Weak Links?

Yoshie Furuhashi furuhashi.1 at osu.edu
Thu Dec 12 18:45:41 PST 2002


At 6:46 AM +0530 12/13/02, Ulhas Joglekar wrote:
> > ***** World Politics 51.2 (1999) 297-322
>>
>> The Political Economy of the Resource Curse
>>
>> Michael L. Ross *
>>
>> ......At first glance, the role of resource wealth in economic
>> development looks like a question of dwindling importance. In 1970,
>> 80.4 percent of the developing world's export earnings came from
>> primary commodities; by 1993 it had dropped to 34.2 percent. But most
>> of this drop was caused by the fast growth of manufactured exports in
>> East Asia and a handful of Latin American states. Three-quarters of
>> the states in sub-Saharan Africa and two-thirds of those in Latin
>> America, the Caribbean, North Africa, and the Middle East still
>> depend on primary commodities for at least half of their export
>> income. 1...
>
>Which nations in Asia depend on exports of primary commodities?
>Afghanistan, perhaps? If you exclude petroleum products, primary
>commodities contribute less than 12% of the developing country
>exports. China, India and Indonesia depend on exports of primary
>commodities?

Michael L. Ross's article above does not discuss Asia (unless we consider the Middle East to be part of Asia). I don't know why you think we need to exclude petroleum from analysis. Here are some examples of shares of primary commodities in exports of several Asian nations:

***** REVIEW OF INTERNATIONAL ECONOMICS Manuscript No: #8526, Acceptance Date: September 14, 1999 Commodity Prices and the Term sof Trade* Prasad Bidarkota Mario J. Crucini RRH: COMMODITY PRICES AND THE TERMS OF TRADE LRH: Prasad Bidarkota and Mario J. Crucini

Abstract Combining national terms of trade data for developing countries with world prices of internationally traded primary commodities we find that variation in the world prices of three or fewer key exported commodities account for 50% or more of the annual variation in the terms of trade of a typical developing country. We also find that a considerable fraction of the variation is specific to a particular commodity and given that the overall importance of primary commodities differs across developing countries, we can account for much of the heterogeneity across them. We conclude that commodity price fluctuations should be central features of two related literatures: studies of business cycle transmission across developing and industrialized nations and empirical work aimed at constructing perpetual claims on developing country incomes as suggested by Shiller (1995)....

Principal Exports Share of Exports Fuel Country 1 2 3 1 2 3 34 Imports

China petroleum maize tea 13 2 1 23 1 Fiji sugar 43 52 18 India tea iron petroleum 5 4 3 23 16 Indonesia petroleum rubber coffee 31 5 4 51 21 Malaysia petroleum logs palm oil 18 12 9 52 9 Pakistan rice 8 24 19 Philippines copper logs coconut oil 5 3 7 28 20 Thailand rice rubber sugar 9 7 3 35 16

Table 2. Summary of Export Composition a a Columns (2)-(4) list the commodity names of the primary, secondary, and tertiary commodity exports of each country with the next three columns containing the share of national exports accounted for by each. The next column is the trade share accounted for by all 34 primary commodities listed in the original CTPT volume. The last column is the ratio of fuel imports to total imports. Sources: Columns (1)-(8) are from Commodity Trade and Price Trends, Table 9, Commodity Share of Country Total Exports, Average 1985-1987; column (9) is computed from World Bank Trade data....

[The full article is available at <http://www.vanderbilt.edu/Econ/faculty/Crucini/bidarkota-crucini-rie00.pdf>.] *****

At 6:46 AM +0530 12/13/02, Ulhas Joglekar wrote:
>Exports are not always decisive for economic growth. India's exports
>are about 10% of the GDP.

We can draw a variety of conclusions from your statement above. -- Yoshie

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