Dependence of countries on export of limited range of raw materials

Other Names:
Economic dependence of developing countries on export of primary commodities
Unplanned expansion of economic base
Single product operation
Single product economy
Single resource thinking
Unplanned production scale
Undiversified commodity-dependent countries
Dependence on few commodities has remained high in many developing countries. Rather than diversification of commodity patterns of trade, in several countries concentration has increased over the past decade; only a few countries have made tangible progress in diversification, primarily based on agro-business. High levels of investment in and substantial rationalization of the commodity sector in many developing countries have resulted mainly in productivity increases benefiting world markets, but only to a small extent in benefits for producers.
Low commodity prices are detrimental to the producing countries because they force them to sell their limited supplies at "give-away" prices. It is detrimental to industrial countries in the long run because these low prices hinder the necessary development of resource productivity. In this way a "lose-lose" situation is created in which no one benefits. The future consumer in both the richer and poor countries becomes the victim of this wastefulness.
Problem Type:
F: Fuzzy exceptional problems
Date of last update
24.02.2000 – 00:00 CET