STATEMENT ON BEHALF OF THE GROUP OF 77 AND CHINA BY AMBASSADOR MOHAMMAD AAMIR KHAN, DEPUTY PERMANENT REPRESENTATIVE OF PAKISTAN TO THE UN, AT THE INFORMAL INTERACTIVE DIALOGUE ON THE GENERAL ASSEMBLY ON COMMODITY MARKETS: "WHAT'S NEXT FOR COMMODITIES MARKETS?" (New York, 31 March 2022)
1) The Group of 77 and China welcomes this interactive dialogue being convened as a follow-up to the mandate by the Commodities resolution of the General Assembly adopted last December.
2) Many members of the Group, especially the LDCs, LLDCs, and SIDS are highly commodity dependent.
3) According to the Secretary General report, produced by UNCTAD for the resolution, the number of commodity-dependent countries has increased in the last decade.
4) As developing countries, we are interested in the analysis of the impact of COVID-19 on the trends and prospects of commodity markets, but more so on how to get back as soon as possible on a track that would move us forward to breaking away from commodity dependency.
5) To the Group of 77 and China, high price volatility undermines the development prospects of its members that are commodity dependent. Instability of commodity prices adds to increasing risks to trade and investment (both public and private) and to uncertainty in revenues prospects.
6) The Group of 77 and China supports the aspiration of its members towards increasing export revenues as this will help us in the implementation of the 2030 Agenda for Sustainable Development and to achieving the Sustainable Development Goals.
7) There are developing countries that managed to increase their export earnings by adding new commodities to their export baskets. However, the price risks of their traditional commodities can also affect these new commodities.
8) For most developing countries, the longer-term solution is to transform their economies structurally. They aspire to increase earnings by adding value to commodities, basically creating new valuable products traded at fairer prices.
9) Through linkages, this leads to growth of other sectors, including industrial and services sectors, also expanding domestic demand and imports substitution. This approach could contribute to the creation of employment and investment in infrastructure.
10) But this is not easy for most developing countries, which recognize that the challenges to adding value to the commodities they produce are limited due to the absence of technology and other productive capacities. Other conditions, including adequate conditions also play a role.
11) Most commodity-dependent developing countries need to overcome several constraints, including lack of experience and knowledge in manufacturing and marketing non-traditional commodities in international markets, inadequate infrastructure, difficulties in access to finance, access to technology, and unfair trade barriers.
12) Other constraints that are likely to present challenges to commodity-dependent developing countries include tariffs and non-tariff barriers, harmful and illegal subsidies, which have impeded progress in embarking on a diversification strategy.
13) To implement diversification strategies successfully, developing countries require human and physical capital accumulation, including infrastructure, technology transfer on concessional and preferential terms, and capacity development.
14) Developing countries also require technical assistance to reduce information deficiencies and asymmetries, which are impediment to the survival of new export flows. This may include providing technical assistance to ensure conformity with overseas market standards and setting up export promotion agencies.
15) Developing countries and countries graduating to higher income per capita status further need financial support and investment, including foreign direct investment in specific areas of the value chain, including non-traditional industries, which facilitate technology acquisition or innovation to address specific challenges.
16) Finally, developing countries look forward to implementing projects with development partners that will help commodity-dependent developing countries to diversify their economies, improve value addition and transform their commodity sectors into major sources of growth and sustainable development.
I thank you.