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
Incidence: 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.
Claim: 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