Implementation of the declaration and the programme of action on the establishment of a new international economic order

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IITED NATIONS

ICONOMIC AND SOCIAL COUNCIL

vwnruooiun rvn

E/CN.14/635 31 January 1975 Original: ENGLISH

IMPLEMENTATION OF THE DECLARATION AMD THE PROGRAMME OF ACTION OK THE ESTABLISHMENT OF A NEW INTERNATIONAL

ECONOMIC ORDER 1/

Note by the secretariat

CONTENTS

I* XMTROBOCTION ---

II, THE PRESENT ECA PROGRAMME OF WORK AND PRIORITIES III, STRENGTHENING OF THE SECRETARIAT'S ACTIVITIES TO ENABLE ECA TO DISCHARGE EFFECTIVELY ITS ROLE WITH

IN THE CONTEXT OF THE ESTABLISHMENT OF A NEW INTER NATIONAL ECONOMIC ORDER ---

IV. RESOURCE IMPLICATIONS ---

age

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3

Paragraphs

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1 -

8 •

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■ 30

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13

31 - 44 45 - 46

TABLBt Production of commodities of interest to African countries, 1971.

1/ General Assembly resolutions 32OMS-VI) and 3202 (S-VI).

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FOREWORD

i. ECOSOC at its fifty-seventh session in July 1971* in resolution 191l(l»VTl) requested "the executive heads of all organs and organizations in the United

Nations system to submit, as appropriate, reports to their respective governing

bodies concerning the re-orientation and,adaptation of their programme of work"

(to implement the provisions of the Declaration and the Programme of Action vitfcin their respective fields of competence); resolution l896(LVII) in its operative paragraph 1 requests "the regional economic commissions to adjust, as appropriate, their respective programmes of work and activities so as to discharge effectively their responsibilities in relation to the urgent implementation of the Programme

of Action on the Establishment of a New International Economic Order adopted by

the General Assembly in its. resolution 3202(S-Yl)". Operative paragraph 2 of the

same resolution requests the Executive Secretaries of the regional economic

commissions "to submit, as soon as possible, to the member States of their respective

commissions, suggestions for the implementation of the provisions of paragraph 1

above"•

ii. A provisional version of the present paper, which has been prepared in response to this request, was submitted to the twelfth meeting of the Executive

Committee in November 197**. The Committee welcomed the paper, which, it was generally agreed "represented a useful approach to reinforce the action of the

developing cpuntries towards the establishment of a New International Economic Order. Various approaches had been made in the past and embodied in such documents as Africa's strategy: for development in the 1970s, the Declaration by the Minister* , of Trade and Industry, and the resolutions adopted by UNCTAD, but it was ureful

to have a single document which could be used as a basis for real 'k

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I. INTRODUCTION

1. The sixth special session of the General Assembly, which had been called «...

tjhe initiative of President Houari Boumedienne of Algeria, closed its deliberations

|{y adopting. ;a. Declaration on the Extablishment of a New International Economic

flrder 1/ and a Programme of Action 2/ intended to put the declaration into effect*

She two texts were adopted without a vot^. However, a number of the developed

Countries recorded their reservations about parts of the texts.

2. Most of the points at issue during .the special session had been discussed

before - the bias against the developing countries in the world economy, their Wifavourable terms of trade, their increasing debt burden and their exclusion, for

all practical purposes, from the decision-making ir, international trade and monetary

•ffairs.

3- The Declaration lists 20 guiding principles on which the New International

■conomic Order should be established. The Programme of Action is spelt out under

tfee 10 following headings;

(1) Fundamental problems of raw materials and primary commodities as related

to trade and development;

(ii) International monetary system and financing of the development of

developing countries?

(iii) Industrialization;

(iv) Transfer of technology; .

(v) Regulation and control over the activities of trans-national corpora

tions;

(vi) Charter of economic rights and duties of States;

(vii) Promotion of co-operation aiaoug developing countries;

(viii) Assistance in the exercise of permanent sovereignty of States over

natural resources; ,

(ix) Strengthening the role of the United. Nations system in the field of

international, economic co—operation?

(x) Special programme.

X/ Resolution 3201(S-VI)

2/ Resolution 3202<S-VI)

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E/CN.1V635

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k. The First and the Second United Nations Development Decades were declared, on the

basic premise that development was going to be a joint venture "between developed and

developing countries, and that there would be a major transfer of resources from the rich to the poor countries. With the adoption of the two General Assembly resolutions the framework for the International Development Strategy may need

significant revision in terms of objectives and policies. In particular, it may

be necessary to modify the Strategy's key quantitative targets for the second half of the 1970s .

5» We are witnessing now the first signs of a future dramatic change in the balance of economic and financial power between the developed and the developing world:

(i) Most of the raw materials required by the industrial world

exist, and are produced, in developing countries. In the future the developed countries are going to be increasingly

dependent on resources imported from outside; l/

(ii) The developed world today comprises less than one-third of

the total world population. By the next century it will have dwindled to about 10 per cent;

(iii) Today the major part of the capital of the world is concentrated in a handful of nations, while the rest of the world lacks

capital but is labour-abundant. It is not possible to keep this capital and labour apart and yet have the basis of world prosperity;

(iv) The developed countries will need to build up and sustain effective demand among the overwhelming bulk of the world population in order to maintain their own standard of living.

6*. The sixth special session of the General Assembly was the first concerted attempt by the third world to bring to the notice of the world the basic changes that are taking place so that instead of the confrontation that has existed so far, there can be co-operation between the developed and the developing world

to promote policies of mutual accommodation. Such accommodation might include:

(i) Redistribution of industries, particularly those based on energy

or using a lot of unskilled labour. The comparative advantage

of a number of such industries is changing radically in favour

of the developing world. Such redistribution can be carried

out in 5 to 10 years allowing for capital replacement and retraining programmes.

(ii) Harmonization or reconciliation of interests with a view to

creating a framework within which each group of countries could play its full and rightful role;

1/ See Annex table for share of Africa and other developing countries in

world production of major commodities, (pages 15, 16 and. 17)*

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B/CN.14/635 3

(iii) Redefinition of the role of foreign assistance^ serve as a ' vehicle' for new development strategies which will enable_

devteibpxng nations to assume full, responsibility for their own

■' ''future development within a framework of economic and political

independence;

(iv) Policies and meaures to ensure that the developing world can increasingly assume the major burden of its own. development, be itin arranging its own foreign assistance or its own trading

patterns; ;

(v) Reform of international financial and trade institutions such as IMP IBRD and GATT, which all were set up after the Second World : War when economic power was concentrated in USA and Western

Europe, to make these institutions more responsive to the - r- " ■■■'■■- increasing influence of the commodity-producing countries;

(vi) Partnership in development. The world balance which is being sought should take account of the long-term interests of all parties

;' concerned. ■ ■ ' . ...-■..'...; '■.■■■- ;....■■ !. ■ ; ' . '.

T. this is the background on which ECA, as a United Nations bodjr serving the_

jtffican developing countries, has to adapt, as necessary, it. program of work

and priorities.

II. THE PRESEHT ECA PROGRAMME OF WORK AHD PRIORITIES

ft, ;The Economic Commission for Africa was established in 1958 with the following

aajor objectives:

(a) Initiate and participate in measures for facilitating concerted^action for the economic development of Africa, including, its social aspect, and interrelationship of economic and social factors, with ,^«. ™fc raising, the level of economic activity and levels of living in Africa,

! : and for maintaining and strengthening the economic relations of . . : member countries and territories of the Commission, both among themselves

and with other countries of the world;

(b) Make and disseminate studies of economic and technological problems : and developments in Africa,and collect, evaluate and disseminate

e6'ohomicV technological'and statistical information; ■ (c) Perform advisory services to countries and territories on request; .;

(<$} Assist in the formulation and development of co-ordinated policies as a basis for practical action in promoting economic and

technological development in the region.

9. Keeping its terms of reference in mind the work programme of ECA for ««

IBTOi hS been formulated on the basis of the International Development Strategy

idifrict's strategy for Develo^ent in the 1970, as adopted in February 1971

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at the first meeting of the Conference of Ministers of the Economic Commission for Africa. It is flexible andsubject to review by the African Conferences of Ministers in order to cope with emerging economic problems facing the continent.

10. The adoption by the General Assembly of resolutions-3201(S-Vl) and 3202(S-VI) may require that the Commission readjusts its programme of work so as to discharge effectively its responsibilities in relation to these resolutions. In this process it should, of course, be recognized that while the resolutions have assembled the salient facts underlying the problems of the developing countries, it is not a panacea for all Africa's ills. The task facing African countries is to restructure their own economies and to identify key projects, institutions and establishments

for the integrated development of Africa. In order to assess the extent to which an adjustment is required, the following paragraphs briefly set out the mam areas of concentration in the present programme, with particular attention to the

activities that can be said to fall within the context of the two General Assembly

resolutions.

11. Particular attention has in recent years been given %o activities in the fields of mass poverty, unemployment and rural development. This is due toa number of important factors which include the inadequate rate of expansion in employment opportunities to absorb the annual additions to the labour force and the worsening in recent years of the living conditions of the majority of

African populations.

12. The development of African agriculture^ is receiving priority, not only because 80 per cent of the total African population is dependent on this sector, but also because through a better combination of factor mix, there are brighter prospects than in other sectors for a substantial increase in production and^

potential gains in employment. It is also this sector that supplies the basic foodstuffs required for a minimum standard of living, the raw materials required for industry and for exports and the major part of the market for industrial products. Emphasis is given in the secretariat activities to measures for

increasing food production and for generally promoting agricultural deve?;o^f^

through multinational co-operation and trade expansion, such as the establishment of aninformation bank on agriculture in Africa; analysis of the strategies and policies for increasing food production, for inter-country trade in food products, and for holding food reserves by groups of countries; assistance to the mass or the small farmers, including livestock rearers, to become more productive and increase their income thereby promoting self-reliance and more equitable income distribution; preparation of studies fof regional commodity groups, including food crops, livestock and meat and industrial and export commodity groups, m order to facilitate discussions on measures for increasing production and

obtaining remunerative prices in developed countries for the export productsi ana

improvement of agricultural institutions and services, particularly marketing and

input supply institutions and extention service, which will facilitate increase

in agricultural and food production.

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x3. . It ia extremely irax-ortant to process Africa's natural resources in order to

increase the value added accruing to Africa. Manufacturing is also a leading <

growth sector. The work of ECA is directed into almost all fields of industrial I rjevelopment. Thus, studies are being completed, to create an .African Mineral ;

ltevelopment Council to promote the greater domestic industrial processing of !

Jlfrica's raw materials; advisory assistance is provided in the area of forest-

fcfased and food-processing industries; collection and analysis of data on prices of commodities and manufactures kavebeen initiated; import-substituting and export-

promoting industries are identified and investment promotion services provided to

foster a greater flow of industrial financing; studies on the transfer of techno logy and the role-of trans-national corporations have been conducted; and the

•fforts of ECA to promote appropriate procedures and instruments for the integra tion of African industrial markets are continuing. Other fields of studies now

assuming high priority are the choice of technique (labour versus capital I

intensity) and choice of sectors for industrial development and export promotion.

Some studies have also been initiated to develop intermediate technologies. f 1A. ECA-, in co-operation with OAU and UNIDO, is also assisting African countries

in defining common African positions or international industrial co-operation Issues, in particular those to be discussed at the Second General Conference of UKIDO in March 1975. The Second Conference of African Ministers of Industry held '■III Cairo in December 1973 adopted the Declaration on Industrialization in Africa:

■frinclples and Guidelines for Co-operation and Development which, inter alia, defines a regional position on international industrialization issues. The first

•peting of the Follow-up Committee on Industrialization which was held in Addis ; Ifcaba" in- September 1974 has up-dated this common position in light of international

developments which took place since the Cairo Conference and particularly in light of the decisions of the Special Session of the General Assembly.

X$>: Since about 80 per cent of Africa's resources for development purposes are . dsxived from exports, emphasis in the secretariat activities in international

.grade is placed- on export promotion and the restructuring of Africa's trade within tfee context of a new international division of labour with a view to promoting a broad range of products and ensuring that trade assumes a dynamic role in integrat ing the various sectors of1the economy and transforming them from traditional, primary producing units into the more dynamic combination of agro-industries.

Htts is essential for most developing countries where the' trade gap is dominant.

Within the context of production in Africa which concentrates on foodstuffs, raw Materials and consumer goods, export is the major means for converting domestic

resources earned into the foreign exchange required to import the capital goods

Hfceded for development. Recent activities have aimed at identifying new trade opportunities in non-traditional markets, such as those in African countries, other developing countries and the socialist countries, while special attention has been paid to problems of Africa's primary commodities; the generalized system a* preferences; and preparations for the multilateral trade negotiations and - related negotiations of African countries with the European Economic Community.

Studies have been prepared on the problems of consultations among countries icing commodities of export interest to Africa, including proposals for

<*«icerted action which African countries could take alone or in co-operation with oilier producing countries. In that connexion, the secretariat has been closely

associated with, the preparation of the Action programme for economic co-operation i

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among non-&liyne<3 cou.-.trl;s in the fields of trade, industry and transport, i,n particular the components related to producers' associations, within the context of the generalized system of preferences, the secretariat has prepared studies on its implications for *\frican countries and has, jointly with UHCTAD, organized seminars on the subject. In respect of international negotiations on trade, the secretariat is assisting African Governments* with the help of tJMDP, to identify problems in these negotiations which may require special attention and to search for solutions which will enable African countries to draw maximum benefits. As part of its activities to stimulate trade with non-traditional markets, a study has been completed on trade with South-East Asia, while in respect of intra- African trade a major programme comprising trade promotion advisory services, marketing research and training is undervzay.

17. These activities are carried out under the guidance of the ECA/GAU joint

meetings on trade and development, which, together with meetings of African ministers of trade, are the principal bodies for the harmonization of African positions in international trade and the main instruments for the mobilization on a wide front of all the political force African countries can muster in order to influence decisions affecting their trade and development.

18. The programme of work in natural resources is direciily related to the

provisions of the General Assembly resolutions in respect of exercise of permanent sovereignty over natural resources. In this field the secretariat is carrying out an inventory of the mineral resources of Africa, to be conpleted in 1976. An economic study of the present status and prospects for the development of mineral

resources in West Africa has been completed, and maps are in preparation, it is

promoting the establishment of multinational mineral resources development centres and is systematically building up a body of knowledge that will enable it better to provide advisory services to governments on the economic aspects of mineral exploration and exploitation. It is also carrying out studies on raw materials for the fertilizer industry, as well as raw materials for iron and steel industry.

Beginning 1976, the studies are expected to cover bauxite, copper, lead, zinc and tin and also raw materials used as sources of energy.

19. The recent Hegional Conference on Petroleum Industry adopted a number of recommendations. The most important required ECA with the collaboration of OAU to study the possibility of establishing an African Documentation Centre, an African Petroleum Organization and an African Petroleum Institute. The programme of work has been redrafted to take these resolutions into account. Work is going on the compilation of an inventory of energy resources, training facilities

and needs, with a view to encouraging the establishment of standing committees for

energy in all the economic subregions, to be responsible for making recommendations regarding the formulation and co-ordination of policies.

20. The implementation of the provisions in the General Assembly resolutions relating to transfer of technology is only possible given a certain threshold of scientific and technical infrastructure in the form of institutions and manpower.

The secretariat is accordingly assisting member States in creating or strengthen

ing the organs required for the formulation of government i.olicies and plans for the promotion and application of science and technology for economic and social development; collecting and analysing data on the techno-economic situation and technological needs * and priorities in member States to provide the basic

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development planning In science and technology; designing training programmes, conduct courses, and promote the - establishment of institutions for

, the development of manpower for science and technology; promote the establishment

of institutions fctr research and development in different sectors of the African economies,, so as to provide a continuous flow of technology and technical services for production activities; and .develop contacts between the science and engineer ing communities in African countries so as to promote joint action and collabora- ,tion in research and training and in tackling problems of multinational interest

in science and technology.

21. High priority is given to manpower training. The level of training, education and technology in Africa is lower than in other continents. All African countries are making determined efforts to expand educational facilities of the academic typ«

which is affecting the educational background of new entrants to the labour force.

Unfortunately, this system is encouraging new aspirations and aptitudes creating youth discontent and social tensions due in part to the rising ratio of the

educated youth in the number of persons unemployed. The role of education is not 1 to create educated unemployed but to raise the productivity levels within the

^country and to expand production and employment. At present, the role of educa tion, which is considered a basic right of citizens, is to provide pre-career j training for entry into the modern sector- The rate of expansion of secondary

^frchools has been larger than that of primary schools and all this at the cost of father goals such as universal literacy. The result is that many of the children Outside the school system are residuals or drop-outs from an educational process j*hich is biased towards the production of a minority. Moreover, the standard of Hfcntry into modern jobs is mostly the academic records and hot the acquiring of

fcasic skills.

J2. Ranedical measures take the form of changing school curricula to incorporate paterial which is relevant to future occupations, and/or changes in the method gf selecting students for higher education, and/or putting greater emphasis upon jg-therjob training and upon part-time extension of skills and knowledge through iidditional education of the already employed. Children could begin an occupation

#fter having completed a more general pre-vocational education, and selection of pRreers for children would be based both en their desires and upon the abilities ghich appropriate aptitude tests reveal. Alternatively, the future expansion of irrelevant secondary and tertiary education could be controlled through shifting She cost of such education to parents or future earnings of the students.

j*3. The secretariat activities in the fieia of transportation have particularly

flmed at assisting African countries in overcoming those handicaps inherited from tte colonial era which have been inhibiting the development of trade and other gonomic contacts between them. Because of the small size of the markets and poor firansportation facilities in Africa excess capacity in the field of industry

#sumes serious proportions. High priority is accorded to the development of trans- Mrican highways and feeder roads to link the different parts of Africa. Attention

|M also recently been given to the establishment of institutional machinery for g-operation in respect of port management and for the establislunent of joint J^ansport operations such as multinational shipping companies, it has further ipovided assistance to African countries during the negotiations on major inter- gtional transport problems, including the code of conduct for liner conferences

a the proposed system for international combined transport operations (IIT)

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24. If the developing African countries are to achieve the target growth rat^e of 6 per cent, greater efforts are needed in mobilizing resources and channelling them, to the desired investment projects. In the first place, there is the need for large productive public works programmes to cope with mounting unemployment problems. The financing of such programmes through national budgets requires new policies to mitigate the concomitant inflationary impact. Fiscal policies will

also assume greater importance in the achievement of a better income distribution.

The programme of work of EGA in respect of financial and monetary matters therefore aims at enhancing the capacity of African countries to support expanded develop ment programmes through (a) the improvement of the budgetary systems and policies with a view to rendering the budget an efficient tool for policy and decision- making and in particular for development planning and plan Implementation, and

(b) reform and strengthening of African taxation systems, policies and administra tion.

25. Studies have also been carried out to assist African countries in improving ■■

the quantity and the quality of the financial flows to the region. Studies on the current international monetary situation and its implications for African countries are prepared and presented to the Association of African Central Banks, as part of the responsibilities devolving upon the ECA secretariat as secretariat for the Association, Studies have been prepared on the management of exchange rates in Africa under conditions of generalized floating of major world currencies and on the liquidity and financial problems arising from higher oil costs, while expert meetings and seminars have been organized by the secretariat to discuss such issues. Assistance is provided to the African Group in various international bodies considering international financial and monetary issues, such as IBRD, IMP

and UNCTAD. •

26. Economic co-operation, as a strategic element in economic development, is given great emphasis in the activities of the secretariat. There is no part of the secretariat in which the objective of economic co-operation among African countries is not pursued. The main aim of these activities la to apprise African Governments of the options that may be adopted in the promotion of economic co operation schemes In various sectors, including arrangements for multinational institutional machinery.

27. The,ECA population programme is an essential component of the overall

strategy for the economic development and quality of life in the region.

Assistance is provided to African countries, on the basis of respect for their sovereignty and national policies, for the improvement of information services designed to give due recognition to the interrelationship between population and economic and social development; to formulate and implement population programme*

and policies consistent with the countries' social and economic development; and in demographic training and research. Another major component of the ECA'.s work programme is the African census programme under which assistance is extended to Governments in improving their census undertakings and the collection of. informa tion on population size, growth rates, employment, education and other population characteristics.

28. Sixteen out of 25 countries identified by the international community as hard-core least developed are African, while thirteen out of a total of eighteen

land-locked developing countries can be found in Africa. Two developing island

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Gauntries are members of EGA, and a number of others are presently engaged on the

»ad t» independence. The identification of the special problems of the least fliveloped, land-locked and developing island countries-, and the formulation of Sasures to overcome the specific impediments to their socio-economic development

ffeerefore havea high priority in the ECA programme of work.

2». Superimposed upon these sectoral programmes are activities related to research

—d statistics, or, in other words activities aimed at improving the information fctse on which African countries can take decisions on their collective or

individual policies. A major constraint to meaningful plan formulation, implementa tion and evaluation in Africa is the lack of a detailed data base. This is

«»ceiving continuous high priority. The tendency for an integrated and unified iWproach to development is likely to emphasize the need for filling in tne gaps in the statistical base. It will also require the undertaking oxt nult:'.?-"^**

censuses and surveys to collect the related data.

30 BCA's work programme in the field of statistics is extensive. Over and

•bove the. development and co-ordination of statistical services in the. African , l*gion to meet the growing needs of administration, industry, policy formulation

*adplanning for economic and social development/ there is a project on the

•Bvelojment of a regional statistical and economic information service. The Secretariat prepares on an annual basis an analysis and a review of economic trends and developments in member States and the region as a whole in the context Of implementing both international and regional development strategies. Within tfaat framework studies are also carried out with a view to evaluating possible

«eys and means of assisting the least developed, land-locked and island African^

countries. As part cf the secretariat's efforts to develop a regional data bank/

•tudies have been prepared inter alia on the balance of payments of African

countries,- purchasing power parities of African currencies; public debt; and terms Of trade; while regular statistical publications are issued with foreign trade

■tatistics for Africa.

III. STRENGTHENING OF THS SECRETARIAT'S ACTIVITIES TO ENABLE

ECA TO DISCHARGE EFFECTIVELY ITS POLE WITHIN THE CONTEXT OF THE ESTABLISHMENT OF A NEW INTERNATIONAL ECONOMIC ORDER

31. The preceding chapter has shown the close connexion between the present ECR programme of work and priorities and activities that should be carried out in Order to implement the Declaration and the Programme of Action for the Establish ment of a New International Economic Order, although it has not been possible to

distinguish separately all secretariat resources that presently are employed exclusively on activities related to the General Assembly resolutions.

32. However, the existing activities do not seem adequate to deal with the full

•cope of the provisions of these resolutions that may be of strategic importance from the point of view of African development. In particular, the analysis indicates that the various activities, projects and programmes are tackled in a fragmented, non-integrated manner. Perception of, and focus on, the strategic issues raised by the r.ixth special session of the General Assembly would be

•ignificantly enhanced if the activities of the ECA secretariat could be

Seoncentrated on specific problems and problem areas in a co-ordinated way. Also,

•ince the secretariat does not command sufficient resources to deal with all the

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subjects covered by th£ ^° resolutions a basic question is how to identify the '•[

critical points of leverage on which the en5>hasis might be placed in a readjustment

of,the .ECA programme of work in order to coolly With- the resolutions. This is *ot

easy since the whole work programme is of hiqh priority.

33. Raw materials and development was the central theme of the sixth special session. . An important element in the readjustment of the work and activities of • ECA should therefore be on how to achieve a redistribution of world income through a restructuring\of world production and trade. The main emphasis might therefore ■ be aimed at securing improved and lasting benefits for African development from the exploration, exploitation, processing and marketing and distribution of the raw materials of African countries. That will involve activities in such different sectors;**: natural resources and agriculture, industrialization, transport, inter

national trade and finance and research and statistics.

34. One objective must be to co-ordinate and stimulate research on technical and economic aspects of production, including for agricultural raw materials research on >diseases affecting production, research on development of disease-resistant

and high-yielding varieties; facilitate the exchange of information on programmes -

and policies, and on any other aspects relating to production* to develop

programmes for increasing consumption in traditional and new markets, including,_

programmes among producers for co-operation in promotional activities; to suggest action-for the removal of obstacles to trade; to co-ordinate standards of quality so as to facilitate international marketing; to keep under constant review develop ments relating: to supply, demand and prices; and to carry out investigations into^

the causes and, consequences of fluctuations in prices of the raw material, includ ing techniques of production.and consumption forecasting.

35. Within the United Nations system, the regional economic commissions, inter, alia, are, by their vory nature, appropriate organs to come to grips with the w^rlTinvolved in the establishment of a New international Economic Order. On the basis of the poliUcal guidelines which were laid down at the Fourth Non-Aligned

Conference in Algiers in September 1973 and reaffirmed by the Chairman of that _ Conference, President Bpumedienne, at the Sixth special session, the secretariats

of the regional economic commissions of Africa, Asia, Latin America and West Asia, whefe<appropriate, should together identify, study and formulate recommendations for action in i espect of a limited number of commodities, of strategic importance to the third world as a whole in its relations with the industrialized world. In particular, they should discern in the new situation the opportunities for a

concrete, functional solidarity among the countries of the third w.orld, within the

framework of the movement generated at the Algiers Conference.

36. in essence, the political guidelines laid down by President Boumedienne may

be xeduced to two major principles*

(i) The developing countries should take their own natural resources in hand.and exploit them for the benefit of their own people;

(ii) A consistent.and integrated development effort should be made, including . steps to develop agriculture to its greatest potenUal, to promote^

industrializaUon based on local processing of mineral and agricultural

resources.

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{37; Within the fieazc'o"*. of these guidelines the following problem areas appear

to stand Out as of particular importance in the development of the third world in

general and African countries in particular: —

<i) The production and marketing conditions for the main agricultural

exports of developing countries. The price structure of these products and that of the prices of the main capital and consumer goods imported from developed countries by developing countries;

The conditions under which the leading mineral products of the developing countries are exploited and marketed. The transfer of capital and of technology in connexion with these operations;

The relations between the currencies and adjustment policies of developing countries and those of developed countries, and their impact on the growth and development of the third world and the developed.countri.es. The possibilities of establishing multi

national monetary institutions of developing countries supported by third vorld monetary funds;

(iv) the establishment of regional or intorrogioual development banks

supported by the px-e3er.t payments surpluses of some developing

countries;

Establishment and support of associations of producers of raw materials;

their composition, objectives .and modus operandi. Definition of their objectives in the light c£ the establishment of a New International

Economic Order. The relations between the various associations with

a view to creatii^g a unified front aaong the main producers of irAu. <uno. mineral materials;

Ciii)

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(vi) The possibilities of technical and scientific co-operation among the countries of tho third vorld. The brain drain from the developing to the developed countries;

(vii) The monopoly oi* the developed countries in such vital fields as the chemical industry, fertilizers and pharmaceutical products, inter continental transport and insurance- Establishment and development of such Industries in developing countries.

38. The studies to be carried our. ±a re&pecc of these problems must proceed on

« very broad front. Since they are obviously closely interrelated, in the sense that policy changes affecting any of them will necessarily have important repercussions for the others, efforts should be made to consider them in a simultaneous framework. Indeed, in order to ensure that meaningful progress will be made towards the implementation of the wide range of policy measures set out In the Progracme of Action tor the Establishment of a New International Economic Order, there will have to be a co-ordinated set of activities in all areas' covered by the programe. Itovements in different .nectars should be not only consistent, hnt alco mutually supporting.

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E/CHO4/635 Page 12

39. The above indicates briefly the areas in which the United Nations regional economic commissions might concentrate their activities to assist the <3overwneot£ <* * of developing countries in the dialogue that they will have to pursue with the industrialized world in order to restructure the existing international economic order. In this task, it is essential that the commissions jointly prepare and carry out certain parts of the programme which are of a global level. The ECA secretariat,' with its own regular resources and resources obtained from extra- budgetary bilateral and multilateral sources, will undertake a part of the programme identified as being of particular interest to Africa.

40. On the basis of the above analysis the Executive Secretary of ECA has decided to undertake three commodity studies to assist African Governments to formulate policies for the New International Economic Order and African delegations at the General Assembly to make specific proposals for the United Nations system to assist in the establishment of that order. The three commodities chosen are iron ore, oil palm products and phosphates and potash within the broader context of fertilizers.

These commodities are significant to Africa or to specific African countries and illustrate the international economic problems African countries face. They do not duplicate existing work so far as has been determined, or that of the

specialized commodity organizations.

41. Each study will analyse the present order at various levels of production, processing, marketing and the African consumption of the commodities, and consider

national and international constraints on the maximization of revenues by producer countries. In each case the value added and profits taken at each level will be set forth. In order to focus attention on the economic situation thus presented, examples of specific inequities will be included. Where applicable, re

negotiations will be examined to determine the extent to which the old economic order has been changed. The studies will in particular consider the following elements:

(i) Production: including exploration/exploitation/utilization; conserva tion and environmental protection; compilation and analysis of

inventories;

(ii) Problems and policies: including analysis of trends; studies of pricing policy and access to markets; competition of synthetics and substitutes;

the relationship between export prices and import prices; buffer stocks;

(iii) Processing: including the identification of resource-based industries on a national or multinational basis; investment promotion;

(iv> Interregional , regional and subregional co-operationn: including

producers' associations; research; ; •

<v) Transport: including combined transport systems; ocean transport^ joint transport operations;

(vi) Transfer of technology: including effectiveness and cost of transfer of technology; sources of supply of technology; co-operative arrange ments on a subregional, regional or interregional basis; alternative

technologies;

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(vli) Transnational corporations: including analysis of actions related to i production, employment and exportation; transfer pricing policies; their

! consistency with national and regional development objectives;

(viii) Financing: including projections on external capital requirements and growth rates; diversification, processing, new investment; co-operative arrangements on a subregional, regional or interregional' basis; possible arrangements for making surplus funds now at the disposal of some develop ing countries available in the form of long-term loans or "participating"

capital; support for producers' associations.

1 42. To support the above activities more information need to be assembled and

■ifted than has been the case so far. There are presently serious gaps in avail- Able Information, and much of it is issued only after a considerable time lag. In particular, there is a need for the strengthening of data collection and compila-

-ftion of primary statistics relating to agriculture, mining, manufacturing, trade

And transport and for derived statistics such as national accounts, financial Statistics, prices and balance of payments, unemployment and mass poverty and income distribution. Greater attention will also need to be given to the

preparation of analysis relevant for dealing with short-term situations and for Studying long-term trends including projections of trade gap and feasible growth

|tates. The events of the last year have dramatically demonstrated the need for puilding a capacity to examine the implications for African countries of changes

In the world economic situation.

£3. After thus examining the past and the present, the papers will make specific Immediate and long-term proposals for the New International Economic Order which

•frican Governments may wish to adopt domestically and proposals for co-operation

>ng producers and by countries on a subregional and regional basis. Proposals .11 also be made for international co-operation and methods by which the United

pations system could be strengthened or new action taken to assist African

•overnments and those of other developing countries in the establishment of the

jl^Bw International Economic Order. This approach will provide a comprehensive and (Integrated treatment of the problems of developing countries, aiming at:

ftp) wresting the right to decide from alien hands; (b) ■=• build-up of knowledge of liiat existed and what could be done with it; and (c) familiarity with international

Market, processes and procedures.

44. While BCA, with its deep overall insight in the problems of African countries

|e in a particularly advantageous position to deal with the issues raised by the jfteclarfttion and the Programmes of Action on the Establishment of a New Inter

national Economic Order, full account will of course be taken of work already done, tr being done* in other bodies such as FAO, UNIDO, UNCTAD, IMF, IBRD etc., all of tbich have to be closely consulted.

; IV. RESOURCE IMPLICATIONS

The strengthening of ECA's activities in the ways suggested above for the irpose of discharging effectively its responsibilities in relation to the "urgent

?len«ntation of the Programme of Action on the Establishment of a New Inter-

itional Economic Order adopted by the General Assembly in its resolution

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3202(5-71)" could be achieved partly by re-deployment of staff within ECa and partly by improved collaboration with other bodies within the United Nations

system as indicated above,

46. There will still be a need, however, for additional resources, the full extent

of which will be determined largely by the decisions of the third meeting of the ECA

Conference of Ministers with regard to the implementation of the General Assembly

resolution- Eqosoc, in its resolution 1896(LVII) therefore urged "the Secretary-

General of the United Nations, and ad appropriate, the Administrator of the United

Nations Development Programme to take the necessary measures to enable the regional

economic commissions to carry out the mandate given to them".

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E/CH.14/635

duct!

annex TasLs ' ...:.:'.;.:

of oommodities of interest to African countries, 1971

Percentage share

Commodities

lean"Group at UKCTAD> Jin Tder of priority:

ties submitted by the

Coffee

Oilseeds, oils and fats Groundnuts

Groundnut oil : Palm kernels

Palm-Kernel oil Palm-oil

Olive oil 3. Phosphates h/

4. Manganese ore h/

5. Cocoa 6. Wine b/

?. Hides and skins 8. Fruits

Bananas a/

Citrus fruit 9. Cotton

1O. Vegetables and pulses IX. Sugar

12. Meat

13. Zinc ore a/ h/

14. Potash

$S. Pyrethrum

i«. Rice

J7. Iron ore a/ h/

1©. Tobacco

|f. Grains Wheat

Barley Maize Sorghum Millet

». Tea

ft. Hard fibres and jute

! Sisal

Rubber c/

1,000 metric tons

World

5,179

18,224

a • •

1,213

mm*

2,038 1,626 61,993 8,100 1,528 289,430 4,882,281

28,214 36,367 12,010

• a •

74,00O 81,455 5,520 61,993

306,945 417,043 4,588

353,303 150,600 304,525 48,944 21,588 1,075

578,787 3O,318

Independent developing

Africa

25.8

26.0

• • •

63.8

• • *

54.3 15.7 23.3 17.6 73.8 3.5 7.5

7.0 9.9 1O.5

* * ■

4.3 3.5 4.7 31.4

. • •

2.5 7.4 3.8

2.1 3.O 4.5 16.5 26.8 9.8

58.2 6.2

other

market economies

74.2

47.6

...

36.2

45.7 7.7 5.4 27.7 26.2 10.9 25.4

90.2 30.5 44.3

...

48.2 32.0 19.8 1.5

...

53.5 19.2 53.9

22.1 21,4 29.1 32.1 58.9 70.0

41.8 93.7

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Page 2

Annex table:

ductiop of cor-modltles of interest tc African countries,

Commodities

1,000 metric tons

World

Percentage share

Independent developing

Africa

Other developing market economies

Other commodities:

Agricultural

Wood and timber a/

Metals

1. Alimunium 2. Bauxite 3. Antimony ore 4. Barium

5. Chrome ore 6. Cobalt 7. Copper 8. Fluerspar 9. Gold e/

10. Pig iron and ferro alloys 11. Lead ore

12. Nickel ore 13. Silver e/

14. Tin ore

15. Tantalum and Niobium 16. Titanium minerals 17. Tugsten ore

18. Vermiculite 19. Beryl

Non-metals 1. Asbestos

2. Diamonds tj <g/

3. Graphite 4. Gypsum 5. Salt 6. Pyrites

7. Petroleum (crude)

1,298 20.9

10, 61,

3, 6,

6, 4, 1, 437, 3, 7,

5,

3 33

52 142 22 2,326

300 200 63 400 200 25 400 600 230 000 500 679 595 208 10 ,284 47 411 4

,600 ,000 695 ,000 ,000 ,100 ,000

15.

6.

3.

7 3 2 6 2.4 72.

17.

0.

3.

0.

4.

1.

8.

20.

0.

2, 0, 25

3 61 2 1 1 2 11 0

2 8 6 2 0 ,8 .3 .2 ,0 .2 .1 .2 .0

.2 .9 .9 .3 .0 .1 .6