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Vol. 1984/0 236 
  
 
Disclaimer  
Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the openi ng to the public of the historical archives of the European Econom ic 
Community and the European Atomic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), this f ile is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februar 198 3 über die Freigabe der historischen Archive der Europäischen  
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983,  
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003  
(ABI. L 243 vom 27 .9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit  
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5  
der genannten Verordnung freigegeben.  
COMMISSION OF THE EUROPEAN COMMUNITIES
C0M<84> 622 final·
Brussels, 14 November 1984
REPORT FROM THE COMMISSION TO THE COUNCIL  
ON THE OPERATION DURING 1983 OF THE EXPORT EARNINGS  
STABILIZATION SYSTEM SET UP BY THE LOME CONVENTION  
AND THE DECISION ON THE ASSOCIATION OF THE  
OCT WITH THE EEC
C0MC84) 622 final

C.
I. INTRODUCTION
1. Article 27 of the Internal Agreement on the financing and administration  
of Community aid stipulates:
"each year the Commission shall draw up a comprehensive report for the  
Member States on the operation of the system of stabilization of export  
earnings and the use made by the ACP States of the funds transferred.
The report shall indicate in particular the effect of the system on the  
economic development of the recipient countries and on the development of  
external trade.
This Article shall also apply as regards the countries and territories."
2. This report covers, for the period 1 January to 31 December 1983, the  
activities of the ACP-EEC institutions, the activities of the EEC institution  
the administration of the system, the results, the replenishment of  
resources, the use made of the transfers and their economic impact.
For the admininistration aspect, this report covers the requests made  
for transfers for the 1982 application year.

-  2 -
II. T H E  ACTIVITIES O F  T H E  A C P -E E C  INSTITUTIONS
A . The A C P -E E C  Council of Ministers
3. The A C P -E E C  Council of Ministers held tw o sessions, one special  
and one ordinary (the eighth), on 19 and 20 M a y  1983 in Brussels.
4. The purpose of the special Council session w a s  to carry out an in-depth  
examination of Stabex within the framework of the second L o m é  Convention.
Talks focused on two aspects: the financial state of the system and
Stabex's impact o n  the A C P  States' economies, notably in the light of the  
w ay the transfers were used.
5. Concerning the financial state of the system in the 1980 and 1981  
application years2, the A C P  States appealed to the Com m unity to release  
additional funds to cover the s u m s  not paid in respect of 1980 and 1981.
The Com m unity recalled that the additional contributions agreed to by the  
Com m unity at the Libreville A C P -E E C  Council meeting the previous year  
constituted an  exceptional case; it would go no further than to say
that w h en  distributing any unexpended balances it would be possible, in  
accordance with Article 35 of the Convention, to take into consideration the  
unpaid share of the transfer entitlements.
6. Discussions on the system's operation and its impact on the A C P  States’  
economies focused o n  the deteriorating production capacity and export  
competitiveness of m a n y  A C P  States, and also on the use of transfers. The  
discussion revealed differing interpretations of the texts. In the Community's  
view, the transfers should normally be used in the sectors where the toss of  
export earnings has occurrred. W h e n  the transfers were so used, it said,
1The meetings of the A C P -E E C  institutions devoted to the negotiations on  
the third L o m e "  Convention are not dealt with in this report.
2S ee the Commission’ s  report to the Council on the operation during 1980 o  
the system set up by the L o m e' Convention for stabilizing export earm^ ,  
C 0M C 81)592 final of 2 1  October 1981, points 7  and 31; sam e report o n  1981  
C0MC82)864 final of 6 January 1983, points 5-11 and 44-45.

- 3 -
undeniably beneficial results had been achieved. The allocation of a  
greater proportion of the funds to affected sectors would help check  
the decline in productive capacity and the deterioration in the  
competitive position of m a n y  of the A C P  States in relation to other  
developing countries.
The A C P  delegation took note of the views expressed by the Com m unity but  
emphasized that the principle of priority utilization of transfers  
as stipulated in the Convention did not exclude the channelling of funds  
to other sectors.
7. A t the s a m e  special session, the A C P -E E C  Council of Ministers noted  
a  report from a  group of experts briefed to study problems linked with  
the use of exchange rates in the calculation of transfers. It instructed  
the A C P -E E C  Committee of Ambassadors to continue studying methods of  
calculation (1).
8. At its eighth ordinary meeting, held the day after the special 
session, the A C P -E E C  Council again discussed a  num ber of issues concerning  
Stabex, notably the inclusion of five n ew  products in the system: tobacco,  
citrus fru it, sisal products, plywood and w o o d  pulp. The Com m unity statement  
on this subject ran as follows:
"Although examination of a ll five products in question has not been finalized,  
... essentially the Community's position as presented in Libreville has  
not changed, and ... it does not seem  very likely that between n o w  and the  
expiry of the Convention these products will be included in the system under  
Article 26.
At a  m o m en t w hen  both of us have to carry out a  thorough examination of  
the perspectives and the conditions of the financial balance of the system  
until the end of the existing Convention . . . .  the general question m a y  be raised  
if it is in the well-understood interest of the tw o parties to increase the  
num ber of risks to be covered by the inclusion of n e w  products which do not  
appear to be fundamental for the external equilibrium of the countries  
concerned. This question goes beyond arguments specific to each product."
(1) Decision No. 5/83 of the A C P /E E C  Council of Ministers of 20 M ay 1983

- 4 -
9. A t this meeting of the A C P -E E C  Council, the A C P  States disputed the  
Commission's application of certain of the Convention's provisions (notably  
Articles 38(2) and 39(3)). N o  instructions were given on studying
these complaints, about which no further details were received.
10. The Committee of Am bassadors w as em pow ered to take the appropriate
decisions for transfers in respect of the 1982 application year o n  the
1basis of the Commission's final report .
11. it w a s  also delegated to rule both on Niger's request that cow peas
be included in the system and o n  F iji's  request for a  derogation under
.  2Article 46(3) of the Convention .
B. The A C P -E E C  Committee of Am bassadors and the A C P -E E C  Stabex Subcommittee
12. The Committee of Am bassadors m et three times in 1983, holding its  
14th meeting on 1  February, its 15th on 4 M a y  and its 16th o n  16 December.
13. At its 14th meeting, the Committee expressed its intention of  
setting u p  a  group of experts to study the problems linked with the use  
of exchange rates in the calculation of transfers.
14. A t its 15th meeting, the Committee approved the establishment of  
a  sub-group to study questions linked with the interpretation of  
Articles 38(2) and 39(3) of the Convention.
15. The A C P -E E C  Stabex Subcommittee held its 7th meeting on 1 1  April  
and its 8th meeting on 27 April, both meetings being devoted to  
preparations for the Committee of Am bassadors and A C P -E E C  Council of  
Ministers sessions.
Decision No. 3/83 of the A C P -E E C  Council of Ministers of 20 M ay 1983.
Decision No. 4/83 of the A C P -E E C  Council of Ministers of 20 M ay 1983.
The subjects discussed by the A C P -E E C  Council and referred to in  
Section A  are not covered here.

- 5  -
C . Working parties and groups of experts
16. A n  A C P -E E C  group of monetary experts m et on 28-29 April to  
examine the m ethods used to calculate Stabex transfers. Discussions  
focused on the repercussions of exchange rate fluctuations on the value  
of transfers, the methods used to calculate the reference value and also  
those used to convert A C P  currencies into E C U S. The group drew u p
a  report which w as submitted to the A C P -E E C  Council of Ministers.1
17. In M a y  an A C P -E E C  working party adopted the terms of reference for  
its task of establishing a  jointly agreed interpretation of certain  
Articles of the Convention, notably Articles 38(2) and 39(3).2  This  
group, which did not have a  specific brief, did not m eet again.
D * The parliamentary bodies of the L o m é Convention
18. The Joint Committee of the A C P -E E C  consultative Assembly m et twice,  
in Kingston (Jamaica) from 2 1  to 25 February and in Berlin from
19 to 23 September.
19. A t the first of these two meetings, the Am bassador of F iji,
M r Cavalevu, as overall rapporteur for the seventh annual report of  
the A C P -E E C  Council of Ministers, m ad e particular criticism of the  
inadequacy of funds in relation to real needs.
20. A t Berlin in September, the A C P  representatives reiterated their  
criticisms regarding the gap between the level of Stabex funding and  
the transfer entitlements which the system had to meet.
21. N o  resolution specifically on the subject of Stabex w a s  adopted  
in 1983.
1^See points 7  and 13.  
See points 9 and 14.

-  6 -
H I. T H E  ACTIVITIES O F  T H E  E E C  INSTITUTIONS  
A . The European Parliament
22. A t its sitting of 8 July 1983, Parliament adopted a  resolution o n
1the Community's policy towards developing countries (m em orandum  
of the Com m ission of the European Communities o n  the Community's development  
policy, C0M(82)640 final) in which it recalled (paragraph 24) "that m a n y  
features and instruments of the European development policy have been  
welcom ed as major achievements and innovations," citing, am o n g  others,
Stabex.
But the resolution deplored the fact that the effectiveness of these  
features, "partly because of inappropriate aid policy, partly because of  
the international economic environment, in particular the fa ll in commodity  
prices, and partly because of the internal policies of certain developing  
countries, has too frequently not matched expectations" (paragraph 25).
23. T w o  m em bers of the European Parliament asked written questions regarding  
the system, namely M r Pearce (ED, U K ) w h o  tabled five question (P Q  N o s  582,  
705, 1359, 1360 and 1365/83) and M r Fuchs (Soc., F ) (P Q  N o  2023/83). T h e  
answers to the questions were published in the Official Journal of the  
European Communities.^
B . The Court of Auditors
24. The Court of Auditors conducted its customary investigation into the  
administration of the requests for transfers for the 1982 application  
year. The conclusions of this investigation will be published in the  
Official Journal of the European Communities.
12~ u  C  242, 12.9.83, pO J
P Q  N o  582,  
P Q  N o  705,104.
26.9.83, O J  C  257,
O J  C  271, 8.10.83,  
P Q  N o  1359, O J  C  38,
P Q  N o  1360, O J  C  31'
P Q  N o  1365, O J  C  31, 6.2.84, p13.2,84,  6.2.§4, p.  26.  
,  17.
.  36.21.
21.
P Q  N o  2023, O J  C  89, 31.3.84, p.18.

- 7 -
IV. ADM INISTRATIO N O F  T H E  S Y S T E M
25. The main feature of the 1982 application year w as the return to  
normal running of the system after the difficulties which marked the tw o  
previous years. In contrast to 1980 and 1981, w h en  the am ounts for  
admissible requests had to be cut back considerably because of the  
shortage of available funds, such requests for the 1982 application  
year were covered in fu ll.
26. For 1982, the Comm ission received a  total of 58 requests for  
transfers presented by 27 signatories of the second L o m e "  Convention.
T w o  requests for transfers were also presented by an O C T  (Vanuatu) which  
had becom e independent and had acceded to the Convention but w as s till  
covered by the Decision of 16 Decem ber 1980 as regards Stabex. N o  
request for a  transfer w as received from the O C T  eligible as such  
under the appropriation provided for by this Decision.
A . Non-admissible requests
27. T w o  requests were turned d o w n  because the dependence threshold had  
not been exceeded (Article 29 of the Convention):
Cam eroon w o o d  -jn  the r0Ugh  and saw n  w o o d
Guinea-Bissau paL m  o il.
28. Eleven requests were turned d o w n  because the fluctuation threshold
w as not exceeded (Article 37 of the Convention):
Cam eroon cocoa
C am eroon coffee
C om oros essential oils
G ui nea-Bi ssau cashew nuts
Guinea-Bissau shrimps
Sudan cotton
Sudangroundnuts
Sudangroundnut oil
Sudan oiIcake
Sudanhides and skins
Tanzaniacashew nuts.

-  8 -
29. Four requests were turned d o w n  because no Loss had been incurred:
Ethiopia coffee
Ethiopia hides and skins
Grenada bananas
Guinea-Bissau ground nuts.
30. Six requests were turned d o w n  because there were surplus earnings  
on exports to all destinations (Article 38(2) of the Convention):
Mali cotton
Central African Republic saw n w o o d
Tanzania coffee
Tanzania tea
Tanzania cotton
Tanzania raw sisal.
B i Reductions following consultations
Consultations were held on the basis of Article 39(3) of the Convention for  
the reasons and in the cases set out below:
31. Fall in ratio between total exports and production of the product:
% reduction
C om oros (copra 1982) 41.25
G am bia (groundnut oil) 6.0
Tonga (coconuts) 25.8
S a m o a  (cocoa beans) 62.1
32. Decrease in the Community’s  share of total exports of the product in  
question:
Sierra Leone (cocoa beans) 15.9
Papua N e w  Guinea (coffee) 14.5
Malawi (groundnuts) 29.7
33. Increase in local consumption or storage:
S a m o a  (copra) 73.3
Lesotho (mohair) 21.9

- 9 -
C - Reduction to Level of Losses sustained in respect of all  
destinations in cases where this is Low er than the Losses in respect  
of exports to the Com m unity
34. Transfer entitlements were reduced to the level of losses o n  
exports to all destinations in seven cases:
Sao T o m e  (cocoa beans)
G am bia (groundnut oil)
Sierra Leone (coffee)
Fiji (coconut oil)
Grenada (cocoa beans)
Mali (groundnut oil)
Benin (cotton, not carded or combed).

-  10 -
V. T H E  R E S U L T S  
A . Results by state
35. Administration of the funds allocated under  the L o m e / Convention
Recipient A C P  State ,  Product A m ou n t in E C U
gen in Cotton  
Palm  Oil  
C ashew  kernels877,329  
1  ,61A  ,942  
215,789
C o m o ro s Copra 293,528
Fiji Coconut oil 788,481
G am bia Groundnut oil  
O i Leake1  ,615,183  
361,036
G hana C ocoa products 3 1  ,160,673
Guinea-Bissau Palin nut and kernel 0-jt  
S aw n’ w o o d360 ,528  
88 ,719
Grenada C ocoa beans  
Nutm eg and m ac e1,318,965  
278,590
Burkina-Faso Shea nuts 1  ,046,734
Ki r i bat iCopra 1,036,682
Lesotho M o h a i r 694,147
MalawiGroundnuts2,684,355
MaliGroundnut oil3,548,554
Papua N e w  Guinea Coffee
C ocoa beans
Copra and copra oil16,344,445  
4,201 ,081  
3,604,036
Central African Republic  
Solom on IslandsCotton, not carded or com bed  
Copra1,675,896  
1,726,633
S a o  T o m e C ocoa beans 2,679,188
Sierra Leone Coffee  
C ocoa beans3,831 ,246  
2,447,381
Swaziland Cotton 3,103,968
C h ad Cotton 3,593,163
Togo C ocoa beans 7,115,332
Tonga Copra
Coconut oil
Bananas
Coconuts1  ,685,134  
391 ,688  
223,173  
365,327
Tuvalu Copra 63,150
S a m o a C ocoa beans  
Copra561 ,805  
877,434
T O T A L 102 ,474,315
Com oros*
C o m o ro sCopra (1981)  
Essential oils (1981)290,577
487,471
G R A N D  T O T A L,  . ■  —- T — — ------- - . , ......... -103,252,363
Transfers relating to 1981 which had to h  charged to l982 funds.

-  11  -
36. The total am ount of Stabex transfers to be charged to the 1982  
application year exceeded funds available by 13 852 363 E C U . In  
accordance with Article 34(1) of the second L o m é Convention, the Committee  
of Am bassadors authorized the advance use of the annual instalment
for the 1983 application year to cover this amount.
37. Disbursements from the O C T  allocation:
Vanuatu (copra) 3 810 084 E C U
Vanuatu (cocoa beans) 593 448 E C U
B. Balance sheet by country
38. O f the 102 474 315 E C U  disbursed to the A C P  signatories of the  
second L o m é  Convention for 1982, 56 098 716 E C U , i.e . 54.7% of the funds  
transferred, went to the least developed A C P  States, which are exempted  
by Article 46(1)(c) from contributing to the replenishment of the  
system’s  resources.
C. Results by product for 1982 (not including Vanuatu, which w a s  
covered by the O C T  allocation)
Products A m ou n t in E C U %
Cotton 9250 356 9.03
Palm products 1975 470 1.93
C ashew  kernels 215 789 0.21
Coconut products 10832 093 10.57
Groundnut products 8029 128 8.01
W o o d 88 719 0.09
C ocoa products 49484 425 48.29
Nutmeg, m ace 278 590 0. 27
Shea nut kernels 1046 734 1.0
Mohair 694 147 0.58
Coffee 20175 691 19.69
Bananas 223 173 0.21
T O T A L 102 474 315100%
It should be noted that two products, cocoa and coffee, alone account  
for 68 %  of the total transferred.

-  12  -
V1 *  REPLENISHMENT OF RESOURCES
40. With regard to the transfers made under the first Lome Convention  
and which by the terms of this Convention must be reimbursed, the  
Commission carried out an investigation to see whether the conditions  
governing the replenishment of resources, as set out in Article 21(3)  
of the first Lome Convention, had been fulfilled in 1982. The 
investigation showed that in none of the cases had the conditions
for reimubrsement been fulfilled.
41. With regard to the transfers made under the second Lomé' Convention  
and which by the terms of this Convention must be reimbursed, the  
Commission carried out an investigation to see whether the conditions  
for the replenishment of resources, as set out in Article 43(2) of
the Convention, had been met in 1982.
The investigation showed that the conditions had been fulfilled in the  
case of the following transfers and for the following amounts:
Application Country Product Amountof Amount to be_——------ ----- transfer reimbursed
ye
ar
1980 Madagascar vanilla 1  211 202 1  211 202
Senegal oilcake 8 2 55 832 8 253 832
Madagascar coffee 2  688 131 2  688 131
The Commission has informed these ACP States of their obligation, under  
the terms of the Convention, to contribute to the replenishment of the  
system's resources in accordance with the procedures laid down.
42. In the case of the following transfers, for which no obligation  
to make full reimbursement had been established at the end of the observation  
period referred to in Article 21(2) of the first Lomé Convention,  
the ACP-EEC Committee of Ambassadors has still to take a decision pursuant  
to paragraph 4 of the same Article;
Application country Product Amount of Amount to be
-------- ---- ----- transfer reimbursedye
ar ______ ________
19
75 C on g o  W o o d  in the rough 7 361 677
1975  G abon W o o d  in the rough 6 703 3111980
1981
See point 10 above.

- 13 -
In November, the Com m ission will send a  report to the Council of Ministers  
indicating the course of action it advocates in these cases in application  
of Article 2 1  of the first L o m é  Convention.
43. In the case of the following transfers, for which n o  obligation  
to m ake full reimbursement had been established at the end of the  
observation period referred to in Article 23(3) of the Council Decision  
of 29 June 1976 o n  the association of the overseas countries and  
territories with the European Econom ic Community, the Council of Ministers  
has s till to take a  decision in accordance with paragraph 4 of the s a m e  
Article:
Application
year
1975
1975
1976
1977Country
Belize  
Kiribati  
K i ribati  
BelizeProduct
S aw n  w o o d  
Copra  
S a w n  w o o d  
S aw n  w o o dA m ou n t of  
transfer
139 650
1  200 321  
1  083 098  
202 714A m ou n t to be reimbursed
61 133
528 240  
384 789
In November, the Comm ission will send the Council of Ministers a  
report setting out the course of action it advocates in these cases  
in application of Article 23 of the above-mentioned Decision.
V II. E C O N O M IC  IM P A C T  O F  T H E  T R A N S F E R S  A N D  THEIR UTILIZATION
A' Prior indications of proposed use and reports on actual use m ad e of the  
1980 and 1981 transfers
44. Prior indications of the proposed use of funds disbursed for 1982  
reached the Comm ission within the time limit fixed by the second L o m e  
Convention. In contrast, barely m ore than a  third of the final reports  
on the use of 1980 and 1981 transfers have reached the Commission. It  
seem s that in m ost cases the A C P  States are not aware of the link between  
these reports and the efficiency and credibility of the system.
These reports were due in in July 1982 and September 1983 respectively.

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45. Examination of the reports sent to the Com m ission reveals that in
the overwhelming majority of cases the proposed use appears to be consistent  
with the system's objectives as laid d o w n  in the Convention:
C a ) allocation to agricultural projects for the purpose of:
(i) increasing or reestablishing production potential,
(ii) diversification,
( ii i)  food self-sufficiency;
(b) support for producer prices.
B. Econom ic impact of the 1982 transfers
46. The relative size of the transfers as a  proportion of the recipient  
countries’  export earnings varies according to the losses sustained, the  
product or products in question and its/their share of the country's total  
exports, and also the structure of exports (the Community's share of  
total exports).
In a  num ber of cases, the proportion is remarkably high, as in the  
following examples showing disbursements as a  percentage of total export  
earnings (all products, all destinations, 1981, measured in ECU):
S ao  T o m e  41.22%
Kiribati 29.62%
Vanuatu 31.13%.
47. The impact of the transfers m a d e  can of course be seen even m ore clearly  
w h en  disbursements in respect of a  given product are related to export  
earnings Call destinations ) from that product (1982).
The following percentages are given by w ay of example:
Benin, cashew  nuts 209.50%
Vanuatu, cocoa beans 98.95%
Com oros, copra 88.02%
Malawi, groundnuts 52.94%
Kiribati, copra 68.65%.
These figures confirm the importance of the flow of substitute funds provided  
by the system and consequently its contribution to the stabilization of the  
A C P  States' export earnings, particularly in the case of the least developed  
A C P  States.

A N N E X
LIST O F  D R A W IN G S  SINCE 1  J A N U A R Y  1982 U N D E R  T H E  IMF'S C O M P E N S A T O R Y  P A Y M E N T S
S Y S T E M
Country M i llion Last m onth of relevant M onth '
S D R 12-month period
Barbados 11.7 6/82 10/82
Belize2 3.6 3/83 6/83
F iji1  X X 13.5 3/82 2/82
Ghana1  X X 120.5 12/82 8/83
G uyana 5.9 6/82 11/82
Jamaica 19.4 3 /82 8/82
Kenya1  X 60.4 12/81 6/82
Liberia 27.7 6/82 10/82
Liberia 7.0 12/81 6/82
1Madagascar X 21.8 12/81 7/82
Malawi1  X X 2 12.2 9/82 3/83
... 2  Niger 12.0 12/82 7/83
... 2  Niger 12.0 12/83 10/83
Sierra Leone1  X X X X 2 20.7 6/82 2/83
1  2Solom on Islands X X 1.6 6/82 10/82
1  2Sudan X 39.1 6/82 3/83
Swaziland1  X 2 9.0 12/82 6/83
Sam oa1  X X X X 2 1.1 12/82 6/83
Zaire 114.5 3/83 12/83
Zai re 106.9 12/81 3/82
Zambia 97.2 12/82 5/83
Zam bia 34.0 6/82 12/82
Zim babw e 56.1 12/82 3/83
The num ber of "X" denotes the num ber of transfers received by the A C P  State  
under Stabex for the years in question (1981 and 1982).
A C P  State not required to contribute to the replenishment of resources.