UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD) - CONFERENCE DES NATIONS UNIES SUR LE COMMERCE ET LE DEVELOPPEMENT - CONFERENCIA DE LAS NACIONES UNIDAS SOBRE COMERCIO Y DESARROLLO

Ms. Sue S.C. Tang, Chief, Commodities Branch, United Nations Conference on Trade and Development (UNCTAD)

I am both honoured and pleased to address this assembly today. First, because of the opportunity that has been given to me to express, on behalf of the United Nations Conference on Trade and Development (UNCTAD), our appreciation for the long and fruitful cooperation that UNCTAD has had with FAO.

I am also pleased to be able to touch on important matters that straddle the preoccupations of both organizations, namely the interrelationship between the issues of commodities, natural resources, trade and development and those of food and agriculture.

It is true that our increasingly integrated world economy affords unprecedented opportunities for international trade and development, yet we must not forget trade and development issues, in addressing concerns of hundreds of millions of people who still suffer from hunger and from serious handicaps associated with inadequate food supply. There is no doubt that orderly and fair international exchanges of goods can make a significant contribution to enhance food security, especially in the poorer developing countries. As everyone knows, without access to outside food supplies, the spectre of famine and malnutrition is a constant threat in many parts of the world where agricultural production often faces insurmountable constraints.

Indeed, during the past two decades, a large number of developing countries had recourse to imports to supplement domestic production and, thus, had allowed consumption to outpace output. But it cannot be emphasized too strongly that importing countries must be assured that food will be available in a dependable and efficient way when needed. Prospects for trade expansion have been much enhanced as the Final Act of the Multilateral Trade Negotiations has resulted in very significant changes in the world trade regime, particularly for agricultural trade, which figured for the first time in an important way in the negotiations. To be sure, not all developing countries are in a position, at present, to share the expected gains from these changes.

More generally, a most pressing concern of countries relying on export earnings to assure food security is the threat of unexpected drops in import purchasing power. This is especially true with countries which have weak economies, especially in Africa.

In the main, they are heavily dependent for both production and exports, on a base of non- or semi-processed commodities and thus are exposed to unstable prices and deterioration in the terms of trade. A lack of significant diversification of the economies and an inability to attract sufficient volumes of foreign direct investment for that purpose, constitute formidable barriers to their ability to exploit fully the potential of international trade. We in UNCTAD believe, that concrete measures should be adopted to assure a more sustainable and efficient use of the natural resources of these countries, both by developing the traditional commodity sectors and building on the existing resource base to create new exports. Diversification of the commodity base is likely to play an important role in the process. While it is true that a favourable macroeconomic framework is a prerequisite for successful diversification, specific practical actions, at both the national and international levels, are required to enable economic actors to exploit the possibilities afforded by the framework.

At the national level, what is needed are specific actions, aimed at stimulating the capacity to identify and exploit diversification opportunities, but diversification efforts will come to fruition only if the international community is committed to work together and improve market access for food products. We believe that sustained efforts in these areas, including our own, UNCTAD-wide Special Initiative on the Least Developed Countries, with the aim to reactivate and accelerate sustained growth and development of these countries and to promote their integration into the global economy and the international trading system, would make tangible contributions towards helping low-income countries escape from a poverty-cum-marginalization gap.