surrounding

1. Changes of the Primary Commodity Market In the 1950’s and 1960’s after the Second World War, developing countries1 had achieved their political independence shaking off the yoke of colonialism under western countries. Up until then, they had been suffering under the economic oppression by suzerains which was based on an economic exploitative system reflected in colonialism. This economic system was established mainly on plantations and associated with agricultural products. Similarly, natural resources such as minerals were developed and exported under the dominance of suzerains. Even after the achievement of political independence, their former suzerains maintained an economic influence over export trade and their importers continued to export primary commodities2 at low costs. Under such conditions, developing countries tied to exports for income, were unable to gain sufficient export incomes as long as their exports of primary commodities were dominated by western countries many of which were former suzerains. And most developing countries were reduced to poverty even though international economic growth accelerated in spite of having achieved their political independence.


Changes of the Primary Commodity Market
In the 1950' s and 1960' s after the Second World War, developing countries 1 had achieved their political independence shaking off the yoke of colonialism under western countries. Up until then, they had been suffering under the economic oppression by suzerains which was based on an economic exploitative system reflected in colonialism. This economic system was established mainly on plantations and associated with agricultural products. Similarly, natural resources such as minerals were developed and exported under the dominance of suzerains. Even after the achievement of political independence, their former suzerains maintained an economic influence over export trade and their importers continued to export primary commodities 2 at low costs. Under such conditions, developing countries tied to exports for income, were unable to gain sufficient export incomes as long as their exports of primary commodities were dominated by western countries many of which were former suzerains. And most developing countries were reduced to poverty even though international economic growth accelerated in spite of having achieved their political independence.
In order to break through such situations, developing countries were challenged to form a third political power block to make head way against the industrialized western countries and the United States. The symbolic international conference was "the Bandung Conference"which was held in Indonesia in 1955. One of the principal objectives of the Conference was to free developing countries from the economic regimes imposed by developed countries solely bent on gain. There was a need to 国 際 協 力 論 集 第 21 巻 第１号 54 recover and establish profitable management of their primary commodities including natural resources. They officially affirmed that the ownership of natural resources belonged to developing countries and only then could they be considered as part of the wealth of the international society. Simultaneously, they urge that the trade of primary commodities should be implemented under the management of developing countries with favorable conditions respecting the fact that developing countries possess the natural resources and cultivate agricultural products to the benefit of developed countries.
However, the terms of the export of primary commodities were not actually sufficient to satisfy the needs to fill up the hunger of the local people. The reasons being that the local economic system was still plantation based and export prices of primary commodities were still controlled by developed countries in the international economic arena. Even if they could earn satisfactory export incomes from a few primary commodities, their earnings entered the pockets of middlemen or bribery officials without return or distribution to the local people. In order to make restoration and distribution to the local people, there were no domestic laws and the lack of governance ability in enforcement. Under such circumstances, some developing countries started to change their economic policy in order to transform the economy into a self-sufficiency economy without depending on the export income of primary commodities.
As for the ownership of natural resources, it had been decided to discuss it at the United Nations Conference on Trade and Development(UNCTAD)which was established in 1964. Developing countries argued for the need to recover economic sovereignty from developed countries at that time. Although they had gained political sovereignty by achieving their independence, the economic exploitative system through trade continued as usual under the dominance of developed countries. Under such a situation, the export prices of primary commodities were decided by the import countries, which were the western countries and the United States. The distribution of wealth continued to be unequal in the international economic system, and the unfairness of the distribution was not restored to developing countries, and their The International Economic Environment surrounding Developing Countries 55 export incomes remained poor. Therefore, at the UNCTAD, they concentrated their efforts on urging the establishment of a new international economic regime which could assure their economic sovereignty and allow them to realize a fair distribution of wealth generated from primary commodities, including natural resources. This assertion came to fruition in the New International Economic Order(NIEO) 3 which was formed along the proposals put forward during the 1970' s by some developing countries through the United Conference on Trade and Development(UNCTAD)to promote the interests of developing countries. Following this, the Declaration for the Establishment of the New International Economic Order and the Program of Action etc. were adopted by the United Nations General Assembly in 1974.
The preamble of the declaration states that the establishment of the New International Economic Order be based on equity, sovereign equality, interdependence, common interest and co-operation among all States, irrespective of their economic and social systems. It shall correct inequalities and redress existing injustices, make it possible to eliminate the widening gap between developed and developing countries and ensure steadily accelerating economic and social development and peace and justice for present and future generations.
The declaration packaged the concepts to promote the interests of developing countries by improving the terms of commodity trade, increasing development assistance, developed-country tariff reductions and so on. It was a challenge to revise the international economic system in favor of developing countries, replacing the Bretton Woods 4 system, which had benefited developed countries, particularly the leading states such as western countries and the United States. However, the ideology of the NIEO was too ambitious to realize all of the various actions so that an unproductive discussion was repeated at the UN Conference. However, in the field of primary commodities, the establishment of several new International Commodity Euro-Dollars resulted in promoting speculative business. In addition, as forward transactions became activated, they had an influence on the primary commodity prices. Since primary commodities are easily affected by irregular weather conditions, prices on forward transactions tended to fluctuate, but under the speculative business, this was exacerbated. Moreover, primary commodity prices were not flexible enough to reflect such movements of supply and demand. When prices increase in response to a rise in demand, supply of primary commodities naturally goes up. But the increased supply is slow to go down in response to a decline of demand due to the smallscale production system of developing countries. Therefore, the market started to take precautions against sudden rises in demand because of the problems associated with fluctuation and downward stiffness of prices. In consequence, prices were generally hanging low in the long term, particularly in the 1980' s, which was unsatisfactory for developing countries. Such unfavorable conditions on primary commodity prices decreased the export incomes of developing countries and became the main factors which generated acute debt problems.

Developing countries in globalization
The liberalization of the financial and capital transactions based upon the Plaza Agreement in 1985 11 , further accelerated the speculative transactions through foreign 国 際 協 力 論 集 第 21 巻 第１号 60 exchange markets and forward transactions. Since that time, hedge funds came into being gathering resources from certain men of prosperity and ordinary investors to benefit from speculation. Subsequently, they became a factor of disturbance in the international economy. At the same time, a financial instrument called"derivatives" appeared in the international financial markets, giving hedges funds even more leverage. This kind of trans-boundary economic activity was accelerated by the remarkable progress of Information Technology which became a symbol of the economic transformation in the 1990' s. This stream of the international economy finally led to"globalization" .
Globalization stimulates and enlarges speculative funds, and these become unstable factors in the international economy. Evidence of this was seen in the economic and currency crisis which occurred in Thailand on July 1997, and in the resulting waves in Malaysia, Indonesia and South-Korea etc. over the short term.
Many economic analysts around the world paid attention to the trans-boundary turmoil caused by the speculation of hedge funds which invited internal economic crises in Asia with the sudden collapse in value of foreign currencies in the exchange markets. As the result of that, it led to a drastic decrease of foreign currency reserves, aggravation of inflation and forfeiture of employment opportunities and so on.
It also became clear that globalization of financial markets is a profitable international economic regime for developed countries, particularly for western countries and the United States, when linked with the swelling and speculative money which has been dominating world markets. The integration of the international economy leans predominantly on the trade policies of developed countries because of their superior economic power, technological competence and access to information content. On the contrary, in many developing countries, the market economy is underdeveloped and the infrastructure is feeble. Under such circumstances, it is extremely difficult for them to be able to achieve economic development by means of entering the stream of globalization. Preferably, they should be facing up to the risks of being marginalized by the international economic regime and looking for ways around this. Globalization is said to be based on the free trade system and closely linked to the Washington Consensus 12 which promote assures the liberalization of finance. To encourage developing countries to participate in the WTO 13 , developing countries should be assured that their economic interests would be enhanced by joining the WTO, and in consequence, be more involved in the international economy. However, the economies of many developing countries were still premature and they were confronted with structural obstacles to satisfy the various economic conditions needed to become a member of the WTO. Therefore, they remain outside the framework of the WTO and cannot participate in the benefits of the open trade system. And in light of the Asian economic and currency crisis mentioned above, we see that the guidance of the IMF linked with the Washington Consensus failed to improve the policies of Asian countries which continued to trouble them.

Key issues to resolve the economic difficulties in developing countries
Many developing countries are still suffering from various economic difficulties which continue to marginalize them from the stream of globalization such as accumulation of external debt, hanging low prices of primary commodities, and a lack of funds to develop for their economies. In addition to this, environmental problems are emerging namely, desertification, global warming and air and water pollutions, which require a global approach that will transcend the national interests of developed and developing countries.
In many ways, international society is becoming increasingly interdependent, and the survival and prosperity of one nation is closely related to the survival and prosperity of all other nations. This sense of global interdependence has become a kind of leitmotif of the international community and may be the key needed to develop support to overcome the economic difficulties of developing countries.
One of the most serious economic problems confronting developing countries is external debt. Not only does external debt seriously constrain the economic development of developing countries, but remains a troublesome problem for the 国 際 協 力 論 集 第 21 巻 第１号 62 international economy as a whole. The promotion of a flexible approach between the debtors(developing countries)and creditors(developed countries)is essential to the solution of this problem. That is to say, in order to relieve the debt burdens on developing countries, the creditors should make more effort to implement expansion of concessional loans, extend limits for repayments and increase grants of aid cooperation etc. On the other hand, the debtors should also make an effort to put into effect economic reforms for their development which will contribute to the maintenance of international trust.
In addition to this, developing countries are also faced with sluggish prices of primary commodities. As already mentioned, many developing countries rely to a great degree on export income derived from the export of a few primary commodities, but as the price of primary commodities was sluggish in remaining at low level, there was a shortage of funds for their economic development. And the International Commodity Organizations could not support to realize an equal distribution of primary commodities and natural resources for developing countries They could not also effectively respond to the fluctuation of weakening prices of primary commodities by using their technical methods of the"Buffer Stock System" ,"Export Quota System" and "Production Management" . But, we saw that exchange of transparent information is still useful at the International Commodity Organizations. The reason being that administered measures which are contrary to market principles cannot resolve commodities problems and that the effective actions taken in line with the market mechanism will play a major role in its solution.
Under such circumstances, there are two key issues to ameliorate a function of the commodity market. First, it is important to promote the exchange of transparent information in the International Commodity Organizations. Therefore, many International Commodity Organizations have changed their function with a view to exchanging information on their commodities. Second, developing countries should promote the diversification on their economies by increasing the degree to which primary commodities are processed prior to export. This will allow them access to grant aid from the second account of the Common Fund for Commodities(CFC) , as In terms of the lack of development funds, against the background of external debt and commodity problems, a reverse flow of capital was seen around the world.
That is, capital flow from developing countries was greater than that from developed ones. This was a major impediment to the development efforts of developing countries.
In order to address this problem, developed countries should promote capital flow to developing countries by implementing measures to recycle funds through expansion of Official Development Assistance(ODA) , particularly through the increase of grant aids, expansion of concessional loans and extension of rescheduled limit of repayments etc.
Simultaneously, in order to increase their export incomes, it is necessary for developing countries to get preferential treatment through the generalized system of preferences in framework of the open trade system. From this point of view, developed countries should constantly implement a special preferential tariff policy of zero or near zero percent on agricultural, fishery and mining products from developing countries.
In terms of Official Development Assistance(ODA) , the donor(developed) countries have been striving to extend, in a practical and flexible manner, various kinds of cooperation that can enhance the self-reliance of the recipient(developing) countries. By not only increasing the amount but also improving the quality such as technical assistance, the donor countries should endeavor to meet the real needs of the recipient countries. Concretely, they should make more effort to expand grant aids and debt relief measures and place greater emphasis on human resources development which is essential if long-term development is to be achieved. On the other hand, the recipient countries should also accelerate their structural adjustment efforts, including improvement of environmental conditions to receive direct investment from overseas.
At the same time, they need to reduce fiscal expenditures, control inflation and maintain stable foreign exchange rate, as well as find ways to nurture the domestic private sector and to further develop human resources. 国 際 協 力 論 集 第 21 巻 第１号 64 In conclusion, I can say that globalization has been inclined to accelerate economic disparities between developed and developing countries and has promoted an unequal distribution of wealth. Developing countries are even now in an inferior situation to achieve economic self-reliance. In order to realize a fair global economic society, developed countries must pursue not only economic rationality, but also social rationality. They need effective and flexible manners based on the morals and ethics in which developed countries grew. And developing countries need to enjoy their own economic interests. And the result will be the creation of an equal, fair, and contented international society with reduced economic disparities between developed and developing countries.

Notes
１ There is no official definition of"developing countries"and"developed countries" . (1) The Development Aid Committee(DAC)in the OECD categorizes developing countries as "Low Income Countries" "Lower Middle Income Countries" "Upper Middle Income Countries"according to their annual per capita income. (2) (4)The IMF categorizes developing countries(recipients of grants)based on four criteria according to the amount of export, capital, debt and an average of GNP per capita. ２ The concept of primary commodities includes agricultural products and natural resources such as minerals in developing countries excluding industrial processed products. ３ The main concepts of the NIEO were(1)Developing countries must be entitled to regulate and control the activities of multinational corporations operating within their territory.
(2) They must be free to nationalize or expropriate foreign property on condition favorable to them.
(3)They must be free to set up association of primary commodities and all States must recognize this right.(4)International trade should be based on the need to ensure stable, equitable, and remunerative prices for raw materials, generalized non-reciprocal and nondiscriminatory tariff preferences and so on. ４ The Bretton Woods system was the first monetary and financial agreement signed by the participated nation-states for the United Nations Monetary and Financial Conference which was held in New Hampshire in the United States in 1945 just after the Second World War. The structure of the system consists of the establishments of the International Monetary Fund(IMF)and the International Bank for Reconstruction and Development(IBRD)which afterward became the World Bank(WB) . ５ The Buffer Stock System was an attempt to use commodity storage for the purpose of stabilizing prices in a commodity market. Specifically, commodity is bought and stored when there is a surplus in the economy, and then it is sold from the store when there is economic shortage in the economy.