As delivered


The 61st session of the UN General Assembly

Second Committee, Agenda Item 51:

Macroeconomic policy questions: commodities






(9 October 2006)



Mr. Chairman,


While my delegation associates itself with the statement made by representative of South Africa on behalf of the Group of 77 and China on macroeconomic policy questions, I wish to make a few additional observations on sub-item entitled “Commodities.”


Mr. Chairman,


As seen from the report prepared by the UNCTAD secretariat (A/61/202), the commodity price recovery over the last three years, by and large, has had a positive impact on most developing countries exporting commodities. South-South trade has become a sizable part of world commodity trade, and this new dynamism has to be fully utilized in support of development and poverty reduction. Yet, depending on the commodity composition of trade and trading capacity, many developing countries are not able to duly benefit from the current positive trends in commodities. Here, much still could be done by the UN, in particular the UNCTAD in assisting commodity-dependent developing countries, through, inter alia, technical assistance to support policy development and capacity building in light of both the emerging need to enable them to adjust to the requirements of expanding South-South trade but also of the continuing challenge of making North-South trade more equitable and fair. In this regard, my delegation wishes to add its voice to the concern expressed by the G-77 that the relevant report of the Secretary-General should have been more comprehensive covering aspects of North-South trade which remains essential element of creating an equitable global market.


Mr. Chairman,  


A number of important medium-and-long-term recommendations made at the Meeting of Eminent Persons on Commodity Issues held in September 2003 still need to be acted upon. They include central problems of commodity-dependent developing countries in such important areas as compensatory financing schemes, capacity-building to improve supplies, experience sharing on commodity policies, institution-building in fiscal management of commodity revenues, market-based management of price risk and diversification of productive capacity.

Many commodity-dependent developing countries lack the capacity to benefit from potential market openings. Therefore, support to strengthen supply capacity in the commodity sector should be made an integral part of international assistance to commodity-dependent countries. This has to include policy-level support to design and implement strategies, policies and measures for commodity-based development and diversification, the improvement of domestic research and development capacities taking into account the specific needs and potential of a given commodity-dependent country. In addition, in commodity strategy design the undeniable link between the commodity sector development and poverty has to be clearly reflected so that commodity issues are to become an explicit part of poverty reduction strategies.   


Mr. Chairman,


We also believe that an early establishment of an Export Diversification Fund could help strengthen national ability of countries to move away from excessive dependence on a few commodities. In the meantime, the existing Common Fund for Commodities needs to be further strengthened with efficiency and effectiveness of its operations enhanced in order to implement the commodities-related provision of the 2005 World Summit Outcome. Mongolia is currently studying with interest the possibility of taking part in relevant projects of the Common Fund for Commodities designed to improve and diversify commodities production and trade. In this we would rely on the experience and support of Member States and relevant international organizations.


Mr. Chairman,


Maximizing the contribution of the commodity sector to sustained economic growth and sustainable development continues to be central challenge for commodity-dependent developing countries, including my own country.


The Government of Mongolia attaches high priority to the development of its commodity sector as we are largely dependent on a few commodities in both our export and import. Main export items are cashmere and mining products, principally copper and gold, whereas petroleum dominates our import. Accordingly, the impact of recent commodity price trends with an increase in both minerals and oil prices has been mixed. Nonetheless, the State and Government have endeavored to convert the export revenues accrued from recent price increases for minerals into development gains through undertaking a host of quick impact measures on poverty reduction and income generation within the framework of implementing its national Millennium Development Goals. Responsible management of natural resources focusing on long-term development of the country will continue to be a central priority for Mongolia.


My Government has taken a number of steps with a view to expanding its commodity export markets and attracting more foreign investment into the mining sector. Namely, a new revised law on minerals was passed by the Parliament last July. Mongolia has also committed itself to the implementation of the Extractive Industries Transparency Initiative that is designed to improve the openness about financial conditions surrounding investments in mining industries. Furthermore, policy measures are being undertaken to reduce the country’s dependence on export of a few commodities through diversification and improved processing of primary commodities and increased share of agricultural products in our export. My delegation is pleased to note that the recommendations of a national workshop organized in Mongolia in cooperation with UNCTAD last year were taken into consideration in formulating our policy on commodity sector development.


In conclusion, Mr. Chairman, may express my delegation’s earnest hope that our deliberations at this session will enable us to move forward on our commitment made at the last year’s World Summit to address the impact of weak and volatile commodity prices and support the efforts of commodity-dependent countries to restructure, diversify and strengthen the competitiveness of commodity sectors.


Thank you, Mr. Chairman.