Development economics

Table of Contents

1. Topic pack - Development economics - introduction
2. 4.1 Economic development (notes)
3. 4.1 Economic development (questions)
4. 4.2 Measuring Economic Development (notes)
5. 4.2 Measuring development (questions)
6. 4.3 The role of domestic factors in economic development (notes)
7. 4.3 The role of domestic factors in economic development (questions)
8. 4.4 The role of international trade (notes)
   1. Role of international trade - introduction
   2. Trade problems (LDCs)
   3. Problems - over-dependence on primary products
   4. Price volatility of primary products
   5. Consequences of price volatility
   6. Price increases can also be problematic!
   7. Price volatility case study - tomatoes
   8. Price volatility case study - copper
   9. Trade strategies for growth and development
   10. Import substitution
   11. Import substitution case study - sorghum
   12. Export promotion
   13. Export promotion case study - Thai toy industry
   14. Trade liberalization
   15. The role of the World Trade Organization
   16. Background information
   17. The Doha round
   18. Case study - trade sanctions
   19. Bilateral and regional preferential trade agreements
   20. Case study of a bilateral preferential trade agreement
   21. Case study of a multilateral preferential trade agreement
   22. Some background reading
   23. Diversification
   24. Case study - diversification
   25. Diversification in Malawi - video
   26. Some background reading
9. 4.4 The role of international trade (questions)
10. 4.5 The role of Foreign Direct Investment (FDI) (notes)
11. 4.5 The role of foreign direct investment (questions)
12. 4.6 The role of foreign aid and multilaterial development assistance (notes)
13. 4.6 The role of foreign aid and multilateral development assistance (questions)
14. 4.7 The role of international debt (notes)
15. 4.7 The role of international debt (questions)
16. 4.8 The balance between markets and intervention (notes)
17. 4.8 The balance between markets and intervention (questions)
18. Print View

Trade problems (LDCs)

Syllabus:Trade problems facing many economically less developed countries

With reference to specific examples (Data Response remember), explain how the following factors are barriers to development for economically less developed countries:

• Over-specialization on a narrow range of products
• Price volatility of primary products
• Inability to access international markets

Also Higher Level Only

With reference to specific examples, evaluate the following factor as a barrier to development for economically less developed countries.

• Long-term changes in the terms of trade

• Overspecialization on a narrow range of products (Plus Page 99)
  

Developing economies mainly trade in primary (Commodities) exports.

The export revenue earned from their sale pays for imports of manufactured goods. Diversification has been a slow process and it has a strong geographic bias. The Far Eastern economies have been able to move up through the categories of exports to command increased market shares of low and medium technology goods. Alas, for many of the poorer African countries, the reliance on low-valued primary exports has not fallen by a significant amount in their sources of foreign exchange earnings.

In 1970, primary exports constituted 72% of total developing country exports. By 1999, this had fallen to 48% for low-income countries and 32% for middle-income countries. Nevertheless, this proportion still contrasts noticeably with only 18% for advanced economies. The percentage remains exceptionally high for many of the poorest African countries at over 90%.