Commodity dependence worsens for developing countries

Commodity dependence worsens for developing countries

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Geneva, 13 Oct – Nine more developing economies became dependent on commodity exports between 2010 and 2015, bringing the total to 91, about two-thirds of all the 135 developing countries, a new UN report says.
Published on Friday, The State of Commodity Dependence Report shows that, during the same period, developing countries saw their revenue from commodity exports jump 25% to US$ 2.55 trillion.Commodity dependence can negatively affect human development indicators like life expectancy, education, and per capita income, and about two-thirds of commodity-dependent developing countries recorded a low or medium human development index in 2014-2015, according to the report, The State of Commodity Dependence 2016.
“In the context of dramatic volatility in commodity prices, developing countries will struggle to achieve the Sustainable Development Goals unless they break the chains of commodity dependence,” UNCTAD Secretary-General Mukhisa Kituyi said in Geneva ahead of the report’s release.
“Many developing countries have been commodity-dependent for the past three decades, and it is worrying to see that the numbers are going up,” Dr Kituyi said.
The rise in commodity dependence was most noticeable in Africa, where seven new countries entered the category in 2014-2015, bringing the total to 46. Over the same period, the number remained stable at 28 in Latin America and the Caribbean, while the region of Asia and Oceania saw its total increase by two to 17.
Regarding the type of exports, dependence was predominantly on agricultural products. This was the case for 41% of the countries, while 30% depended on fuel exports and 23% on minerals, ores and metals.
More than half of the countries depending on agricultural commodity exports, and two-thirds of countries relying on minerals are African. The region of Asia and Oceania was home to almost half of those dependent on fuel exports.
UNCTAD defines a country as dependent on commodities when its commodity exports account for more than 60% of its total merchandise exports in value terms.
When this share exceeds 80%, the country is considered “strongly commodity export dependent”, which was the case for seven out of 10 commodity-dependent developing countries in 2014-2015.
Launched in 2012, this is the third edition of The State of Commodity Dependence series. – UNCTAD

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