BEIJING – Leading international commodity organizations will meet in Beijing March 30-31, as developing countries are poised with anticipation, waiting to see what the outcome of the G20 summit in London will mean for them, as the global economic crisis continues to unfold.
The international commodity bodies (ICBs) will gather together at the annual meeting with the Amsterdam-based Common Fund for Commodities (CFC), an inter-governmental financial institution established by the United Nations with mandate to support the commodity sector in developing countries. The Common Fund works closely in partnership with the ICBs to advance commodity development and to enhance global trade.
The International Network for Bamboo and Rattan (INBAR), the Fund’s major partner for commodities in China is hosting the meeting. In China, the Common Fund has financed significant projects for bamboo and rattan, cotton, tea and other commodities. More important, China is an essential partner of the Fund, particularly in fostering commodity development measures and technical assistance programmes, especially in Africa through South-South co-operation.
The meeting in China, which is a very important and influential member of the Common Fund, will also review progress of the Fund’s action plan on commodity development policy and address priority issues of concern and immediate challenges that the commodity bodies are currently facing.
Senior officials and invited representatives will have a full slate of issues to grapple with during the meeting. Among these are recent developments in the global commodities sector, which is already reeling from rapid rise in food prices, climate change, the biofuels dilemma; and more directly, the knock-on impact of the unraveling international financial situation on commodity producing developing countries and consumer ones, such as China.
Poor and developing countries, who to some extent are experiencing the unintended consequences of an international financial mess not of their making, must cope with emerging, complex dimensions and ominous social-economic effects brought on by the current severe dislocations in the international financial system at a difficult time for the entire world economy.
Furthermore, for many countries, especially those wholly dependent on the agricultural commodity sector; the downturn in prices and volatility has been devastating. Very few of them can afford ‘stimulus’ plans to shore up their already fragile economies, given that many are not capable of navigating these turbulent economic times, while also facing critical financial and institutional constraints.
According to leading experts, since regular development aid packages promised by rich countries would not be forthcoming, the situation for poor countries is precarious to say the least. Indeed, with donor countries presently seen as being unable to extend a vital lifeline to ensure financial stability, poverty reduction targets in vulnerable countries will be severely compromised.
Policy makers at the World Bank estimate that each one-percent decline in growth in poor countries “would trap 20 million more people in poverty.”
In an urgent appeal, the World Bank and other international financial institutions, including the Common Fund, are calling for concerted policy action and solidarity, working with the private sector and civil society organizations for massive capital infusion into the so-called ‘vulnerability fund’ mechanism.
Only through the policy mechanisms envisioned by the vulnerability fund, can poor and developing countries avert potential social disaster and economic uncertainty, in a financial environment that has seen, in 2008 alone, “an additional 100 million people…driven into poverty, since the spike in food and fuel prices.” [END]