Commodity-dependent countries grow to 20-year high: UN report

Source:Xinhua Published: 2019/5/16 13:46:47

The number of countries that depend on commodities has reached its highest level in 20 years, a new report released Wednesday by the United Nations Conference on Trade and Development (UNCTAD) reveals.

The average commodity price levels between 2013 and 2017 were substantially below their peak between 2008 and 2012, the report says.

UNCTAD defines a country as dependent on commodities when these account for more than 60 percent of its total merchandise exports in value terms.

The State of Commodity Dependence Report 2019 published shows that commodity-dependent countries increased from 92 between 1998 and 2002 to 102 between 2013 and 2017.

"Given that commodity dependence often negatively impacts a country's economic development, it is important and urgent to reduce it to make faster progress towards meeting the sustainable development goals," said UNCTAD Secretary-General Mukhisa Kituyi.

More than half of the world's countries and two-thirds of developing countries are dependent on commodities, the report indicates.

Commodity dependence affects developing countries almost exclusively, according to the report.

It affects 85 percent of least developed countries, 81 percent of landlocked developing countries, and 57 percent of small island developing states.

With 89 percent of countries in Sub-Saharan Africa being commodity-dependent, it is the hardest-hit region.

It is followed by the Middle East and North Africa, where 65 percent of countries depend on commodities.

Half of the countries in Latin America and the Caribbean and half of the countries in East Asia and the Pacific are also commodity dependent.

Commodity dependency is also persistent, according to the report.

The dominant groups of exported products changed in only 25 percent of countries between 2013 and 2017, partly due to changes in commodity prices.

The number of countries dependent on the export of agricultural products declined from 50 to 37 between the 1998-2002 and 2013-2017 periods.

The number of mineral-dependent countries steadily rose, from 14 to 33, while the number of energy-dependent countries increased from 28 to 32.

Relative price fluctuations among the different commodity groups contributed to changes in the dominant product groups exported, as the prices of energy and minerals increased much more than those of agricultural and manufactured goods.

The report also found that commodity-dependent developing countries are vulnerable to adverse commodity price shocks and price volatility.

The 2019 report, the fourth edition in the series launched in 2012, contains 189 statistical country profiles of developed countries and economies in transition.

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