PGA Remarks at the Informal Interactive Dialogue of the General Assembly on Commodity Markets


 Remarks by the President of the General Assembly,

Mr. Dennis Francis,

at the Informal Interactive Dialogue of the General Assembly on Commodity Markets

26 April 2024

[As Delivered]

 

Ms. Rebeca Grynspan , Secretary-General of UNCTAD,

Excellencies, Invited Panelists,

Ladies and Gentlemen,

It is a great pleasure to welcome you all to this General Assembly’s informal interactive dialogue on commodity markets, a subject of special importance to so many countries in the Global South, whose development is constrained by the vagaries of global markets for such products.

I am particularly grateful to the United Nations Conference on Trade and Development for their robust support and partnership in organizing this event – a commitment evidenced by the presence with us here today of Ms. Rebeca Grynspan, its distinguished Secretary General, who will contextualize our discussion by delivering a Keynote Address.

Commodities – the basic goods and raw materials that form the bedrock of global trade – are integral to the global economy.

These commodities – ranging from the cereals in our meals to the cotton in our clothes, to the copper in our electronics – underpin production, consumption, and trade worldwide.

While commodity markets are vital to the global economy, excessive dependence on commodities can create adverse consequences for a nation’s economic sustainability and the well-being of its people.

Globally, commodity dependence – defined as a scenario where 60 percent or more of a country’s export revenue depends on basic goods – disproportionately affects developing countries, in particular.

Consider that – according to the most recent UNCTAD State of Commodity Dependence report – only 13 percent of advanced economies, particularly Australia and Norway, are commodity dependent.

By contrast, a staggering 85 percent of the world’s Least Developed Countries are commodity dependent.

A majority of Landlocked Developing Countries and Small Island Developing States also find themselves in similar situations of commodity dependence – rendering their economies vulnerable, and highly susceptible to external shocks.

The fact that the number of commodity-dependent developing countries has increased – from 94 to 99 between  2002/04 and 2020/22 – should sound the alarm bell for us, because, addressing the issue of commodity dependence is key to the implementation of the 2030 Agenda for Sustainable Development and achieving the SDGs.

 

Excellencies,

Peculiar challenges faced by commodity-dependent economies are many and varied, including that:

  • commodity-dependent countries frequently grapple with issues such as sluggish productivity, income volatility, overvalued exchange rates, and heightened economic and political instability. Such dependence leaves economies vulnerable to external shocks and fluctuations in international market prices.
  • an overwhelming 95 percent of the 20 countries most vulnerable to climate change are commodity-dependent developing countries – further exacerbating their economic and social challenges.

In addition, the devastating impact of commodity dependence – particularly its effect of limiting foreign exchange earnings – remains highly problematic, at a time when global public debt has reached grossly unsustainable levels.

Furthermore – amid global discussions on debt sustainability and the reform of the international financial architecture – it is crucial that we address commodity dependence, with the urgency the matter deserves.

I believe that breaking free from commodity-dependence – while challenging – is achievable.

I say so mindful of the success stories of countries like Costa Rica and Malaysia – which provide examples of viable pathways that can be emulated by other countries.

Costa Rica transitioned from primarily trading bananas and coffee to exporting services and medical instruments.

Similarly, Malaysia shifted from producing mostly rubber and tin to manufacturing electronics.

These cases – among many others – highlight valuable lessons in economic diversification and emphasize the importance of implementing policies that both capitalize on opportunities while managing risks associated with economic transitions.

 

Excellencies,

Ladies and Gentlemen,

I close by urging you all to take today’s mandated dialogue as an opportunity to take stock of world commodity trends, prospects, and strategies for economic and export diversification – particularly in so far as it affects commodity-dependent developing countries.

I therefore look forward to your deliberations on specific strategies that commodity-dependent countries can adopt to enhance their technological capacity and innovation ecosystems.

I encourage discussions that focus on key sectors and financing mechanisms which hold the greatest potential to drive structural transformation, economic diversification, and resilience in commodity-dependent developing countries.

I am also hopeful that Member States and other stakeholders will consider how the international community can support sustainable and inclusive diversification efforts in commodity-dependent developing countries.

Lastly, I do believe that the great work that agencies like UNCTAD have produced over the years – on enhancing the productive capacity of many vulnerable countries – must be fully leveraged, for the benefit of especially the LDCs.

Together, we can transform challenges into opportunities for diversification, inclusive growth and sustainable development.

 

I thank you.



https://www.un.org/pga/78/


https://www.un.org/pga/78/2024/04/26/pga-remarks-at-the-informal-interactive-dialogue-of-the-general-assembly-on-commodity-markets/