South Perspectives - March 1996

FOREWORD

The aim of the present report is to encourage the developing countries to bring the commodities issue back onto the international agenda, and to suggest some broad directions that an initiative by the South could take, including proposals for specific action by the international community or by the South itself, through the Non-Aligned Movement or the Group of 77. The report has two principal components. The first -- Part 1 -- comprises an overview of commodities issues as they affect developing countries. This part also presents the broad lines of a possible strategy that developing countries could pursue to improve their individual and collective situation in world trade in commodities.

Part 2 presents a more detailed analysis of recent experience with regard to commodities and to international commodity policy. It considers the main trends in world commodity markets over recent decades, and highlights the nature and magnitude of the present problems facing the commodity-dependent developing countries. Then, the inadequacy of past international policy responses is examined, with particular attention to the limitations of a policy of complete reliance on the free play of market forces in dealing adequately with the commodity problems of developing countries. This is followed by detailed consideration of possible policies for dealing effectively with each of the major commodity problems. While collaborative action by the South and North on each issue would be the preferable approach, in cases where Northern governments are unwilling to take action -- for example, because opposed in principle to intervention in the commodity markets -- then it is argued that Southern commodity producers should seriously consider whether they themselves could take appropriate measures in common to safeguard their trade interests.

Finally, all the major suggestions for specific action by the South are brought together.

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