Limiting fluctuations in the prices of crude oil and other commodities that many developing countries depend on for economic growth is crucial to ensure steady sources of revenue to fund poverty-alleviation programmes, the head of the United Nations trade and development agency said today.
More than 85 developing countries depend on commodities for at least 50 per cent of the of their export earnings, said Supachai Panitchpakdi, Secretary-General of the UN Conference on Trade and Development (UNCTAD), noting that the commodities’ boom that began in 2002 after more than two decades of declining prices had raised hopes that producers could reinvest higher profits into reducing poverty and diversifying their economies.
“But then the boom turned to bust as the global recession struck in 2008,” Dr. Supachai told delegates attending UNCTAD’s inaugural Global Commodities Forum in Geneva.
Prices are only now beginning to recover, but immense challenges remain for commodity-dependent countries seeking to meet the Millennium Development Goals (MDGs) and other poverty-reduction targets, Dr. Supachai said.
In addition to seeking ways to increase stability in commodities markets, he said, the Forum will highlight how countries - both importers and exporters - can limit their exposure to commodity price volatility and mitigate the detrimental effects of commodity price swings.
Delegates at the two-day conference stressed that a better mix of policies and market mechanisms by governments, producers, those involved in international financial and credit markets would be required to tame the volatile price shifts.
The Forum will also address other pressing issues in the commodities’ sector, including recent developments in the extractive industries; investment in improving the productive capacities of the commodities sector; options for mitigating risks in commodities production and trade; commodity finance and related legal issues; and policy options for minerals and metals producers.
Jean Feyder, ambassador of Luxembourg and president of UNCTAD’s Trade and Development Board, told the meeting that the Forum is intended to provide a neutral, high-level platform for reaching a convergence of views on price volatility and other commodities issues. The relationship between commodities exports and prices and poverty reduction also must be discussed, he said.