CFC asked to allocate more on research

CFC asked to allocate more on research

JAKARTA (JP): The Common Fund for Commodities (CFC) should
allocate more to commodity research and development if it is to
help developing countries, seminar members concluded yesterday.

"The CFC still has a future if it focuses its program on
financing the research and development of commodities," Budi
Hartantyo, a former CFC managing director, told the seminar
organized by the Center for Strategic and International Studies
(CSIS).

The seminar, moderated by CSIS director Hadi Soesastro, was
also attended by senior economists Mari Pangestu and Pande Radja
Silalahi.

Many officials and analysts, especially those in developed
countries, doubt the future of the CFC, which is bogged down by
the sharply differing views of developing and developed
countries, said Budi.

"Several developed countries, such as the United States,
Canada and New Zealand, resigned right after the financial
institution started operations," he said.

He said that the developed countries became CFC members for
political reasons. "They don't see it as necessary for their
economic interests."

Budi pointed out that the CFC was set up in 1980 but that it
only became active in September 1989 due to a ratification delay
by member countries. The 102-member CFC, which is based in
Rotterdam, the Netherlands, receives its funding from member
countries.

Set up as a financial institution for commodities, the CFC has
two programs: Funding the buffer stock system for stabilizing
commodity prices and financing commodity research and development
projects.

The formation of the CFC, he said, was the only concrete
outcome of the so-called North and South dialog that took place
between developed and developing countries in the 1970s.

Mari Pangestu said that the buffer stock system has no future
because it is regarded as an intervening force. "The developed
countries do not agree with the kind of intervention which goes
against the market economy," she said.

She added, however, that the CFC might survive if it focuses
on research and development projects that are mutually
beneficial. Then the developed countries will be willing to
participate, she said.

According to Budi, the CFC has never been effective in
stabilizing commodity prices. However, he said, its studies on
the processing of jute and rubber were successful.

"The technology for jute processing has been applied in China,
while the technology for processing rubber is regarded as
environmentally friendly," he said. (13)