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Unit 30 : UNCTAD, IMF, World Bank and Asian Development Bank

5. To be available as a centre for harmonious trade related development policies of government, Notes
and regional economic groupings.
Objectives and Achievements of UNCATED
UNCTAD is supposed to fulfil the following objectives which have been evolved gradually of the
various conferences : (1) trade in primary commodities, (2) trade in manufactured goods, (3) development
financing, (4) technology transfer, and (5) economic co-operation among developing countries. We
discuss below the extent to which UNCTAD has been successful in achieving these objectives.
Trade in Primary Commodities
The UNCTAD has been active in the international commodity arrangements since its inception. LDCs
want to expand the market for their traditional exports of primary commodities. Developed countries
place restrictions on the exports of the latter in such forms as licensing, quotas, tariffs, health and
packaging regulations, etc. and provide subsidies to domestic producers. Such trade restrictions tend
to be higher for processed products than for unprocessed. Besides, exports from LDCs have been
subject to wide fluctuations. Consequently, there has been a continual deterioration in the terms of
trade of primary products of the LDCs in relation to the export of manufactured products from the
developed countries.
Since UNCTAD II, the LDCs have been insisting on International Commodity Agreements (ICA) to
stabilise the prices and markets for their exports of primary products. These agreements seek : (1) to
stabilise the price of the commodity concerned so as to reduce price fluctuations and the resulting
instability in the economies of the producing LDCs; and (2) to increase its price to compensate for the
fast worsening in the terms of trade of the LDCs.
At UNCTAD IV (Nairobi), in 1976 it was proposed to have an Integrated Programme for Commodities
(IPC), and to create a common fund for buffer stock financing. The proposal was to negotiate
international commodity agreements to stabilise the prices of 18 commodities, ten of which were to
be included in the initial buffer stock scheme. This programme led to the international commodity
agreements on only cocoa (1981) and rubber (1980). UNCTAD VI (Belgrade) in 1983 also emphasised
the importance of negotiating ICAs for ten commodities. Of the five agreements on commodities—
coffee, cocoa, sugar, tin and rubber—only that for rubber is still in operation.
UNCTAD VII had a Subsidiary Committee on Commodities and UNCTAD VIII set up a Standing
Committee on Commodities for making recommendations to the TDB.
It was at UNCTAD VII (Geneva) that a Common Fund for commodities under the IPC became
operational after a number of countries ratified it or expressed their intentions to do so. New pledges
announced at UNCTAD VII raised its total pledged capital to 66.9 per cent $ 4.7 billion fund, allowing
it to become operational.

The UNCTAD IV proposed for a $ 6 billion Common Fund in 1976 to create and finance
international buffer stock of ten storable commodities.

Economic Cooperation Among LDCs
UNCTAD II held at New Delhi in 1968 emphasised for the first time the need for promoting
international co-operation and self-reliance among the LDCs. UNCTAD VI held at Belgrade in June
1983 again emphasised the need for co-operative efforts among LDCs through widening the scope of
preferential trading arrangements, harmonising industrial development programmes through
infrastructural facilities, particularly in respect of shipping services and simple payment mechanism
under common clearing system.
The first step towards economic co-operation among LDCs was taken at the ministerial meeting of G-
77 held at New York in October 1982 when it was decided to launch the Global System of Tariff
Preferences (GSTP). In 1984, the UNCTAD organised two meetings where intensive technical level
discussions were held in drafting the ground rules procedures for GSTP negotiations. Another

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