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By Felicity Ussher, 19 September 2000 16:30

NEWS However, while an impressive number of small traders have signed up to the scheme, it could run into stormy weather if companies in the developing world are enticed into selling their raw materials and consequently fail to play a part in developing more complex economies at home. At the launch of the service, Patricia Hewitt, UK ecommerce minister, said: "There's no reason at all why a small company, based anywhere in the world, shouldn't be buying supplies from other companies, from different parts of the world, provided they've got the internet connection. "Even more importantly, they may find they can start supplying to larger companies - like some of the car companies." However, Dr Mohan Kaul, director general of the CBC, conceded there was an imbalance, with more poor countries selling goods to multinationals than buying raw materials to develop industries. But he told silicon.com that he expected this to change. He said: "I think we are already seeing some examples where small companies are playing a role with the bigger companies. I think it's not very far off that we will have small companies buying directly with big companies, and vice versa." The danger is that undeveloped economies will be enticed into selling their wares for short-term profit, rather than developing more complex internal economies that will generate wealth. Caspar Murphy, emerging market strategist at Dresdner Kleinwort Benson, said the risk was that developing countries would remain dependent on global demand for a single product, or raw material. He told silicon.com: "In effect, the developing country could miss out on a vast amount of economic wealth, because it is not producing the value-added part of the supply chain, and is highly susceptible to a change in demand." Murphy said the problem could be compounded if the country's authorities did not invest their revenues wisely.