Promoting commodity-based diversification

Identifying ways to improve the supply capacity of commodity-producing countries, as well as obstacles hampering the development of processing industries, and assisting commodity-dependent developing countries on how to fully exploit commodity diversification as a major potential avenue to industrialization.

Many developing countries, and in particular most of those with weak growth performance, remain highly dependent on commodities for their trade, production income and employment. Commodities continue to provide an important source of foreign exchange earnings for developing countries: they have a high value-added potential; and agricultural commodities are an important source of employment and offer scope for anti-poverty campaigns. Agriculture inter alia acts as a buffer against economic problems and allows the return to rural areas of urban unemployed. Commodity-based diversification therefore offers a major opportunity for change in line with existing comparative advantages. The important role played by commodity protocols in the socio-economic development of certain developing countries should be highlighted.

Dependence on a few commodities has remained high in many developing countries.