56. The continuous deterioration of the terms of trade of developing countries places severe constraints on their development efforts. Besides the permanent erosion of the purchasing power of their raw materials exports earnings, developing countries are adversely affected by wide and continuous short-term fluctuation of raw materials prices, mainly due to speculation, including sale of strategic reserves by developed counties, lack of financial resources preventing developing countries from maintaining their own national reserves, consumption boycotting, disorder in international markets, and by depressed raw materials price levels, which sometimes do not cover their production costs and which do not reflect their share in the final products values and are not remunerative to producers.

57. Sustained efforts have been made to overcome the various problems related to raw materials, particularly within the Integrated Programme for Commodities. Although agreement has been reached on the establishment of the Common Fund, only limited progress has been made in the negotiation of commodity agreements as well as in dealing with other elements of the Integrated Programme for Commodities.

58. In order to provide adequate support to the developing process, it is necessary to enhance economic cooperation among developing countries in the field of raw materials, particularly through a comprehensive set of measures and steps designed to, inter alia, the stabilization of raw materials, prices at levels remunerative in real terms to producers, improvement of the raw materials export earnings purchasing power, and increased participation of developing countries in the processing, marketing, distribution and transshipment activities of primary products in their raw and processed forms.

Prevention of Fluctuations in the Price of Raw Materials

59. The Conference recommended that:

  1. Developing countries should sign and ratify the Agreement establishing the Common Fund as soon as possible to enable the Agreement to enter into force not later than April 1982 as envisaged in the Agreement. The Conference decided to endorse the agreement reached in the New Delhi Conference of the Ministers of Foreign Affairs of the Non-Aligned Countries that the Headquarters of the Common Fund for Commodities should be located in a developing country. The Conference took note of the Philippines offer as permanent site of the Headquarters of the Common Fund;

  2. While following a commodity by commodity approach and therefore taking due account of the specific conditions of each commodity in the international market, priority consideration should be given by interested developing countries to measures of supply management which could be supplemented by stocking arrangements, including the setting up of appropriate mechanisms to ensure remunerative and stable export earnings to developing countries for their commodity export. The Group of 77 in Geneva should organize meetings of interested producing countries to consider appropriate, supply management measures particularly in products in which the developing countries have the bulk of the share of world production. Where necessary these meetings should be hosted by individual producing countries;

  3. With a view to fostering further cooperation between raw material producing developing countries, existing developing countries producer associations should be strengthened, and new associations should be established as appropriate. The secretariat of the existing producer’s associations should provide technical assistance in the setting up of new producer’s associations. Developing countries concerned should, in the context of their producer’s associations, take urgent steps towards the entry into force of the Statute of the Council of Producer’s Associations;

  4. Full consideration should be given to the study to be prepared by the group of experts of the Non-Aligned Countries on the proposal by Madagascar for the setting up of a stabilization fund;

  5. In any of the arrangements made in (b) above as well as in considering the measures and actions already mentioned, due attention should be given to the position of developing importing countries which lack commodities;

  6. While recognizing the importance of enhancing primary commodity trade among developing countries, priority should also be given to trade in manufactures among such countries in view of its potential for the expansion of trade and their economic development.

Mutual Assistance in Developing, Exploiting and Processing of Developing Countries Raw Materials Resources

60. The Conference recommended that a study should be carried out by an expert group to be convened by the Group of 77 in Geneva, on possible arrangements for the preparation of joint projects and other suitable modalities for further developing, exploiting and processing raw material resources of developing countries. It also recommended that developing countries should intensify efforts in order to increase participation in the processing, research and development for new uses, distribution and marketing and transshipment activities of primary products in their raw and processed forms.

Priority of Raw Materials Supplies to Developing Countries

61. The Conference explored the different ways and means to achieve a better coordination among the developing countries in order to safeguard their interest and secure their raw materials supplies on a priority basis. To this end it recommended that:

  1. As far as measures related to marketing of indigenous raw materials in developing countries are concerned, raw material-exporting developing countries should take concrete measures, such as preference in allocation of quotas, where such quotas are in force, to accord priority, without prejudice to their national interests or to their existing commitments, to other developing countries in securing their raw materials supplies, so as to meet their net domestic requirements. Raw material-importing developing countries should also accord similar priorities, without prejudice to their material interests or to their existing commitments to developing countries while making purchases to cover their import requirements in raw materials.

  2. In their procurement of commodities, developing countries should establish direct contacts with suppliers from developing countries with a view to avoiding intermediation from developed countries, including transnational corporations. In this connection relevant arrangements should be established as appropriate. The aforementioned expert group should present specific proposals in this regard.
  3. Developing countries should take measures to promote the consumption of products of developing countries, including perishable commodities.

62. The Conference recommended that the Group of 77 should intensify its consultations and coordination within the framework of the Integrated Programme for Commodities with a view to strengthening mutual support.

63. The Conference recommended that the mechanism and arrangements to promote financial cooperation among developing countries should make provision, inter alia, for the adequate financing of projects geared towards increasing the participation of the developing countries in the processing, marketing, distribution and transshipment of raw materials.

64. The Conference recommended that the Group of 77 in Geneva examine and present proposals for the developing countries to correct distorted information leaked by the developed countries in the international commodity markets, with a view to improving their position in such markets and, in this regard, it expressed the importance of carrying out a closer surveillance.

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