THE TWER AND THE MOUSE

...The Norwegian Minister for Foreign Affairs said the fund was crucial for the whole North-South dialogue...

...Britain and West Germany are the two European nations holding out against the fund and the U.S...

...After all," said Venezuela's roving Ambassador Manuel Perez Guerrero, "inflation in the West is becoming intolerable...

...The fund would help towards stable commodity prices and give Western countries a better chance of overcoming inflation...

...One aspect of international gatherings, such as the common fund conference, that disturbs poor countries is the way that most Western countries are happy to be represented by a low-level delegation...

...With some positive action on the part of Western statesmen, a fund should be set up during 1978—and that would do a great deal to improve the climate between rich and poor...

...Greater access to the markets of rich countries for their manufactured goods would perhaps do even more to create new workplaces, provide new jobs and earn valuable foreign exchange...

...Many, although not all, Western countries appear to be trying to cling to commodity power at any cost—even the cost of doing without stable prices and of worsening rich-poor relations...

...Now they are "open-minded" about other measures, recognizing that buffer stocks are of little use to producers of perishable commodities such as bananas...

...Technically the two sides moved fractionally nearer to each other...

...It was Dr...

...The urgent need is for people to be there who can really negotiate to get results...

...industrial nations too have an interest in stable commodity prices and a very definite interest in securing supplies of commodities for industry and supermarket...

...They did at least manage to break away from their former polarized concepts—it must be a tiger/it must be a mouse—so that was progress...

...Poor countries want governments to contribute in accordance with their role in world trade, with the richest nations paying the most...

...The conference might be seen as a slow and cumbersome step on the way to setting up a new fund...

...Officials, as 17 February 1978: 106 good as they are, cannot make any substantial shifts in their country's political stance...

...If we want to continue with our lifestyle it seems reasonable to make sure that the people who help make it possible are adequately rewarded...

...The common fund would be set up tomorrow if it were not for its political implications...

...Western countries control and have power over world commodity markets...

...It would help them to break away a little from the dominant power of rich countries...

...These other measures might include helping poor countries to diversify away from overdependence on a single commodity, and encouraging research into new ways of using crops—a number of interesting ideas have recently been put forward for new uses of sugar, for example...

...Eighty percent of their foreign exchange earnings come from the sale of one or more raw commodities, and they believe they are entitled to something better than the swings and roundabouts of present-day commodity markets which gives them very Commonweal: 105 little idea how much they will earn from one month to the next...

...But in Geneva the two sides showed some willingness to seek an animal midway between the extremes...

...This suspended conference could be resumed in the Spring of 1978 at senior ministerial level and, if direct contributions can be agreed on, the rich countries need to be generous enough that those contributions are sufficient for the new fund to work effectively...

...This despite the fact that history is littered with examples of nations clinging to power in a short-sighted fashion even though it was likely to cost them dear in the long run...

...Power is at the heart of the disagreement...

...But morality aside, two self-interest reasons of the West are also important...

...The U.S., EEC (apart from Holland) and Japan, want contributions to come mainly through commodity agreements...

...But not all Western nations are intent on digging their heads into the sands...

...The new agency would of course give poor nations more control over both their commodities and their own destinies...

...recognizes the key role that the fund could play in the fight against inflation...

...at first they only wanted it to finance buffer stocks...

...The U.S...

...Poor countries seek a large-scale $3 billion common fund, financed by all countries, that would actively encourage the establishment of commodity agreements, buffer stocks and other measures to help steady prices...

...There is a strong moral case for a better deal for the third world producers who supply us in Western countries with the raw materials and foodstuffs which make possible our way of life...

...The third world believe this is a mouse of a fund compared to the tiger they have in mind...

...is thought to have told them "change your policy and there is a good chance we will do the same...

...It is also clear that stable commodity prices would lead to more investment in new commodities...

...The rich have eased their original position on the fund...

...And there is a third self-interest reason for the rich—the fund would lead to better relations with poor countries...

...However, it appears that the Carter administration may be prepared to back direct contributions if all other Western countries agree to do the same...

...delegation was led by an official from the State Department...

...In effect the West said to the third world, "Look, we do not think this conference is important enough for one of our top statesmen to attend...

...Third world countries were right to raise the issue of the political will of the West...

...An earlier fund conference in March 1977 had resulted in failure...

...Assistant Secretary of the Treasury, said, "The United States' primary purpose in pursuing international commodity agreements is to reduce the risk of inflationary pressures at home...

...The present lack of investment threatens to cause a drop in the supply of raw materials coming to North America and Europe...

...The key technical issue is over whether governments should contribute directly to the new agency...

...Jan Pronk, the Dutch Minister for Development, pledged his government to give $25 million to the new fund...

...Setting up an effective common fund is important enough in the whole context of rich-poor affairs for Western statesmen to give it far more priority...

...The big division that remains is political...

...The split among Western countries has encouraged the third world to believe that die common fund is on its way...

...At a special UN Conference, attempts were made to persuade Western countries to establish an international fund to help stabilize the prices of the commodities on which poor countries heavily depend...

...But the fund has become something of a test of the West's good faith —they now have the choice of sharing power with the poor or of seeing a deterioration of the relationship with them...

...john madeley (John Madeley is an international development economist who contributes to the London Observer, the Guardian, Church Times and other publications...

...they are not keen to share that power with the third world...

...And they want to control it themselves...

...Third world statesmen now intend to lobby hard in the capital cities of Washington, London and Bonn to persuade their Western counterparts of the importance of making progress...

...The third world see this fund as the centerpiece of their demands for a fairer world order...

...This second gathering made a tiny bit more progress even if it did end on a sour note with poor countries requesting suspension of the conference because, as they phrased it in their statement, "it is futile to continue until the developed countries demonstrate the necessary will to make negotiations meaningful...

...Poor countries are now prepared to concede that the fund could start with less than $3 billion...

...Fred Bergsten, the U.S...

...The U.S...

...Rich countries are prepared to concede a much smaller and more passive fund that would operate chiefly by pooling the resources of existing commodity agreements...

...They have in mind an agency that will do for commodity trade what the World Bank and the International Monetary Fund are doing for general development and finance...

...With the exception of Holland and Norway, no Western country was represented by a government minister in Geneva...

...The common fund is, of course, only a part of the new international economic order that the third world is seeking...

...The predictable result is that proceedings are limited if not seriously weakened...

...They originally wanted all the fund's money to come from governments but they now accept that some could be raised from commodity agreements...

...The economics of a large-scale active fund are sound...

...surely they realize the fund would help to steady prices...

...Early in 1977, in a speech to the Council of the Americas, Mr...

...Third world primary producers want the power to be able to enjoy a more orderly pattern of trade, with reasonably guaranteed prices—something that domestic primary producers in the West take for granted...

...Despite the suspension, rich and poor countries inched a little closer towards each other...

...At die end of the Geneva conference, four nations, Holland, Norway, Sweden and Finland came out in support of the third world's idea of the fund: Their view is that sharing power with the third world is both morally right and in the West's own long-term interests...

...Henry Kissinger who pointed out that a common fund would do a lot more than the innocent stabilization of commodity prices...