Resolution 93(IV): The Integrated Programme for Commodities

APPENDIX

Resolution 93(IV): The Integrated Programme for Commodities The United Nations Conference on Trade and Development,

Recalling the Declaration and the Programme of Action on the Establishment of a New International, Economic Order1 as well as the Charter of Economic Rights and Duties of States, 2 which lay down the foundations of the new international economic order, General Assembly resolution 623 (VII) of 21 December 1952 and Conference recommendation A.II.1.

Recalling, in particular, section I, paragraph 3(A) (iv), of the Pro­gramme of Action on the Establishment of a New International Economic Order, relating to the preparation of an over-all integrated programme for 'a comprehensive range of commodities of export interest to developing countries',

Recalling also section I, paragraph 3, of General Assembly resolu­tion 3362 (S-VII) of 16 September 1975, which states, inter alia, that 'an important aim of the fourth session of the United Nations Con­ference on Trade and Development, in addition to work in progress elsewhere, should be to reach decisions on the improvement of market structures in the field of raw materials and commodities of export interest to the developing countries, including decisions with respect to an integrated programme and the applicability of elements thereof',

Taking note of the work undertaken on commodities in preparation for the fourth session of the Conference, in particular the proposals submitted by the Secretary-General of UNCT AD for an integrated programme for commodities.

Reaffirming the important role of UNCT AD in the field of com­modities,

Bearing in mind resolution 16 (VIII) of the Committee on Com­modities concerning decisions by the Conference at its fourth session with respect to an integrated programme for commodities, on, inter alia:

Appendix (a) objectives; (b) commodities to be covered; (c) international measures;

273

(d) follow-up procedures and time-table for the implementation of agreed measures;

Affirming the importance to both producers and consumers, notably the developing countries, of commodity exports for foreign exchange earnings and of commodity imports for welfare and economic develop­ment,

Recognizing the need to conduct international trade on the basis of mutual advantage and equitable benefits, taking into account the interests of all States, particularly those of the developing countries,

Recognizing also the need for improved forms of international co­operation in the field of commodities which should promote economic and social development, particularly of the developing countries,

Recognizing further the urgent need for substantial progress in stimulating food production in developing countries and the important bearing of international commodity policies on this aim,

Recalling the proposal in the Manila Declaration and Programme of Action for the establishment of a common fund for the financing of international commodity stocks, co-ordinated national stocks or other necessary measures within the framework of commodity arrange­ments,3

Bearing in mind the view that there might be financial savings in operating a central facility for the purpose of financing buffer stocks,

Taking note of the readiness of a number of countries, expressed prior to and at the fourth session of the Conference, to participate in and financially support a common fund,

Noting that there are differences of views as to the objectives and modalities of a common fund,

Convinced of the need for an over-all approach and an integrated programme for commodities which is a programme of global action to improve market structures in international trade in commodities of interest to developing countries, and which is consistent with the interests of all countries, particularly those of the developing countries, and assures a comprehensive view of the various elements involved while respecting the characteristics of individual com­modities,

Decides to adopt the following Integrated Programme for Com­modities:

274 The Political and Social Economy of Commodity Control I. OBJECTIVES

With a view to improving the terms of trade of developing countries and in order to eliminate the economic imbalance between developed and developing countries, concerted efforts should be made in favour of the developing countries towards expanding and diversifying their trade, improving and diversifying their productive capacity, improving their productivity and increasing their export earnings, with a view to counteracting the adverse effects of inflation, thereby sustaining real incomes. Accordingly the following objectives are agreed: 1. To achieve stable conditions in commodity trade, including avoidance of excessive price fluctuations, at levels which would: (a) be remunerative and just to producers and equitable to con­

sumers; (b) take account of world inflation and changes in the world economic

and monetary situations; (c) promote equilibrium between supply and demand within expand-

ing world commodity trade; 2. To improve and sustain the real income of individual developing countries through increased export earnings, and to protect them from fluctuations in export earnings, especially from commodities; 3. To seek to improve market access and reliability of supply for primary products and the proposed products thereof, bearing in mind the needs and interests of developing countries; 4. To diversify production in developing countries, including food production, and to expand processing of primary products in develop­ing countries with a view to promoting their industrialization and increasing their export earnings; 5. To improve the competitiveness of, and to encourage research and development on the problems of, natural products competing with synthetics and substitutes, and to consider the harmonization, where appropriate, of the production of synthetics and substitutes in developed countries with the supply of natural products produced in developing countries. 6. To improve market structures in the field of raw materials and commodities of export interest to developing countries. 7. To improve marketing, distribution and transport systems for commodity exports of developing countries, including an increase in their participation in these activities and their earnings from them.

Appendix 275 II. COMMODITY COVERAGE

The commodity coverage of the Integrated Programme should take into account the interests of developing countries in bananas, bauxite, cocoa, coffee, copper, cotton and cotton yarns, hard fibres and products, iron ore, jute and products, manganese, meat, phosphates, rubber, sugar, tea, tropical timber, tin and vegetable oils, including olive oil, and oilseeds, among others, it being understood that other products could be included, in accordance with the procedure set out in section IV below.

III. INTERNATIONAL MEASURES OF THE PROGRAMME

1. It is agreed that steps will be taken, as described in section IV, paragraphs 1 to 3, below, towards the negotiation of a common fund. 2. It is also agreed to take the following measures, to be applied singly or in combination, including action in the context of international commodity arrangements between producers and consumers, in the light of the characteristics and problems of each commodity and the special needs of developing countries: (a) Setting up of international commodity stocking arrangements; (b) Harmonization of stocking policies and the setting up of co-

ordinated national stocks; (c) Establishment of pricing arrangements, in particular negotiated

price ranges, which would be periodically reviewed and appro­priately revised, taking into account, inter alia, movements in prices of imported manufactured goods, exchange rates, produc­tion costs and world inflation, and levels of production and con­sumption;

(d) Internationally agreed supply management measures, including export quotas and production policies and, where appropriate, multilateral long-term supply and purchase commitments;

(e) Improvement of procedures for information and consultation on market conditions;

(f) Improvement and enlargement of compensatory financing facilities for the stabilization, around a growing trend, of export earnings of developing countries;

(g) Improvement of market access for the primary and processed products of developing countries through multilateral trade measures in the multilateral trade negotiations, improvement of

276 The Political and Social Economy of Commodity Control schemes of generalized preferences and their extension beyond the period originally envisaged, and trade promotion measures;

(h) International measures to improve the infrastructure and indus­trial capacity of developing countries, extending from the produc­tion of primary commodities to their processing, transport and marketing, as well as to the production of finished manufactured goods, their transport, distribution and exchange, including the establishment of financial, exchange and other institutions for the remunerative management of trade transactions;

(i) Measures to encourage research and development on the problems of natural products competing with synthetics and con­sideration of the harmonization where appropriate, of the produc­tion of synthetics and substitutes in developed countries with the supply of natural products produced in developing countries;

(j) Consideration of special measures for commodities whose problems cannot be adequately solved by stocking and which experience a persistent price decline.

3. The interests of developing importing countries, particularly the least developed and the most seriously affected among them, and those lacking in natural resources, adversely affected by measures under the Integrated Programme, should be protected by means of appropriate differential and remedial measures within the Pro­gramme. 4. Special measures, including exemption from financial contribu­tions, should be taken to accommodate the needs of the least developed countries in the Integrated Programme for Commodities. 5. Efforts on specific measures for reaching arrangements on products, groups of products or sectors which, for various reasons, are not incorporated in the first stage of application of the Integrated Programme should be continued. 6. The application of any of the measures which may concern existing international arrangements on commodities covered by the Integrated Programme would be decided by governments within the commodity organizations concerned.

IV. PROCEDURES AND TIME-T ABLE

1. The Secretary-General of UNCT AD is requested to convene a negotiating conference open to all members of UNCT AD on a common fund no later than March 1977.

Appendix 277 2. The Secretary-General of UNCT AD is further requested to convene preparatory meetings prior to the conference referred to in paragraph 1 above concerning, inter alia: (a) Elaboration of objectives; (b) The financing needs of a common fund and its structure; (c) Sources of finance; (d) Mode of operations; (e) Decision-making and fund management. 3. Member countries are invited to transmit to the Secretary-General of UNCTAD, prior to 30 September 1976, any proposals they may have concerning the above and related issues. 4. The Secretary-General of UNCT AD is further requested to convene, in consultation with international organizations concerned, preparatory meetings for international negotiations on individual products, in the period beginning 1 September 1976. These meetings should complete their work as soon as possible, but not later than February 1978. The task of the preparatory meetings shall be to: (a) Propose appropriate measures and techniques required to achieve

the objectives of the Integrated Programme; (b) Determine financial requirements resulting from the measures

and techniques proposed; (c) Recommend follow-up action required through the negotiation of

commodity agreements, or other measures; (d) Prepare draft proposals of such agreements for the consideration

of governments and for use in commodity negotiating con­ferences.

5. The Secretary-General of UNCTAD is further requested to convene, as and when required, commodity negotiating conferences as soon as possible after the completion of each preparatory meeting held pursuant to paragraph 4 above. These negotiations should be con­cluded by the end of 1978. 6. The Secretary-General of UNCT AD is requested to undertake the necessary arrangements for the servicing of the preparatory meetings and the subsequent commodity negotiating conferences, in co­operation with the secretariats of the specialized commodity bodies and other organizations concerned. 7. It is agreed that international negotiations or renegotiations on individual commodities covered by existing agreements shall be in accordance with appropriate established procedures for the purpose of concluding international arrangements. 8. The Trade and Development Board is instructed to establish an ad

278 The Political and Social Economy of Commodity Control hoc intergovernmental committee to co-ordinate the preparatory work and the negotiations, to deal with major policy issues that may arise, including commodity coverage, and to co-ordinate the imple­mentation of the measures under the Integrated Programme.

Notes

CHAPTER!

1. The term 'developed countries' is synonymous in this text with 'the North'. Market-economy developed countries are referred to as 'Group B' or OECD countries. Similarly, 'developing countries' is a term equivalent to 'Third World', 'the South', and 'Group of 77'.

2. GAIT's most formidable achievement to date, the Kennedy Round of multilateral trade concessions, begun in 1963 and reaching a pinnacle in 1967, was nonetheless of only marginal interest to developing primary­producing countries who did not participate because of the reciprocity required for concessions made. In 1966, tariff cuts exchanged by developed countries were extended to developing countries on a non­reciprocal basis, but these pertained primarily to manufactures traded by the developed countries with which developing countries did not compete. The choice of products for non-reciprocal concessions arose from the preoccupation in GA TI negotiations with only those products for which reciprocal concessions were to be made by participants. Since direct participation by developing countries on this basis had been limited, their exports were included, incidentally, if at all (cf. Reynolds, 1978, pp. 6--8).

3. A sixth agreement, the Olive Oil Agreement, was to establish an advisory service designed to coordinate national policies, had no provisions for controlling trade or price and covered a commodity of minor importance even to member countries (cf. Rangarajan, 1978, pp. 38-41).

4. The following observations are drawn largely from: Binder, 1966; Brown, 1975; Burgess, 1949; FAO, 1970; Farnsworth, 1956and 1958; Golay, 1950; Harbury, 1949; Hedges, 1967; Kaldor, 1952; Law, 1974; Rowe, 1965; Sanderson, 1968; Sarris and Taylor, 1976; Tyszynski, 1949; Westerman, 1969; and Wheeler, 1967.

5. Another 'multilateral' contract of long duration was the Commonwealth Sugar Agreement, limited to Commonwealth countries, which in 1974 largely became a part of the European Community ST ABEX scheme discussed in chapter 3 (pp. 82-4). This agreement specified annual quantities to be purchased by the United Kingdqm (about 1.5 million tons), Canada and New Zealand, from exporting Commonwealth countries who, in tum, agreed to sell at predetermined prices. The agree­ment provided for a maximum volume of exports from exporting member countries to these three preferential importing countries.

280 The Political and Social Economy of Commodity Control 6. Contemporary opinions on the agreement tend to divide on the motiva­

tions behind control, as to whether these were pragmatic, humanitarian or both. United States' officials, for instance, observed that the agreement would provide an internationally approved basis for an export subsidy to span the gap between the high domestic support price and projected lower world prices. Australia and Canada saw the ceiling ofthe price range under the contract as providing a limit to the amount of export subsidization by the United States' government. Of the four leading wheat-exporting countries only the United States permitted domestic producers to receive the high international prices prevailing during the first three post-war years of acute food shortage. Policy-makers there initially argued that free­market forces should be used to increase output and pointed to average levels of output in Australia, Canada and Argentina well below their pre-war levels. Canada and Australia directly controlled trade through statutory marketing authorities while what was to become the EEC did so through a system of variable levies and subsidies (export and import taxes) designed to keep prices high for domestic producers. The United States, which exported approximately one-half of all wheat internationally traded at the time, was also anxious to reduce bilateralism in wheat trade. Nearly 80 per cent of the trade of other exporters occurred on bilateral terms. The three major producers, the United States, Canada, and Australia, motivated by the prospect of a contraction in import markets and increased export competition (a prediction borne out by subsequent events), signed a four-year agreement with importers that stipulated a price range far below current levels.

7. (Cf. Farnsworth, 1956; and Law, 1975, p. 55.) This objective was gained in the 1952 renegotiation at the price of reduced participation. Importers argued that declining prices despite high stock levels was reason not to raise the price band. In protest over the rise in the price range, the United Kingdom (the largest importer of wheat) and other importers declined to join the 1953 agreement, so reducing the volume of world trade covered by the agreement from 60 per cent to 25 per cent. Member exporters over the life of the second agreement exported 40 per cent of their exports outside the agreement under Food for Peace, PL 480, and bilateral deals with socialist countries. By keeping potential purchasers off the free market, these concessionary sales helped lower prices there.

8. (Kirschen, 1975, p. 41.) The International Grains Arrangement of 1967 and its sequel consisted of two separate legal instruments, a Wheat Trade Convention and the Food Aid Convention, linked by a common preamble and secretariat. The Food Aid Convention, established in 1968, was administered by the Food Aid Committee, an autonomous body that used the International Wheat Council secretariat for administrative purposes. The 1967 agreement was negotiated in GATT and concluded in UNCTAD.

9. The 1969-70 harvest set a post-war record of65 million tons in Argentina, Australia, Canada, the European Community and the United States.

10. (TD/B/C.1/194, p. 32 and TD/207, 14 May 1976, p. 4.) The United States put a proposal before the General Assembly in September 1975 for a scheme to stockpile 30 million tons of wheat and rice at a cost in that year of

Notes 281 about $4.5 billion with annual maintenance costs of $0.5 billion. This was hedged, however, with the provision that stocks which would be equivalent to roughly 40 per cent of world annual exports of these com­modities should not interfere with the commercial market. Stock releases were to be triggered by a critical minimal level of private stocks, replacing the conventional ceiling price in this respect. There would be no price range, a feature which led Sarris and Taylor (1976, p. 969) to suggest that the proposal reflected the influence of the handful of companies which handle the United States' export trade. Evidence of low stocks, par­ticularly data about on-farm storage in the United States, would lag behind increases in price because of difficulties inherent in collecting and assess­ing stock data. This would allow these exporters to reap gains before official stock releases were sanctioned.

11. A country's stock share was to be based on its share of total world wheat trade, production and per capita GNP. Although there was a wide divergence in opinion over the size of global holdings to fall under the agreement (ranging from 15 million tons proposed by Japan, an importer, on the basis of fluctuations in global trade, to 30 million tons proposed by the United States based on annual world-production deviations) a com­promise figure of20-25 million tons might have been agreed upon if accord on prices had been reached, a compromise understanding to hold consultations on voluntary coarse grain measures was largely reached before the November 1978 conference.

12. The Community recalled the United States' ban on soyabean exports in 1974 which deprived it of an important source of hog and chicken feed and disrupted its oilseed-crushing industry.

13. The European Community is the world's largest net importer but also accounts for 8-10 per cent of global exports. Exports are subsidized in periods of low world prices to maintain a high internal farm support price.

14. These are based on the difference between the world price and the high price administered by the Community. In 1973-4 a period of wheat price inflation, the levy was dropped and world wheat producers competed freely in Community markets.

15. Developing countries also requested supply commitments at conces­sionary prices in a two-tier price system that would specify higher transac­tion prices for developed importers. And external financing of their stock commitments. Importers generally feared that if there were no supply commitments, stocks might be sold to the Soviet Union as in 1971-4. The above requests by developing importers were rejected by The Gang of Six' (Argentina, Australia, Canada, the European Community, Japan and the United States) which negotiated in a 'contact group' closed to others.

16. To an argument by some importers that the international agreement should exercise some measure of control over domestic production and export policies in exporting countries, exporters were willing to make a general commitment that such policies would take into consideration international market conditions. This issue did not generate much heat, however, because developing countries feared production control might raise prices and the European Community suspected that the Community might fall under such a scheme.

282 1he Political and Social Economy of Commodity Control 17. In 1976 the Soviet Union committed itself to buy and the United States to

sell six million tons of wheat or maize annually during the succeeding five years. A similar agreement exists between the United States and Japan for the sale of 14 million tons over a three-year period.

18. Information not specifically acknowledged in this section is drawn largely from: Ali, 1966; Barkman, 1975 and 1976; Brown, 1975; Burger, 1977; Edwards, 1969; Fox, 1974; Geer, 1970; Gilbert, 1976; Heymann, 1965; Robertson, 1960; Rogers, 1969, Rowe, 1965; Smith and Schink, 1975; and Stodieck, 1%7.

19. This information was provided by R. T. Adnan, buffer-stock manager 1966-75, in an interview 9 December 1976.

20. During successive renegotiations of the International Tin Agreement, another recurring point of debate has been the apparent complicity of metal exchanges with speculative uses. Indeed, the mention of the words 'London Metal Exchange' at these meetings could be relied upon to throw delegates of producing countries into a paroxysm of abusive rhetoric. To many, even on the consumer side of the market, criticism often seemed justified in light of the Exchange's inaction on measures which might have been taken to reduce the effect of massive speculative dealings, such as those which occurred in the early 1970s when international money sought a hedge against currency devaluations (Fox, 1974, p. 400 and contemporary issues of Metal Bulletin).

21. This group's ostensible motive was to protest about what they saw as tacit collusion between the International Tin Council administering the agree­ment and the United States' government on strategic stock releases or, at least, as weakness in the Council's resolve to obtain the cooperation of the United States. Among the charges put forward were that the Council was biased in its decisions because of advisers and members who had commercial or speculative interests in tin trade.

22. Some observers felt the whole performance was, at the governmental level, a clever move to keep the United States, which was seriously considering joining, out of the agreement-to keep 'the lion out of the house'.

23. The fourth agreement (1970) raised few contentious issues and came into being with relative ease. The expected falling out of producers and con­sumers over price did materialize. Although prices were high historically and a cause for consumer concern, consumption was keeping pace, making the bid of consumers for no rise in the price range appear unconvincing. A compromise was reached with a modest rise.

24. Domestic industry seemed to favour a large strategic stockpile which, as in the past, would keep prices from rising excessively. If this were not possible, however, industry preferred international buffer stocks to export quotas which were seen as raising the average level of prices. Without a large strategic stockpile the best alternative would be a large international buffer stock.

25. Producer concern with a favourable impression on the Congress stemmed in part from the potential United States' contribution to the buffer-stock funds as the world's largest single consumer of tin. Substantial consumer contributions were thought to be possible should consumers become

Notes 283 interested in having some control over the release of the high-grade tin held by the buffer stock. For this reason the new agreement diverged from its predecessors by providing that 'preference as regards the supply of tin available shall be given to consuming countries which participate in this Agreement' (Article 40).

26. This resulted from high capital-equipment costs of dredges used in sea-bed mining and of replacements for those on land, many of which were 40-55 years old, as well as from the high cost of re-working tailings.

27. (Metal Bulletin, No. 6161, 25 January 1977, p. 19.) Bolivia, possibly responding to pressure from Chile and Brazil (countries that placed little credence in global schemes that did not conform to their own needs) to take a hard independent line also asserted that it would not join the agreement until the United States, Japan and the Federal Republic of Germany contributed their share to the buffer stock. By 1978, the United States and Japan had pledged to do so. Bolivia's bargaining position on these issues had been strengthened over the years by increased structural diversification of its economy away from dependence upon tin. Forces in the United States argued that paying these voluntary subscriptions was cheap goodwill and would increase that country's influence in the Tin Council, particularly with regard to domestic policies in tin-exporting countries, such as progressive export taxes and restrictive-licensing practices, that discouraged expansion of production capacity. Capital subscriptions, in fact, had consistently shown competitive returns to participants (8 per cent per annum on average over the first four agree­ments).

28. First session of the International Tin Council, Summary Record of the Fifth Meeting, 2 July 1976.

29. Buyers, especially the United Kingdom, in a complementary manoeuvre, imposed quotas on tin imports from the Soviet Union. Quotas subse­quently invoked from late 1968-9 and 1972-3 were mild, and in the former period ineffective in restraining exports, possibly as a result of the haste and confusion surrounding their use. The 1975-6 quota of 75 per cent of normal output was too short in duration to cause production cutbacks.

30. This happened in Thailand's case, but when Thailand refused to join a subsequent agreement the country was wooed to join by other members' offer of a basic quota larger than it could reasonably fill.

31. The Council could 'borrow for the purposes of the buffer stock upon the security of tin warrants held by the buffer stocks' (Article 24a of the Fourth Tin Agreement), In 1976, the manager used the above line of credit to increase purchases to 23,000 tons when paid-up subscriptions would have allowed only 12,000 tons to have been bought. Representing a drawing of £26.1 million of the £36.5 million standby credits available, this was the first experience in operating the buffer stock on an overdraft since 1958. The profit after interest in holding tin on this overdraft was 46 per cent, on an annual basis. Banks have virtually competed in offering standby credits to the Tin Council. Among the twenty accepted are Barclays Bank Inter­national Ltd.; Lloyd's Bank International Ltd.; National Westminister Bank Ltd.; Bank of Tokyo; Banque Nationale de Paris; Royal Bank of Canada and the Toronto-Dominican Bank.

284 The Political and Social Economy of Commodity Control 32. Not only had the export quota of 60 per cent normal output reduced

production by a third, but the Council had been strict with Thailand for violation of the quota provisions. Export exceeding the quota amount 'was not recorded, possibly because of bribery or directions from Thai high authority to customs officials. Thailand maintained the non-existence of the excess shipments or of the high-placed personages who were rumoured to be behind the evasion, but ultimately agreed to make a voluntary contribution of£400,000 in 1960 to the buffer stock' (Fox, 1974, p. 268).

33. Address by the Executive Chairman at the American Metal Market Forum, London, 19 October 1977. This figure would appear to be based on a pyramiding of borrowings through two stages with loans amounting to about 85 per cent ofthe value of tin put up as collateral. The Netherlands, a country with large tin-smelting operations, and France had contributed to the fourth agreement.

34. References include Baron, 1973: Brown 1975; FAO, 1968; Goldberg, 1977; Lovasy, 1968 (a) and (b); Rowe, 1965; Smith, 1977; and Swerling, 1954.

35. The United States and the United Kingdom together imported over half the trade which was to fall under the agreement. The United Kingdom had an interest in high residual market prices as these would encourage Commonwealth exporters, satisfied with high prices for their sales to the market controlled by the sugar agreement, to refrain from pressing for as high a contract in their annual negotiations with the government there. Moreover, a large amount of sugar imported on Commonwealth preferences was re-exported in processed or refined form to the residual market (cf. Swerling, 1954).

36. In the bargaining over basic export quota allocations, Australia and South Africa were allotted quotas which did not reflect their potential or plans for expansion of output, while a number of developing exporters received quotas (termed 'paper quotas' by dissenting delegates) which they were unable to meet. The European Community declined to join the agreement because its assigned quota, while reasonable given its potential, was less than it sought (cf. Smith, 1977, p. 245). The issue of quota determination whether based on objective criteria or on bargaining and trade-offs has been a continuing major stumbling-block in sugar negotiations and is taken up further in chapter 6.

37. In some years however, copper has ranked ahead of coffee as the leading export, excluding petroleum, of developing countries. At the time of the first coffee agreements, all producing countries were considered develop­ing countries, although today Brazil and Mexico are generally classed as 'middle-income' countries. In terms of its export value to developing countries, oil ranked before coffee, but apart from this quantitative edge over coffee, capital-intensive oil production did not directly affect the welfare of so many people or countries. Moreover, within the oil-export­ing countries, benefits tended to be skewed toward government institu­tions rather than more directly to poor people. An estimated 20 million people (in the 1970s) were directly employed in the production of the coffee crop.

38. This, and the following sections, on the first two international coffee agreements have drawn heavily upon Fisher's (1972) penetrating political

Notes 285 commentary. Subsequent studies have generally not improved upon his first-hand information in this field, nor have the other commodity agree­ments benefited to date by such analysis. Other references not specifically cited include Bilder, 1963; Frederick, 1970; Fisher, 1971; Galloway, 1973; Geer, 1971; Hanson, 1965 and 1967; Kravis, 1968; Law, 1969 and 1973; Lowenfeld, 1967; Rangarajan, 1978; Rowe, 1965; Singh, 1968; Stuckhard, 1977; Wassermann, 1973; and Wickizer, 1964.

39. 'Most large brokers-like the large roasters-were worried about the possible difficulties in obtaining supplies if the world market broke. As the best-travelled of all segments of the coffee trade-and, often, its eyes and ears abroad-they feared that a market collapse might be imminent. They were also moved by unabashed sentimentality for the region they knew so well and simply were not willing to see their corner of the globe fall upon evil times if it could be prevented' (Fisher, 1972, p. 22).

40. The unemployment consideration meant that Brazil was not in a position to carry out threats to drive new producers, primarily in Africa, out of the market and regain a larger share of the market by 'dumping' coffee stocks on the world market, unless, of course, the Brazilian government was prepared to subsidize exports. Because of its dominant position in terms of market volume and production of a middle-grade coffee, Brazil has, however, been the key exporter in coffee negotiations. Brazil's coffees compete both with the high-grade coffees ('milds') grown elsewhere in Latin America and with the lower-grade robustas grown in Africa, and are suitable for use in both roasted and soluble form.

41. Penalties could be exacted only through collusion between producer and consumer interests, with consumers restricting imports from non-members in periods of quota implementation-an unlikely situation without concerted consumer altruism.

42. With individual exporting countries seeking as large a quota as possible, quotas were increased at a rate slightly above the annual average growth rate in world demand over the course of the first two agreements ( cf. Glismann and Stecher, 1977, p. 28).

43. That infringements did not completely cancel out the formal control provisions was primarily due to the comparable increases Brazil made in its stockpile. In 1963-4 and 1964--5, Brazil deliberately undersold the quota alloted by 12 per cent and 25 per cent respectively, to keep prices from falling. This gesture was not received with due gratitude by the African producers who used Brazil's quota underfulfilment to demand that the unused portion be redistributed to them. In 1965-6 Brazil, by filling her quota, dropped the price of green coffee to keep the quota-increase mechanism from being triggered off at the ceiling price (cf. United States, Senate, Committee on Finance, November 1975, p. 92).

44. The figures provided by Fisher (1972, chapter five) on the magnitude of 'tourist coffee' show the largest infringements occurring in 1963-4 (presumably to take advantage of the prevailing high prices) and again in 1965-6 (to dispose of abnormally large crops). According to Bohrish (1965), socialist net importing countries served as the principal entrepot, selling 'tourist coffee' at a discount to obtain hard currencies. Although in all cases illegal exports did not exceed 6 per cent of annual quotas, this

286 The Political and Social Economy of Commodity Control amount could have significantly lowered prices given the likely high short­run price inelasticity of demand. Widespread use of forged certificates used for keeping track of members' exports added to the problem created by 'tourist coffee'. In defence of these infringements, Fisher (ibid., p. 36) argues, 'a tolerable amount of over exports to satisfy the legitimate grievances of dissatisfied members and new low-cost producers bound to emerge during the life of the agreement must be permitted in order to maintain the organizational equilibrium. The enforcement paradox in export quota commodity agreements is that it is preferable to have some noncompliance with international law rather than none. The difficulty is knowing at what point to impose meaningful sanctions.'

45. Little attention was paid under the first agreement to a provision for production control of a voluntary nature, except by Brazil. Even without recourse to the Fund, one-third of the trees in Brazil in 1961-2 had been uprooted by 1968, thereby reducing production capacity by 20 per cent (5-10 per cent of world production). In 1966-7, it was resolved that 20 per cent of the value of quota waivers granted by the organization to countries over exporting be placed in a diversification fund, with the donor retaining a say in its ultimate use.

46. Seventy-eight per cent of the contributions were to be used only by the donor for projects approved by the Board of Directors; 20 per cent by any country according to criteria which went undefined for most ofthe Fund's life; and 2 per cent to cover administrative expenses. A further provision was made for voluntary contributions from importing members, a number of which pledged amounts. The largest was a $15 million loan proffered by the United States with a further $15 million in loans if matched by con­tributions from other importing members as a group. Negotiations in 1970 and 1971 between the Coffee Council and the United States Agency for International Development over the use of these loans, however, reached an unresolved stalemate with the donor asking for more control over them than the Council felt warranted. No voluntary contributions were made to the Fund during its life. The Fund's provisions allowed no payments to be made on interest and principle on loans from the Fund during the first five years of the loan period and in some cases up to ten years. Repayment periods ranged from seven to 25 years (International Coffee Organization, 1977, p. 12).

47. (Cf. United States, Senate, Committee on Finance, November 1975, p. 12; and Fisher, 1972, pp. 153-5.) Fisher, contesting the methodology used in this estimate and noting that no effective control was demonstrated during the first two years covered, argued that the amount was probably not so large.

48. 'Some Participants, in their desire to use the resources of the Fund as soon as possible, suggested projects which were hastily prepared and not suit­able for financing while other Participants, because of lack of experience in identifying projects, were finding it difficult to make proposals' (Inter­national Coffee Organization, op. cit., pp. 8-9). In the latter case, the organization provided loans for hiring technicians to draw up proposals; sent missions to exporting members; hired experts on secondment at its own expense from other international institutions; and obtained assistance

Notes 287 from the World Bank, Inter-American Development Bank, United Nations Development Programme and the FAO in project appraisal. Two projects (both in tea development) were jointly financed by the Fund and other institutions. Despite these efforts, however, ' ... in some cases, Participants postponed negotiations for a considerable period and in some cases failed to send representatives for negotiations for projects which had been appraised and approved by the Board of Directors' (ibid., p. 11 ).

49. Ibid., p. 2. All31 projects sent to the Board of Directors for approval were approved, two were withdrawn and three contracts were not signed by the requesting country (ibid., p. 10).

50. The soluble issue underscored problems which may well be encountered in the control of other primary commodities and their processed products, e.g. logs and sawn timber and crude and refined vegetable oils discussed in chapter 6. Rising Brazilian soluble coffee exports to the United States, sold at half the domestic price, had reached proportions by 1968 which were threatening to the latter country's soluble processors (from 1 per cent of domestic consumption in 1965 to 14 per cent in 1967). The price dif­ferential was attributable in large part to Brazil's ban on exports of the broken coffee used in soluble production, thus forcing domestic processors to use more expensive grades, and to an export tax in Brazil which discriminated in favour of processed coffee. After prolonged debate and wavering in the United States it was agreed that export taxes, where they existed on processed and unprocessed coffee, had to be comparable. Procrastination on Brazil's part in implementing this equalization, as well as the installation or expansion of eight plants there, spurred the United States to bring the case before an International Coffee Organization arbitration panel. Brazil, Fisher argues (1972, p. 141), lost her case before the panel by expressing an interest in capturing the roasted coffee market by similar means. Brazil subsequently raised the tax on soluble exports by somewhat less than half of what the United States considered adequate. The State Department was, however, unwilling to recommend a domestic equalizing import tax as a counter measure because of the anticipated deterioration in relations with Brazil which this would bring and of domestic resistance by importers of soluble coffee. General Foods, the largest domestic processer, reversed its position in 1970 because of its imminent purchase of soluble plants in Brazil, and then reverted again to its initial stance when the Brazilian government stipulated joint owner­ship. The company lobby put pressure on the House Ways and Means Committee Chairman and urged its domestic union to do likewise. The union testified before the Committee and 'the Committee, impressed by the union's plea and confident of being sustained by a protectionist­minded House of Representatives' rejected the legislation (ibid., p. 144 ). Brazil eventually acquiesced in equalizing export taxes there.

51. The reluctance of both producing and consuming countries to lose their formalized structure for ongoing contact along with an acute awareness of the need for intermittent but frequent political interaction (under the guise of economics) on an international level to deal with national socio-political issues, may well be equally responsible for such extensions, which have also occurred under the wheat and sugar agreements.

288 1he Political and Social Economy of Commodity Control 52. Thirty per cent of the global quota could be reallocated to exporters in

proportion to the size of stocks held with the condition that no country could receive an allocation from the variable part of the quota in an amount exceeding 40 per cent of it. As in the previous agreements, the remaining 70 per cent of the total quota was to be distributed in proportion to exporting countries' basic exports. Quotas were to be applied or sus­pended if specific indicator prices fell below the floor or rose above the ceiling of the price range, as previously.

53. During the period preceding the creation ofUNCTAD, a number of other commodities-for example, rubber, jute, wool, and cotton-were un­successfully considered for control. The course which all these attempts took was that of an initial conference which relegated the proposal for control to a study group which then met periodically to weigh up the climate of opinion on control and to discuss technical aspects of control.

54. Law (1975, p. 46) found that the annual average price fluctuation under coffee control was at least 50 per cent greater during the agreement years 1964-72 than for the period 1950--63, while Glismann and Stecher (1977, pp. 28--30) conclude that the effect of the coffee agreements on prices is unclear but 'certainly shows no stabilizing effect over the life of the agreements.' In Law's study of sugar control cited earlier, similar conclusions were reached. This is not to say, however, that prices would have been more stable without control, or that control did not dampen price movements that would have existed otherwise.

55. Under the tin agreements, marketing policies that conflicted with the objectives of the agreement in two market powers, the United States and the Soviet Union, were reconciled through separate arrangements with these countries by the control authority.

56. See Rangarajan (1978, p. 29, ch. 5, and pp. 214-17) for further discussion of political versus economic determinants of agreement provisions.

CHAPTER2

1. Previously, concern for international commodity agreements in the United Nations had fallen to the Interim Coordination Committee for Ir.:erna­tional Commodity Agreements set up by the Economic and Social Council in 1947 and, after 1954, to the Committee on International Commodity Trade.

2. During the period influenced by the Havana Accords (before the creation of UNCT AD) several aspects of the Accords were notably altered in spirit. By the early 1950s official United Nations' publications began to state categorically that international commodity agreements were necessary for control of price fluctuations. Dropping the restraint shown in earlier pronouncements, one example avows, 'we know of no practicable method of reducing the international impact of short-run fluctuations in the price and terms of trade of primary products, other than a direct and detailed attack on the problem through the negotiation of international commodity agreements. The essential objective should be, not the introduction of restrictions to help remove "burdensome surpluses", but the stabilization of world commodity markets in the face of temporary ups and downs of

Notes 289 demand and supply' (United Nations Department of Economic Affairs, 27 November 1951, p. 10). Further modification was evidenced in 1953 when the General Assembly recommended that 'whenever governments adopt measures affecting the price of primary commodities entering interna­tional trade they should duly consider the effect of such measures on the terms of trade of countries in the process of development, in order to ensure that prices of primary commodities are kept in adequate, just, and equitable relation to the prices of capital goods and other manufactured articles' (reproduced in United Nations, Department of Economic Affairs, 25 November 1953, p. 1). This declaration presaged the demands in the 1970s for 'indexation' of commodity prices under the Integrated Pro­gramme. In the 1970s developed countries added the objective of restraining inflation to the perceived goals of such control.

3. The designation, 'Group of 77' derived from the Joint Declaration of the Seventy-seven Developing Countries made at the conclusion of the conference. It is perhaps best viewed as a political party whose platform includes a reiteration of need for commodity agreements and other measures to rectify problems in international trade (cf. McNicol, 1976, p. 2).

4. (E/CONF. 46/141 (1964), pp. 9-12 and 60-1) Commodity agreements were to 'establish minimum prices and improve prices, as the case may be, by maintaining price parity with those of manufactures' (ibid., p. 61 ).

5. (General Assembly Resolution 1995 (XIX) Section 2(a), 30 December 1964, subsequently amended in Resolutions2904 and 31/2 A and Bin 1972 and 1976, respectively.) Section 2 goes on further to elaborate the func­tions (goals) of UNCTAD: '(b) to formulate principles and policies on international trade and related problems of economic development; (c) to make proposals for putting the said principles and policies into effect and to take such other steps within its competence as may be relevant to this end, having regard to differences in economic systems and stages of development; (d) generally, to review and facilitate the co-ordination of activities of other institutions within the United Nations system in the field of international trade and related problems of economic development, and in this regard to co-operate with the General Assembly and the Economic and Social Council [ ECOSOC-see chart p. 271] with the performance of their responsibilities for co-ordination under the Charter of the United Nations; (e) to initiate action, where appropriate, in co-operation with the competent organs of the United Nations for the negotiation and adoption of multilateral legal instruments in the field of trade, with due regard to the adequacy of existing organs of negotiation and without duplication of their activities; (f) to be available as a centre for harmonizing the trade and related development policies of Governments and regional economic groupings in pursuance of Article 1 of the Charter; (g) to deal with any other matters within the scope of its competence' (cf. UNCTAD, 25 April 1973, TD/B/16/Rev 2).

6. The Lima Declaration refers to the joint pronouncement (Declaration and Principles for an Action Programme) issued by the Second Ministerial Meeting of the Group of 77 in Peru, November 1977 (reproduced in UNCTAD, 1972, pp. 373-404).

290 The Political and Social Economy of Commodity Control 7. Commenting in 1973 on the three UNCTAD conferences to date, Hazzard

(1973, p. 227) remarks: 'If official postmortems on the periodic sessions of the United Nations Conference on Trade and Development are an indica­tion, these huge and costly assemblies, held at intervals around the globe, center in large part upon disputes between "wealthy" and "poor" govern­ments over expenditures on-rather than quality of-development; feuds between Third World denizens over institutional forms and prerogatives; and power squabbles among United Nations governing bodies and Secretariat departments over their respective exercise of authority.'

8. A more cynical notion of the technology issue is represented in the words of Cooper (1977, p. 109): 'the notion has emerged that western nations are somehow withholding this special knowledge from the rest of the world. There is a failure to appreciate that much of the specialized knowledge is readily available for the taking in professional and trade journals, and that much of the rest resides in the small and scattered bits of knowledge concerning how to do particular things. In both cases, the key is trained manpower.'

9. Lucid discussions of the superior bargaining power and legal and moral abuses of transnationals vis-a-vis host governments can be found in Mikdashi (1976, especially pp. 36-7, 147) and Jeffries (1977).

10. The Soviet Union and Australia started their schemes in 1965 and 1966, respectively; the European Community, Japan, and Norway in 1971; followed by Austria, Finland, New Zealand, Switzerland, Bulgaria, Czechoslovakia, and Hungary in 1972; Canada and Sweden in 1974; and the United States and Poland in 1975. All schemes, except that of the European Community, cover primary commodities in BTN chapters 25-99. Preferential treatment is generally accorded to selected-processed and semi-agricultural products in BTN chapters 1-24. The schemes of Australia, Bulgaria, and Czechoslovakia give preference to all agricultural products and the Soviet Union's scheme covers all agricultural and industrial products. The manoeuvrings of the Manufactures Division to influence these undertakings are discussed in Bhatta-Charya, 1976.

11. Cf. ibid., p. 869. Nemmers and Rowland (1977, p. 906), in commenting on the United States' scheme aver of the 50 per cent of imports-quota limita­tions; 'Instead of protecting developing industry in the poorer countries as intended, the rule most often works against the interest of those poorest countries by eliminating duty-free entry for goods unique or important only to that exporting country, sometimes producing absurd results. Further, where there are two suppliers, the rule guarantees that first one and then the other in alternate years will lose duty-free status ... the rule also encourages importers to seek a second supply country and, because of the guaranteed "ping pong" effect, eventually a third and possibly more for products now uniquely produced in one country.'

12. Bronfenbrenner, 1976, p. 826. Nemmers and Rowland, speaking of customs officer value assessment under rules of origin provisions, note: 'Whether or not the original regulation was left unclear to allow Customs maximum discretion, both importers and Customs officers in the field have been unable to understand it ... the result has been a very uneven

Notes 291

application of the rules from port to port' (Nemmers and Rowland, 1977, p. 908).

13. Stern (1975), reflecting on the problems of the Integrated Programme, argued: 'It would appear that the Multilateral Trade Negotiations now underway under GATT auspices in Geneva provide a unique opportunity for effecting changes in tariffs and other aspects of commercial policy because these negotiations could furnish the quid pro quo that has been so elusive when pursued especially in the more limited discussions of inter­national primary commodity agreements.' Henderson and La! (1976, p. 13) express a related doubt: • ... there may be a danger that the issue of trade liberalization which is now being discussed as part of the current "'Tokyo round" of negotiations within the General Agreement on Tariffs and Trade will be insufficiently emphasized by the developing countries, partly because of an undue preoccupation with the common fund and related matters.' Banks (1976), an UNCTAD Secretariat staff officer before joining a research institution, argues that developed countries should pay for the training of domestic workers dislocated by reciprocal tariff reductions with developing countries out of funds currently being used on aid. 'The losers will be bureaucrats in the United Nations, and in various aid organizations, probably some corrupt politicians and func­tionaries in the developing countries-with the gains that will eventually accrue to all parties by reduced tariffs it might be possible to provide these people with some kind of direct welfare payment instead of the round­about type they are receiving at present.'

14. References for this section, not cited specifically, include Brown, 1968; Falsani, 1973; Goreux, 1972; Kofi, 1977; Papson, 1977; and Wassermann, 1973, 1974 and 1976.

15. While international trade in cocoa is not large in either volume or value as compared, for example, to coffee or copper, it remains of vital importance to a number of developing countries, particularly in Africa where five countries (Cameroon, Ghana, Ivory Coast, Nigeria, and Togo) account for nearly 80 per cent of total world production. Export quotas for cocoa are not simply a measure of last resort, as under the tin agreements, to be used when the buffer stock would otherwise be unable to support the floor. With cocoa, export quotas were to be effectuated simultaneously with buffer stock purchases. In the agreement adopted, the buffer stock could purchase 250,000 metric tons (roughly $215 million at 39 c per !b) with the buffer stock fund and borrowings in financial markets as provided under the tin agreements.

16. During these debates, Brazil declined to make any commitment, in protest over what was seen as intransigence among developed countries to requests for the reduction of preferential treatment given former colonial cocoa exporters by their metropolitan countries.

17. The United States, whose demands for a low floor price had not been met, refused to participate and brought in its wake the Dominican Republic, the only significant producer to remain outside the agreement. The Republic's deference to the United States' position was attributed to heavy depen­dence on the market there.

292 The Political and Social Economy of Commodity Control 18. National surpluses of cocoa which were expected to occur under periods of

export quota restriction were to be bought (within limits) by the buffer­stock authority which, in tum, might channel them to markets or uses where they would effectively be removed from the main world market where international cocoa prices are set. This was not to occur under the adopted agreement, however, ifthere was a prospect of selling these stocks in the upper third of the price range. In comparison with production control under the tin and coffee agreements, surplus disposal of cocoa is expensive to the control authority.

19. The extent to which these assertions are true has been the subject of much discussion in the literature in the field since the Second World War. Theoretical findings have become increasingly based upon assumptions regarding the specific nature of the market being controlled and the proffered reaction of investors to price and income risk, a subject discussed in chapter 5 (pp. 151-5). For instance, the source of market disturbances (whether on the supply or demand side of the market) and the type of shift (whether additive or multiplicative) can determine whether price stabilization destabilizes and reduces producer income, destabilizes and increases income, and the like. If a buffer stock which stabilizes prices in a particular market stabilizes producers' income (or profit) but also reduces it, and if the reduced income (or profit) predominates in invest­ment considerations, it may be preferable to use an export quota device where income is reduced by less or even increased, and if, in negotiations, a high weight is attached to expanded production capacity as an objective of control. In sum, the conclusions of the United States concerning the investment creating or retarding effects of specific commodity-control devices go too far in generalizing about the superiority of one device over another given capacity expansion as the only consideration (see Department of the Treasury News, 8 June FJ77, pp. 2-3).

20. This occurs when price variations around the trend are normally dis­tributed and the price range is centred on the trend of prices. Should these two conditions not hold, alternative conclusions can be reached. For instance, if the price range is centred above the trend such that a buffer stock operating alone would accumulate more stock at the floor than it could sell over time at the ceiling, an export-quota device which limited the need for buffer-stock intervention at the floor might, nevertheless, leave the buffer stock with sufficient purchases at the floor to support the ceiling.

21. In keeping with its policy on all commodity agreements in the latter 1970s, the United States' proposals at preliminary talks in 1978 on the renewal of the agreement to expire in 1979 called for one based on buffer stocks alone. This position was successfully supported by the Ivory Coast and Brazil, who feared that quotas might impinge on export expansion programmes well under way in their countries. Buffer stock fund accumulations of $150 million precluded a pressing need for a quota mechanism. The 1979 negotiations failed, nonetheless, over a marked divergence on the level of the price band.

22. Of the 227 United Kingdom national export cartels reported, 87 per cent entailed collusion on price levels; 14 per cent, quotas for exporting firms; and 41 per cent, agreed payment terms. In the United States, pressure

Notes 293 existed (i.e. by the Williams Commission in 1971) to broaden the definition of 'export cartel' in the 1918 Webb-Pomerene Act which exempted exports from consideration in antitrust legislation, and to expand product coverage to include services as well as goods (cf. Rangarajan, 1978, pp. 124--5).

23. This effect was reinforced by related events; in contrast to the immediate post-war period, in which the United States held 80 per cent of all inter­national monetary gold, in 1971 the United States' trade balance went into deficit for the first time this century, and in 1972, West Germany possessed twice as much as the United States in reserve assets.

24. Noting this growing sophistication, Bergsten (1975, p. 297) pointed out that 'OPEC was reportedly conceived in a bar in Cambridge, Massachu­setts, and every [developing] country now has its full quota of graduates from prestigious institutions'.

25. The resolve of developing countries to account for 25 per cent of world industrial production by the end of the century implied, according to UNIDO, an annual growth rate of at least 10.5 per cent over the period 1975-2000 compared to a current rate of 4 per cent (UNIDO, October 1974). This was above the target of 8 per cent a year established in the United Nations' 'international development strategy' for the 1970s and according to Donges (1977, p. 247) implied external financing comparable to about 1.5 per cent of the combined gross national product of the developed countries.

26. The Charter, originally proposed by the President of Mexico, was drafted in UNCTAD over a 17-month period by a working group of 40 United Nations' members.

27. This was a direct response to two price reductions in Middle East oil during a price war between transnational oil companies, and more generally over discontent with an unfavourable system of concessions. The latter had assured transnational companies of discretion in determining investment programmes, and export volumes, in setting and altering the posted prices upon which taxable company profits were determined, and in deciding on the disposition and use of large unexplored concessionary areas (cf. Mikdashi, 1976, p. 51).

28. For a number of years prior to 1971 the tax and royalty per barrel to developing exporters had remained unchanged while oil prices gradually declined. From that year until the autumn of 1973 the revenue per barrel was raised roughly 70 per cent to $1.75. The decision at that time to increase this figure drastically to $7 raised crude oil prices from $3.50 to more than $10, providing oil-exporting countries with additional export earnings of $60 billion a year, or more than three times the global financial flows from developed to developing countries, and six times the conces­sional aid in 1973 (Radetzki, 1976, p. 53). This also represented the largest and quickest single shift in world income which the world has perhaps ever seen; a shift of wealth of 2 per cent of global gross national product, of which roughly 1.5 per cent came from developed countries and 0.5 per cent from non-OPEC developing countries (Institute of Development Studies, 1976, Jolly, p. 5). The magnitude ofthese figures, however, is not so much due to price raising of an order that is, in fact, common in commodity

294 The Political and Social Economy of Commodity Control markets, but rather, to petroleum's exceptionally large shar'e (45 per cent) of developing countries' exports of primary commodities.

29. The need for revenue in most oil-producing countries was a potential source of weakness in OPEC and led to covert and overt price cutting. Saudi Arabia's initial independent and temporary cut in oil production for political reasons, associated with the Yom Kipper War, demonstrated to the others the strength of their market position. It was Iran, however, which sponsored the price hike. Iran and Algeria, anxious to industrialize quickly and capable of doing so, sought price increases even if these were to bring greater long-term losses. Kuwait and Saudi Arabia, on the other hand, could not use the additional revenues and, thus, were more inclined to look to oil's long-term competitiveness with other energy sources (Donges, 1977, p. 238). Further potential sources of weakness emerged in 1978 with political instability in Iran and the growing certitude that Mexico possessed larger reserves than Saudi Arabia.

30. In the words of Vastine (1977, p. 414): 'Initially, OPEC was a source of inspiration to them, although they later suffered its harsh effects. OPEC was seen as a group of non-Western, non-industrial countries successfully dictating tough terms to the industrialized world, and it appeared to promise economic success for other cartels. The OPEC cartel was a model, and it was believed that enormous OPEC profits would be made available to help finance similar producer organizations for other commodities.' The countries hardest hit by OPEC's actions were the very poor developing ones with little or no petroleum production of their own. OPEC rejected proposals for two-tier pricing for their aid, arguing that the two-tier approach would invite and be undermined by black-marketeering. By 1976, the OPEC Special Fund, which had reparatory overtones, contained $1.6 billion, $800 million of which had been distributed in grants and soft loans to developing countries in addition to those made on a unilateral basis by members. Mikdashi (1976, pp. 139--41) estimates that OPEC member (reparative) aid in 1974 exceeded 10 per cent ofthe GNP ofthese countries, on average, compared to 0.3 per cent for OECD countries. Venezuela used oil revenues to help finance Central American coffee stockpiling and agreed to loan about half of its revenues from oil sales to Central American national banks for development purposes.

31. Ecuador, the largest exporter, refused to join the group, hoping to diminish its competitive disadvantage from higher sea transportation costs. It had a comfortable balance-of-payments position from increased prices for its petroleum exports. Jamaica, the Ivory Coast and Surinam enjoyed preferential treatment under the Lome Convention which they did not want threatened, and the Philippines, with a transport advantage to Japan, had what it considered favourable prices in its major import market. Colombia declined to participate in the export-tax scheme because of a substantial banana expansion programme there.

32. Over the past decade, there has been a net transfer of real resources to developed countries from the banana-producing developing countries (UNCTAD, Secretariat, 7 May 1974, TD/B/C.l/Cons. 10/L.5, p. 5). One publication (among a number of detailed, well-researched studies written by Fred Clairmonte which had considerable substance removed by the

Notes 295 Secretariat) estimated that domestic planters receive only 11.5 per cent of the price paid by the ultimate consumer, 88.5 per cent going to intermediate activities (ripening, freight, insurance, retailing, etc.) (UNCTAD, Secretariat, 24 December 1974, TD/B/C.l/162, p. 74). The banana industry and trade at the time was dominated by three vertically­integrated North American transnationals (Standard Fruit, United Brands, and Del Monte). Although national companies accounted for a large share of production, that production was marketed through the transnationals either by consignment or direct sales. The transnationals still owned numerous plantations in tropical banana-growing countries and fleets of refrigerated banana boats, and controlled ripening, advertising and marketing of their brands in importing countries. Because of the oligopolistic structure of the market, banana prices have been fairly stable, although perhaps not 'fair' ( cf. Grayson, 1977, p. 10). For instance, United Brands, which accounts for 40 per cent of the European Community trade was found by the Community Commission to have violated Article 86 of the Community Treaty and Article 66(7) of the European Coal and Steel Community Treaty by discriminating in the distribution of bananas between customers and in pricing between Community member countries (with differences of more than 100 per cent); setting prices unrelated to costs; and in a few cases, refusing to supply individual customers.

33. The Association's goal of controlling the influence of transnational companies in the bauxite industry concurred with that of the Australian Labour Government's view on the matter and was largely responsible for that country's participation.

34. (Cf. Grayson, 1977, p. 9.) The dominant market power, Australia, declined to follow up the initiative until December 1977 when the eleven members of the Association (Australia included), agreed to support a minimum price of $24 per ton c.i.f. (Metal Bulletin, 13 December 1977). Although distance from markets had formerly kept Australia at a competi­tive disadvantage in relation to other producers, it has recently moved into one of clear advantage with rapidly-expanded production capacity. In 1977, before this decision, Alcan, which had acquired a lease and was developing mines in Australia (paying royalties of about 10 per cent of the amount being asked by Jamaica), together with Kaiser used the threat of alternative supplies in negotiations with the Jamaican government over royalties and ownership. An internal Alcan study found that ore could be mined in Australia and transported to Canada more cheaply than from Jamaica (Latin American Commodities Report, 20 May 1977). In December 1978 the IBA established a 'floor price' for metalurgical grade bauxite to the North American market at 2 per cent of the average American Metal Market list price of99.5 per cent ingot.

35. Alumina bearing ores, substitutes for bauxite, are by far the most abundant structural materials in the earth's crust. The United States has known reserves of alumina bearing clays and ores that would satisfy world consumption for over 10,000 years at current rates of consumption, although costs of processing would be somewhat higher than under the current system. Dawsonite, alunite and anorthosite are other substitutes for bauxite in alumina production which are available in abundance.

296 The Political and Social Economy of Commodity Control Eighteen alternative processes exist for producing alumina from alumina clays alone (Pindyck, 1977, p. 7).

36. Between 1974 and 1976, Jamaican bauxite production fell by over 30 per cent and alumina by over40 per cent; it recovered partially in 1977 at levels far below those reached in 1974. The decline was due to recession in the United States, the sole importer of Jamaican bauxite and alumina; domestic strikes; and to the reduction in the share accorded to Jamaican bauxite in the global activities of three mining and processing companies and the collapse of a fourth.

37. (Cf. Mikdashi, 1976, p. 97). This copper was in theform of nodules the size of tennis balls which also contained high proportions of cobalt, manganese and nickel. The estimated 15 billion tons of nickel on the sea-bed would last 23,500 years; 358 billion tons of manganese, 34,000 years; and 5 billion tons of cobalt, 260,000 years at 1972 consumption levels.

38. (Charles River Associates, Inc., 1976, table 2-1, p. 43.) Tin and bauxite fell in the middle range in all three aspects. Iron ore received a ranking of four out of a highest score of five representing the lowest expected crisis costs, and manganese was rated two.

39. With the nationalization issue largely under way by 1971, CIPEC had turned its attention to copper prices. It unsuccessfully approached the IMF and World Bank in that year for loans to finance a buffer stock composed of existing copper surpluses which would then be disposed of when prices were at abnormally high levels (Mikdashi, 1976, p. 86). Further efforts at price control were delayed in the rising market of 1972-3 when the junta's coup made Chile's compliance uncertain. The Zambian government was unwilling to negotiate with the new government there until 1974 (Zorn, 1977, p. 26).

40. (Metal Bulletin, 15 June 1976, p. 16.) Chile had closed its small Exotica mine, a high-cost source of copper and thus a likely candidate for closure given declining world prices even without agreement. Reservations held by other members about Chile's usefulness to the organization were reflected in the delayed appointment of a head of the CIPEC Secretariat in 1976 as planned 'because the most technically qualified potential candidate was Chilean, and this was politically unacceptable to other members' (Zorn, 1977, p. 26).

CHAPTER3

1. The Declaration reiterated the UNCT AD III resolution on developing­country sovereignty over their natural resources (i.e. the need for less transnational power), improved terms of trade for primary commodities, trade liberalization and resource transfers from developed to developing countries.

2. (United Nations, 16 May 1974, A/RES/3202(S.VI), p. 6.) 'Integrated Programme' seemed to imply, at the time, what was referred to as a 'package deal' in TD/B/498 (UNCTAD, 8 August 1974). Rothstein, commenting on the radical nature of the Declaration and its deflection of interest from other areas of concern, has argued: 'What happens when

Notes 297 contentious issues are forced into an arena like the U.N. is that the underdeveloped countries can agree among themselves only on "highest common denominator" proposals. The recent "Declaration on the Estab­lishment of a New International Economic Order", passed by the General Assembly in May 1974, illustrates the problem. It includes so many demands, some sensible, some foolish, some unclear, that the rich countries can avoid a serious response by pointing to the obvious unrealism of the total package of demands ... there is no way of knowing whether they would in fact create a better order if they could be implemented, and they divert attention from real problems that must be dealt with as quickly as possible. Furthermore both the rich and the poor countries recognize that neither side is really taking such revolutionary proposals seriously, which does nothing for the quality of an international dialogue already sufficiently debased' (Rothstein, 1977, p. 366).

3. W. S. Jevons, Money and the Mechanism of Exchange, London, 1875, and Jan Goudriaan, How to Stop Deflation, London, 1932, are cited in Hart, Kaldor, and Tinbergen, 1964, p. 527. The UNCTAD I resolution on commodity control is ambiguous: 'Commodity arrangements may, how­ever, also cover groups of commodities under certain circumstances. Where the negotiation of arrangements for a group of commodities is considered desirable but does not appear practicable, the possibility of negotiating simultaneously a number of separate arrangements for dif­ferent commodities can be considered. In any case, there will be considerable advantage in providing. within the institutional machinery that may be set up, a common forum for consultation and confrontation where the related aspects of all these arrangements may be periodically considered' (UNCTAD, 1964, vol. 1, Annex A.II.l, para 5, p. 27).

4. (UNCTAD, Secretariat. 1968, vol. II, pp. 3~. written by Alfred Maizels.) As in the 1974 Secretariat proposal, the 1967 report referred to a source or source-plus-pool fund, government guarantees for commercial loans to the fund, lending by governments and international financial institutions, economies in obtaining commercial loans through such a fund and savings in overall requirements through offsetting sales and purchases of commodities. The words 'integrated programme' first appeared in this report.

5. (UNCTAD, December 1974, TD/B/C.1/166, Supp. 1-5.) Domestic policies in the developing countries were mentioned only in passing in the documents of the Secretariat. A one-paragraph discussion of internal development policies appeared in UNCTAD, 2 July 1975, TD/B/C.1/183, p. 17, under The Essentials of a New Order', and that was devoted to income distribution. On the issue of indexing prices, TD/B/C.1/166, para. 7 reads, 'without some kind of provision for relating prices of exports to prices of imports . . . commodity arrangements operating in conditions of rapid international inflation would tend to break down'.

6. ' . . . it may be necessary to organize generalized arrangements for stocking those commodities on which progress could not be made in individual commodity schemes' (para. 21). The Common Fund agency 'could be responsible for and be capable of taking into account the effects of policies for one commodity on others ... give guidance to individual

298 The Political and Social Economy of Commodity Control commodity agencies on diversification policies and . . . set a better perspective for long-term planning' (para. 22).

7. The Programme should 'aim at a financial profit on its operations as a whole·, 'the buying and selling prices should be subject to re-examination at regular intervals ... in light of experience, particularly with respect to the level of purchases and sales by the stock', and 'the fund will be organized and conducted as a financially viable agency'. 'Although the common fund is not intended to maximize profits, the earning of an '"adequate" net income ... is desirable' (para. 15).

8. Pressures for change are felt most severely by organizations like UNCT AD that have no explicit market for their output. Organizations that survive under these conditions develop adaptive substructures that are designed to anticipate changes in the environment and to suggest plans for the future which foresee and take charge of such changes. This substructure is outward oriented in contrast to the ongoing business of the organization which is concerned with, and indeed, maintains the status quo.

9. The sequence of events being reviewed relates a fairly typical decision­making process: a. pressures were put on the Secretariat through the Group of77 and through unfavourable feed-back from those disappointed by UNCTAD's record; b. analysis of a descriptive commonsense variety was made in the 166 series of publications of the type of problem and its scope; c. consideration was given to alternative solutions such as buffer stocks, multilateral contracts, diversification programmes and the like: and finally, d. some consideration was given to the consequences of these alternatives. The analysis which might have followed at this stage was largely circumvented with emphasis rather being placed on anticipating the way in which the programme would be received politically.

10. The urgency of the situation reflected a typical malaise of United Nations' organs. In his study of the United Nations Development Programme of which UNCTAD is a part, Jackson (United Nations, Jackson Report, 1969, vol. 1, p. 49) noted; 'virtually all the outstanding people involved in the present UN development operation are now subject to stress-a clear indication of the over-extending capacity of the present "non-system". Many of them admit that they are unable to give of their best under present conditions. This means that the finest and most experienced minds of men and women who really understand development-and there are very few of them either within the system or outside-have little or no time to think about its future orientation. Thus, a vicious circle is created. Because the condition is not remedied by the application of foresight and imagination, it becomes progressively more acute. The only solution is the introduction of effective management procedures which would smooth the flow of work and introduce the right degrees of decentralization and delegation.'

11. Responding to the questions and disclaimers being put to it, the Secretariat found itself in a position, commonly experienced in commercial enter­prises, of having to mould public taste to fit its product since it was unwilling to adapt the product to fit the prevailing mood. The most painless and the quickest approach was to decide not to embark upon a new stage of appraisal and information gathering which might complicate the situation or fuel further disclaimers, in the hope that an adequate

Notes 299 adjustment could be made at the existing stage. Existing policies were embellished and sharpened rather than changed. Unless the organization took the initiative in selectively stating its members' preferences, it might be discovered that they really fell within the prerogative of other organiza­tions. Moreover, should attempts to change the environment be successful, the wisdom and appropriateness of the existing organizational structure would be reaffirmed.

12. (Erb and Fisher, 1977, p. 510; and Persaud, 5 December 1975, p. 2.) There were 40 countries with special economic and political relationships with the European Community countries (e.g. the 21 in the Commonwealth) and six were African countries with no special relationship but whose economies were 'comparable'. The STABEX scheme formally came into effect in April1976 (cf. Hasse and Weitz, 1978).

13. Bananas, cloves, cocoa, coffee, cotton, ground-nuts. gum arabic, leather and skins, mohair, palm-oil and kernels, pyretheum, raw sisal, tea, vanilla. wood products, wool and ylang-ylang. The Community agreed to the inclusion of [iron ore] only for the sake of securing a general agreement and remains firmly opposed to mineral products being included under the system' (Commission of the European Communities, 1975, p. 25).

14. Repayments are made only when they can be financed from an increase in unit values. If prices fall but export volumes increase and push earnings above the reference level, no repayment is required.

15. In some cases, transfers ir. the first two years of the scheme represented a substantial amount of export earnings to all destinations. With respect to commodities included under the Integrated Programme, some notable examples are: Burundi, cotton 63 per cent; Togo, coffee 39 per cent; Benin, cotton 27 per cent; Ethiopia, coffee 15 per cent, Somalia, bananas 12 per cent; and Ghana, wood 11 per cent (Treydte, 1977, p. 302).

16. The Seventh Special Session was called by Group B, who wanted to negotiate compromises on the demands given expression in the NIEO resolutions of the Sixth Special Session. The Session's resolution, while largely endorsing t!le earlier resolutions, used a less militant tone and included, at the urging of the United States, an endorsement ofthe existing trade system, individual commodity pacts, trade liberalization, and the transfer of aid and technology through non-United Nations international organizations ( cf. Grube!, 1977, p. 288).

17. The State Department had proposed that the United States show willing­ness, necessitated by what it saw as urgent economic and political reasons, to consider some of the measures proposed under the Integrated Programme. 'The State Department proposals, and its willingness to float those proposals without clearance by other agencies, marked the begin­ning of an often heated internal debate as to whether a free-market approach, strongly espoused by the Department of Treasury, or an orderly-marketing approach would be the fundamental principle upon which U.S. international economic policies would be based ... [to date) commodity issues had been handled on a strictly ad hoc basis by a number of individual agencies and departments with little or no inter-agency coordination' (Vastine, 1977, pp. 436-7).

300 The Political and Social Economy of Commodity Control 18. Repayment of loans for these shortfalls would be graduated up to 10-12

years for the least-developed countries in contrast to the rule of five years under the existing IMF facility. Interest rates would also be graduated. As under the present facility. funds would not be made available if shortfalls were caused by trade policies of the exporting country; would be subject to overall balance-of-payments considerations; would be limited to those situations where it was shown that the shortfall was of a short-term nature (so that the loan could be repaid in 3-5 years), and would be conditional on the exporting country's agreement to cooperate with IMF recommenda­tions on rectifying the balance-of-payments situation. The proposal envisaged that loans under the Development Security Facility could be higher than $2.5 billion a year with outstanding loans of more than $10 billion. Loans under the Compensatory Finance Facility which it was to replace had never exceeded $800 million a year. It also supported liberali­zation of the IMF Buffer Stock Facility to ensure that the Facility would be available without reducing other drawing rights.

19. The proposal speech made by Ambassador Daniel Moynihan for Secretary of State Kissinger, included a rejection of price indexation as a means for redistributing wealth (see chapter 4, pp. 103-9) and stressed the need for further reductions in tariff and non-tariff barriers to trade (presumably including preferential treatment, tariff escalation, import quotas, and subsidies to domestic producers). The speech also substantiated the good intention of the Administration with respect to commodity pacts, by announcing its willingness to participate in a new coffee agreement, sign the International Tin Agreement, negotiate agreements on cocoa, copper and sugar, hold a major share of a world food reserve of 30 million tons of wheat and rice, and establish a producer-consumer forum for every key commodity lacking one. No mention was made ofUNCTAD in the speech (cf. Erb and Fisher, 1977, p. 484 and Singh, 1977, p. 24). This contrasted with earlier refusal of the United States to join the 1968 Sugar Agreement, the 1972 Cocoa Agreement, and its role in the demise of the Coffee Agreement.

20. In the words of Vastine, who participated in these events in his capacity as an officer in the United States Treasury: 'the United States was faced with two basic policy options. It could maintain a tough position critical of the integrated programme proposed by the UNCT AD Secretariat-parti­cularly its mandatory nature, emphasis on price setting. focus on a central fund for buffer stocks, and incorporation of indexation-and send it back to the Secretariat for further work. Alternatively. the United States could criticize the integrated programme, but give a clear signal that if its suggestions were incorporated therein it might be able to accept such a programme at UNCTAD IV. Agencies within the U.S. government lined up heatedly on both sides of the issue, but the initial decision was to remain tough, and to seek continued debate in the CIEC's Commission on Raw Materials where the United States might get some returns for concessions in the commodities field in terms of improved energy relations' (Vastine, 1977, p. 448).

21. At the same time, the 1976 report to the Congress of the United States National Commission on Supplies and Shortages noted that all available

Notes 301 ·geologic, economic, and demographic evidence' indicated that no physical lack of resources or cartel action was likely to 'seriously strain our economic growth for the next quarter century and probably for genera­tions thereafter'. The low level of leverage this afforded developing exporters prompted Harry Johnson (May 1976, p. I) to remark: The so called "integrated commodity policy" is neither integrated nor a policy, but an attempt to paper over with semantic ambiguity a variety of inconsistent policies and policy objectives for particular commodities and their producers, policies whose presumed feasibility rests on the creation of a degree of comprehensive monopolistic organization of international trade in commodities that has never even remotely existed in the past and has no more possibility of being achieved in the present' (cf. Mingst, 1979).

22. Changes in the price of individual metals, such as tin in a tin can, may leave the price of a tin of soup unchanged or changed by so little that it goes unnoticed by the ultimate consumer. Even if the cost of a raw material input represented a large part of the cost of the end product, the product's importance in the average consumer's budget may be so small that changes in prices of the product do not noticeably affect his well-being. When the commodity is a major factor in one end product, such as rubber in an automobile tyre, consumers of automobiles are, nevertheless, unlikely to base their decisions to buy or use a car on the cost of the four tyres needed to run it.

23. There has been a tendency in the post-war period, however, for the export demand for primary commodities to spread. On the demand side, the four major importers of each of the ten 'core' commodities spanned only twelve developed countries, with the United States, the European Community and Japan accounting for the bulk of imports. The United States was the leading importer in all cases except cotton and copper in which the country was self-sufficient. The Federal Republic of Germany was among four major importers of seven of the commodities and Japan, the United Kingdom, and France in five each (Behrman, 1976, pp. 71-4). As a group, the developed countries imported more than half of all ten commodities and on average imported three-quarters of them.

24. 'Establishment of a common fund for the financing of international commodity stocks or other necessary measures within the framework of commodity arrangements ... Harmonization of stocking policies and the setting up of co-ordinated national stocks financed, in the case of develop­ing countries, by the common fund ... or by international financial agencies ... ' (Manila Declaration February 1976, p. 11). Also called for were 'effective application of appropriate measures and procedures for indexing the prices of commodities exported by developing countries to the price of manufacturers imported from developed countries'. These resolutions were accompanied with a threat 'to make full use of the bargaining power of the developing countries through joint and united actions' (ibid.).

25. Nonetheless, the Philippines, host country to the Group of 77 Ministerial Meeting, pledged $50 million for the fund, a figure which was to grow to $150 million by the end of UNCT AD IV.

26; Vastine ( 1977, p. 454) summarizes these affairs with the words: 'the

302 The Political and Social Economy of Commodity Control quadrennial meetings of the full UNCTAD Conference provide the world's largest stage for discussion of development issues. Hundreds of delegates from almost every country in the world gather together for several weeks to pound out resolutions on every conceivable develop­ment-related subject. The presence of so many delegates in a highly­publicized event ensures that the discussion of these economic issues takes place in a highly-charged political atmosphere.'

27. The nine countries of the European Community deliberated for days on a unified stand with key ministers arriving for the crucial final days. Neither West Germany, with its coalition government, nor the United Kingdom, was willing to go as far in meeting the demands of the Manila Declaration as the other European Community countries, particularly France. They were joined by the United States and Japan in opposing the creation of commodity agreements for a pre-specified list of commodities, and, thus, prior financing of a Common Fund. While the Europeans met, the other developed market-economy countries convened separately to produce a paper following the harder line taken by the United States. The United States entered a formal qualification to the resolution on the Integrated Programme (Res. 93(1V)) that withdrew its support from a number of key features, notably the prior financing of a Common Fund. Canada and Australia tended to take the position of the major exporters, among which they are included and were counted among a group of 16 developed countries which gave broad support to the resolution. The general opposi­tion to indexation of commodity prices spared France, which favoured such a scheme, the difficult task of spelling out the details of how it might work. Vastine (1977, p. 461) has described the disarray of Group Band the unified stand of the Group of 77 in pressing specific objectives as a 'triumph of strategy for the Group of 77'. .

28. (TD/217, p. 96.) Their determination on this issue was reminiscent of the 1966 United Nations Capital Development Fund promoted by Raul Prebisch; 'developing countries, feeling even more sharply the deficiencies of both bilateral and United Nations systems in aiding their development, finally used their voting strength in the United Nations General Assembly to force through the Capital Development Fund, in the hopes that their urgent needs would prompt the more generous of the donors to endow it adequately. The purpose of the Fund was to provide capital at low rates of interest, and the intention was to finance it by voluntary contributions. But the pledging conference was largely boycotted by the developed countries and its resources limited to unconvertible currencies' (United Nations, Jackson Report, 1969, vol. 2, p. 17). Three years later it had only$128,000.

29. Wheat and rice, it was argued, were being covered by the International Wheat Agreement, GATT, and the FAO, and wool was primarily exported by developed countries. Forty-two per cent of world wheat imports and 79 per cent of world rice imports go to developing countries making them, in any event, unsuitable for schemes involving high floor­price support. The Commonwealth Secretariat advocated, at the time (Persaud, 5th December 1975, p. 3) the exclusion of 'products such as wheat, maize, rice and sugar for which proposals have been made for agreements under the context of the Multilateral Trade Negotiations

Notes 303 (MTN) and products for which there are already agreements or informal arrangements-tin, coffee, cocoa, and tea-the remaining products on which the Community's attention should be focused in concluding new agreements are copper, zinc, lead, cotton and wool'.

30. In related studies, Behrman (1977, p. 36) includes tin in his group with lowest real price instability and copper as a near candidate for his group of commodities showing high real price instability. Behrman's analysis also shows relatively high export-earnings fluctuations in real terms for sisal; medium fluctuations for tin, copper, rubber, jute, and cocoa; and low fluctuations for coffee, cotton, sugar, and tea.

31. Commodity bonds and the lRB concept were the brain-child of Chuck Robinson, appointed to Under-Secretary of State by Nixon and formerly president of a mining company who fought to have it launched at Nairobi in spite of the objections of other agencies. The proposal had much the same appearance of haste as those for which the UNCT AD Secretariat is at times discredited.

32. Erb and Fisher, 1977, pp. 486-8. 33. This politicized confrontation was not drawn strictly along North-South

lines, partly because a number of developed countries felt political realities favoured major concessions to the developing countries, and partly because developed countries accounted for a number of important commodity producers.

34. This view was held on a wide range of United Nations' undertakings.ln the words of Hazzard (1973, p. 139): 'The melancholy-or heartening, depending on how you look at it-fact is that many more imaginative approaches to the world's problems exist outside the United Nations' confines than within them.'

35. The compensatory-finance facility of the IMF had disbursed $1.4 billion (SDR 1.6 billion) to developing countries in 1976. About one-third of the developing countries which had made compensatory drawings were able to finance close to all of their export-earnings shortfall (cf. Michalopoulos and Perez, March 1977, p. 12; and Erb and Fisher, 1977, p. 508).

36. 'There are now so many conferences dealing with related aspects of the struggle for a new international economic order that one is hard pressed to tell which of them really "matter" for the resolution of any particular issue' (Institute of Development Studies, 1976, Helleiner, p. 19).

37. The Bank's commodity projects have at times been harmful to global commodity markets. For example, they caused an over-expansion of coffee production in East Africa in a depressed market during the late 1950s, of sugar production in the early 1960s, and of tea production in Africa in the following two decades (cf. IBRD, 17 August 1973, Financing Tea, Report No. R73-206, pp. 73-206; and Singh, 1977). Between 1964 and 1973, the Bank financed eight tea pwjects which were to account for 20 per cent of global increases in exports during 1974--85 and 6 per cent of total exports after 1980 (Singh, ibid.). By the Bank's own admission, while these projects expanded export earnings of individual countries, they reduced global earnings because of the price inelasticity of demand for tea (IBRD, op. cit.). On one occasion the Bank offered a loan to the Tin

304 The Political and Social Economy of Commodity Control Council. It was declined because the interest rate was not competitive with other offers.

38. A majority of votes in the World Bank were controlled by Canada, France, the Federal Republic of Germany, Italy, Japan, and the United States. Nationals of developed countries, in 1973, occupied 68 of the top 80 posts in the Bank and International Development Association (Mikdashi, 1976, p. 138). Developing members held 36 per cent of all votes.

CHAPTER4

1. Document TD/B/C.1/193 (UNCfAD, 6 October 1975, p. 7) had argued that: 'the Fund management authority be permitted to intervene directly, for a period, in the market of commodities for which commodity arrangements do not yet exist, so as to be able to provide emergency price support when needed ... The ability of the Fund to provide market support in critical situations would be of major importance for the catalytic role of the Fund in stimulating new commodity agreements. The condi­tions for such emergency intervention should include: a request by the producing countries accounting for more than one-half of the total exports of the commodity concerned; their agreement to initiate the establishment of a commodity organization to which the stock would be transferred; and approval by the board of management of the Fund on which votes would be distributed according to considerations of population, region, assess­ment and democratic representation ("one vote one country").'

2. As used here, indexation is an institutional device by which the price of commodities would be periodically adjusted to variations in the price of a basket of imported products according to an automatic formula. In the dialogue, this was also called 'direct indexation' in contrast to 'indirect indexation', the concept of adjusting floor and ceiling prices periodically as under previous commodity agreements without a formula or even objective criteria but in rough conformity with movements in the price trend. 'Indexation' was linked in Secretariat documentation with what in the history of United States' agricultural policy is known as 'parity' between farm and industrial prices. Its antecedents within the United Nations date to a 1949 expert group recommendation that countries experiencing declining terms of trade receive direct transfers from those that make corresponding gains. (UNCf AD, 6 August 1974, Supp. 1. Add. 1, Annex I).

3. Preoccupation with exploitation, particularly of natural resources, emanated from a popular conviction in some quarters that individual and national wealth comes from natural resources and the use of market power in their trade. This conviction was used to support the theory of colonial exploitation and to explain the current wealth of the developed metro­politan countries. It in part accounted for the emphasis being given to commodities and developing-country market power under the New Order. The argument ignored the scarcity of cases of national wealth based purely upon natural resources (Saudi Arabia being an exception) and the tendency in modern times for wealth rather to be based on technology and managerial skill.

Notes 305 4. Echoing the sentiment of a great many consumers Harry Johnson said

recently: 'There is nothing morally commanding about a presumed obligation of taxpayers and consumers in countries whose average citizen is well off to surrender resources to the governments and ruling elites of countries whose average citizen is poor--especially if the latter's poverty is maintained and increased by the policies of his government towards him' (May 1976, p. 9). Similarly, Cooper, United States Under Secretary of State for Economic Affairs (1977, p. 79), has averred that, 'the developing countries insist on the principle of total non-interference in their national affairs even while they are calling for transfers of resources in the name of fundamental rights of individuals. Their own indifference to the poorest members of their own populations-those on whose behalf these claimed rights are presumably advanced-is frequently egregious.'

5. The concept of wealth transfers through indexation flew in the face of the premise of the Integrated Programme. In the Secretariat's own words, 'a basic objective of the proposed system is to improve the conditions of life and work of small farmers, landless labourers, and mining workers. In establishing schemes for individual commodities, it may be desirable to pay particular attention to the extent to which these benefits ... will be broadly shared' (UNCTAD, 12 December 1974, TD/B/C.l/166, Supp. 1, p. 7). Cooper (1977, p. 96) points out, 'Raising a country's export receipts is not the same as raising the incomes of its poorest members or even of its government. While some resource transfers pass through the hands of the government, this is not true of commodity prices. Powerful pressures would exist to pass them directly to the owners of the resource.'

6. Behrman noted that non-OPEC developing countries which do not have more than one-third of their export trade in the core commodities and which have more than 20 million inhabitants include China, India, Pakistan, Mexico, Vietnam, Burma, Colombia, Argentina, and Afghanistan.

7. By increasing the secular trend of deflated commodity prices on which the buffer-stock price range is based by 2 per cent a year which the guarantee mechanisms might be expected to do, Behrman (1976, p. 55) found that after ten years of his sample period the core commodities' discounted export earnings were $83 billion higher than without such 'indexation' (the buffer stock's discounted loss was $10 billion greater than without 'indexa­tion'). Glismann and Stecher (1977, p. 40) found that a 10 percent increase in the average prices of the core commodities would raise export earnings by $16 billion a year. A doubling of the prices of these commodities with everything else remaining equal, would, according to Behrman, raise the annual export earnings of developing countries by $20 billion, a small figure compared to the transfers to oil-exporting countries under the OPEC cartel but large relative to official aid transfers to developing countries (Behrman, op. cit.).

8. Socialist countries have argued that their capital subscriptions should not be based entirely on either method since the need for the Common Fund arises in part from industrial recessions.

9. On the demand side of the market, the United States had the highest share of imports by value in all but two of the ten core commodities, being

306 The Political and Social Economy of Commodity Control second to the United Kingdom in tea, and sixth in copper. Thus, its total share would be 17.5 per cent as an importer and an additional3 .5 per cent as an exporter of cotton. The list in the text continues, Colombia (3.1 per cent); China (3 per cent); Philippines (2.7 per cent); Indonesia (2.6 per cent); Egypt (2.4 per cent); Mexico (2.3 per cent); Peru (2.3 per cent); Australia (2.1 per cent); Bangladesh (2 per cent). All other countries would have less than 2 per cent (UNCTAD, 6 October 1976, TD/B/C.l/ 196, pp. 11 and 13).

10. The warehouse receipts (warrants) on the initial stock purchased worth, say, one billion dollars would be used to acquire an additional $750 million loan from financial institutions. The warehouse receipts from stock purchased with the loan would provide collateral for an additional loan of $562 million and so forth.

11. If tin control is taken as an example of this point, the experience over its twenty years of control is not discouraging. On average the buffer-stock authority earned an annual profit of 8 per cent on subscriptions up to 1976 and during the fourth agreement, 1971-6, 34 per cent a year. Singh (1976, p. 80) estimates a financial rate of return to the Common Fund of 7-S per cent a year. The International Cocoa Agreement had accumulated over $150 million by 1978 from its levy on cocoa exports and accrued interest and anticipated that this would grow to $330 million by 1982 (TD/ Cocoa.5/Ex/C.I/CPR.2, 5 February 1979).

12. Labys had been a staff officer of the Secretariat before taking an academic position and was periodically used as a consultant by UNCT AD's Research Division.

13. In testing whether the Fund would bear the cost of supporting the price of substitutable commodities outside the programme, Labys (1977) reported that they did not upset his portfolio analysis.

14. Comparison is provided by what may be considered the United States domestic equivalent of the Common Fund for agricultural price support, where no specific limits are set on the volume of purchases made by the government or the amounts to be spent on supporting prices of individual commodities. In 1977 farm support programmes under this scheme had close to $1.6 billion in loans with which to finance stocks in wheat, com, rice and cotton. An over-all budgetary total existed, however, which if exceeded would trigger a call for supplementary appropriations. If these were not approved, floor-support prices would be reduced. In the agricul­tural policy of the European Community, the amounts to be spent on individual commodities were specified by commodity in the budget of the Community. During the implementation of the budget, however, transfers (virements) were made from one commodity appropriation to another in Council. The process was simple, rapid, and the transfers frequent and large.

15. Brazil and Colombia wished to keep coffee independent of a Common Fund which they feared might be dominated by their African rivals (cf. Wall Street Journal, 1 August 1977), and Chile wished to avoid control of the copper market altogether.

16. A study by Smith (1975) for the United States State Department found that fully $3 billion would be required to keep the price of one commodity,

Notes 307 copper, within 15 per cent of a secular trend. This figure, however, was largely a function of large buffer-stock purchases in 1956 through 1960 due to the method used to determine the price trend upon which the floor price was based. A Commodities Research Unit study, commissioned by three United States government departments, arrived at a figure of$2.6 billion, $1.7 billion of which would have been spent in 1973 because of a large discrepancy between the world price and the floor price and an assumption that the buffer-stock purchases all speculative stocks. Having tested the Secretariat's proposed 880,000 ton copper buffer stock in a model of the 1961-75 copper market, the Unit concluded it would be 'unlikely to be sufficient to ensure stabilization of copper prices for any reasonable band width'. This report was circulated informally by the United States to other governments (Wall Street Journal, 18 March 1977). McNicol (November 1976, table 4.1) derives a figure of $6.7 billion (of which $5.0 billion is accounted for by copper) for the core commodities. His tin and copper figures are taken from United States Treasury Department estimates. Estimates for the other commodities are based on the type of analysis proposed by Masse! (1969 and 1970) in which rubber is assumed to be in a demand-shift market and the others in ones of supply shift. Assumed elasticities of demand and supply are based on empirical work by others. Glismann and Stecher (1977, p. 37), using assumptions largely unrelated to the Common Fund proposals, estimate a cost of $7-14 billion. Estimates at such variance indicated that a Common Fund sum, negotiated on the basis of the Secretariat estimate, would only be relevant if individual commodity agreements included provisions which did not deviate from the policy assumptions used in deriving this estimate. There was, however, no mention in the dialogue about ensuring such compatability.

17. Some considered it necessary to stabilize the prices of commodities which compete closely for the same resources. It would be difficult to stabilize the price of jute (one of the ten core commodities) for instance, while the price of rice continued to fluctuate widely since both compete for the same factors of production. The same holds for grains and cotton, and for rubber and palm oil. Rice and other grains were included in the original UNCT AD Secretariat proposal but were dropped by participants at UNCTADIV.

18. The Secretariat had hoped that the participants of the meeting originally scheduled for December (and postponed until May) which included the United States, the European Community, and six other developed countries in CIEC, would have resolved their position by March.

19. (Cf. Wall Street Journal, 4 April1977) The OECD Secretariat noted at the time: 'Although, prime facie, the main option seems to be between a pool of resources and a source of finance, it may not be the best one to start with in international discussions. This is because of the wide ramifications which the choice of whichever solution would have on nearly all aspects of a Common Fund. It might therefore be preferable to start with some more precise options and to build on these for the elaboration of a practical approach to the Common Fund issue. For example: the scope of a Common Fund (financing of buffer stocks or wider conditions); allocation of power between a Common Fund and individual commodity organiza-

308 The Political and Social Economy of Commodity Control tions; allocation of voting powers and basis of contribution; participation; etc.' (OECD, 12 August 1976, CE/CG(76) 25). Particularly disturbing to Group B was that in the concept of the 'source' of funds there was no link between the accumulation of funds and the use to which these would be put. Thus, among other problems, a country which did not participate in the Common Fund could participate in individual commodity agreements avoiding financial obligations and penalties against non-members.

20. At the time, President Carter of the United States told the General Assembly: 'The United States is willing to consider with a positive and open attitude the negotiation of agreements to stabilize commodity prices including the establishment of a common funding arrangement for financing buffer stocks where they are a part of individual negotiated agreements.' This statement went further than the United States' proposal to the Seventh Special Session of the General Assembly in September 1975 in suggesting a pooling of the funds of previously negotiated commodity agreements and was interpreted as support for the European Community position. Carter's 'positive' approach was backed by the United States' financial community because of the large debt, $100--200 billion, owed to it by developing countries. The financiers feared a credit collapse with increased protectionism and saw any measures which increased or assured export earnings of developing countries as in their interest ( cf. Wall Street Journal, 7 June 1977).

21. The conservative stand adopted by the Federal Republic of Germany reflected its unique experience with inflation (in the mid-1920s and again during and after the Second World War) and its conviction, born of its post-war success, in the efficacy of free-market forces and individual economic self-determination (Leistungsgerechtigkeit). The experience of being divided from a previously united country into two opposing economic systems made the Republic particularly sensitive to suggestions of centralized control.

22. The position of the Group of 77 was psychologically strengthened by a decision to set up their own common fund if an accord with developed countries could not be reached, and by the possibility of support from OPEC. In August 1976 developing countries had met to express their solidarity and determination to regulate markets through Common Fund buffer-stocking financing. The 81 countries attending the Fifth Conference of Non-Aligned Countries had resolved to establish a Council of Producer Associations for their primary-commodity exports and a common fund for financing buffer stocks if the forthcoming UNCT AD Common Fund conferences failed to yield satisfactory results by March 1977. (This was essentially a reiteration of the stand taken by the Group of77 at the Dakar Conference of February 1975, cf. Earp, 1977, p. 293.) In the December 1976 OPEC meeting (after the first preparatory meeting), Saudi Arabia and the United Arab Emirates made a further threat, indicating that they were restraining oil price increases on the condition that progress be made in the dialogue on commodities (Erb and Fisher, 1977, p. 494). Developed countries dependent on Arab oil responded by acknowledging privately that there could be a trade-off between oil price hikes and concessions to the Common Fund should the OPEC countries threaten to raise the issue,

Notes 309 since a transfer to developing countries would occur in either case. In the last analysis, however, the economic power of OPEC was small when compared to that of the developed countries; the base of what power they did possess was both narrow and vulnerable and had not been translated into other conspicuous symbols of power such as military strength. They could conceivably, however, use their market power in oil and that implicit in their ability to reallocate monetary reserves between developed countries subject to the constraint that to do so excessively might undermine the value of their reserves through world depression or depreciation of reserve currencies, or cause developed countries to place restrictions on the movement of the assets. At the Common Fund meetings, OPEC delegates maintained that members of the organization were prepared to contribute only their allocated subscriptions to the Common Fund although the organization would consider loans to the Fund. The more populated OPEC members (Indonesia and Nigeria) backed OPEC contributions to the Common Fund.

23. Five of the six American ACP countries were small Caribbean island states. Of the remainder, four were Pacific island countries, six Indian Ocean and Atlantic island countries, and 36 African mainland countries.

24. Brazil exported roughly 9.4 per cent by value ofthe core commodities and Malaysia, 5.4 per cent. The United States is the leading exporter if all18 Nairobi commodities are considered (accounting for 11 per cent) and Brazil second with 8 per cent. Brazil is the first ranking global exporter of coffee and hard fibres (i.e. sisal); second in sugar, iron ore and soyabeans; third in manganese; and fourth in cocoa. The 18 Nairobi commodities account for 86 per cent of Brazil's commodity earnings and 56 per cent of its total export earnings. The country is also the largest single borrower from the World Bank and Inter-American Development Bank, and most of the loans are spent on 'other measures'. Malaysia is the leading global exporter oftin (40 per cent); sawn timber (40 per cent); natural rubber (45 per cent); and palm-oil (75 per cent)-all included under the Integrated Programme.

25. UNCTAD IV had stipulated that proposals on the objectives of a Common Fund-financial needs, organizational structure, sources of funding, operation, decision-making and management should be submitted to the UNCTAD Secretariat not later than the end of September 1976. The deadline came and went with no such proposals and by the first preparatory meeting in November 1976, only Argentina, Colombia, and Venezuela of the developing countries and Australia, Canada, Finland, Norway, and Sweden of the developed countries had submitted any proposals.

26. One tenet of the Secretariat's position had been that the strong com­modities with considerable borrowing power, like tin, should participate actively in the Common Fund, and, in the interests of global solidarity, support the weaker ones, such as jute.

27. The Secretariat privately suggested that should the equality principle be applied to a large element of total Fund subscriptions under the Group of 77 source scheme, provision might be made in the Fund's accords to waive subscriptions from the least-developed countries until these were urgently

310 The Political and Social Economy of Commodity Control needed for a specific commodity. As their 'subscriptions' would thus be earmarked for immediate buffer stocking of a commodity, these countries could be eligible for drawings on the IMF Buffer Stock Facility discussed earlier (p. 44). This facility cannot lend to cover subscriptions to an international financial institution, but might see a case when 'subscrip­tions' were directly related to buffer stocking in this way and would be returned to the facility (through the borrowing country) when the stocks were sold. Whether the IMF would make such loans to a country if the commodity to be stocked was not exported by it was, however, not explored.

28. Comparison of schemes is facilitated by observing the degree to which maximum borrowing is less than the collateral available. Using the dis­counts indicated in parentheses above, the equation becomes: borrowing s 100 per cent of subscriptions to the Fund + 80 per cent of the deposits of agreements + 100 per cent callable capital pledged to the Fund from its inception (halved to eliminate uncreditworthy pledges) + 70 per cent callable capital pledged to agreements x (%) + 80 per cent pledged to the Fund as agreements join x (% ). The Group of 77 equation becomes: 662/J per cent= 100 per cent x (331fJ per cent) + 100 per cent x (66213 per cent x 50 per cent); that is, borrowings would just cover recognized collateral. In addition, commodity warrants representing stock bought with the 662h per cent borrowed would allow commodity prices to decline considerably without affecting the security of the loan. For the Group B proposal the equation becomes: 25 per cent< 80 per cent x (75 per cent)+ 70 per cent x (25 per cent x 50 per cent) = 683/4 per cent.

29. Within the United Nations system, the UNDP, FAO, UNIDO, ILO, ITC, UNCTAD, and GATT cover 'other measures'. International financial institutions include the World Bank Group, Inter-American Development Bank, Asian Development Bank, African Development Bank, African Development Fund, Islamic Development Bank, Arab Fund for Economic and Social Development, Arab Fund for Technical Assistance to Arab and African Countries, Caribbean Development Bank, East Africa Development Bank, and West African Development Bank. Numerous international commodity councils, producer associa­tions, and research, development and product promotion organizations for individual commodities also exist, not to mention the aid programmes of individual developed countries.

30. He also expressed the view privately that the costs of the Common Fund negotiations, estimated by JCDA Conference News (28 November 1977) to be $5 million for each four-week session, would go a long way to financing the 'second window'.

31. In a statement to the lOth Washington Conference for Corporate Executives of the Council of the Americas on 27 June 1977, Fred Bergsten, Assistant Secretary of the Treasury for International Affairs had this to say on the Common Fund: 'This Administration, however, does not support the UNCTAD proposal for a $6 billion fund which would (1) be the principal source of financing for individual commodity agreements, (2) finance measures other than stocks, (3) have considerable control over the operations of individual agreements and (4) be authorized to intervene

Notes 311

directly in markets to buy commodities where no agreement exists. We rejected the premise on which that proposal is based-that it is necessary to put funding in place to permit the conclusion of international agree­ments on particular commodities ... Furthermore, we reject the notion of a Common Fund which would get into a host of income transfer activities and could be used to raise prices above long-term market trends. Any such scheme would seem counter to our own fundamental objective, be inordinately expensive, require continual replenishment, duplicate a number of the functions of existing international institutions, and disrupt markets. The UNCTAD proposal would clearly not be in the U.S. economic interest, and thus we will not support it' (Department of the Treasury News, 27 June 1977, pp. 1(}...11). The attitude expressed in this quote changed marginally, if at all, during the months preceding or the weeks during the second negotiating conference.

32. The March 1979 negotiating conference agreed to a $400 million first and a minimum $70 million 'second window' financed by direct government contributions; roughly 10 per cent from the Group of77, 68 per cent from Group B, 17 per cent from Group D and 5 per cent from China. Participating commodity agreements would be required to deposit one­third of their financial needs with the Fund. The United States and the Soviet Union objected to an even split of votes between developed and developing countries even though important decisions would be taken by a three-fourths majority.

CHAPTERS

1. The popularity of this latter theme is reflected in its use in Schumacher's widely-read Small Is Beautiful. 'It is fashionable today to assume that any figures about the future are better than none. To produce figures about the unknown, the current method is to make a guess about something or other-called an "assumption"-and to derive an estimate from it by subtle calculation. The estimate is then presented as the result of "scientific reasoning", something far superior to mere guesswork. This is a pernicious practice which can only lead to the most colossal planning errors, because it offers a bogus answer where, in fact, an entreprenurial judgment is required' (1974, pp. 114-15, also in Economic Journal, March 1974, p. 192).

2. The study, which many considered less than the 'extensive empirical investigation' it claimed to be, averred: 'An extensive empirical investiga­tion of the sources of commodity price instability for a source panel of 17 primary commodities, considered to be technically and economically suit­able for international market price stabilization, shows that LDC's [Less­Developed Countries] as exporters can benefit from such action only in two agricultural commodities: coffee and cocoa. The case of three other agricultural accommodities-cotton, jute and sugar-where LDC's would also gain as exporters, rests on much weaker empirical ground. As importers, LDC's stand to gain only from international price stabilization in wheat. LDC's, however, could gain as producers from domestic price stabilization in maize and wool, in addition to cocoa and coffee.'

312 The Political and Social Economy of Commodity Control 3. Mr Dell was Secretary of State for Trade and leader of the United

Kingdom delegation at UNCTAD IV. The speech was presented to the United Kingdom Chapter of the Society for International Development, London, 24 June 1976.

4. Klein was one of President Carter's economic advisers and architect of the global economic model of the University of Pennsylvania's Wharton School, Kendrick was a leading expert on the application of control theory to commodity markets, and Cuddy was an UNCT AD staff member specializing in control theory.

5. Cooper had become United States Under Secretary of State for Economic Affairs and Junz, an assistant to Fred Bergsten who was appointed Assistant Treasury Secretary for International Affairs. Cooper and Bergsten's better-known articles on the Integrated Programme and, more generally, on the NIEO are cited in the bibliography. Bergsten was known to hold the belief that 'the developing countries, mistakenly, have put their main emphasis on something which won't help them or hurt us much and where we can win a lot politically at modest cost' (Businessweek, 9 May 1977, p. 80) and Cooper, 'I am sympathetic (to buffer stocks) but sceptical as to our ability to improve the functioning of markets' (ibid.).

6. Following this line of thought, Johnson (May 1976, p. 9) criticizes the description of the buffer stock proposed in UNCT AD Document TD/B/ C.1/193 (UNCTAD, 28 October 1975) as 'lumping together two different economic problems ... instability of supply, and instability of demand ... requiring quite different solutions, in a manner that one has to learn to tolerate as measuring the economic illiteracy of the UNCTAD economic Secretariat ... Although the section on "compensatory financing" in fact recognizes that "more stable world prices may not always [sic] stabilize earnings for an individual country if its export supply is adversely affected by poor crop conditions"'.

7. (Cf. also Brown, op. cit., pp. 242-65.) Just (1977, pp. 913-14) has argued: little confidence can be placed in empirical and simulation studies until the form of random disturbances is adequately investigated'. Just goes on to remark that risk response and institutional considerations (e.g. marketing boards and tariffs), often omitted from empirical studies, have a marked influence on the welfare effect. 'Given that institutional and trade factors can strongly influence the quantitative welfare effects of stabiliza­tion even in a simple model, one must seriously question the studies that ignore these factors in attempting to find quantitative estimates of welfare impacts ... there has been a disturbing lack of private storage considera­tions in empirical studies of price stabilization. In particular, given the empirical research that verifies private storage supply response . . . , one must view most empirical work thus far with some degree of scepticism.'

8. In another review of this literature, Michalopoulos and Perez (1977, p. 19) conclude on a more positive note than Behrman that: ' ... while there are significant doubts that additional measures to stabilize developing country export earnings are necessary, it may be argued that there is sufficient reason to believe that international action to stabilize commodity prices would yield benefits to producers and consumers alike, and should be pursued. However, the benefits from such stability are difficult to

Notes 313 quantify.' Just (1977, p. 912) supports these remarks: 'the general question of price stabilization is one of those problems in economics where the complexity of the issue is far beyond the theoretical and technical capabilities we now possess for analysing it. Consequently, analytical studies of stabilization policy have been reduced to examination of only one or a few important aspects of the problem (at a time) while disregard­ing others. As a result, much of the theoretical work on price stabilization has been overlooked by empiricists and those involved directly in the policy-making process.'

9. All significant costs and benefits, whether direct or indirect, should be enumerated and quantified where possible, recognizing that not all of the incidental effects of price stabilization will be known, measurable or important. Expediency may require restriction of the analysis to a partial context in which secondary, tertiary and further reverberations of control are ignored if there is reason to believe that they are of minor importance or costly to measure given their likely impact on results. If, however, important spillover costs and benefits are ignored in order to present what appears to be firm quantitative results from those effects which can be easily measured, the latitude for interpretation at conferences and the chance of a mistake are increased. Conversely, the identification of all relevant facts and their importance and reliability would permit discus­sions to be better informed and open to specific, concrete exchanges.

10. That is, the consumer price index has an elasticity of 0.07 with respect to the primary commodity prices included in his analysis. In order to analyse the effect of a reduction in the prices of the core commodities on the consumer price index, Popkin's elasticity would have to be modified to take account of the relative importance of the core commodities in the volume of all primary commodities used in the United States.

11. Using the Popkin elasticity mentioned above, Behrman makes an estimate (without recorded calculations) that increases of 30-60 per cent in the prices of the ten core commodities would raise the United States' consumer price index by 1 per cent. This compares with a roughly 15 per cent increase for all commodities using Popkin's elasticity since the core commodities constitute only a proportion (not specified) of these. Behrman (1976) observes that prices of the core commodities increase periodically about 40 per cent above their long-term trend. Reducing this to 15 per cent through buffer-stock devices with ceilings 15 per cent above the secular trend would reduce increases in the consumer price index by 0.4 per cent in the years in which such price increases would otherwise have occurred (15/40 = 0.4). More conservatively, he argues, the figure might be put at 0.2 per cent. Drawing on a 1970 Phillips curve showing the effect of inflation on the level of unemployment, Behrman goes on to argue that if this 0.2 per cent inflation were allowed to occur, unemployment would increase by 0.03-0.3 per cent. (The 1970 Phillips curve showed that a 1 per cent decrease in inflation was accompanied by a 0.15 per cent increase in unemployment. Thus, 0.2 x 0.15 = 0.03, and 0.2 x 1.5 = 0.3.) Behrman does not mention that the Phillips curve has shifted outward since 1970 (i.e. greater unemployment occurs with a given level of inflation) and may possess a different slope over the relevant range of unemployment. His

314 The Political and Social Economy of Commodity Control 0.03--0.3 per cent unemployment increases translate, according to Okun's law, into0.1-{).9 percent of GNP. Ofthe two, Behrman chooses the lower figure. Okun's law (in Proceedings of the Business and Economics Statistics Section, American Statistical Association, 1962) states that a 1 per cent increase in unemployment costs a 3 per cent decrease in GNP. Thus, the 0.03--0.3 per cent unemployment saved through price control multiplied by Okun's 3 per cent gives 0.1-{).9 per cent of GNP gained respectively, or roughly $1.5 billion to $15 billion. In Behrman's own words: 'Such an estimate is only a ballpark figure based on rough estimates' (Behrman, op. cit., p. 66).

12. Cooper and Lawrence (1975) popularized the concept of a ratchet effect in price increases of primary commodities and their end-products in their analysis of the 1972-5 commodity price boom. This thesis was supported in a subsequent article by Kaldor (December 1976) and more recently contested by Fisher and Roosa (1977). The latters' analysis is weakened by the time series used (omitting important recent price fluctuations for some commodities), the end-products chosen, and their disregard of changes in input-output coefficients over time.

13. It is interesting to note that while the theoretical analysis reviewed above brings inconclusive results, simulations with econometric models indicate that price stabilization is likely to decrease or leave unchanged the degree of export-earnings instability for the core commodities (cf. Behrman, 1976, p. 9).

14. One ofthe goals of CIPEC, for example, is 'to obtain for member countries better and more complete information and appropriate advice on the production and marketing of copper' (CIPEC, 1975, Article L). OPEC has had a similar provision and both have hired research firms and staff to this end (cf. ~orn, 1977, p. 3). One ofthe areas in which the short-lived Coffee Diversification Fund (discussed in chapter 1, pp. 31-3) invested its resources was in the gathering of information on domestic coffee industries. UNCTAD's mandate to improve market transparency has been periodically re-emphasized. Recent examples are provided by the General Assembly Resolution 3202 (United Nations, 16 May 1974, Sec. IX, para. 4) and Trade and Development Board Resolution 123 (XIV) (UNCTAD, 13 September 1974). Group B countries seemed anxious to obstruct the Secretariat's demonstration of competence in this as well as other areas. They preferred that it publish figures served up by governments, as was the case in the Tungsten Committee. Because member governments of this Committee had formally agreed to provide data, the Secretariat was obliged to publish this, including data all knew to be inaccurate.

15. Just (1977, p. 915) remarks: 'one must consider the possibility that controls other than buffer stocks provide a more economically efficient means of attaining stable prices. For example, Turnovsky (1977) shows that publicly announced forecasts can have a price-stabilizing impact. Thus, for example, federal funds may be better spent on improving U.S Department of Agriculture forecasts than in operating a buffer stock.'

16. In commenting on studies to date, Behrman (1976, p. 44) notes: 'At this point in time, the support seems fairly strong for the proposition that

Notes 315 developing countries recently have experienced a greater instability in their earnings than more developed countries. Considerable uncertainty remains about the role of dependence on primary commodities in this instability'.

17. Smith (1977, p. 30) has argued, however, that it is not clear from the Knudson and Parnes analysis whether it is export-earnings instability or its correlation with export-earnings growth which leads to these conclusions. Yotopoulos and Nugent derive their conclusions from a regression of the ratio of gross national product on a measure of export instability for 38 countries. They write, 'Our empirical analysis leads to the conclusion that investment is not deterred by instability in income, but is in fact stimulated by it' ('income' being real export earnings).

18. Kreinin and Finger (1976, p. 505) have subsequently argued that 'export earnings stability is a luxury for government officials who manage foreign accounts, not a necessity in the development process'.

19. Rangarajan and Sundarajan (1976, p. 372) estimate econometric models for eleven developing countries. They conclude, 'The impact of instability in exports on income growth rate is not in the same direction in all countries. In the case of only five countries, there is a decline in growth rate when there is an increase in instability of exports. The policy implication is that the usefulness of international schemes for stabilizing primary product prices or the export earnings of less developed countries has to be examined for each country separately on the basis of its economic structure (cf. Acquah, 1972).

20. Cf. Brown, 1975, for an exposition of popular measures used. 21. The terms of trade in any given period are related to the unit value of all

imports relative to all exports, and thus will change as the price and composition of these variables change. Alternative time periods and definitions for measuring changes in the terms of trade will produce different results. Empirical investigations have thus come up with positive, negative and non-existent secular trends in the terms of trade of develop­ing countries.

22. Actual consideration of the relevant data was confined to about ten minutes. The report's strident conclusion reflects both the orthodoxy of other empirical research that the evidence is not clear and the influence of the conference chairman, who shared this view, on the drafting of the report after the group had adjourned. The report states, 'While opinions in this matter differed there was general agreement that the statistics presented to the Group of Experts did not provide any clear evidence of a long-term deterioration in the net barter terms of trade of developing countries, although they did suggest that these terms of trade were subject to substantial short-term fluctuations. In this connection, two members of the Group expressed the view that it was the double factorial and not the net barter terms of trade which were relevant to the distribution of income between developed and developing countries and that it could be plausibly argued that the former terms of trade showed a long-term tendency to move against the developing countries' (UNCTAD, July 1975, TD/B/ 563, Annex II, p. 1).

23. Johnson wonders: 'Why it is that political figures (including in this term the

316 The Political and Social Economy of Commodity Control staff of UNCTAD) are so tenacious in their insistence on formulating questions of "exploitation" or more neutrally "justice" in terms of schemes for rigging prices and adjusting supplies and production, in spite of the virtually axiomatic elementary economic principle that prices neither define the true problem nor provide an effective way to its solution.' (The phrase in brackets is his.)

CHAPTER6

1. Historically, the value of the eighteen 'Nairobi commodities' in rough order of diminishing importance in value exported from developing countries, has been: coffee, copper, sugar, oil-seeds and cakes, cotton, tropical timber, rubber, iron ore, meat, cocoa, tin, tea, bananas, phosphates, jute, bauxite, hard fibres and manganese. Ranked by value traded globally, the order becomes: oil-seeds and cakes, copper, coffee, sugar, cotton, iron ore, meat, tropical timber, rubber, tin, cocoa, tea, bananas, phosphates, bauxite, jute, manganese and hard fibres.

2. Metal Bulletin, 5 April 1977, p. 20. A later issue of Metal Bulletin (9 December 1977, p. 19) elaborated on this concept ' ... increasingly we developed country copper producers are having to realize that developed countries have yielded up a large part of their historic basis for participating in international debate on commodities stabilization because they no longer have the status of financiers of producing companies in the developed countries. At the strict commodity level, the developed world's voice is now purely that of a net consumer. Small wonder therefore that a significant part of audible comment in the developed world on the stabili­zation issue is now coming from politicians rather than from the industry. Politicians, after all, are never at a loss for words ... '

3. Twenty-four per cent of Canada's copper production (3 per cent of non­socialist world production in 1975) was, for instance, a by-product of nickel production. Of global copper production, 7.7 per cent (1971) occurred as a by-product of lead and zinc production. Where it is a co-product (i.e. where its marginal cost of production is not considered to be zero), copper price stabilization could destabilize the price of metals jointly produced. For instance, copper floor-price support which encourages more produc­tion of copper and its joint products might augment an existing downswing in the markets for the _joint products.

4. American Metal Market, 27 September 1976, p. 3. Cf. UNCTAD, 27 August 1976. The UNCTAD Secretariat stated that 500,000 tons would be sufficient for a buffer stock. This level was based on an assumption that no speculative stocks would be transferred to a buffer-stock agency. World stocks of refined copper, including speculative stocks, as the document noted, stood at 1. 7 million tons. American Metal Market averred, 'Even if only a part of these speculatively-held stocks were to be transferred to the buffer stock agency it would be swamped and so be unable to match demand to production at a stable price'. Gilbert (1976, pp. 32-6) estimates a buffer stock of three million tons by assuming most of this would be transferred.

Notes 317 5. Because copper had historically been an expensive material when

compared to alternatives, substitution continually took place, even with inferior materials. In the latter 1970s, fluctuations rather than the cost of copper became the I'Il:ajor factor encouraging substitution. Substitution is stepped up in times of high prices within the constraints of the time and expense involved in redesigning components to take substitutes and could be ruinous to an agreement if copper-scrap recovery systems responded dramatically to floor-price support. Copper scrap (secondary copper), an above-ground substitute for primary copper, occupies about 40 per cent of the United States' market in periods of normal prices. This figure is split evenly between new and old scrap. New scrap is derived primarily from semi-fabricator's process off-cuts, either directly or through merchants, in such forms as turnings from machinings and webbing from press work. Old scrap, such as treated copper cable and shell cases, is retrieved especially during periods of high prices. Substitution of other materials occurs at high and even normal prices. A recognizable and unreversed substitution of plastic water pipe for copper pipe occurred during the period of high copper prices in 1973-4. Plastic pipe was found to be easier to install; not subject to corrosion by acetic water; and capable of withstanding freezing better than its copper equivalent. In the electrical industry, aluminium has been substituted despite its inferiority in many uses. Fibreglass is currently being substituted for copper in telephone lines because of its economic and technical superiority. In the automobile industry, stainless steel and chromium-plated die castings and more recently plated plastics have taken the place of copper and copper-based metals.

6. Fox (1974, p. 208), Secretary of the International Tin Council from 1956--71, commenting on the usefulness of study groups observed: 'The history of international study groups in the commodities tempts one almost to believe that the primary purpose of some member governments has been to prevent rather than to stimulate further action towards effective international agreements.' This is put more cynically by Kirschen (1975, p. 40) when speaking of international coffee expert groups: 'What would undoubtedly happen is that the traditional negotiators would soon find themselves out-talked and out-generaled by a host of experts who know nothing about coffee but a great deal about the sinister art of making committees do what they are told.' In short, the formal designation 'expert group', while indicative of the accepted stereotype about their function, did not indicate their psychological nature, their limits, or what they actually did. A common political manoeuvre was to create a new com­mittee, rather than abolish the existing one, and to increase the size of the group by including all interested parties, thus immobilizing some of the sources of strain in exchange for less bothersome ones.

7. The machinations of UNCTAD's internal system and the dynamics by which these related to the events and circumstances of the broader environment are discussed more fully in chapters 7 and 8.

8. Indeed, producers and consumers began meeting in March 1978 to discuss a global '(informal) production-quota scheme under the auspices of the International Wrought Copper Council. 'All this', Metal Bulletin (10 March 1978) remarked, 'is against a background of the UNCT AD talks in

318 The Political and Social Economy of Commodity Control Geneva. It seems that the copper industry, somewhat disillusioned by past UNCT AD failures, is now determined to take matters into its own hands.' At these talks, however, Chile remained adamant that production could not be cut in light of its large foreign debt payments, and Peru gave no indication that it would slow down its extensive copper investment programme.

9. Zaire, undergoing an insurrection at the time did not attend. The Federal Republic of Germany had concurrently dampened the enthusiasm of Zaire and Zambia for a solution through UNCTAD by a proposal of a special trading relationship with the European Community.

10. The repeal ofthe United States Sugar Act reduced by halfthe sugar traded globally under special arrangements. Domestic producers urged the end of the act in order to take advantage of the high world price prevailing in 1974-5, while domestic consumers and processors complained that it was ineffectual in insulating the domestic market from high world prices.

11. The import tax provided by the bill, together with subsidies to farmers, was designed to raise the domestic price to what was considered the break-even level for domestic producers, 13lh ¢per lb. The bill gave authority to the Agriculture Department to suspend the support programme should it determine that an international sugar agreement was able to maintain domestic producer prices at that level. This feature was included in the provisions in order to make the bill acceptable to an Administration which did not wish to be constrained by the Congress during the September 1977 sugar negotiations.

12. This compares to the 200,000 ton fund in the 1968 agreement which could be distributed only to the smallest exporters who demonstrated a need.

13. The successful conclusion of the sugar agreement sparked a heated debate in the United States over the conditions under which producers there would consent to ratification. Producer representatives in Congress indicated they would agree to ratification only in return for a domestic support price of 17 ¢per lb. and import duties and quotas. The Administra­tion argued that this would undercut the Agreement and hurt exporters severely by shrinking import demand and, in turn, suggested a price of 14¢ per lb. with presidential authority to impose duties and quotas as standby measures. Colombia also refused to ratify, anticipating 1978-9 exports of over 100,000 tons as compared to a basic export quota of 75,000 tons.

14. This report, written by Fred Clairmonte and John Cavanagh but sub­stantially edited by Secretariat leadership, averred that while develop­ing and centrally-planned economies produce more than four-fifths of the world's cotton, they have only a marginal role in determining the price on world markets {TD/B/C.1/Cotton).

15. These countries included the Soviet Union, the second largest exporter after the United States {18 per cent of global exports); Turkey, the third largest (7.3 per cent); Egypt, the fourth (5.6 per cent); and Mexico, the sixth (4.2 per cent).

16. Interest in the production of rubber from guayule centred on the Bureau of Indian Affairs (Department of the Interior); Office of Native American Programmes (Department of Health, Education, and Welfare); Economic Development Agency (Department of Agriculture); and the Office of

Notes 319 Science and Technology (Agency for International Development). Malaysia and Thailand, countries with expanding output, also sought a large buffer stock that would preclude the need for the export quota provisions built into the ANRPC agreement upon the insistance of Indonesia, a country with stagnating production.

17. Higher grades of tea generally deteriorate more rapidly in storage than lower grades. As there is a 200 per cent difference between the lowest- and highest-priced teas, a buffer-stock manager could make substantial losses in stocking higher grades.

18. This tea did not lose value in nominal terms because of increased world prices, and, as a low-quality tea, it did not deteriorate appreciably in grade.

19. The privileges granted Kenya under the Lome Convention were not a source of reluctance to enter an agreement with non-member producers (India, Sri Lanka, and Indonesia), as they were in the cases of some other commodities considered under the Integrated Programme. The rapid expansion of exports in tea precluded the shortfalls in earnings needed to benefit from the ST ABEX scheme, and the tariffs on European Com­munity imports which might have permitted preferential treatment for ACP countries under the Convention were absent. Kenya questioned why, if it were to be an export-quota agreement, consumer participation was needed; infractions by any of the four dominant exporting countries (accounting for over 75 per cent of global trade) could easily be detected without a consumer policing mechanism.

20. Cf. chapter 1, note 50, p. 287. In order to avoid the higher cost of estab­lishing industry in the north-east of the country or creating jobs in the south for possible migrants from there, the government of Brazil sub­sidized sisal production in the north-east. Sisal is the only cash crop in the north-east, the country's poorest region, that can withstand drought. As in the case of soluble coffee exports, it assured itself an expanding share of the world market to absorb the new output by selling raw sisal twine at lower prices, for instance. than Tanzania was receiving for its higher-grade raw fibre. By 1977, Brazil had increased its share of the sisal and henequen global export market to 40 per cent from about 5 per cent in 1950.

21. Bananas, bauxite and phosphates, covered in chapter2, pp. 58-62, are not expanded upon at this point. Meat had been included among the 18 Integrated Programme commodities as a tactical manoeuvre to put pressure on GATT where bovine and live animal trade was under discus­sion in the Special Sub-group on Meat having terms of reference suf­ficiently broad that all meat trade issues could potentially be resolved within it, including price instability. Discussions on meat trade in UNCTAD, thus, quickly reverted to GATT where the European Com­munity's use of tariff and health regulations to protect domestic prbducers from outside competition was the major issue that galvanized developing exporter interest. The meagre progress there was periodically given impetus by developing-country threats to transfer talks to UNCT AD.

22. This was first proposed by India at UNCTAD III. India has high land and sea transportation costs when compared to its major competitors, Australia and Brazil. Unlike the mines of these countries, India's mines

320 The Political and Social Economy of Commodity Control are located in the interior. Australia has the additional advantage of proximity to Japan and Brazil to Europe, the major importers of Indian ore.

23. In response to the UNCTAD II resolution (Res. 16) which encouraged intergovernmental consultations between consumers and producers to examine primary-commodity trade problems and recommend solutions, iron-ore exporters met in Geneva in 1969 and producers and consumers in 1970 under UNCTAD auspices. At these conferences exporters pressed for a scheme to link ore prices to rising steel prices. Importers argued that this would raise steel prices further and encourage over-production in ore. If prices were to be linked to rising steel prices, ore production would have to be controlled.

24. In 1975 an iron-ore exporter association was founded (AIOEC) by nine major developing exporters and Australia and Sweden. Those promoting the Association believed that if there were sufficient participation of iron-ore exporting countries, their market power, like that of OPEC member countries, could be used to raise prices and otherwise influence the terms under which iron ore is traded. Brazil did not join and Australia, Canada and Sweden insisted, in conformity with the principles of the Havana Accords, that the articles of agreement clearly specify that any action by the association would take account of consumers' interests. The Association eventually represented about 50 per cent of global iron-ore exports; Canada and Brazil remained non-members. It is unlikely, how­ever, even if all exporters had been willing to participate, that they could have influenced market prices over the long term because of the wide geographical distribution of ore deposits and the large known reserves and mining capacity in non-exporting countries. Exports accounted for only a fraction of total world production most of which occurred in developed countries for domestic use.

25. Moreover, the United States' GSA held stocks equivalent to three years of domestic consumption, enough time to encourage domestic production and exploitation of nearby sea-bed deposits should exporters unilaterally use their market power. Rose (1976) has argued that the maximum price increase from a producer cartel would be the three-fold increase needed to make United States' domestic production economically viable. Con­fronted with the prospect of a cartel, the government itself might guarantee such a price to investors to encourage domestic production. Since guarantees would have to be supported by import quotas, substitu­tion of domestic for imported manganese would be irreversible, possibly leaving exporters worse off than before.

26. United States' exports of oil-seeds and products were more than four times those of Brazil, the second largest exporter, and ten times those of the next larger exporters, the Philippines, Malaysia, Canada and the Soviet Union, all of which exported similar amounts.

27. During the vegetable-oil glut of 1974/5, the American Soybean Associa­tion financed a campaign, directed at domestic consumers, that focused on the health hazards of the more hydrogenated (lower-cost) oils, specifically palm-oil based margarine and cooking oils and the carcinogenic properties of coconut meal. An adjunct to the campaign was a bill in the United States

Notes 321 Congress requiring producers to specify the oils used in fabrication in orde'r of their volume on margarine packaging. The Association also suggested. legislation mandating inspection of the sanitary standards under which palm oil is refined in developing exporting countries. Malaysia's counter­appeal to the Administration apparently won support by emphasizing that country's capital success story in a part of the world threatened by socialism.

28. PL 480 sales to these countries deprived Malaysia of an important market and conditioned consumer tastes there to a more costly oil. Malaysia felt PL 480 should be globalized and include palm oil.

29. Forty per cent of Malaysian palm-oil production was absorbed by the European Community which maintained a MFN tariff of 4 per cent on crude oil and 12 per cent on semi-refined oil, a 300 per cent difference between the two categories of oil which bore no relationship to the value added. This tariff escalation stemmed from efforts of the soyabean­crushing industry there to assure a market for soyabean oil, a by-product cake produced for poultry and hog feeds; from attempts of the dairy sector to maintain a market for its butter (to the exclusion of palm and other oil-based margarines); the determination of the African ACP palm-oil producers to preserve their duty-free advantage under the Lome Conven­tion; the effects of private and government Community investors in African palm-oil production to assure repayment of loans and comfortable profits; and, finally, from the designs of high-cost oil refineries to preclude inroads from lower-cost Malaysian refineries. Brazil. dependent upon the Community for 75 per cent of its soyabean exports faced a similar tariff structure.

CHAPTER 7

I. Of these. Ill were developing countries, 30 developed market-economy countries (including Israel and Turkey). and 15 socialist countries.

2. The United Nations Charter. Article 101 (2) reads: 'Appropriate staffs shall be permanently assigned to the Economic and Social Council. the Trusteeship Council. and, as required. to other organs of the United Nations. These staffs shall form a part of the Secretariat.'

3. Helleiner (Institute of Development Studies. 1976, p. 20) has argued on this point that: There is a crying need for an effective high-level secretariat to consider (the best settings or organizations to pursue certain issues. plan strategies and priorities. solicit cooperation) on behalf of Third World interests. to monitor. assess and co-ordinate the growing number of regional and functional groupings of Third World countries, and generally to support efforts of whatever kind geared to greater collective self­reliance. There is at present no Third World counterpart to OECD ... Once such a body is created the institutions of the UN could return to their proper role as brokers rather than continuing to perform advocacy func­tions at the same time.'

4. Rothstein (1977. p. !58) remarks: 'Many criticisms may fairly be made of UNCTAD-the group voting system that forced too many divergent

322 The Political and Social Economy of Commodity Control interests into a single package, the presentation of some positions that were not carefully thought through, the demand for concessions without sufficient effort to indicate why they were in the long run interest of the rich countries, the tendency of the organization to become too identified with the rhetoric and the stance of the most radical countries, a rather astonishing lack of political sophistication on the part of some high-level staff, and a share of the responsibility for inflating expectations about what could be got from the international systems-but these criticisms ought not to be allowed to obscure the contributions that UNCT AD has made or to deflect an attempt to understand why UNCT AD has taken the form it has.'

5. A comparison can be drawn between UNCTAD as a symbolic structure, expensively constructed and maintained, and a cathedral built by people who cannot afford it, but who build and support it for the possibilities it signifies. The parallel to some formal religions could be reasonably extended to the Secretariat's dogma; the absence of a measurable, or even visible, output; the ritual and the establishment of a comfortable priestly class. The 105 weeks of conference described in the fourth and sixth chapters, for instance, while largely unsuccessful in conventional terms, often had a ceremonial or symbolic aspect, evidenced by the convening of so many that all knew would accomplish nothing definitive and by the many idealistic prepared statements delivered. As is also the case with most religions, there are substantial differences of opinion on both form and content, but there is also a common set of parameters, a normative system of belief and behaviour.

6. A contemporary United States Senate report on the United Nations' Secretariats states: 'All too often the organizations, headquartered in extravagant and luxurious surroundings, are inefficient, overstaffed with high paid officials, under-represented by U.S. personnel, uncertain in their purposes, and unduly repetitious of the activities of other organiza­tions' (Herald Tribune, 15 April 1977). A proposal was put to the Trade and Development Board, the official governing body of the UNCT AD Secretariat, in May 1977 by the United States asking the Board 'to request the Committee for Programme and Co-ordination of the Economic and Social Council to conduct a thorough review of the co-ordination aspects of the work programme of UNCT AD, with particular attention to the fields of manufactures and transfer of technology, where the possibility of duplication of work with WIPO and UNIDO and other competent orga­nizations appears to exist' (UNCTAD, 3 May 1977, TD/B/L.473).

7. The rapid proliferation in the 1960s of agencies to assist the Third World increased coordination problems and reduced lines of responsibility to what some came to see as 'a great big mishmash' (Wall Street Journal, 11 August 1976). The conception of the Integrated Programme, with its scheme for at least fifteen new organizations, in addition to the four already existing, to administer the Common Fund and agreements in each of the Nairobi commodities without bodies occurred at a time when a number of key developed countries were actively hostile to the creation of any new international institutions regardless of the purpose they might serve. New United Nations' organizations included UNCTAD (1964),

Notes 323 UNIDO (1966), UNFPA (1969), UNEP (1972), WFC (1974), IFAD (1976), and UNDA (under discussion)-or roughly one every two years. Other international commodity bodies under discussion at the time included the International Tropical Timber Bureau (proposed by the lTC and UNCfAD in 1969); Jute International (the UNDP in 1970); the International Tea Promotion Association (Commonwealth Secretariat, FAO, Intergovernmental Group on Tea and lTC in 1974); Cotton Development International (UNDP, World Bank and Rockefeller Foundation in 1977); and Coir International (FAO Intergovernmental Group on Hard Fibres in 1978). Over fifty other existing inter­governmental bodies concern themselves with various aspects of primary­commodity trade, production and processing (cf. Rangarajan, 1978, pp. 38-42). UNCTAD's own creation and increasingly central role in the aspirations of developing countries in the post-war period overlapped with that ofthe United Nations Development Programme, the F AO, the World Bank, IMF, GATT, and to a lesser extent other agencies. An estimated 53 other governmental bodies outside the United Nations could be seen to participate in UNCTAD's work; these ranged from the African Development Bank to the World Tourism Organization. The forums within the United Nations' system in which discussions of some or all aspects of development policy take place include, among others, the General Assembly; the UNDP Governing Council; the Economic and Social Council; the legislative bodies of the Specialized Agencies; the UNCfAD Trade and Development Board; the Industrial Development Board of UNIDO; the Executive Board of IBRD; the Intergovernmental Committee ofWFP; and the Executive Board of UNICEF.

8. In 1976 the Secretariat, noting this overlap, argued, 'a clear identification of the responsible forum is needed when issues reach the stage of negotia­tion' (UNCTAD, 1977, TD/183/Rev. 1, para. 204). The climate of rivalry reduced cooperation, increased duplication of effort, and insured a reluctance to show unused funds at the end of the fiscal year to the extent that, when unused funds became apparent as the year progressed, organizations and their departments approved projects which were known to be of dubious value (cf. United Nations, 1969, and Hazzard, 1973, chapter 5). In 1978, for example, the Commodities Division shifted back­dated consultant contracts so as to over-commit the underspent Integrated Programme budget to build a case in the Fifth Committee for continuing an enlarged budget as extended in 1976 to accommodate the Integrated Programme expenditures. It frequently used extra-budgetary sources to finance regular programme activities. Jealousies and problems of coordination between organizations (offices) within the United Nations' system prompted the Geneva-based Joint Inspection Unit to comment (United Nations, 31 July 1973, p. 21): The inspectors were told time and again one office learns about some study being undertaken by another office on a subject in which it, too, has an interest only once it is underway or already completed.' Examples are provided by the Commodities Division pursuit of research on the processing of primary commodities in 1978 independently of similar work being done in the Manufactures Division, UNIDO and the FAO, and on compensatory finance

324 The Political and Social Economy of Commodity Control independently of efforts in the Money, Finance and Development Division and the IMF.

9. Commenting upon the independence of Geneva based organs, Meron (1977, p. 133) observes, 'Given the distance from New York ... and the lack of authority of the Director General [of the Geneva Secretariat], the baronial powers of heads of departments, which are so apparent even at Headquarters, are considerably greater when it comes to heads of departments located in Geneva. There appears to be a fragmentation of substantive responsibility and central guidance in Geneva and, often, a lack of clarity concerning the exact meaning and scope of the central policy laid down at United Nations Headquarters' (cf. ibid., pp. 91-101).

10. That the high level of material well-being assured for delegates and Secretariat staff was seen to have ill-effects is indicated by the statement of one Third-World delegate who said; 'People who work here live in a cocoon. How can someone earning $48,000 a year relate to a programme for the poor in developing countries?' (Time Magazine, 'The Good Life by the Lake', 6June 1977, p. 3).

11. On this point, Grube! (1977, pp. 300-1) argues: 'the strongest support for the NIEO originated with the international bureaucracies of the United Nations. These bureaucracies are staffed predominantly with people from developing nations who qualified for their positions through technical expertise or past meritorious service in national politics or bureaucracies. These international civil servants live in some of the best cities of the world, such as Geneva, Rome, Vienna, New York, and Washington and they enjoy incomes that often exceed those of national bureaucrats with similar responsibilities in the civil service of the United States and other industrial countries. Their incomes are many times above those they could earn in their native countries. One of the shortcomings of working as an international bureaucrat is that most agencies of the United Nations have little or no power and executive responsibilities. Consequently, a very large proportion of the time of the international bureaucrats is spent in writing reports for other U.N. agencies and generally keeping going a dialogue among countries of the world on a wide range of topics ... The NIEO would provide them with increased power and status and since it would lead to an expansion of the bureaucracy, lead to greater demand and income for their services.'

12. The decision was taken under pressure from the AFL-CIO (the organiza­tion of American labour unions) which argued in part that the system of equal representation of management, labour and government through which confrontation occurred in the forum provided by the ILO had been undermined by the socialist countries, and particularly the Soviet Union, for which all three argued on the same side of issues raised. If the United States withheld part payment of its stipulated 25 per cent portion of the United Nations budget for a prolonged period it would become subject to Article 19 ofthe Charter. This lays down that a member which is 'in arrears in the payment of its financial contributions to the Organization shall have no vote in the General Assembly if the amount of its arrears equals or exceeds the amount of the contributions due from it for the preceeding two full years'.

Notes 325 13. Although the developed countries never possessed nominal control Of

those United Nations' committees that dealt with budgetary matters, they did exercise effective control until recently. The General Assembly, however, where each country has one vote, had been reducing the repre­sentation of developed countries on these committees such that recom­mendations on UNCT AD's budget were increasingly made by developing countries and supported in the General Assembly with their votes.

14. Article 100 of the United Nations Charter reads: 'The paramount consideration in the employment of the staff and in the determination of the conditions of service shall be the necessity of securing the highest standards of efficiency, competence, and integrity. Due regard shall be paid to the importance of recruiting the staff on as wide a geographical basis as possible.'

15. The principle of using recruitment and promotion on merit to define the social and political realities of the multilateral political organization was perhaps conceptually weakest in its implicit assumption that a common denominator existed which would permit the merit of individuals from varying backgrounds to be assessed and compared. No easy way, and perhaps no practical way at all, exists for comparing, for instance, university and other degrees and professional and practical experiences between many countries. Likewise, competitive examinations for open­ings have been equally difficult to formulate except in a few areas, such as language interpretation, translation and instruction, where utilized skills are easily prescribed. Nevertheless, the Joint Inspection Unit has specifically recommended regional competitive examinations for young university graduates applying for P-l/P-2level positions (United Nations, Joint Inspection Unit, July 1971, pp. 28 and 143-4). Regionality would be reflected in offering examinations in a number of languages, alternative economic disciplines (free market and socialist), cultural orientations, etc.

16. Ibid., p. 691. Cf. Finger and Mungo, 1975; James, 1970; Meron, 1977, and Weiss, 1975. The latter practice conflicts with a regulation (Staff Regulation 1.6) prohibiting employees to accept from any government any gift, favour or money. A staff member is 'not to divulge, without per­mission, any information known to him by reason of his official position; nor to use it at any time, to private advantage; not to accept any honour, decoration, favour, gift or remuneration from any government; not to accept such awards from any source external to the Organization without first obtaining the approval of the Secretary-General, (Office of Infor­mation circular, 01/119, 15 July 1974, p. 2; cf. United Nations, Secretariat, 1976, Article 1, p. 5). The Joint Inspection Unit (United Nations, July 1971, pp. 29-30) justified the prevalence of secondment on the basis that much-needed short-term specialists may only be available in member governments' civil services and only willing to come if they are assured of a position upon return. Monetary inducements by member governments, it argued, were needed for seconded civil servants because they might not be able to find a suitable post upon their return and may have been passed over in the promotion process.

17. Investigation of United States' applicants first occurred during the McCarthy purges of the early 1950s at the urging of the United Nations'

326 The Political and Social Economy of Commodity Control Secretary-General who was staunchly anti-communist (cf. Hazzard, 1973, pp. 14-15). Existing United States' clearance requirements are given in Hazzard, p. 285.

18. Barron (1974, appendix D) cites two officers of the UNCTAD Secretariat and one former one in his limited list of Soviet agents working abroad. Among the Secretariat staff, the conjecture was common that the total number approached the total Soviet citizens employed, a view supported by their daily visits to the Soviet mission across the street and their continuous use of the photocopying machines. Some have asserted (Sherman, 1977) that they use their positions within the Secretariat, and their diplomatic immunity in positions of P-5 and above, to make contacts outside the organizations.

19. This was argued in Bild Zeitung, 29 June 1978, and in Robert Moss's article in the Daily Telegraph. 4 July 1978, following the defection of Vladimir Rezun from the United Nations and spurred unsuccessful efforts by the United States, Switzerland and others to prevent the appointment of Geli A. Dneprovski as Chief of Personnel in Geneva. Dneprovski and the incumbent Director of the Division for Policy Co-ordination, Office of Personnel Services, of the New York Secretariat were alleged to be officers in the K.G.B. Moss speculated: 'If Dneprovski takes up his new job the K.G.B. will be able to ensure thatno-one is appointed to a senior job in the U.N. without their approval ... they would also be in an ideal position to identify potential spies for the K.G.B. recruiters, and to send back voluminous personal files to Moscow to fill in gaps in the K.G.B. archives ... With the arrival of Dneprovski, all key aspects of U.N. administration in Geneva would be under the control of the K.G.B., with the sole exception of finance . . . Soviet officials are assigned to the U.N. depart­ments without regard for their qualifications (or lack of them)--and their colleagues complain that they make it embarrassingly obvious that their exclusive loyalty during the period of secondment is to the Soviet regime, or which ever of its secret agencies employs them' (cf. Merton, 1976, p. 664, and 1977, pp.16and28-34).

20. The latter, designed to limit problems raised by geographical considerations to what then became known as the professional level (the 'P' and 'D' classes of employees), meant that promotion of many talented individuals in this lower two-thirds, in UNCT AD's case largely local Swiss and French, to the professional grades was blocked. Promotion from one grade to another on the basis of merit could not occur if geographical quotas for countries represented in the lower grade were filled in the higher one.

21. Meron (1977, pp. 178-9) speaking of the inadequate role of staff and the political and departmental trade-offs that go around the Board and its committee argues, 'The board, especially, can be singled out for criticism, for rather too often reversing negative recommendations of the committee, for too often going along with recommendations made by the administration, and for not voicing reservations often enough'.

22. Meron found in his study of the New York Secretariat ' . . . about one­third of the presentations of appointments in the course of 1975 to the appointment and promotion bodies of candidates for posts subject to

Notes 327 geographical distribution at the P-1 to D-2 levels were not based on vacancy announcements. As regards vacancies at the D-2 level and all vacancies to be filled by promotions, no vacancy announcements are circulated at all' (1976, p. 676). He remarks (1977, p. 125). 'There is a growing feeling in the [United Nations] Secretariat that appointments to the D-2 level are increasingly regarded as political, and that political­geographical factors are decisive ... appointment from outside to the D-1 level has sharply gone up from 28 per cent in 1972 to 43 percent in 1975' ( cf. ibid., pp. 179-87).

23. In one known instance, an ambassador from a developing country assured a fellow countryman within the Commodities Division that he would see that the man received an 'accelerated promotion'. A developing-country applicant for the position of branch chief in the Commodity Division, who had no knowledge of commodity markets, was hired (with predictable effect on the work of the branch) because his region of origin objected to the absence of a senior officer in the Division from the region. Another, whom some spoke of removing through Tribunal proceedings because of disruptive personality conflicts he developed with his peers and superiors, was relieved of most of his responsibilities and promoted to director. Tribunal expulsion apparently was precluded since the individual might have contested it as a case of racial discrimination. The position of director and his assistant in the Commodities Division are reserved for the Group of77 and the positionofdeputy-directorforGroupB (cf. Meron, 1977, pp. 93-101, 123 and 189-93).

24. The Secretary-General of UNCTAD is appointed by the United Nations Secretary-General and confirmed by the General Assembly and is answerable to member states through his presentations at the sessions of the Conference and at the Trade and Development Board. (UNCTAD, 1964, vol. 1, p. 60). In turn, the Secretary-General's recommendations are an instrumental force in securing the promotion of preferred officers to those director positions where influence can be exerted.

25. One type of irregularity, for example, was the insertion in the confidential file for external references derogatory internal memoranda. Meron (1977, p. 169) observes, · ... in the present practice it is not uncommon that positive written recommendations of the staff member's supervisors-such as those contained in periodic reports-are contradicted by them through derogatory comments transmitted orally to the Office of Personnel Services and/or to members of the appointment and promotion bodies .... A staff member has no access to confidential memoranda relating to him which are placed in privileged-confidential files', nor does he have any means of knowing of their existence.

26. Of the United Nations departments in Geneva autonomy in recruiting is greatest for UNCT AD due to 'the insistence of the first Secretary-General of UNCT AD, Raul Prebisch of Argentina (one of the great barons of the Organization, who excelled in obtaining the support and the pressure of developing nations for most of the demands that he chose to make on the central administration), on his power to control at least the processing of recruitment and the making of recommendations for the appointment of a candidate' (Meron, 1977, pp. 134-5).

328 The Political and Social Economy of Commodity Control 27. (United Nations, General Assembly, 1975, Vol. IV, Sec. 11, and United

Nations, General Assembly, 1977, Vol. II, Sec. 11.) Expenses to other offices involved indirectly in UNCTAD activities but not included in the above figures would accrue to the Office of Director-General (Geneva), the General Assembly, Committee on Contributions, Advisory Com­mittee on Administration and Budgetary Questions, United Nations Board of Auditors, Internal Audit Service, Administrative and Financial Services (New York and Geneva), Staff Training Activities, Office of General Services (Geneva) and conference and library services.

28. However, it is possible that the figure might not reach Behrman's (1976) figure of discounted benefits to developing countries (exclusive of costs of running the schemes and externalities) of $5 billion over a ten-year period, providing buffer stocks for all ten commodities were successfully nego­tiated and the other constraints of his model did exist.

29. In this vein The Wall Street Journal (11 August 1976) noted the tendency of the 'United Nations [in Geneva) to take on young relatives of Third World politicians, whose main motivation seems to be to sample for a few years the finest of western life'.

30. The Secretariat argued: 'It is true that the specific achievements of UNCTAD have, despite the successes, fallen short of its goals and ambitions, but it should be remembered that these goals and ambitions were bold and far-reaching and related to change of a fundamental, rather than a marginal or peripheral, nature. These changes inevitably take time. Much of what was new when first proposed in UNCTAD in the middle and late 1960s is now part of the conventional wisdom in positions taken by governments' (UNCTAD, Secretariat, 1977, p. 67).

31. Grube! (1977, p. 300) has argued: 'Underlying the interpretation of the causes of failure of economic development under bureaucratic control and the push for the expansion of control are the natural reluctance of the bureaucrats and politicians to admit that they made mistakes or that the very system is inappropriate. It is much easier to blame failures on sinister forces from abroad and to argue that any mistakes made are simply a matter of learning and will be avoided next time. Such views are even more understandable if it is realized that bureaucrats and politicians in LDC's have a strong vested interest in the maintenance of a system which is providing them with employment, high income and status.' Similarly, Rothstein (1977, p. 159) remarks: ' ... improved trading conditions (and more aid) might be a necessary condition for growth, but they were not sufficient. The tendency to look abroad for salvation, to seek through UNCT AD alone gains that had to be sought jointly through domestic reform and international concessions, was an illustration of an increasing tendency on the part of many-not all-underdeveloped countries to lose sight of how much help could really be expected from abroad and to resist confronting their own domestic problems directly . . . the balance of rhetoric and arguments veered too sharply toward the quest for external scapegoats and away from concern with what the underdeveloped countries could and had to do for themselves.'

32. Taylor (1977) provides an enlightening description of how differences among the European Community countries were resolved during the

Notes 329 CIEC conference at which the Community was represented as a whole.

33. They go on to argue: 'although these conflicts of interest and perception within the group of 77 clearly weakened its ability to function as an effective negotiating body, at no point has a significant number of states been prepared openly to breach the common front. Unlike the indus­trialized states, which are divided . . . by differences of economic philosophy, the developing countries as a group have no reason to oppose any extension of the principle of centralized economic management, to which they are virtually all committed in domestic affairs anyway, to the international sphere. If there is a doctrinal dispute it is between those who argue for redistribution in the name of social justice and those who place the emphasis on political management to iron out the imperfections of international markets in the interests of both rich and poor; but these positions are not necessarily in conflict and their deployment greatly reflects a tactical choice.'

34. At the Ford Foundation Conference on Stabilizing World Commodity Markets of March 1977, attended by both academics and government officials, it was evident that America's academic establishment felt that control could be useful in cases where careful study showed clear benefits, while representatives from the Treasury Department remained sceptical of control in any of its envisaged forms. Not surprisingly, junior staff in many developed-country government departments, such as the Ministries of Economic Co-operation and Foreign-Affairs in Bonn and the Ministry of Agriculture and Department of Trade in the United Kingdom, were more receptive to the Integrated Programme concept than their superiors, perhaps reflecting their status, but also, possibly, an attitude emerging among those who would one day be making the decisions.

CHAPTERS

1. The need felt within the Secretariat to minimize frictions, at least with the developing countries, may largely explain the absence of any publication by the organization with contributions under authors' names. The FAO's Monthly Bulletin of Agricultural Economics and Statistics; the Interna­tional Labour Organization's International Labour Review and multi­authored books; the World Health Organization's Chronicle; and UNESCO's International Social Science Journal all publish articles of varying calibre for and against official positions by persons both within and outside the organization. In some cases, articles by outsiders are rejoinders to those written by high-level officials, with the scholarliness of the article being the main criterion for publication. Observers have argued that if the Secretariat were able and willing to air its differences in this manner, there would be little motivation to continue with the obscurity and secrecy of its internal thought processes. The collective staff of the UNCT AD Secretariat represented authority in many fields in which members had been involved for years. Publication of their experiences, mistakes as well as successes, in an official organ would have represented an organizational output which may have enhanced its members' perception of the benefits

330 The Political and Social Economy of Commodity Control derived from their contributions. On the other hand, the Secretariat's leaders may have perceived correctly that given the multiple publics which the organization served, and its need to remain inoffensive to the Group of 77 which it had come to represent, the gains to be made through sharing this knowledge were more than counterbalanced by the tension among members that publication would arouse.

2. The Commodities Division was composed of 78 individuals of which 50 were in the professional and 28 in the general service categories. Of the professionals, 18.7 per cent were directors (D-1 and D-2), 43.7 per cent were at or above the senior officer level (P-5), and 70.8 per cent were in the officer (P-4 and P-5) and director levels (October 1978).

3. The emphasis on economics is indicated by the fact that all those professionals at levels P-1 and P-2 were designated Assistant Economic Affairs Officer, those at level P-3, Associate Economic Affairs Officer, those at level P-4, Economic Affairs Officer, and at P-5, almost all have the title Senior Economic Affairs Officer.

4. The term 'role' is being used here to describe the behaviour expected of an individual occupying a particular position in the system in relation to others in the system, as a representative of the UNCT AD system to those outside of it, and in relation to goal pursuance. 'Norms' refer to the written or unwritten rules which prescribe how this behaviour should be carried out. 'Values' are the ideological justifications which undergird the formal and informal goals of the organization. Values provide the rationale for normative requirements and together with norms are the compelling force that ensures that people are kept in the system and carry out their role assignments. As well as tasks and functions to be filled by the person in a given position, job descriptions normally define a person's legitimate authority over subordinates, his superior's legitimate authority over him, and the relationships of his position to others in the system. The former includes the activities he will supervise and the sanctions and rewards by which he can influence subordinates. In 1978 the United Nations' Secre­tariat initiated a programme to classify jobs. The ultimate usefulness of this move is uncertain given the need to maintain ambiguity in roles alluded to in the text.

5. United Nations, Joint Inspection Unit, July 1971, p. 281. The report found that although there was no legal distinction between types of jobs, it was possible to divide the current staff of the United Nations' Secretariats into 'administrative generalists' (23.6 per cent of all professional staff); sociologists and economists (23.4 per cent); language staff (21.0 per cent); statisticians, information officers, political affairs officers, legal affairs officers (4-5 per cent each), and verbatim reporters, auditors/accountants, engineers and librarians (2-3 per cent each) (ibid., pp. 55-6).

6. One professional in the Commodities Division resolutely refused to play any part in Secretariat activities concerning the Integrated Programme which he believed would deflect attention from more fundamental efforts toward controlling oligopolistic forces in trade. At the same time, he was promoted to Senior Officer ~P-5) and, like many other Senior Officers, given no supervisory responsibilities. He spent 1976--8 conducting research on exploitation in international trade much of which went unused by the

Notes 331 Secretariat in its original form because the radical positions taken and information provided in his work would, if published, have been divisive even within the Group of 77. The promotion of this individual at the same time that his work was suppressed is not inconsistent if viewed from the perspective of maintaining harmony and at the same time portraying the staff as creative professionals of varying persuasions, both of which are necessary to sustain the impressiveness of the organization.

7. On this point, it would be fruitful to compare the UNCTAD Secretariat's experience with that of international organizations such as the World Bank and the IMF which are also staffed by individuals of widely differing economic and cultural backgrounds.

8. It was not uncommon for some career professionals to do little work at all for weeks on end. One regularly spent his afternoons working on a house he was building. In the extreme, one might arrive at 9.15 a.m. ('work' began at 8.30 a.m.), take a 45-minute coffee break at 10.00 a.m., a two-hour lunch break at 12.30 p.m., one or more tea breaks in the afternoon and go home half an hour early at 5.00 p.m. This routine could be broken by 'doctor appointments' during which shopping was done. Such flexibility in actual hours 'producing' is acceptable in other service organizations staffed by professionals such as universities and research institutes.

9. For example, one P-4 officer, wrote most of the analytical papers published on indexation, compensatory finance, the Common Fund in terms of cash flow, financial arrangements, and voting, the impact of the Integrated Programme on inflation in importing countries, application of control theory to commodity analysis and ST ABEX. He remarks: 'I am astonished to find how much of the burden for analytical support of the Programme the leaders were prepared to place squarely on the shoulders of one single, rather lonely, individual, namely myself. In fact, in reflecting on it, I'm rather frightened by the implications of such decisions.'

10. A contemporary journalist stated with some accuracy that: 'It is not uncommon for employees at the Palais [the building housing the United Nations Office in Geneva] to work only half of their scheduled eight-hour day. The Palais' seven bars are full from morning to night. One example of the languid Geneva atmosphere: a newly hired Asian economics expert was assigned an office with two secretaries, but was given nothing to do until he asked for work. After receiving a stack of documents with a request to prepare a report, he told his supervisor that he could do it in two days. "My goodness", came the startled reply, "Three months would be more like it'" ('The Good Life by the Lake', Time Magazine, 6June 1977, p. 13).

11. For instance, one individual (at level P-3) in the Commodities Division, after two years of effort on his part, succeeded in obtaining for UNCT AD UNDP project finance to study the need for technical assistance from trade experts to government food grain importers in developing countries. The study showed that officials in charge often did not understand the market, lacked information, did not obtain favourable contract or price terms, and did not schedule deliveries properly. Enthusiasm among developing importers for such assistance was great enough to obtain a

332 The Political and Social Economy of Commodity Control further UNDP grant (of roughly $400,000 for the first eighteen months) for a comprehensive assistance programme supervised by the individual who had initiated the project. This was to be one of the few concrete accomp­lishments of the Commodities Division during the Integrated Programme period.

12. Many enterprises, whose survival depends on efficient and creative management, contract with consultants from various professions con­cerned with organizational management who then assist in identifying problems and proposing solutions. The World Bank Group, for instance, had hired management and personnel consultants over the period 1973-6 and, in 1976, established their own group of management experts, employ­ing some of the former consultants to work directly for the Bank. Manage­ment consultants for system design and management-skill development have a chance to be effective only if and when there is a real external and internal commitment to effectiveness in meeting specific goals. This is more likely to occur when and if such inadequacies are admitted by the formal internal leadership, or when the organization is forced by strongly dissatisfied constituencies who 'need' to achieve something specific via the organization and its failure to produce in relation to this can no longer be hidden. In such a case, the organization's symbolic meaning would be seriously undermined.

13. For those who did not have such opportunities but were retained in the organization by attractive salaries, Hazzard remarks (1973, p. 94): 'Super­ficial alleviations ... have tended to rest on the demeaning assumption that man can live by bread alone, and that a system of vacations, sick leave, and pensions can reconcile almost any employee to the atrophy of his facilities ... if the liberal annual leave of six weeks is excessively dwelt upon, that is because hope of other fulfillment has long since been extin­guished. One cannot give rational meaning to a job through the amount of time one may spend away from it; nor to a career through its retirement benefits. One staff member has remarked that the Secretariat obsession with retirement and pensions shows "a touching faith in the life after death". The staff as a whole has been forced back on the material con­siderations that many of them, in enlisting, were willing to make secondary' (cf. Meron, 1977, p. 131).

14. A high level of secrecy was not always condoned by the leadership. The Special Assistant to the Director of the Commodities Division implored professional staff to be less restrictive in the circulation of memoranda: 'An increasing proportion of letters and memoranda are being sent with the notation "Not for circulation", which means that copies are not put in the float file. As a result, the float file is becoming more and more a record of routine matters and not an informative dossier. The purpose of the float file is to keep members of the Division informed. It is no longer serving this purpose. Consequently, you are requested to mark correspondence "Not for circulation" only when it contains truly confidential matters' (9 September 1977). Even when desired by the leadership the flow of information was less than perfect. A mission of directors sent from the Secretariat to the Commission of the European Economic Community in June 1977 to discuss a forthcoming hard-fibre conference, learned of the

Notes 333 Secretariat's cancellation of the conference from the Commission.

15. The Black Earth Group, 1969-72, was composed of20-25 staff members in the first officer (P-4) level from several international organizations in Geneva. All members of this group had left the organization before the period under study to take up university and institutional posts elsewhere.

16. The unquestioning loyalty and proofs of initiation into the system hold something of the same nature of devotion demanded in the priesthood and, indeed, those who remain with the organization and come to exemplify it need to demonstrate unswerving commitment if the organiza­tion is to be a potent symbol. There were many who felt that one of the implicit criteria for achieving advancement into the inner circle was nationality-i.e. being a member of a developing country. Thus, even if one were able to identify and follow the expectations of those in decision­making positions, it might be possible only to achieve largely unacknow­ledged input and not to gain acceptance as part of the goal- and policy­setting group or to be visible exemplars of the organization. Promotion in itself did not meant increased input. Instead, promotion often appeared to be used as a consolation to those whose loyalty to the system had been established and whose value as a standard-bearer was being recognized but who were being moved further away from any effective authority.

17. Had a professional wanted to stay, it was doubtful that the Secretariat could have refused to renew his appointment if his country quota were not overfilled, since to do so, would have allowed the individual to ask his government to enquire about evidence of his incompetence. In the extreme, a case could be brought before the Administrative Tribunal, for instance, on a claim of 'improper motive for non-renewal of contract' (cf. Meron, 1977, pp. 103--22, for a discussion of serial fixed-term appoint­ments and other abuses).

18. This phenomenon had earned UNCTAD the interpretation of its acronym, 'Under No Circumstances Take Any Decision'. In his report on the United Nations' development system, of which UNCTAD was a part, Jackson says: 'For many years, I have looked for the "brain" which guides the policies and operations of the U.N. development system. The search has been in vain. Here and there throughout the system there are offices and units collecting the information available, but there is no group (or "Brain Trust") which is constantly monitoring the present operation, learning from experience. grasping at all that science and technology has to offer, launching new ideas and methods, challenging established practices, and provoking thought inside and outside the system. Deprived of such a vital stimulus, it is obvious that the best use cannot be made of the resources available to the operation' (United Nations, Jackson Report, 1969, vol. 1, p. 13).

19. One officer, who had been with the Commodities Division for five years (1974--8), noted that, in the many meetings he had attended in the Secretary-General's office and at lower levels, there had never been a decision taken per se, nor had the chairman of the meeting ever summed up so as to imply decisions taken. No official minutes of such meetings were ever circulated to participants.

20. The Jackson Report on the United Nations' development system (vol. 1,

334 The Political and Social Economy of Commodity Control p. v) comments on the insular attitude of agencies in the system: ' ... resistance to change will come from many Agencies. Supported by governments, most of them have now become the equivalent of princi­palities, free from any centralized control. Over the years, like all such institutions, they have learnt to safeguard and increase their powers, to preserve their independence, and to resist change. All these characteristics are reflected in their individual patterns of organization and administra­tion and it is largely because of that that the machine is as it is ... Lacking any central control, they have naturally advanced independent sectoral policies, often without due regard to the interests of either the developing countries or the UN system.'

21. In 1976, at a meeting in the director's office, one officer raised the textbook example of price stabilization destabilizing export ear11ings which was discussed in chapter 5 (p. 151 ). In response, a superior told him that if he really believed this he should resign from the organization.

22. In his report on the United Nations' development projects, Jackson (op. cit. vol. 1, p. iv) wrote: 'I do not imply any deliberate obstruction but rather refer to those whose official positions require them to sustain the status quo. Many senior officials, whilst readily acknowledging that change is essential, would be impelled to resist it. They would do this on the understandable grounds that they are so heavily committed to the present operation that they could not physically find time to introduce a major reorganization. I sympathize, but it is a situation which cannot be accepted for progress on these terms is impossible.' On the subject of youth he added (ibid., vol. 1, p. 49): 'Today, the U.N. system seems to be a disproportionately old and bureaucratic organization. Many governments, steeped in much longer traditions, are far more progressive and ready to respond to modern conditions. One reason advanced for this is the lack of enlightened personnel policies, another is the uneven quality of staff management demanded by such a complex group of organizations. What­ever the reasons, a sense of urgency-which must be a vital factor in any development programme-is lacking in many parts of the system ... The U.N. system has more than its fair share of "experts" in the art of describing how things cannot be done. There is some relationship between the impression of disproportionate age and this attitude of negativism.' In a later study, the Joint Inspection Unit found that 'the proportion aged thirty to forty years (in the United Nations Secretariat] is also very small: only 46% at P-1/P-2, 39% at P-3, under 15% at P-4 and negligible in the higher grades ... 37% of the staff are over fifty years old ... ' (United Nations, Joint Inspection Unit, October 1976, part II) (cf. Meron, 1977, pp. 189-93).

23. 'Power' refers here to legitimate power derived from occupying a position which holds authority, not to expert or referent power which derive from attributes within the individual.

24. The melancholy which characterized many aspects of the Division's day­to-day life in 1976 and 1977 stemmed in part from the then director's preoccupation with national political interests; burdensome travel requirements imposed by the Secretary-General who in many cases should have made the trips himself; the preparation for his promotion in grade

Notes 335 and position and delays in the latter caused by the wavering enthusiasm of prospective replacements who sensed that the outcome of the Division's work might not be a credit to them; the unwillingness of his deputy to oversee technical work beyond the Director's competence; and the Director ennui toward the Division's work due to prolonged personality conflicts among the staff.

25. In a related statement to a Wall Street Journal reporter he candidly admitted that 'the dream of 18 commodity agreements had disappeared' noting that increasingly larger numbers of developing countries shared the view of a 'diluted Common Fund' and a 'modified' Integrated Programme. He attributed the initial enthusiasm for the Programme to the oil crisis and remarked on the difficulty of getting (or changing) a common position among UNCTAD's 111 developing member countries (Wall Street Journal, 2 June 1978).

26. The highest degree of one branch chief was a Bachelor of Arts in economics. Another chief had acquired a Masters degree in economics, and was replaced by one who had several degrees in law and political science. The one officer in the Director's office who was responsible for overseeing research done had a Masters de)!;ree in economics.

27. Op. cit., 1971, p. 30. The 1971 Joint Inspection Unit report recommended a scheme for insuring that those who remained in touch with their discipline would attain high positions in the organization: 'for those vocational groups in which the higher posts are often orientated more towards research than towards administration (economists, sociologists, etc.) consideration should be given to the idea of creating a grade P-7 equivalent to D-1, and possibly a grade P-8 equivalent to D-2, so that particularly efficient and experienced research workers might be ade­quately paid without having to be given ostensibly administrative assign­ments through promotion to Principal Officer or Director' (ibid., p. 295).

28. According to the report, UNCTAD paid the highest average consultant fees and pointed out to the Inspectors 'that it need not clear fees above $5000 as laid down in existing regulations' (ibid., p. 71).

29. Ibid., pp. 63-4. They also note the difficulty in gathering information on the use of consultants: 'While in some cases the required information was readily available, in others the collection of even such elementary data as the total number of consultants and experts employed in any one year, or the amount of money actually spent on them, proved a laborious and in some cases even hopeless exercise. Moreover only exceptionally did the figures provided by individual offices coincide with those provided by the Office of Financial Services, with no satisfactory explanations being given for the discrepancies.' One division disregarded all requests for information by the inspectors (ibid., pp. 2-3).

30. Ibid., p. 44. ' ... some of the work now farmed out to consultants', the inspectors noted, 'may not be as "action-oriented" as is claimed, ... it is sometimes in the nature of a continuing activity, could probably have been handled by the regular staff and was, in a number of cases being so handled, i.e. by former staff members ... owing to inadequate controls, the quality of the consultants hired is uneven and their fees sometimes far from reasonable. Under these circumstances (the inspectors) view the

336 The Political and Social Economy of Commodity Control argument (that consultants are) "better value for money" with consider­able reservations. Particularly (the inspectors) question the practice of hiring a former staff member to continue, as a consultant, the activity he used to perform prior to his retirement, instead of the timely training of a replacement' (ibid., pp. 41-2), a practice which was common in UNCTAD during the period under review. However, on the basis of a survey of 18 international organizations, Morpurgo argues that 'consultants are some­times found to have three or four times the efficiency of established posts' (1977, p. 488).

31. Consultants who contracted with the organization to complete a single specified piece of work would appear superficially to have more leeway in devising their studies and recording objective results than those directly supervised within. Many, however, completed their assignments on UNCTAD premises and so were open to the same subtle and not so subtle pressures to conform to 'political' rather than other realities as Secretariat staff were. Many were motivated to conform by the hope of future consultancies. Most soon became cynically aware that their reports would be transformed anyway by the official United Nations' editing (censorship would certainly not be too strong a term) which rendered all documents innocuous (so as not to offend any member state) no matter how clearly the author had stressed conclusions or drawn implications in the original.

32. Draft reports were edited through successive levels eliminating potentially offensive ideas and substituting generalizing statements. The staff of the editorial unit was instructed, in addition to 'improving style', to delete or water down those sentences or phrases which could be unfavourably construed by some countries, particularly emerging ones. The finished product abounded with anomalies. The style of writing adopted by the organization had in the best of circumstances a stiffness and ambiguity that was perhaps designed to give it a flavour of authority, such as one finds in religious and legal documents. It was one of a number of visible indications which, together with similar patterns of formal speech, enhanced the Secretariat's psychological separation from the everyday world. Hazzard (1973, p. 193) commenting on the destructiveness of the 'polysyllabic jargon' found in many United Nations' papers and of the 'abstractions having no conceivable reference to individual lives', writes that these 'represent a dehumanizing and, in a deep sense, illiterate form of modern "official" expression of which world leaders have themselves become indefatigable exponents' (cf. Meron, 1977, pp. 129-31).

33. In the six months July-December 1978, UNCT AD published 688 reports, addenda, corrigenda, or 3,765 publications when account is taken of those appearing in more than one language. Commenting, in 1973, on the occurrence of this in the United Nations' system as a whole, Hazzard (op. cit., pp. 190-1) noted: 'Even documents that might be of use and interest naturally grow meaningless or are passed over in the selfdefeating inunda­tion. Many, many of the papers circulated in the Secretariat and the conference rooms go into the wastebaskets unread; it is only perhaps thanks to this instinct of survival that the United Nations can continue at all ... Any person who has worked in the Secretariat knows that the paper increase is the jealously defended justification for many a redundant post on the manningtable, and that "productivity" is more often than not assessed in wordage. It is not a matter of reducing or eliminating surplus documentation in order to facilitate a basic operation: in many cases, the

Notes 337 basic operation is the paper production ... '

34. It was this and other reasons related above that inspired a dictionary definition of UNCTAD by the Institute of Development Studies (1976, p. 2): 'UNCTAD (vnktad) [origin obscure, poss. fr. unctobsol. chiefly Sc. to anoint, to smear with oil, to exhibit soothing complacency of speech & conduct ... ] 1. (Obsol. ). One of the early global rites held before estab­lishment of Universal Benevolent State. Similar to Olympiads, except that form of competition emphasized rhetorical rather than athletic prowess, & rules of competition were less clearly defined. 2. Any gathering at which hostility is veiled by expression of high-minded sentiment, and construc­tive action thwarted by passage of elusive resolutions. Cf. unctaddery, a form of rhetoric, involving liberal use of certain characteristic words ("comprehensive", "integrated", "urgent", "should", etc.) particularly associated with such gatherings.' In The Art of Listening, Barbara (1974, pp. 16--17) argues that meaningless words play a role in creating an atmos­phere for dialogue, 'The Zulus, for example, still use the so-called "filling sounds" in order to keep their mouths busy. In their long sentences only a few words have specific meaning; the rest are used to fill in the void. In children we find this same effect reached in the babbling and prattling which in essence is not communication, but simply playing with noises. There are some organized "palavers" in primitive tribes, meetings in which prolonged indulgence in words and debate occurs, often without any decision being reached. Not even the threat of famine will disrupt this verbal spree which fosters a kind of ecstatic anaesthesia.'

35. In chapter 7 (p. 321, note 5), an analogy was drawn between UNCTAD as a symbolic repository of future hopes and the cathedrals and temples built and maintained at great sacrifice as a means of spiritual outreaching. But just as religious bodies can become perverted, losing sight of ultimate goals for which they are the means, and becoming instead an end in themselves which diverts attention and energy from genuine spiritual development, so UNCT AD as a symbol of economic redress may be detracting awareness and resources from more concrete and effective efforts in economic development.

APPENDIX

1. General Assembly resolutions 3201 (S-VI) and 3202 (S-VI) of 1 May 1974. 2. General Assembly resolution 3281 (XXIX) of 12 December 1974. 3. TD/195, part two, section one, paragraph 5(a).

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Index

Abbott, George C., 89 Abbreviations, xvi Acquah, Paul, 314 n.19 Adnan, R. T., 14, 19,282 n.19 African, Caribbean & Pacific Countries

(ACP countries), 82-4, 89, 208-9, 211,234,298 n.l2,318 n.l9, 320n.29, see also Lome Convention: STABEX

Ali, Liaqat, 281 n.18 Amuzegar,J., 125 Avromovic', Dragoslav, 103

Baldwin, Robert, 48, 49 Bananas, 53, 201-2

cartel, 58-9, 294 n.31-2 Integrated Programme, 59, 167,318

n.21 Banks, Frederick E., 291 n.13 Barbara, D. A., 336 n.34 Barkman, Kerstin, 14, 44,281 n.18 Baron, L. D. A., 284 n.34 Barraclaugh, Geoffrey, 90 Barron, John, 325 n.18 Bauer, Peter T., 160 Bauxite, 53, 56, 57

cartel, 60-2, 295 n.33-6 Integrated Programme, 62, 318 n.21

Behrman, Jere R., 2, 53, 104, 105, 114, 115,118,143,153,154,159,200, 301 n.23, 302 n.30, 305 n.6--7, 312 n.11, 313 n.13, 314 n.16, 327 n.28

Bergsten, Fred C., 18-19,51,57,292 n.24, 310 n.31, 311 n.5

Bernstein, Richard E., 159 Bhatta-Charya, Anindya K., 290 n.10 Bibliography, 337 Bilder, Richard B., 284n.38 Binder, A. K., 279 n.4 Bray, Jeremy, 147-9,171,173,262 Brook, EzrielM., 129, 144,189,311 n.2 Bronfenbrenner, Martin, 290 n.12

Brown, Christopher P., 150, 152, 158, 279 n.4, 281 n.18, 284 n.34, 291 n.14, 311 n.7, 314n.20

Buffer stocks, 92, 109-10, 199,200 borrowing, 19, 11~12, 130,283 n.31,

284 n.33, 305 n.10 cocoa, 5~2. 291 n.15, 18 coffee, 285 n.40, 43, 294 n.30 copper, 168-78 passim, 315 n.3, 316

n.4, see also Common Fund, copper: Copper

cotton, 188 ff. economic theory of, 151-5, 292 n.19-20 levies, 50,117,179, 183-4, 190,305 n.11 rubber, 192-5,318 n.16 Secretariat, UNCfAD, 7~, 80, see

also Integrated Programme, research: Secretariat, research

strength (viability), 18, 52, 283 n.31 sugar, 18~1 tea, 195-6,318 n.17-18 tin, 11-20,282 n.25, 283 n.27 wheat, 281, n.ll United States policy toward, 18-19,

51-2, 188, 292 n.l9, 21 see also Ceiling prices, Common Fund, Floor prices

Burger, Sharon R., 281 n.18 Burgess, C., 279 n.4

Cartels, 5, 52, 66--8, 86--8, 92, 106, 300 n.21

bananas, 58-9,294 n.31 bauxite, 60-2, 295 n.33-6 Club of Rome, 84 coffee, 25, 34, 58, 64, 294 n.30 copper,56,61,62-6,29~

n.37-40 Havana Charter (Accords), 4-6 iron ore, 92, 319 n.24 manganese, 205,319 n.25 OECD, 53, 292 n.22

Index 367 OPEC, 55--8, 293-4 n.27-30, 308 n.22 phosphate rock, 59--60 pre-war, 3 summary, recent experience, 37, 55-66,

269 timber, 208-10 tin, 15, 18 see also Integrated Programme, market

power Cavanagh, John, 317 n.14 Ceiling price, 87, 111

coffee, 33-4 forward sales, 110 inflation, 18-19,51, 154, 180, 312-13

n.10-12, 314 n.15 substitution, 316 n.5 sugar,22-3, 180-1,183 support of, 23 tin, 18,20 wheat, 7, 280 n.6, 281 n.10

Charles River Associates, Inc., 173, 174, 296n.38

Charter of Economic Rights & Duties of States, 45, 55, 61, 62, 68, 72, 272, 293 n.26

CIPEC, see Cartels, copper: Copper Clairmonte, Frederick, 294 n.32, 317 n.14 Clarfield, D. W., 66 Cocoa,6, 17,24,56,122,143,151,291

n.14-18, 292 n.21, 300 n.19 administrative costs, 230 agreements, 49-52 ceiling support, 50-1 Common Fund, 102, 115, 166 export levy, 50, 117 floor price, 50-1,291 n.17 price tranches, 51-2 quotas, 51-2,291 n.l5

Coffee, 6, 17,24-35, 143, 151,284 n.38, 288 n.54, 316 n.6

1958-61 agreements, 25-7 1962 agreement, 27-9,285 n.39-44 1968 agreement, 27-9 1973 agreement, 33-4 1975 agreement, 34-5,300 n.19 administrative costs, 230 Common Fund, 31, 102, 115, 166, 303

n.37 Diversification Fund, 31-3, 117, 132,

286 n.45-6, 313 n.14 market power, 24, 27, 29, 34, 56, 57,285

n.40-3, 294 n.30, see also Cartels, coffee

policing (enforcement), 25, 27, 29-30, 285 n.41

processed coffee issue, 34,200,287 n.50

production control, 31-3 quotas, 27, 287 n.52 UNCTAD, 10, 25, 122,215 voting, 28

Coir, 91, 200-1, 322 n.7 see also Hard fibres

Commodities Research Unit, Ltd., 173, 306n.16

Common Fund, 100-38, 163-4, 166, 270, 291 n.13

bauxite, 123 borrowing, 110-12, 126, 130,283 n.31,

284 n.33, 297 n.4, 305 n.10, 309 n.26, 28

capital structure, 125-30 catalytic role, 76, 115-18, 125, 128,

304n.1 clearing house concept, 116 cocoa, 102,115,123 coffee, 31, 102, 115, 123 compromises, 135-7, 310 n.32 conferences(1977-78), 119-38 copper, 146, 167-78, 306 n.16, 315 n.2,

316 n.4, 317 n.8 costs, 109-19, 141-2, 188,228-31,306

n.16, 310 n.30, 316 n.4, 321 n.7, 327 n.27--8

existing agreements and the, 115 forward transactions, 109-10 Group B, 10, 90, 96, 115-16, 119-37

passim, 163-4,239,307--8 n.19, 21, 310 n.31, 321 n.7, 328 n.34

Group D (socialist countries), 134-5, 305 n.8

Group of77 (developing countries), 76, 90, 119-37 passim, 200-1, 202, 213-14, 239,305 n.6, 306 n.15

iron ore, 202-5 passim jute & hard fibres, 199-201 Manila Declaration, 89,273, see also

Manila Declaration off-setting (financial savings), 76,

112-17, 161,297 n.4 OPEC, 133, 294 n.30, 308 n.22 origins, 74--8, 106, 297 n.4 phosphates, 123 pool offinance concept, 76, 111, 114,

116, 126 power (authority), 76, 101-2, 126, 297

n.6, 303 n.l profits (financial & commercial

profits), 103, 112, 120, 126, 129,283 n.27, 31, 297 n.7, 305 n.11

368 Index second window (other measures), 31,

102-3, 121,122, 126-7ff., 131-2, 2fXJ-7, 234, 286 n.46, 48, 302 n.28, 303 n.37, 310 n.29

Secretariat, UNCTAD, 75-7, 100, 115, 131,137-8,141-2,190,194,196-7, 204,206,207-8,210,213-14,225, 311 n.6

Seventh Special Session, 86 source of finance concept, 75-6,

100-2, 115, 125,297 n.4, 301 n.27, 307n.19

subscriptions (pledges, guarantees), 126

sugar,115,123, 178-9 tea, 195-S passim, 318 n.17-18 tin, 19, 102, 115, 123 UNCTAD IV, 89-92,276-7 voting (control), 107-S, 126-7ff., 304

n.1, 305 n.9 see also individual commodities and

groups Compensatory finance, 42, 64, 70, 75,

82-4, 120, 189,235,275,299 n.18 see also International Monetary Fund,

Compensatory Finance Facility & Buffer Stock Facility: STABEX

Conference on International Economic Cooperation (CIEC), 82, 93, 94, 101, 119, 120, 121, 125, 127,300 n.20, 307 n.18, 327 n.32

Cooper, RichardN., 84,104, 148, 290n.8, 304 n.4-5, 311 n.5, 313 n.12

Copper CIPEC (copper cartel), 56,62-6, 167,

170,295-6 n.37-40, 313 n.14 Common Fund, 119, 167-78 passim conferences (expert groups), 167-78,

316n.6 information, 170--3 researchoncontrol&market, 143,146,

169, 173-5,306 n.16, 315 n.4 Secretariat, UNCTAD, 169-70, 172, 173-S substitution, 118, 316 n.5 United States policy, 167-78 passim

Coppock, J.D., 158 'core' commodities, see Integrated

Programme, commodities Costs, administrative, of negotiation,

see Common Fund, costs: UNCTAD, costs

Cotton, 6, 53,288 n.53, 307 n.17, 317 n.14, 322 n.7

conferences, 188-91

United States policy, 188-9 ff. Cuddy, John D. A., 143, 148,330 n.9

Dasgupta, P., 150 Deans, Robert, B., 159 Declaration on the Establishment of a

New International Economic Order, see New International Economic Order

Developed countries, see Group B Developing countries, see Group of77 Development Security Facility, 84-6,

96,299 n.18 Diversification, see Coffee, Diversifica­

tion Fund: Common Fund, second window

Donges, Jurgen B., 55, 293 n.25, 29

Eads, George C., 85 Earp, Steven W., 93,308 n.22 Eckbo, PaulL., 25, 37 Economic analysis (research), see

Empirical analysis: Secretariat, UNCTAD, research: Theoretical analysis

Economic and Social Council, United Nations, 4, 5-6, 288 n.1, 320 n.2, 6

Edwards, John, 281 n.18 Empirical analysis (research), 139,269,

312 n.7-8 copper, 169 cost-benefit analysis, 150, 154, 230--1,

312n.9 cotton, 189 export earnings stability, 157-61,312

n.8, 314 n.16-19 Group B, 120, 140--7, 170, 194-5,310

n.1 information (data), 139, 155-7 jute, 144 off-setting (financial savings), 112-15 policy optimization, 147-50, 171-2 rubber, 143 Secretariat, UNCTAD, 74-5,79-80,

101, 140, 164-5 Erb, Guy F., 28, 52, 93, 159,298 n.12,

300 n.19, 302 n.32, 303 n.35, 308 n.22 Export earnings instability, effect on

development, see Empirical analysis, export earnings instability

Export quotas, 35, 87 bananas, 59 bauxite, 61-2 cocoa, 50--2,291 n.15, 18 coffee, 24-35 passim, 287 n.52

index 369

copper, 62--6, 167-9, 317 n.8 cotton, 190 discrimination against non-members,

21-2, 183, 285 n.41 enforcement, see Policing floor price issues, see Floor price indexation, 35, see also Indexation manganese, 205 sugar, 21-4, 180-8 passim, 284 n.34-5 tea, 196-7, 318 n.19 timber, 20S...10 tin, 17-20,283 n.29--30, 32 United States policy, 51-2,292 n.19 vegetable oils, 206-7 wheat, 281 n.16

Falsani, Robert C., 291 n.14 Farnsworth, Helen C., 279 n.4, 280 n. 7 Finger, J. M., 49,314 n.18, 324 n.16 Fisher, BartS., 26, 27, 28, 29, 30, 52, 87,

93, 284 n.38, 285 n.39, 44, 286 n.47, 287 n.50, 298 n.12, 300 n.19, 302 n.32, 303 n.35, 308 n.22

Fisher, Richard W., 313 n.12 Floor price, debates, support, 110-12,

315 n.3 cocoa, 50-1,291 n.18 coffee, 24-35 passim co-products, 64 forward purchases, 109--10 rubber, 193 substitution at, 193 sugar, 21-3, 180,284 n.35 tin, 14-17,282 n.26, 283 n.23 wheat, 8, 280 n.6, 281 n.lO

Food and Agricultural Organization (FAO), 22, 97, 131, 156,200,213, 219,220,221, 245, 279 n.4, 284 n.34, 286 n.48, 302 n.29, 310 n.29, 322 n.8, 328n.1

bananas, 59 cocoa,49--50 hard fibres, 322 n. 7 tea, 195--6

Fox, William, 12, 41,281 n.18, 282 n.20, 283 n.32, 316 n.6

Frederick, K. D., 284 n.38

Galloway, ThomasL., 284n.38 Geer, Thomas, 281 n.18, 284 n.38 General Agreement on Tariffs & Trade

(GATT), 4, 5, 6, 9, 40-1,47-9,73, 95,96-7,123,189,201,207,211, 215,219,221,235,239,245,269, 279 n.2, 290 n.13, 302 n.29, 310 n.29,

318 n.21, 322 n.7 see also Trade barriers

Generalized Systems of Preferences (GSP), 43,47-9,56, 68, 72, 96,209, 290n.10-12

Secretariat, UNCTAD, 47, 48, 49,271, 290n.10

shortcomings, 48, 49, 290 n.ll-12 trade diversion, 49

Gilbert, C. L., 173, 281 n.18, 316 n.4 Glezakos, C., 159 Glismann, Hans H., 19, 105, 285 n.42,

288 n.54, 305 n. 7, 306 n.16 Golay, Frank H., 279 n.4 Goldberg, Charlotte K., 284 n.34 Goodwin, Geoffrey, 137-8, 236 Goreux, L. M., 291 n.14 Graham, B., 74 Grayson, Leslie E., 62, 63,294 n.32,

295 n.34 Grilli, EnzoR., 129,144, 189,311 n.2 Group B (developed market economies),

42, 72, 79, 120-37 passim, 210, 279 n.1, 299 n.16, 303 n.33, 307-8 n.19--21

attitudes towards UNCTAD, 81,95-6, 142, 212-39 passim, 321 n.6, 322 n.12

decision-making, 94, 120ff., 211, 233-4, 237-8,301 n.27, 327 n.32, 328 n.38

research, 141-7,194-5,213-14 see also Common Fund: Integrated

Programme: UNCTAD Group D (socialist countries), 42, 94-5,

134-5,216,325 n.18--19 Group of77 (developing countries),

279 n.1 Common Fund, 88--9, 102-3, 119--37

passim, 197-8, 234, 239, 300 n.24, 308 n.22, 327 n.31

copper, see Copper: Cartels, copper: Common Fund, copper

cotton, 189--91 decision-making, 80-1,236-9,296 n.2 divisions within, 89, 121-3, 134, 171,

189--91,200-1,202,205--6,208--10, 211, 220,234-8,308 n.23, 309 n.26, 318 n.19--20, 320 n.29, 327 n.33

goals (values, objectives), 44, 71,207, 213, 231-3, 235-0, 296 n.2, 327 n.31, 33

income levels, 55--6 indexation, 72, 301 n.24, see also

Indexation Integrated Programme, 78,80-1,

8S...9, 90, 98,123-4,134,211,296 n.2,

370 Index 319 n.21

origins, 41, 42, 289 n.3 research (economic analysis), 120,

141}-2, 189 Secretariat, UNCTAD, 80-1, 109,

137-8,213-14,218,220,235,258, 328 n.1

UNCTAD, 213, 215, 235, 320 n.3, 322n.10

see also Common Fund: Integrated Programme: UNCT AD

Grubel, Herbert G., 73, 74, 299 n.16, 322 n.ll, 327 n.31

Guerreo, Perez, 138

Hanson, Simon G., 284 n.38 Harbury, C. D., 279 n.4 Hard fibres, 122

conferences, 200-1, see also Sisal, Henequen, Coir

Harmon; E. M., 74 Harris, Stuart, 97 • Hart, Albert Gailord, 74, 297 n.3 Havana Charter (Havana Accords), 1,

2-6, 92, 108, 319 n.24 burdensome surplus & unemployment,

5, 11-12,288 n.2 chapterfour, 4 chapter five, 4, 6, 53 chapter six, 4-6 evolution of, 5, 288 n.2 see also International Trade

Organization Hayek, F. A., 74 Hazzard, Shirley, 224, 225, 289 n. 7,

303 n.34, 322 n.8, 325 n.17, 331 n.13, 335n.32

Hedges, I. R. 279 n.4 Helleiner, Gerald K., 90, 303 n.36, 320

n.3 Henderson, P. D., 290 n.13 Henequen,91,200-1

see also Hard fibres Heymann, H., 281 n.18 Huddleston, Barbara, 85

Import substitution, 40, 43 Indexation, 32, 42, 46, 55, 60, 72, 73, 75,

79,85,86,101,103-9,145,162,257, 288 n.2, 289 n.4, 297 n.5, 300 n.19, 301 n.24, 304-5 n.4-7

definition of, 304 n.2 see also Terms of trade

Inflation, see Ceiling price, inflation Information, see Market information:

Secretariat, flow of information Integrated Programme for Commodities

(Integrated Programme, IPC), 6, 17, 23, 24, 39, 67, 155, 269, 321 n. 7

ACP Countries, 82, 89, see also African, Caribbean & Pacific Countries: Lome Convention

bananas, 59 bauxite, 61-2 benefits, distribution of, 89, 104-5,

121, 124, 142, 305 n.6, 309 n.26, 311 n.2

Brazil, 81, 87, 88, 122, 142,200-1,202, 205,206,210,235, 306n.15, 308 n.24, 318n.20

commodities ('Nairobi commodities') 275 choice of, 90-1, 118-19,201-2,302 n.29 ranking, 166,201,284 n.37, 291 n.15, 315 n.1

Common Fund, see Common Fund compensatory finance, 70, 82 conferences, individual commodities,

see under commodity headings European Economic Community, 70,

207 Federal Republic of Germany, 133,

193, 210, 308 n.21 Group B, 81, 91, 94, 193,203,211,

215-16,232-4,301 n.27 Group of77, 71,80-1,88-9, 102-3,

119-24,197-8,220,231-3,234-8, 301 n.24, 306 n.15, 308 n.22

Indexation see Indexation Malaysia, 87, 122, 142,207,209,235,

308 n.24 Market access, see General Agreement

on Tariffs & Trade: Generalized System of Preference: Trade barriers

Market power (oligopoly, oligopsony in trade), 58--66 passim, 84-5, 86-8, 92, 188, 205, 208, 291 n.15, 295-6 n.34-8, 300-1 n.21-3, 304 n.3, 305 n.9, 308 n.24, 319 n.24-6

OPEC, 1, 55, 108,294 n.30 Origins, 42, 45,68--9,73-7,95,288 n.2,

296 n.2, 297 n.3 Phosphate rock, 59-60, 201-2 Programme of Action, 72-3, 79, 245,

272 research, economic (economic

analysis), 75, 79-80,89, 100, 101, 109,118--19,120,129,139-50,256-7,

Index 371

312 n.IO, see also Common Fund, empirical research

Resolution 93(IV), 91-2, 120--1, 125, 131, 171, 188,215,271,302 n.27 text, 272-8

Secretariat, UNCTAD, 73,78-82, 106,131,137-8,190,194,196-7,204, 206,207-8,210,219,220,267-70, 333 n.25

United States, 70, 84-6, 91, 92-4, 120,133-4,189,206,210,216,232-3, 299 n.17, 300 n.19, 21,302 n.27, 307 n.20, 310 n.31, 311 n.5, 328 n.34

World Bank (IBRD), 97-8, 103, 131-2 International Investment Trust, 70, 84,

92, 299n.18 International Monetary Fund (IMF), 3,

6, 73,94,95, 107,145,160,213, 221,239,322 n.7-8, 330 n.7

Buffer stock facility, 44, 112, 296 n.39, 299-300 n.18, 309 n.27

Compensatory finance facility, 83-4, 85, 97, 115, 189,299 n.18, 302 n.35

Integrated Programme, 72,98 SDR 'link', 44, 73,77 see also Compensatory finance

International Resources Bank (IRB), 51, 55, 70, 92-4, 116,302-3 n.31-2

International Trade Organization (ITO), 3, 4, 5, 40,222

Iron ore, 53, 122, 296 n.38, 319 n.22, 24 conferences, 202-5

Jackson Report, United Nations, 219, 236-7,298 n.IO, 302 n.28, 332 n.18, 20,333 n.22

James, Robert Rhodes, 324 n.l6 Jeffries, Pease, 290 n.9 Jevons, W. S., 74,297 n.3 Johnson, Harry G., 142, 162-3, 231-2,

264, 300 n.21, 304 n.4, 311 n.6, 315 n.23

Joint Inspection Unit, United Nations, 226, 247,253, 260--5,322 n.8, 324 n. 15-16,329 n.5, 333 n.22, 334 n.27-30

Jolly, Richard, 293 n.28 Junz, Helen, 24, 148, 311 n.5 Just, Richard, 152-3,311 n.7, 312 n.8,

314n.15 Jute, 56, 188,288 n.53, 307 n.17, 322 n.7

conferences, 144, 198-200

Kahn, R. L., 108 Kaldor, Nicholas, 74, 279 n.4, 297 n.3,

313 n.12 Katz, D., 108 Kay, DavidA., 232 Kenaf, 91

see also Hard fibres Kenen, P. B., 158, 159 Keynes, John Maynard, 3, 74 Kirschen, Leonard, 29, 280 n.8, 316 n.6 Klein, Lawrence R., 148,311 n.4 Knudsen, Odin, 158, 159,314 n.17 Kofi, Tetteh A., 291 n.14 Kravis, Irving B., 284 n.38 Kreinin, Mordechaie, 49, 314 n.18

Labys, WalterC.,60, 113,306n.12-13 La!, Deepak, 290 n.13 Lancieri, Elio, 158, 159 Law, Alton D., 7, 23, 279n.4, 280 n.7,

284 n.38, 288 n.54 Lawrence, Robert Z., 84, 313 n.12 Lim, David, 158 Little, I. M.D., 150 Lome Convention, 82-4,89,208-9,211,

234,298 n.12, 318n.19, 320n.29 see also ACP Countries: STABEX

Lord, Montague J., 159, 160 Lovasy, Gertrud, 284 n.34 Lowenfeld, Andreas F., 284 n.38 Lutz, E. 152-3

MacAvoy, Paul, 24,34 MacBean, Alisdair I., 158 Manganese, 53,295 n.37, 296 n.38, 319

n.25 conferences, 205

Manila Declaration, 81, 88-9,273,301 n.24, 27

Marglin, S. A., 150 Market access, see Trade barriers Market information, 60, 66, 139, 155-7,

209,275 coffee, 32 copper, 170--3,313 n.l4 Secretariat, UNCTAD, 156,245 vegetable oils, 206 see also Empirical analysis

Market power (oligopoly, oligopsony in trade), see Cartels: Integrated Programme, market power: Transnational corporations

Market prices, influence on negotiations, 36, 192-3, 208, 282 n.23, 285 n.39

cocoa,49-50 sugar, 21-3, 180ff., 284 n.35 wheat, 8-11,280 n.6-7, 9, 281 n.14

372 Index Massell, Benton F., 109, 152, 153, 158,

306n.16 Mathieson, D., 158 Mayall, James, 137-8,236 McKinnon, R., 158 McNicol, David L., 29, 73, 92, 105, 158,

289 n.3, 306 n.16 Meat, 201-2, 318 n.21 Member states, UNCf AD

appropriations, 107-8,217-18 employment of Secretariat staff, 223-8 expectations towards UNCfAD,

212-22 passim, 216, 231-3, 321 n.5, 322n.10

goals (values, objectives), 46--7,232-3, 296 n.2, 321 n.5

Group B (developed market economies), 203,213-22 passim, 233-4, 300 n.20, 301 n.27, 321 n.6, 323 n.12, 328 n.34

Group of 17 (developing countries), divisions, 81, 89, 121-3, 171, 200-1, 205,207-10,236--9,327 n.33, see also Group of77

indexation, attitudes toward, 105, see also Indexation

relations between groups, 105,202, 206, 215-22 passim, 231-3, 302 n.27, 303 n.33, 316 n.6, 327 n.31

research (analysis), attitude toward, 140--7, 214, see also Group B, research: Integrated Programme, research

Secretariat and, 81, 103, 164-5, 173-8, 212,213,212-39,324-5 n.17-19, 332 n.20, 335 n.32

see also Integrated Programme: Common Fund: Secretariat, UNCTAD: UNCTAD

Meron,Theodor,224,227,254-5,323 n.9, 324 n.16, 326 n.23, 25-6,335 n.32

Metzger, Stanley D., 5, 53 Michalopoulos, Constantine, 105, 111,

161,303 n.35, 312 n.8 Mikdashi, Zuhayr, 57, 58, 60, 82, 290 n.9,

293 n.27, 294 n.30, 295 n.37, 296 n.39, 303 n.38

Mirrlees, J., 150 Morpurgo, Paul, 334 n.30 Multilateral contracts, 6-7,79

see also Wheat Multilateral Trade Negotiations (MTN),

see General Agreement on Tariffs and Trade

Mungo, John F., 324 n.16 Murray, Tracy, 48,49 Myint, Hla, 160

Nemmers, Barry H., 48, 49, 290 n.11-12 Newbury, D. M.G., 152-3 New International Economic Order

(NIEO), 2, 39, 61,233,236,245 Integrated Programme, 78, 86, 95-6,

101, 125, 136,268,304 n.3 origins, 53-66 passim, 71,322 n.11 resolutions, 72-3, 272-8, 296 n.1-2,

299n.l6 Nugent, J. B., 159,314 n.17

OECD Secretariat, 81, 85, 114, 118, 120, 142, 150, 162,221,279 n.l, 307 n.19, 321 n:3

OPEC, 23, 34, 48,55-8,61, 65, 84,291 n.24, 293-4 n.27-30, 313 n.14

Common Fund, 133, 294 n.30, 308 n.22 UNCfAD, 55, 58,215

'Other measures' see Common Fund, second window

Palm oil, 56, 205-8 passim, 307 n.17, 320n.27-9

see also Vegetable oils Papson, Thomas C., 51,291 n.14 Parnes, Andrew, 158, 159,314 n.17 Perez, Lorenzo L., 105, 111, 161,303

n.35, 312 n.8 Perrin, Yves, 113 Persaud, B., 85,298 n.12, 302 n.29 Phosphate rock, 59--60, 167, 318 n.21 Pindyck, RobertS., 61,295 n.35 PL 480, 10, 207-8, 280 n. 7, 320 n.28 Policing export quotas (export quota

enforcement), 36,318 n.19 cocoa, 52 coffee, 25, 27,29-30,285 n.41, 44 sugar, 21-3,179 tin, 17-18,283 n.29, 32

Popkin, J., 153, 312 n.10--11 Powelson, JohnP., 161 Prebisch, Raul, 41, 42, 43, 138, 161,

162, 302 n.28, 326 n.26 Price ranges (bands), see Ceiling prices:

Floor prices Prices, effect on dialogues, see Market

prices, influence on negotiations

Radetski, Marian, 293 n.28 Rangarajan, L. N., 5, 34, 58, 161,279

n.3, 284 n.38

Index 373 Rangararajan, C., 159,314 n.19 Research (analysis), see Empirical

analysis: Secretariat, UNCTAD, research: Theoretical analysis

Reynolds, Paul D., 279 n.2 Robertson, W., 282 n.18 Rogers, Christopher D., 282 n.18 Roles in commodity negotiations, 36

see also Secretariat, UNCTAD, roles Roosa, Robert V., 313 n.12 Rose, Sanford, 49,319 n.25 Rothstein, Robert L., 43, 46, 48, 77, 105,

124, 233, 253, 296 n.2, 321 n.4, 327 n.31

Rowe, John W. P., 279 n.4, 282 n.18, 284 n.34, 38

Rowland, Ted, 48, 49, 290 n.11-12 Rubber, 6, 53, 188, 288 n.53, 301 n.22, 307

n.17 conferences, 192-5, 318 n.16 empirical research, 143

Sanderson, Fred H., 279 n.4 Sarris, Alexander H., 279 n.4, 281 n.10 Schiavo-Campa, Salvatore, 159 Schink, George R., 19, 36,282 n.18 Schmitz, A., 152-3 'Second window', see Common Fund,

second window Secretariat, UNCTAD, 10, 23, 57, 58,

59,240-71 Commodities Division, 219, 229,

245-6,252,258-60,265,271,322 n.8, 326 n.23, 329 n.2, 6, 330 n.9, 11, 331 n.14, 332 n.19, 333 n.21, 24-5

Common Fund, 74-8, 100, 115, 131, 137-S

consultants, 262-6, 334-5 n.28--31 decision-making, 69, 77,78-82,252-3,

255-6,298 n.9 editing, 106, 143, 256, 263, 265-6,

335 n.31-2 employment & promotion policies, 220,

223-8,243,247-8,252-3,324 n.14-15, 324n.16, 325-6n.19-26, 329 n.2, 6, 332 n.16-17, 333 n.22, 334 n.26-7

flow (control) of information, feed­back, 124,138,219,243,250-2, 256,258,268,298 n.11, 328 n.1, 331 n.14

goals (values, objectives), 45, 77, 80, 100,156,164,213-15,228,240-1, 243-4,247-8,256,258,261,264-7, 297 n.5, 314 n.14, 321 n.5, 322 n.11,

329 n.4, 6, 333 n.22 leadership, 79-SO, 100, 109, 138, 255-6,

261,268, 332 n.18-19, 333 n.23 loyalty. 243, 249-52, 257-S, 331 n.16,

333 n.21 management,250-1,258,260-2,298

n.lO, 322 n.9, 331 n.12-13, 334 n.26 norms, 246-7, 329 n.4 organization, formal, 212-13,240-4,

298 n.ll, 320 n.1, 323 n.9, 329 n.2 organization chart, 271

productivity (output, accomplishment), 80,214-15,222,230-1,244,261-2, 265-6,312 n.4, 327 n.30, 328 n.1, 330 n.S--11, 332, n.18, 335 n.32-3, 336 n.34

promotion of goals, policies, 44, 45, 47, 49,58,89, 103, 137-S, 162-3,175-7, 190,194.196-7,204,210,213-14, 218--19,221,243-4,246,290 n.lO, 297 n.8, 298 n.11, 315 n.23, 322 n.ll, 328 n.1, 329 n.3, 330 n.9 bananas, 58 copper,169-70,172 cotton, 189-90 tea, 195-6

research (analysis), 62, 79-SO, 112-13, 124,140-50,164-5,173-4,191,194, 213,242-3,250,256-7,260,268,311 n.6, 328 n.1, 329 n.6, 333 n.21, 334 n.27

roles, 42, 46, 73,216-17,228,240-1, 246-51,254,298 n.lO, 329 n.4-5

turnover of staff, 253--5, 324 n.16 United States attitude toward, 45, 91, 214,216,227,323 n.12

Sen, A. K., 150 Sherman, William, 225, 325 n.18 Singh, Jyoti Shankar, 125,300 n.19 Singh, Shamsher, 97, 145, 284 n.38, 303

n.37, 305 n.ll Sisal, 91, 188,200-1,318 n.20

see also Hard fibres Smith, Gordon W., 19, 36,156-7, 169,

173, 282 n.18, 314 n.17 Smith, Ian, 21, 22, 23, 182,284 n.34, 36 Socialist countries see Group D Soutar, Geoffrey N., 159 Spraos, John, 161 STABEX, 70, 82-4,96, 121,208--9,211,

235,279 n.5, 298 n.12-15, 318 n.19 see also Compensatory finance

Stecher, Bernd, 19, 105,285 n.42, 288 n.54, 305 n. 7, 306 n.16

Stein, Leslie, 159

374 Index Stem, Ernest, 86 Stern, RobertM., 37, 92,290 n.13 Stodieck, Helmut, 282 n.18 Streeten, Paul, 161 Stuckhart, Catharine E., 284 n.38 Study groups (expert groups), 316 n.6

see also Copper, conferences Sugar, control of, 6, 20-4, 122, 151, 284

n.34, 287 n.51, 288 n.54 1953 agreement, 21, 24,284 n.35 1958 agreement, 21,24 1968 agreement, 22-3, 180-2, 187 1977 negotiations, 23, 178--88,317 n.13 balance of obligations, 24, 179, 181 ceiling support, 23, 179 costs of administration, 230 Cuba, 21-2, 182, 185, 187-8 discrimination against non-members,

21,183 European Economic Community,

181-3 exporters, 181ff. floor prices, 21, 22, 23, 180 'free (residual} market', 21, 24 Integrated Programme, 178-9, 303 n.37 market power, 24, 57,284 n.36 national stocks, 22-3,117, 180ff. policing (enforcement), 23, 30, 178 UNCfAD, 10, 22, 23, 115, 123, 166,

178-9 United States 22-3, 24, 88, 180-2, 284

n.35, 300 n.19, 317 n.10-11, 13 Sundararajan, V., 159, 314 n.19 Swerling, Boris C., 284 n.34-5

Taylor, Lance, 279 n.4, 281 n.10 Taylor, Stephen, 327 n.32 Tea, 53, 56,303 n.37, 322 n.7

conferences, 195-8,318 n.l7-19 Terms of trade, 161-3,288 n.2, 296 n.1,

314 n.21-2 decline in, 41, 42, 55, 56 see also Indexation

Theoretical analysis of control, 53, 67-8, 105, 139,269,292 n.19-20

review, 151-5,312 n.8 see also Ceiling price: Floor price

Thomas, Harmon C., 55 Timber, 56, 82,322 n.7

conferences,208-10 Tims, Wouter, 86, 97, 145 Tin, control of, 6, 11-20, 143, 151,281-2

n.l8, 288 n.55, 302 n.30, 305 n.11, 316 n.6

1948-55, 1955 agreement, 11

1970 agreement, 282 n.23 1975 agreement, 14-17,282 n.25, 300

n.19 borrowing, 19, 110, 283 n.31, 284 n.33,

303 n.37 buffer stock efficacy, 13--14, 19-20 burdensome surplus issue, 11-12 Common Fund, 19, 102, 115, 166 costs of administration, 230 export quotas, 283 n.29--30, 32,291 n.15 floor price debates, 14, 15-17,283 n.27 IMF drawings, 115 market power, 18, 24, 56, 57, 296 n.38

300 n.22 see also Integrated Programme, market power

policing (enforcement), 17-18, 283 n.29 strategic stockpile, United States,

12-14, 19--20,57, 282 n.21, 24 voting, 11, 28, 108

Tinakorn,Pranee,104,114,115, 159 Tinbergen, Jan, 74, 297 n.3 Trade barriers (market access), 3, 4, 41,

44,53, 75,82,96-7,211,235,274, 275,290 n.10, 13,291 n.16

hard fibres, 201 jute, 199 sugar,21 tea, 198 timber, 208-9 vegetable oils, 207, 320 n.27, 29 wheat, 9--10,281 n.13--14

Trade & Development Board, UNCTAD, 41, 42, 45, 91, 106, 216, 218,244-6,258,271,277,321 n.6

Transfer oftechnology, 45, 71, 73, 271, 290 n.S-9

Transnational corporations (trans­nationals, multinationals), 45, 53, 60, 62,66,85,88,93, 156,191,206, 290 n.9, 293 n.27, 294 n.32, 296 n.1

Treydte, Klaus-Peter, 299 n.15 Turnovsky, Stephen J., 152-3,314 n.15 Tyszynski, H., 279 n.4

UNCT AD Secretariat, see Secretariat, UNCTAD

United Nations Conference on Trade and Development (UNCfAD), 10, 30, 39, 68, 301 n.26, 320 n.1

cost (budget), 177,217-18,221,228-31, 310 n.30, 321 n.6-7. 324 n.13, 327 n.27

goal (values, objectives), 42-3, 45-Q, 78, 100, 156,213,232-3,269,289 n.5, 297 n.S, 8, 300 n.21, 314 n.14;322

Index 375 n.ll, 327 n.30, 336 n.35

member states, relations between, 81, 89,100, 177,213,231-9,327n.31,33, see also Member states, UNCf AD: Group of 77, divisions: Group B origins, 1, 5, 40-3

organization, 42,212-13,271 organizational rivalries, 108-9, 174-7,

210-11,221,228,235,289 n.7, 297 n.8, 303 n.36, 321 n.6-7, 322 n.8, 11, 332 n.20

ritual, 46, 218-19,335 n.34 Secretariat, see Secretariat, UNCTAD symbolic role, 214-15,222,228,239,

243-4, 248,262, 269,321 n.5, 331 n.12, 332 n.16, 335 n.34-5

UNCfAD I, 40-3,47,72, 74,297 n.3 UNCf AD II, 44-5, 60, 99, 297 n.4,

319 n.23 UNCf AD III, 44-5, 62, 72, 74-5, 96,

296 n.1, 319 n.22 UNCfADIV,32, 71,78,82,88-95,

96,113,136,221,233,272,301 n.25-6, 302 n.31-3, 309 n.25

United Nations Development Programme (UNDP),58, 131,189,191,200,218, 219,221,245,259, 286n.48, 310n.29, 322 n. 7-8, 330 n.ll

Vastine, Robert, 5, 45, 72, 93, 167,213, 216,294 n.30, 299 n.17, 300 n.20, 301 n.26, 302 n.27

Vegetable oils, seeds, meal, products, 88, 122,319 n.26, 320n.27

conferences, 205-8, 320 n.28-9 Voivodas, C. S., 158, 159 Voting, 2, 5, 11, 28, 37, 42, 98, 303 n.38

Common Fund, 107-8

Wassermann, Ursula, 221, 285 n.38, 291 n.14

Weiss, Thomas George, 324n.16 Westerman, P. A. 279n.4 Wheat, control of, 6-11, 19,279 n.4, 287

n.51 1947-56,6-7,280 n.6-7 1960-67, 7 1968-71, 8, 280 n.8 1973-78,8-11,280-1 n.ll-17 low cost producers, 8 UNCfAD, 10, 79,302 n.29

Wheeler, Leslie A., 279 n.4 Wickizer, V. D., 285 n.38 World Bank (IBRD), 3, 72, 73, 79, 85, 92,

95,97-8,103,107,112,129,130, 131-2,144-5,189,191,197,213,219, 221,239,286 n.48, 296 n.39, 303 n.37-8, 309 n.24, 310 n.29, 311 n.2, 322 n.7, 330 n.7, 331 n.12

Yotopoulos, P. A., 159, 314 n.17

Zorn, Stephen A., 56, 61, 62, 64, 65, 296 n.40, 313 n.14