Zim commodity export dependent: UN
THE United Nations has named Zimbabwe among 15 other countries within the Common Market for Eastern and Southern Africa (Comesa) that are heavily dependent on commodity exports resulting in low levels of development and high poverty rates.
In a statement yesterday, Comesa said the findings were part of a report from the United Nations Conference on Trade and Development (UNCTAD).
“The Commodities and Development Report for 2017 has revealed that these countries have continued to be commodity export dependent leading to them recording low levels of development and high poverty rates,” it said.
“The findings are based on the recent commodity price boom of 2003-2011, which showed that strong commodity prices do not alter the long-term pattern of their terms of trade. In addition, the terms of trade of economies that dependent on primary commodities tend to deteriorate in the long run due to the secular decline of primary commodity prices relative to the prices of manufactured goods.”
Other affected include Burundi, DR Congo, Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Rwanda, Seychelles, Sudan, Uganda and Zambia. The UNCTAD report further states that, Egypt, Swaziland and Mauritius have diversified their economies and are not categorised as commodity export depended countries.
Comesa said the 98-page document showcased results from 10 case studies conducted in 12 countries around the world namely; Costa Rica, Brazil, Argentina, Botswana, Sierra Leone, Ghana, Nigeria, Mali, Burkina Faso, Bangladesh, Indonesia and Zambia
“In view of this, UNCTAD has made several observations on the disadvantages of being too dependent on export commodities for developing countries. It has also given different policy recommendations that countries should introduce in-order to bring about holistic and inclusive development,” said Comesa.
“In addition we (Comesa secretariat) have since proposed that a joint study be conducted with UNCTAD to come up with permanent solutions to the dependency of commodities for export.”
It is understood that commodity export dependent developing countries derive the bulk of their export earnings from primary commodities such as minerals, ores, metals, fuels, agricultural raw materials and food. Export commodity dependence may cause potentially harmful impacts and affect all dimensions of sustainable development.
Most of the developing countries that depend on commodity exports and/or imports are characterised by low human development. The annual Commodities and Development Report series is produced jointly by UNCTAD and the Food and Agriculture Organisation (FAO).
It seeks to contribute to an understanding of the linkages between commodity markets and development outcomes by highlighting a number of transmission channels through which commodity prices impact an economy.
First, there are impacts that emanate from the terms of trade while commodity dependence presents fiscal and monetary policy challenges.
Thirdly, developments on international commodity markets can affect consumers and producers at the micro level.