UNITED NATIONS, Apr 01 (APP):Pakistan, speaking on behalf of the “Group of 77” developing countries and China, has underscored the need for transforming commodity-dependent developing countries’ economies structurally so as to increase their earnings by adding value to commodities, basically creating new valuable products traded at fairer prices.
Speaking in an interactive dialogue on “commodities” convened by the UN General Assembly President, Ambassador Aamir Khan, Pakistan’s permanent representative to the UN, said developing countries look forward to implementing projects with development partners that will help those countries to diversify their economies, improve value addition and commodity sectors into major sources of growth and sustainable development.
Pakistan is the current chairman of G-77 and China, which now has 134 members and is the United Nations’ biggest intergovernmental group of emerging countries.
Noting the increase in the number of commodity-dependent countries in the last decade, Aamir Khan voiced G-77’s interest in the analysis of the impact of COVID-19 on the trends and prospects of commodity markets, more so on how to get back on a track that would move them forward to breaking away from commodity dependency.
High price volatility undermines the development prospects of G-77 members that are commodity dependent, he said, adding that instability of prices adds to increasing risks to trade and investment, both public and private and to uncertainty in revenues prospects.
“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.”
Some developing countries managed to increase their export earnings by adding new commodities to their export baskets, but he said the price risks can also affect these new commodities.
Through linkages, Aamir Khan said this leads to growth of other sectors, including industrial and services sectors, also expanding domestic demand and imports substitution, an approach that contribute to the creation of employment and investment in infrastructure.
“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”.
Most commodity-dependent developing countries, he said, need to overcome several constraints, including lack of experience in manufacturing and marketing non-traditional commodities in international markets, inadequate infrastructure, difficulties in access to finance, access to technology, and unfair trade barriers.
“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”, Aamir Khan said, adding that developing countries require human and physical capital accumulation, including technology transfer on concessional terms.
“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.”