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This project under implementation by UNCTAD in 2000 and 2001 is financed from the United Nations Development Account.


Rationale

The project aims (i) to promote the horizontal, vertical and geographical diversification of production and trade structures; (ii) to improve government's capacities to formulate focused, effective and sequenced policies in this respect; (iii) to increase the competence of enterprises in adapting their business strategies and supplies to the Post-Uruguay Round trading framework; and (iv) to strengthen positive linkages between the commodity sector and the rest of the economy.


Background

World trade is rapidly growing for high value commodities. These include, in particular, foodstuffs that could easily be supplied by commodity dependent developing countries, and processed forms of many products currently exported by them in an unprocessed stage. Industrialised countries and a small number of developing countries have been generally successful in exploiting these dynamic and lucrative markets, while others, particularly LDCs and African countries, have been left behind. The enterprise sector in this second group of countries has been unable to adapt itself to the liberalised and more exigent trading environment, and its needs for support are not effectively prioritised. Government policies also need to be reviewed in the current trading framework, and support that could be provided with the meagre resources of the governments need to be selective and focused. The civil society and institutions also have a crucial facilitating role in the diversification process.


Objectives

The implementation of the project will contribute to: · enabling enterprises in commodity dependent countries to adapt their export diversification strategies and business practices to modern market exigencies, e.g., by adopting appropriate communication, information, and partnership channels, identifying opportunities for niche products and processed items, and providing supplies that meet specific market requirements; · enabling enterprises to build effective partnerships with banks and other finance providers for using structured commodity finance and modern risk management instruments, as well as to prioritise and communicate their needs to governments; · enabling governments to design and implement focused and sequenced policies and measures that deal with the most important bottlenecks experienced by their enterprises, and that facilitate, wherever possible, the provision of necessary support services by the enterprise sector; · increasing the effectiveness of local institutions and civil society in ensuring that the more disadvantaged segments of the population are involved in the diversification process with a view to reducing poverty; and · increasing food self-sufficiency, besides export diversification, in net food importing developing countries.


Activities

The activities are focused on capacity building in regional and subregional workshops and some country specific training sessions. Training material is under preparation for these activities.

Contact: Mr. M. Arda
Officier in Charge Commodities Branch
United Nations Conference on Trade and Development (UNCTAD)
e-mail: mehmet.arda@unctad.org
tel: +41 22 917 57 90 fax: +41 22 917 05 09