Protocol, pending its ratification by the Iranian Parliament.

Mr. GHEIT (Egypt) said he recognized the tangible contributions of the Agency in the field of safeguards and technology transfers, and said that its role in technical cooperation for the development priorities of developing countries deserved greater recognition.  That activity was a pillar of the Agency’s work and constituted a fundamental aspect of the development efforts of developing countries.  There should be full realization of the necessary budgetary resources for the Agency’s activities.  Undoubtedly, realizing an increase in the Agency’s budget by 6 per cent would reflect Member States’ appreciation for its work in the areas of nuclear non-proliferation and technology cooperation for sustainable development.

Regarding safeguards, he recognized the IAEA’s work in elaborating an international safeguards regime, and said that the universality of “full scope” safeguards should be ensured.  His country had put forward a number of initiatives at the regional and other levels to forward the non-proliferation regime, including through support for a nuclear-weapons-free zone in the Middle East.  However, Israel had not shown any desire to cooperate in the assurance of nuclear safeguards in the Middle East.  That adversely affected efforts to ensure nuclear non-proliferation, particularly in the Middle East region.

On the issue of nuclear security, he said that the events of 11 September 2001 had highlighted the need to strengthen the Agency’s activities to protect nuclear institutions and nuclear material from international terrorism.  As long as nuclear material not subject to effective control and international verification existed, nuclear terrorism would remain a threat.  The proposed activities of the Agency must take into account a number of criteria.  He anticipated that additional activities and measures would supplement programmes under technical cooperation, without detracting from them.

KIM SAM-HOON (Republic of Korea) said North Korea and Iran presented the most pressing proliferation concerns for the international community, and the Agency had thus far dealt with those two cases in an appropriate and professional manner.  With respect to the North Korean nuclear issue, he reiterated his nation’s position that Pyongyang’s nuclear weapons programme could not be tolerated under any circumstances, and there was no substitute for dismantling North Korea’s nuclear weapons programme.  His country was committed to a diplomatic and peaceful resolution of the issue through the six-party talks.  Welcoming Iran’s decision to cooperate with the IAEA, he said that country’s intention to sign the Additional Protocol was a significant step in the right direction.  Iran’s voluntary suspension of uranium enrichment and reprocessing activities was another positive indication.

Recent challenges to the global non-proliferation regime had demonstrated the inherent limitations of the existing regime and the inadequacies of legalistic approaches to dealing with proliferating countries.  The IAEA must be better equipped with both resources and a strengthened mandate to deal with multiple challenges from multiple sources.  As such, the existing safeguard system must be strengthened through the universalization of the Additional Protocol.  He supported the IAEA’s work in the promotion of peaceful uses of nuclear energy, and its applications through its technical cooperation programmes and activities to enhance global nuclear safety standards.  He agreed that nuclear power remained the only energy source that could supply electricity on a large scale with minimal impact to the environment.  Peaceful uses of nuclear energy were an integral part of his country’s sustainable development programme.

ALEXANDER V. KONUZIN (Russian Federation) said he was satisfied with the Agency’s work and recognized its increasing role in strengthening the international nuclear non-proliferation regime and ensuring the required level of confidence for cooperation in the peaceful use of atomic energy and safe nuclear-power production.  He reaffirmed the need to further strengthen and increase the efficiency of the Agency’s system of safeguards as the basis for the nuclear non-proliferation regime.  Terrorist acts in his own country and the United States, recent dramatic events in the Middle East and the critical situation in Iraq clearly demonstrated the danger posed to the world community by international terrorism, and demanded consolidated efforts to establish a global system to counter new challenges and threats, including those in the nuclear sphere.

The NPT, he said, played a key role in ensuring international security.  Bilaterally, the implementation of agreements under the Russian-American Strategic Offensive Reductions Treaty served to strengthen strategic stability and was evidence of his country’s compliance with its NPT obligations.  The Russian Federation also supported the IAEA Project on Innovative Nuclear Reactors and Fuel Cycles.  Pursuant to the Government-approved Strategy of Nuclear Power Development, a number of innovation projects on thermal and fast neutron reactors had been undertaken to address the problem, among others, of the safe use of weapons-grade and energy plutonium and prepare the transition to a closed fuel cycle.

On the international stage, he said the development of the situation with regard to Iran’s nuclear programme was being closely followed.  In the future, all problems between Iran and the IAEA should be resolved through cooperation.  Iran was expected to comply fully with the provisions of the resolution of the IAEA Board of Governors, and it was hoped that, at the Board’s next meeting, it would be possible to record substantial progress in implementing the measures contained in that resolution.  At the present time, the issue of Iran’s nuclear programme was excessively politicized; it should be switched back to regular IAEA inspection activity.  Moreover, there was no reason for his country to reduce its cooperation with Iran in the nuclear field; it was fully transparent and did not violate international obligations.

On the Democratic People's Republic of Korea, he said there must be a comprehensive solution to the current situation, including measures to make the Korean peninsula a non-nuclear area, to stop Pyongyang’s military nuclear programme, to bring that country back into the NPT, and to cooperate with the IAEA giving due account to that country’s legitimate interests, such as guarantees of its security and economic development.

MUNIR AKRAM (Pakistan) said the rapid depletion of fossil resources had sparked the demand for nuclear energy.  It was now widely scientifically accepted that nuclear energy provided environment-friendly sustainable sources of energy needed for development, especially in developing countries.  He was pleased to see that the IAEA’s report had highlighted the growing demand for nuclear energy in 2002.  Out of 33 reactors currently under construction worldwide, 20 were located in Asia.  The pace of construction could be further increased if States were not subjected to undue restrictions.

He said that, with innovative technologies, “safe” nuclear power plants were now a reality and could be constructed in energy deficient developing countries.  In that regard, the IAEA’s role in the transfer of safe technology to developing countries had assumed added significance.  He added that the Agency’s role in development had been duly noted at the Johannesburg World Summit on Sustainable Development (WSSD) last year, particularly for promoting scientific action for sustained energy development through peaceful uses of nuclear energy.

He said safety and verification aspects of the IAEA’s mandate remained important to the Agency’s work, and, while the Agency had initiated actions regarding the safety of nuclear materials, there was also a need to focus on securing “orphan” sources, which posed an immediate danger of falling into the wrong hands.  On strengthening the Agency’s safeguards system, equal emphasis on the balanced approach over its statutory functions would be required.  The maintenance of a proper balance between the promotional aspects and safety- or security-related aspects in all the Agency’s functions was essential to success.  The IAEA’s safeguards should not be used to serve partisan political objectives.  Its verification regime would be credible only if it was applied on a non-discriminatory basis.

His Government, he continued, attached great importance to the IAEA’s technical cooperation programme, as it offered unique opportunities for prosperity and economic growth with the ready availability of easy and affordable resources.  With its limited fossil fuel supply, Pakistan depended on nuclear power generation.  The country’s future activities in the field would not be limited to the installation of more power plants, but to further extend the use of those facilities for powering desalination plants.  Pakistan was keenly aware of pollution issues and it was highly sensitive to the safety and security of its nuclear installations.  The country was, therefore, diligently adhering to the principles of the Nuclear Safety Convention.  It had also strengthened its measures around its nuclear installations to avoid the possibility of nuclear terrorism or illicit trafficking in weapons.

YOSHIYUKI MOTOMURA (Japan) said the Nuclear Non-Proliferation Treaty had been a key element in world peace and stability, and served the common interests of all.  He reaffirmed Japan’s unshakable commitment to the NPT regime and to limiting the use of nuclear energy for peaceful purposes.  Having been the only nation to suffer nuclear devastation, his nation would not produce nuclear weapons, nor permit the introduction of such weapons.  That policy would not change.  The peaceful, appropriate use of nuclear energy contributed to the welfare of mankind and to social and economic development worldwide.  It also minimized the burden on the environment.  Still, it was necessary to strengthen the IAEA safeguards system by promoting the Additional Protocol.

Nuclear security had become an important issue for the international community with the IAEA playing a vital role in that area.  Since last October, he noted, the North Korean nuclear issue had heightened international tension.  It was regrettable that that country remained in non-compliance with its safeguards agreement, and that it had proceeded with nuclear weapons development.  In fact, he said, North Korea’s development of nuclear weapons, and its possession and transfer of such weapons, were “totally unacceptable”.  He called on that nation to come into compliance with all international obligations related to the nuclear issue, including the NPT, and immediately dismantle its nuclear weapons programme in a complete manner.

With regard to Iran, he said that nation’s recent decision was in line with requirements enumerated in the IAEA Board of Governors’ resolution.  Japan viewed such developments as a positive step.  However, it was important that Iran act in accordance with its own decisions and that it fully complied with the resolution.  Japan would watch Iran’s actions closely.

MICHAEL OYUGI (Kenya) said nuclear non-proliferation, as enshrined in the NPT, went beyond States relinquishing their right to develop nuclear weapons.  It also involved those States already in possession of nuclear weapons agreeing to give them up.  Calls by nuclear-weapons States for other States to abandon their nuclear ambitions would carry more weight if there were a greater show of commitment to nuclear disarmament by the former.  Thus, it was disappointing to see nuclear-weapons States instead pursuing research into new types of nuclear weapons and developing strategic plans that included their possible use.  The lack of progress towards ratification of the Comprehensive Nuclear-Test-Ban Treaty by Annex II countries was equally disheartening.

Welcoming the IAEA’s determination to continue developing peaceful nuclear applications such as seawater desalinization, insect sterilization techniques and the mutation and breeding of food crops, among others, he recognized the special significance of such activities for technical cooperation to developing countries.  As one of the greatest obstacles to increased food and agricultural production in sub-Saharan Africa was tsetse fly infestation and trypanosomiasis, the effective Sterile Insect Technique, developed by the IAEA, was a welcome innovation.  Furthermore, the Agency’s human health programme in Kenya included improving the national health-care delivery system, particularly in the area of diagnostics and radiotherapy.  Kenya was also involved with the Agency in the implementation of a regional project on “Isotope Hydrology Integration in the Water Sector”, which aimed to redress water inadequacy in the region.

As the flourishing of peaceful nuclear techniques in the twenty-first century required a stringent safety culture, he added, his country appreciated the Agency’s support for the Kenya Radiation Protection Board.  Moreover, as Kenya, and many other developing countries, continued to integrate modern nuclear techniques in technological development, the need for highly competent personnel assumed greater significance.  In that regard, he welcomed available opportunities for training scientists and encouraged the IAEA to widen its cooperation in the area of human resource development.

The Assembly adjourned at 4:25 p.m. and then resumed at 4:45 p.m. to hear addresses by the Deputy Secretary-General, the Chairman of the Second Committee (Economic and Financial), the Deputy Secretary-General of the Commonwealth Secretariat and the President of the Trade and Development Board of the United Nations Conference on Trade and Development (UNCTAD), on the occasion of the visit of the President of Uganda, Yoweri Kaguta Museveni, who was expected to address the issue of “Commodities and Development:  the Experience of Uganda”.

Commodities and Development

After resuming the Assembly’s meeting, JULIAN ROBERT HUNTE (Saint Lucia), President of the General Assembly, welcomed President Museveni, who had graciously agreed to address the Assembly on the issue of “Commodities and Development:  the Experience of Uganda”.  How to respond to the problems of commodity-dependent economies had preoccupied the international community for many years, he said, particularly in respect of the developing countries.  Indeed declining and volatile commodity prices and trade policies in the developed world, including tariff escalation and tariff peaks, had been among the factors significantly impeding the development efforts of commodity-dependent countries.

Commodities were, therefore, a key issue for the United Nations, he acknowledged.  The visit of the Ugandan President provided an important opportunity to spotlight many of the issues concerning commodities.  In addition to the invaluable assistance provided by the report of the Meeting of Eminent Persons on Commodity Issues, there had been opportunities to review many of the issues concerning commodities over the past week, particularly during the High-Level Dialogue on Financing for Development, as well as during the Open-Ended Panel of the Assembly on Commodities.  Issues including the 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 those phenomena on the natural volatility of commodity earnings had been addressed in a frank and forthright manner.

The Meeting of Eminent Persons had, in particular, made important recommendations for consideration by the Assembly in areas including market access, oversupply of commodities, compensatory financing and the strengthening of capacity and institutions.  One proposed long-term solution was to establish an international export diversification fund, and the Assembly’s Second Committee was now proceeding with further consideration of the commodities issue.  The important message conveyed by all that was that the time for decisive action to assist commodity-dependent countries achieve a higher level of growth, employment and income was overdue.

All initiatives in the commodities area, he concluded, stood to benefit immensely from today’s address by the President of Uganda, whose country, in many ways, typified the experience of commodity-dependent poor countries.  Uganda had faced development challenges due to commodity price volatility, as well as a decline in commodity prices and the trade policies of the developed world.  However, there were now encouraging signs that an environment more conducive to growth and development for Uganda and commodity-dependent countries was taking shape.

LOUISE FRECHETTE, Deputy Secretary-General of the United Nations, said the world economy had gone through enormous changes over the last few decades.  But one thing had changed very little; a large number of developing countries remained dependent on exports for primary commodities.  Out of 141 developing countries, 95 depended on commodities for more than half their export earnings.  For 70 of them, only three commodities generated those revenues.  That made those countries very vulnerable to price declines and volatility.

Commodity prices, she noted, had declined over the long-term, particularly after 1980.  Between 1980 and 2002, agricultural prices relative to manufacturing prices had declined by 47 per cent and the prices of metals and minerals by 35 per cent.  For some individual commodities, the price declines had been even larger.  For instance, coffee producers now received roughly a third the price that prevailed in the mid-1990s.  The price declines could be explained by factors such as low demand, technological advances that had led to synthetic substitutes, and oversupply, as a result of subsidies or misguided policies.

“Needless to say, this has deprived both governments and the people of developing countries from large amounts of revenues contributing to poverty and making it more difficult to reach the Millennium Development Goals (MDGs)”, she continued, adding that for a group of 81 mostly small developing countries, the foreign exchange loss amounted to more than $6 billion per year on average from 1995 to 2000, according to estimates.  Lower export revenues had also endangered the success of the Heavily Indebted Poor Countries (HIPC) Debt Initiative.  Eight countries in that programme had reached the “completion point”, but some of them had experienced worsening debt indicators owing to lower commodity prices.

Little had been done about those long-standing problems, she said, recalling what French President Jacques Chirac had called “a conspiracy of silence” surrounding the issue.  The Monterrey Consensus -- adopted at the 2002 International Conference on Financing for Development in Monterrey, Mexico –- had highlighted the need to mitigate the consequences of low and volatile revenues from commodity exports.  “Where do we go from here?” she asked.  First, market access needed to improve.  It was deplorable that cocoa beans entered largely unhindered into the major developed markets, while final products could only enter at tariffs of 15 to 30 per cent, with maximum tariffs even higher.  The next Doha Development Round of trade negotiations, under the auspices of the World Trade Organization (WTO), should address those issues for all commodities.

She also said that developing countries themselves could implement policies that reduced their vulnerability.  Especially important were medium-term fiscal frameworks, social safety nets and well-managed reserve funds to smooth large swings in public revenues.  Further, dominant international financing mechanisms that compensated for fluctuations in export revenues should be revived.  In addition, new, market-based approaches should be explored, including insurance schemes and risk management tools.

Finally, and perhaps most important, was diversification.  Many developing countries had made great strides in the area of diversification of exports, thanks to policy reforms, education and investment in skills.  Uganda, for instance, had significantly increased exports on items such as fish and cut flowers.  “If we are to have any chance of halving poverty by 2015 and meeting the MDGs by 2015, we need to address the fundamental problem of commodities that many developing countries face”, she said.

SHA ZUKANG, President of the Trade and Development Board of the United Nations Conference on Trade and Development (UNCTAD), said that the situation of commodity-dependent countries had regained centre stage because, over the past two decades, commodities had lost over half of their purchasing power to manufacturing.  That trend had compromised long-term planning in developing countries.  Commodities such as cocoa, coffee and cotton, among others, formed the backbone of many countries’ existences, and with current prices and market volatilities, those countries were suffering mightily.

It was clear that dealing effectively with commodities was needed to ensure that dependent countries achieved growth and development, he continued.  The necessity of achieving the Millennium Goals added further impetus to address the situation of commodity-dependent countries.  The Panel of Eminent Persons on Commodities had come up with a set of realistic and practical solutions and recommendations focused on three broad categories dealing with short-, medium- and long-term objectives.

The Panel’s report had highlighted a series of priorities, including addressing problems of oversupply, making compensatory financing schemes more user-friendly and operational, pursuing the possibilities of creating a new international diversification fund, and enhancing institutions.  The Panel’s work had also revealed that the work ahead involved many players, including the Bretton Woods institutions, the FAO, as well as UNCTAD and major private institutions.  It was his hope that the forthcoming UNCTAD XI could be utilized to add impetus to the Panel’s work and to strengthen the Conference’s effort to promote the relevant recommendations.

Solving the problem was an international issue, he said, chiefly because commodity-dependent countries did not have the capacity to restructure their economies without international support.  That was why the developed countries must evince the political will to act in good faith.

YOWERI KAGUTA MUSEVENI, President of Uganda, recalled that commodities were also known as “raw materials” –- the name referred only to unprocessed goods.  The production of those raw materials was not a mistake; the mistake was to rely solely on that production for future development.  That mistake took two forms.  The first was to base an economy solely on their export.  The second was not to add value to raw materials before their export.  For example, in the Ugandan experience, one could see that, in exporting cotton as a raw material, his country recuperated only one tenth of the final value of that cotton.  Throughout its history, Uganda had exported cotton at the stage in production after the seeds had been removed.  However, for every kilogram of such cotton exported, its equivalent value after being carded and made into yarn was increased by three times, and the value added increased further with every stage of production.

The same story applied to coffee, he added.  In 1986, Uganda had been the fourth largest exporter of coffee in the world; it had earned $500 million from its coffee exports.  At the current time, when Uganda exported twice as much coffee, it earned only half as much from its total exports.  And yet, the price of coffee for the final consumer was not decreasing, but increasing.  Five years ago, coffee was a $55 billion global business.  Out of that, the coffee exporting countries received only $8 billion.  Currently, the value of the coffee business was $71 billion; yet “the Ugandas” received only $5 billion.

That type of situation, he said, called for a revised understanding of the term “donors”; when exporting commodities as raw materials, developing countries were “donors”.  In receiving only one tenth of the final value of the product, they were donating money to other countries.  Moreover, they were donating jobs necessary to process the cotton to other countries.  The “donees” were those who benefited from that export situation.

Uganda, he continued, had been ignorantly and persistently donating to others.  If the spinning and weaving of cotton were done in country, there would be more profit for Ugandans.  That would mean more consumption in Uganda, and the tax profits thereon would allow the Government more resources.  However, without changing current practices, profits from raw materials would continue to decline for three reasons.  First, taking the example of copper, he pointed out how technology changes led to market collapse.  While the world had once been dependent on copper for the telephone industry, the technology had changed and it was no longer so useful.  The price of copper had collapsed as a result, leaving copper-dependent countries needing to adjust their economies.

In the second instance, he said, commodities, as low-technology products, were easy to produce and, as a result, oversupplied by developing countries.  Thirdly, subsidies in the United States, European Union and Japan adversely affected commodity markets.  In that instance, the example of beef production was instructive.  Developing countries were unable to compete with the United States and Japan –- the world’s largest beef exporters -- because they could not compete with government subsidizes.  That meant that developing countries crowded into industries where there was no competition, such as coffee and tea production.

The solution to the problem of commodity dependence, he said, was twofold.  As emphasized by the Deputy Secretary-General and others, developing countries must diversify their economies.  Uganda, he affirmed, had diversified its production and now exported, among other things, fish, cotton and flowers.  However, the country continued to receive little revenue from those markets.  The real answer was to be found in transforming commodity-dependent economies.

Transformation, he said, meant to cut out the middleman, linking commodity-dependent countries directly to consumers by completing the processing -– by adding value –- to raw materials before their export.  However, that would only be possible if developing countries could get access to the “big” markets of the West –- although the United States market was composed of only one third as many individuals as the African market, America’s consumption was 22 times that of Africa.  In order to increase African markets, it would be necessary to increase employment opportunities, thus creating growth and a greater capacity for consumption in Africa.  That would also be an advantage to the large markets of the United States, Europe and Japan, as it would allow them to export to the African market in turn.  Africa, he said, was the “last emerging market”.

The way to solve the problem of raw materials was to transform the countries dependent on them, to industrialize their economies, he concluded.  Recalling Adam Smith’s emphasis on “specialization”, which had revolutionized economic thought, he said Africa was currently trapped in the past, still focused on the sheer production of raw materials as the path to growth.

In his concluding remarks, Assembly President HUNTE applauded President Museveni’s presentation, particularly noting that he had spotlighted for all the vicissitudes, economic volatility and market challenges that so many developing countries faced.  He said that the Ugandan leader had rightly stressed that diversification was one of the keys, but such expansion alone was not enough.  Small countries must diversify with a view to transforming their economies.  That was a sure way to ensure that commodity-dependent countries could eventually “get out of the box” that so many found themselves in.

He said President Museveni’s emphasis on “value added” was equally important, particularly since that idea had been ignored for so long in the commodities debate.  There was a definite need to get beyond the traditional manner in which developing counties and the wider international community had been dealing with the commodities problem and move on to more independent and innovative methods and mechanisms.

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For information media. Not an official record.