Economy

More developing nations now dependent on commodity exports: UN report

It can negatively affect human development indicators like life expectancy, education and per capita income

 
By DTE Staff
Last Updated: Friday 13 October 2017 | 12:56:33 PM

About 41 per cent of commodity dependent developing countries predominantly export agricultural products. Credit: PixabayNine more developing economies became dependent on commodity exports between 2010 and 2015, bringing the total to 91—two-thirds of all the 135 developing countries, a recently published UN report claims.

Titled ‘The State of Commodity Dependence Report’, the report also shows that during the same period the value of commodity exports from developing countries increased from US$2.04 trillion to $2.55 trillion, a jump of 25 per cent.

Total commodity exports: 2009-10 and 2014-15. Credit: UNCTAD

Out of the nine new Commodity Dependent Developing Countries (CDDCs), seven of them are from Africa and two from Asia and Oceania. Most of the CDDCs were mainly exporters of agricultural products in 2014-15, claims the report. They were followed by exporters of fuels, minerals and metals.

The trend of strong commodity dependence was observed in more countries (61) in 2014-15 as compared to 2009-10 when the trend was present in 56 countries. What is alarming is the fact that out of the 10 CDDCs, about seven could be considered as strongly dependent on commodity export. According to the report, the situation deteriorated in Africa, Latin America and the Caribbean.

When it comes to India, the total value of commodity exports has increased by 44.3 per cent from $84,861 million in 2009-10 to $122,500 million in 2014-15.

A country is considered dependent on commodities when its commodity exports account for more than 60 per cent of its total merchandise exports in value terms. When this share exceeds 80 per cent in a particular country, it is considered "strongly” dependent on commodity export.

Limited number of commodities

More worryingly, export is concentrated on a small range of products, with 73 of 91 countries relying on three commodities for the bulk of their earnings. If these developing nations are exporting, it is the European Union and China that are buying these commodities. Together, they form 25 per cent of the total market share for commodities from Asia and Oceania.

Composition of commodity exports 2014-15. Credit: UNCTAD

Impact on human development index

Commodity dependence can have a negative effect on human development indicators like life expectancy, education and per capita income. According to the report, about two-thirds of the CDDCs recorded a low or medium human development index in 2014-2015. However, in Africa, about 93 per cent of the export dependent developing countries were part of the low and medium categories in 2014.

Subscribe to Weekly Newsletter :

Related Story:

Calls for protectionism in the West should not scare Africa: UNECA

African exporters face choppy waters in the wake of Brexit

Investments from India to lead growth in East African market

India still scores low in human development in UNDP report

IEP Resources:

Win–win: how international trade can help meet the Sustainable Development Goals

The Sustainable Development Goals and their trade-offs

Agriculture, development, and the global trading system: 2000– 2015

Commodities and Development Report 2015: smallholder farmers and sustainable commodity development

We are a voice to you; you have been a support to us. Together we build journalism that is independent, credible and fearless. You can further help us by making a donation. This will mean a lot for our ability to bring you news, perspectives and analysis from the ground so that we can make change together.

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.

  • Send any information regarding rice ezoorts

    Posted by: V K Agencies | 11 months ago | Reply