Strategies to reduce commodity dependence should be based on three principles: (i) a judicious combination of free market and market regulation mechanisms to be used as appropriate, in attaining agreed objectives; (ii) a distinction between different types of price problems (depressed levels, multi-year price cycles and short-term fluctuations, for example); and (iii) a consideration of the relationship between commodity problems and other sectors, particularly financial markets.
Diversification reduces dependence on commodity exports.
This strategy features in the framework of Agenda 21 as formulated at UNCED (Rio de Janeiro, 1992), now coordinated by the United Nations Commission on Sustainable Development and implemented through national and local authorities.
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