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Study notes

Development and Growth Constraints - Primary Product Dependency

  • Levels: A Level
  • Exam boards: AQA, Edexcel, OCR, IB

Many nations still relying on specialising in and exporting low value added primary commodities.

Revision Video: Primary Product Dependency

Primary product dependency - revision video
  • The prices of these goods can be volatile on world markets
  • When prices fall, an economy will see a sharp reduction in export incomes, an adverse movement in their terms of trade, risks of a higher trade deficit and a danger that a nation will not be able to finance state-led investment in education, healthcare and core infrastructure
  • Despite being rich in natural resources, for many countries this is a curse rather than a blessing
Exports of least-developed countries by major product, 2010
(Percentage of total exports)
2005 2010
Others 14.6 19.4
Textiles 1.4 1.3
Other semi-manufactures 3.2 2.3
Raw materials 4.3 3.5
Food 9.2 9.9
Clothing 13.7 11.8
Fuels 53.6 51.7
Source: World Trade Organisation

Here are some examples of export dependence for a selection of countries in Sub-Saharan Africa: The data shows the % of total exports in 2010:

  • Angola: 97% oil
  • Ghana: 39% gold, 26% oil, 17% cocoa
  • Kenya: 19% tea, 12% horticulture
  • Senegal: 11% fish, 11% phosphate
  • Zambia: 84% copper

Sub-Saharan Africa (SSA) is often cited as a region where primary sector dependence is high. SSA's share in global manufacturing trade remains extremely low.

This chart from the Economist (published in December 2014) illustrates clearly the countries that are most heavily dependent on primary commodities either as a net exporter or a net importer:

http://www.economist.com/blogs/graphicdetail/2014/...

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