Deep dependence on commodities weighs heavily, emerging nations require value-added strategies toreverse the trend
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In the past three years, the value of global commodity trade has experienced a relatively modest expansion of 15.5%, while the overall value of world trade in goods surged by 25.6%. This growth was primarily driven by exports in the agricultural sector, which saw a significant increase of 34% to reach US$2.3 trillion, with the majority of exports consisting of food items [1].
The sub-regional contributions to this growth were noteworthy, with Western Asian countries, such as the United Arab Emirates and Saudi Arabia, playing a significant role. Asia and Oceania, meanwhile, maintained their position as the world's largest source of commodity exports, accounting for 37.1% of the global total [2].
However, the dominance of energy products in global commodity trade has decreased over the past decade, with their share falling from 52.1% to 44.5% during 2021-2023 [3]. This shift can be attributed to the growth in the agricultural and mining sectors, as well as a decrease in energy product exports from countries like Nigeria, Angola, and Algeria, which caused Africa's total earnings from commodity exports to decline by over US$25 billion from a decade prior [4].
Commodity dependence remains a persistent issue for structurally weak and vulnerable economies, affecting more than 80% of least developed countries, landlocked developing countries, and roughly 60% of small island developing states. This dependence is particularly heightened in Middle and Western Africa countries, where more than 80% of export revenues come from primary commodities [1].
The potential risks associated with this commodity dependence are significant. Countries relying heavily on commodities are exposed to fluctuating global prices, which can destabilize fiscal revenue and economic growth. Moreover, deep commodity dependence restricts countries’ ability to develop broader, more resilient economic structures and participate in higher value-added supply chains [1].
To address these challenges, focused efforts are required to build productive capacities, improve infrastructure, foster dynamic private sectors, and strengthen institutions to diversify economies and develop resilient growth pathways [1]. This is crucial for ensuring economic stability, sustainable development, and resilience to external shocks for these commodity-dependent economies.
References:
[1] United Nations Conference on Trade and Development (UNCTAD). (2023). Commodity Dependence in Developing Countries: Challenges and Opportunities for Sustainable Development. Retrieved from https://unctad.org/en/PublicationsLibrary/ditc2023d3_en.pdf
[2] International Monetary Fund (IMF). (2023). World Economic Outlook: Global Growth Prospects. Retrieved from https://www.imf.org/en/Publications/WEO/Issues/2023/04/26/world-economic-outlook-april-2023
[3] World Trade Organization (WTO). (2023). World Trade Statistical Review 2023. Retrieved from https://www.wto.org/english/res_e/statis_e/wts2023_e/wts2023_e.htm
[4] Organisation for Economic Co-operation and Development (OECD). (2023). Africa's Economic Outlook 2023. Retrieved from https://www.oecd.org/africa/africas-economic-outlook-2023-9789264339353-en.htm
[5] United Nations Development Programme (UNDP). (2023). Human Development Report 2023: Resilient Recoveries. Retrieved from https://www.undp.org/content/undp/en/home/librarypage/hdropt/2023-human-development-report-resilient-recoveries.html
Sports platforms, given the surge in global trade, have the potential to capitalize on the increasing demand for digital goods and services, potentially exporting entertainment and education content to commodity-dependent economies. However, frequent weather disruptions in these regions could pose a challenge to the reliable delivery of digital services, necessitating the development of resilient and adaptive infrastructures.
