[As prepared for delivery]
Ladies and gentlemen,
I have the pleasure to welcome you to the 3rd UNCTAD Multi-year Expert Meeting on Commodities and Development.
In my understanding this meeting aims to achieve at least three objectives.
- To help commodity-dependent developing countries harness development gains from the booms in commodity prices.
- To deal with development challenges related to commodity dependence.
- To increase benefits from the global integration of markets, helping these countries achieve their development goals, including the Millennium Development Goals.
This meeting will undertake the following matters. It will analyze recent developments and challenges in commodity markets and contemplate their future outlook. The meeting will also review and identify policy actions to mitigate the impact of volatile prices and incomes on commodity-dependent countries, and to facilitate for them value addition and greater participation in commodity value chains. The meeting will also identify innovative approaches to resolving commodity-related problems.
Ladies and gentlemen,
The recent trends in commodity markets have raised some concerns. The picture is multi-faceted and complex. High price volatility on commodity markets remains a challenge for commodity-dependent developing countries. Since mid-2010, prices for basic products have been edging up towards the limits reached in 2008. Natural phenomenon such as floods and fires have increased pressure on prices for agricultural goods. Volatile and rising prices for basic food products have huge negative impacts on vulnerable groups, for whom food expenditure normally accounts for a dominant portion of household budgets. Low investments in the mineral sector, alongside with a challenging situation in upgrading mining capacity, has generated a supply contraction. These forces, coupled with increases in demand fueled by the rapidly growing economies, have led to volatile and rising prices.
The issue of price volatility was precisely the topic of UNCTAD´s second Global Commodities Forum which took place in Geneva from 31 January to 1 February 2011.
Let me highlight some of the main issues discussed during the Forum.
Agricultural commodities: There is a need for a paradigm shift in stabilizing global agricultural production. A green revolution is required in Africa to generate a structural transformation of agriculture for triggering its large-scale development. Global action to stabilize prices is key if developing countries are to have food security and farmers are to break out of the poverty cycle. Stabilization policies must be implemented in conjunction with modernization strategies for agriculture.
Oil and gas sectors: There is a need for a change in the sectors´ institutional, legal and regulatory arrangements for international cooperation. Better international cooperation between suppliers, transit countries and users should all be part of the commodity policy agenda. Measures for this purpose will require investment, infrastructure and innovation.
Minerals and metals: The judicious use of the rents received in this sector should contribute to economic development and diversification. There is a need for improving linkages between this sector and the rest of the economy, and enhancing revenue management, poverty reduction, and better employment opportunities. Negative environmental impacts of mining activities should be mitigated by policies such as progressive taxation, particularly of mining royalties, budget stabilization laws, and the establishment of sovereign wealth funds. It is also important to focus on economic diversification and to promote investments in skills development and infrastructure.
The topics of the Second Global Commodities Forum and our Expert Meeting are closely linked. I would therefore like to encourage discussions in this meeting to further build on, and add to, the results of the Forum. I wish you all very fruitful and productive deliberations over next three days and I look forward to their outcome.
Thank you very much.