The Integrated Framework for Trade-Related Technical Assistance to Least
Developed Countries (or IF) programme focuses on trade capacity
development with sustainable development and poverty reduction as key
objectives. It therefore follows that prioritization of commodity
development strategies should feature strongly in the IF programme. Even
more so, the Enhanced Integrated Framework should prioritize commodity
development strategies that promote, upgrade, diversify and add value to
help the countries move up the value chain in the sectors associated
with commodity production.
Primary commodities, including agricultural and mineral commodities, are
the major source of income and employment for a number of developing
countries and LDCs. Development of this sector offers hope for reducing
poverty especially amongst marginalized groups like small farm producers
and women. For a large number of commodity-dependent countries, the
journey out of poverty is linked to the development of their commodity
sector and to their successful transition up the production ladder.
In order to address this problem, a UNDP-supported study was conducted
to review the existing Diagnostic Trade Integration Studies (DTISs)
available as of October 2008 that were carried out under the IF. The
objective was to assess whether and to what extent concrete
recommendations and actions which can support comprehensive strategies
relating to commodity production are provided. The DTIS is a detailed
country study of trade needs and priorities, which constitutes the
essential first step for participation in the IF.
DTISs were not designed to provide a commodity development strategy as
such, but they do perform a useful function by looking at trade capacity
development issues including the macroeconomic framework and
business/private sector support. In the LDC context, given the extent of
commodity dependence, it follows that the DTIS should inevitably
consider commodity development strategies.
Some of the DTISs contain useful pointers for a more focused strategy
for commodities with considerable potential. But overall, the UNDP study
found that the DTISs had the following shortcomings: insufficient
attention to 1) physical infrastructure, 2) supply side issues, 3)
gender participation, 4) value chain issues, 5) standards, 6) skills and
7) inadequate provision for monitoring the implementation of the DTISs.
The findings of the report call for policy makers, institutional actors
and enterprises to develop an integrated commodity development strategy
that will move primary commodity producers up the value chain and help
reverse the present trend of deindustrialisation in LDCs. Governments
and the international community need to provide much needed physical and
institutional infrastructure and provide ongoing support for an enabling
regulatory environment that encourages investments.
The study points out the significant gaps between different elements in
the commodity value chains. It calls for identification of viable policy
solutions and the correct sequencing of required interventions for value
addition of commodity-related outputs in LDCs.
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