NEW YORK – – As days turn to months, it is becoming clear that the international financial crisis will not abate any time soon. In the opinion of many development experts, the longer the crisis lags on and without concrete proposals to assist vulnerable countries, increasingly there is danger that poor countries will be severely affected.
This week, speaking in New York at the UN Conference on World Financial and Economic Crisis and its Impact on Development, Managing Director Amb. Ali Mchumo, called for global action on commodities as part of the framework of discussions to address the international economic and financial crisis. [UN Webcast: Archived Video -Tape Counter@ 1:39]
“We find this to be important given the fact that commodities continue to form the backbone of the economy of many developing countries, especially the poorest among them,” said Amb. Mchumo. He recalled the efforts by the Common Fund in its partnership with UNCTAD, UNDP and the ACP states, in launching a Global Initiative on Commodities (GIC), which brought together commodity stakeholders from across the world to underline the importance of commodities sector in the development process.
In re-launching the commodity agenda, the Global Initiative on Commodities (GIC) identified main aspects of commodity issues, which have a direct bearing on commodity producers’ incomes and wellbeing; as well as on opportunities for economic growth, sustainable development of commodity dependent developing countries, LDCs and other small and vulnerable economies.
“We believe the Global Initiative on Commodities (GIC) should be the starting point of a sustained initiative that needs to be followed through, until we arrive at a global consensus supported by all stakeholders, with all the requisite involvement of high-level political and economic decision-makers nationally and internationally,” said Amb. Mchumo.
Amb. Mchumo made note of the central importance of the commodity sector in view of the present financial and economic crisis, as underlined in the Report of the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System. He made reference to Chapter Four, which highlights the detrimental effects of commodity price volatility, as a key source of instability in the global economic system and calls on the international community to explore ways in mitigating the risks from commodity fluctuation.
It is in this context that the Common Fund supports the call by the Secretary-General of the United Nations for a “global commodity agenda for development which could become a stepping stone for progress towards the Millennium Development Goals (MDGs).”
Amb. Mchumo acknowledged the Common Fund for Commodities has been providing development support to many commodity dependent developing countries in key development areas including diversification, productivity improvement, market access, risk management and market development as well as in assuring reliability of commodity supply.
“For the Fund to continue its valuable work as a development partner, we need to mobilise wide support to galvanise the forces of the various stakeholders towards a consensual framework to advance the commodity agenda and address on a permanent basis the systemic issues behind the commodity problematique confronting the world,” he said.
The Managing Director offered hope that at the end of this important conference, the issue of commodities will be duly reflected in the final outcome negotiated text. “The Common Fund pledges to play its part in elevating commodities in the international agenda, acting as the voice of commodity dependent countries and to continue providing support though its commodity-based project financing interventions in this key sector within the economies of many poor countries.”[END-2009] Published June 25, 2009.