– As delivered –
Statement by H.E. Mrs. María Fernanda Espinosa Garcés, President of the 73rd Session of the UN General Assembly
15 May 2019
Distinguished Permanent Representatives,
Mrs. Pamela Coke-Hamilton, Director of the Division on International Trade and Commodities, UNCTAD,
Mrs. Carla Mucavi, Director of FAO Liaison Office in New York,
It is my pleasure to give you a warm welcome to this interactive dialogue organized in the framework of this “Prosperity” week, which started yesterday with the high level event on Inclusive development and inequality, and which will continue tomorrow with the event on Illicit financial flows.
Each of these events offers us an opportunity to analyze, in a consecutive and integrated manner, three issues that are fundamental to continue moving forward in the path of sustainability and inclusive economic growth which is the aspiration of the 2030 Agenda.
Today I will refer to three aspects that make the discussion on commodities a critical matter to leave no country behind, particularly the developing countries that essentially depend on commodities.
Firstly, I will refer to the consequence of the commodity markets volatility.
It is paradoxical that many of the developing countries with the greatest abundance of natural resources and that depend on commodities are, at the same time the countries that are the furthest behind and most vulnerable to commodity price shocks.
The fluctuations in the international prices of agricultural, energy, mineral and metal products inevitably affect the economic, social and environmental conditions of the countries that depend on them, with direct and immediate effects in persons.
This link is clearly reflected in developing countries. 64% of them depend on the exports of commodities and 45% depend on imports.
When the prices of these products come down or their demand decreases, the exporting countries, whose income comes mainly from this market, can suffer severely in their capacity to implement policies in education, health and other priority areas clearly marked by the 2030 Agenda.
Although in a different way, the variations in prices also affect countries that depend on commodity imports, due to the inflationary effects when the prices go up.
The impact is direct both for producers and in the everyday lives of consumers, with repercussions in their purchasing power and food and energy security.
Also, the price crises of commodities can further worsen the tax conditions of countries with high levels of debt, such as Least Developed Countries and Small Island Developing States and can also affect their efforts to fight climate change.
Similarly, 26 out of the 32 Landlocked Developing Countries depend on commodities and their participation in total exports is 60%. These countries face additional challenges, such as elevated costs in the transportation of their products to reach the main international markets.
Under these conditions, the countries that depend on commodities find particularly difficult to implement the long-term investment plans that they need to transform their economic structures and escape from their dependence. Nevertheless, this is crucial is we are to achieve more resilient and inclusive economies.
This leads me to my second point: we must support economic diversification toward sectors of more added value or services.
This will allow improving the exchange terms and the entry of foreign currencies, creating a positive impact in economic growth and, with the adequate public policies, the reduction of poverty.
We must promote an inclusive and sustainable industrialization, in harmony with nature, as well as responsible investments from the private sector to create sources of decent work and, of course, we must improve the tax revenue systems.
I also emphasize the importance of developing infrastructures and promoting technologies, research and innovation.
In this context, south-south and triangular cooperation have a great potential that must be harnessed.
International financial institutions must support these structural transformation processes for developing countries, providing lines of credit with fair conditions and adapted to their realities.
Microfinance and cooperativism also offer alternatives to mobilize resources. The financial inclusion of women, as agents of the economy, is indispensable, especially to overcome structural limitations.
This is not an easy path, on the contrary, it is very complex but, fortunately, we have two ambitious instruments that show us the way forward: the 2030 Agenda and the Addis Ababa Action Agenda.
Thirdly, we need to move forward in strengthening the multilateral system, to ensure a fairer and predictable commodity international market.
Without a doubt, the “Prosperity Week for All” comes in a very appropriate moment, since we are just months away from celebrating the High Level Political Forum Summit; the High Level Dialogue on Financing for Development; and the review of the programs for the Small Island Developing States and Landlocked Developing States. The exchanges that arise from this dialogue will also be useful to fuel each of these processes.
The international community must integrally support stimulating investments to create added value and the diversification of production in the countries that depend on commodities.
For that purpose, we need a stronger multilateral commerce system that promotes the participation of developing countries in a global trade structure without imbalances or inequities.
We need to reform the organization of global value chains, allowing small producers to participate in defining prices considering that, currently, the biggest cut of commodities still remains mostly in the hands of a very few companies.
Likewise, we cannot escape from the debate on the need to broaden and reinforce the level of participation of developing countries in the decision-making process of international financial institutions.
Without a doubt, the “Prosperity Week for All” comes in a very appropriate moment, since we are just months away from celebrating the High Level Political Forum Summit; the High Level Dialogue on Financing for Development; and the review of the programs for the Small Island Developing States and Landlocked Developing States. The exchanges that arise from this dialogue will also be useful to fuel each of these processes.María Fernanda Espinosa Garcés
The commodity sector must be a source of opportunities for developing countries and not a factor of vulnerability and uncertainty.
To conclude, I invite you to be creative and proactive. Let us reflect together on how to overcome a dependence that, many times, perpetuates the inequality between and within our countries. Addressing these challenges will contribute to the eradication of poverty and will favor food security and preserving the environment and, thus, from this moment on and until 2030, we can achieve the goal of living in fairer, more prosperous, resilient, inclusive and peaceful societies.