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 average. This recent weakness of commodity prices may not be only a temporary phenomenon. Commodity prices have not yet recovered from the depth of the world recession despite increased economic growth in consuming countries. The reasons may be partly technological (an acceleration in raw material substitution); partly monetary, caused by the high cost of holding stocks of commodities: and partly due to increases in supplies by countries desperate to earn foreign exchange.

44. These countries are turning the term' of trade against themselves, earning less while exporting more. The promotion of increased volumes of commodity exports has led to cases of unsustainable overuse of the natural resource base. While individual cases may not exactly fit this generalization, it has been argued that such processes have been at work in ranching for beef, fishing in both coastal and deep sea waters, forestry, and the growing of some cash crops. Moreover, the prices of commodity exports do not fully reflect the environmental costs to the resource base. In a sense, then, poor developing countries are being caused to subsidize the wealthier importers of their products.

45. The experience of oil has of course been different from that of most other commodities. (See Chapter 7.) It does provide one example of producers combining to restrict output and raise prices in ways that greatly increased export earnings while conserving the resource base and promoting energy saving and substitution on a large scale. Recent events suggest that regulation of the market by producers is very difficult in the long term. whether or not it is desirable in the wider global /…