Commodities and LLDCs: Implications for post-Almaty PoA

Division for Africa, Least Developed Countries and
Special Programmes ( ALDC )
UNCTAD
Commodities and LLDCs:
Implications for post-Almaty PoA
Mussie Delelegn
Division for Africa, Least Developed Countries and
Special Programmes, UNCTAD
1 October 2014, UN, New York
Structure of the presentation
I. Role of commodities in LLDCs: Why commodities?
II. Current position of LLDCs in GVCs
III. Challenges in maximizing gains from commodities
IV. Policy conclusions and recommendations
Major observations
•
Resource-rich LLDCs are in a better position to build productive
capacities and enhance structural economic transformation.
•
There is a total lack of commodity policies or strategies at the
national, regional and global levels;
•
The current form of integration into RVCs and GVCs is through
primary commodities i.e. the locus is at the lowest segment in the
value chains;
•
Geographical disadvantage and commodity dependency are
causes and consequences high export concentration and greater
vulnerability to volatile financial and commodity markets
I. Role of commodities in LLDCs:
Why commodities?
A.
•
•
•
Share of commodities in total merchandise exports
Top ten export items of LLDCs
Export Concentration Index (ECI)
Economic Complexity Index
B. Commodities in total value addition
C. Employment intensity of commodities
A. Share of commodities in total
exports
•
24 of the 32 LLDCs are commodity dependent for their
exports;
• Range: 28 % (Nepal) - 99% (Chad);
• Median LLDC is dependent on commodities for 84.5% of
its export (2011- 2012);
• This share was 83.2% during 1995-1997
In LLDCs dependency increased over time
Top 10 export items of LLDCs
(2010 – 2012)
Product
Petroleum, petroleum products and related materials
Non-ferrous metals
Gas, natural and manufactured
Metalliferous ores and metal scrap
Iron and steel
Textiles fibres and their wastes
Non metallic mineral manufactures, n.e.s.
Gold, non-monetary (excluding gold ores and concentrates)
Inorganic chemicals
Vegetables and fruits
Source: UNCTADstat
Share
43.30%
7.40%
7.40%
5.70%
3.60%
3.00%
2.70%
2.50%
2.40%
1.80%
Degree of commodity dependence
AZE (3)
MDA (3)
TCD (3) 100%
KGZ (2)
NPL (0)
90%
BWA (3)
MKD (0)
80%
BFA (3)
UGA (2)
70%
60%
MLI (3)
UZB (3)
50%
40%
TKM (3)
AFG (3)
30%
20%
ZMB (2)
ARM (2)
10%
0%
BDI (3)
SWZ (2)
RWA (3)
ZWE (2)
MNG (3)
LAO (3)
KAZ (2)
NER (2)
BTN (2)
PRY (3)
CAF (3)
ETH (3)
TJK (3)
BOL (3)
LSO (1)
MWI (3)
Commodity dependence & ECI:
(2011 – 2012)
Share of
commodi es
100%
90%
LLDCs
80%
Transit countries
70%
Other developing
countries
60%
50%
40%
30%
20%
10%
0%
HHI
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1
B. Median share of commodities
in total value added (% GDP)
(2003 – 2012)
45%
40%
35%
LLDCs
30%
25%
Transit countries
20%
Other developing countries
15%
10%
5%
0%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Median share of commodities in
total value added within LLDCs
(% GDP) (2003 – 2012)
C. Employment: Median share of
commodities in country groups in
2013
80%
70%
60%
50%
40%
30%
20%
10%
0%
All LLDCs
Transit countries
Other
developing
countries
African LLDCs
Asian LLDCs
European LLDCs South American
LLDCs
II. Where do LLDCs stand in
Global Commodity Value Chains?
A. Technological sophistication:
i.
ii.
iii.
iv.
v.
Resource-based activities
Low-tech manufacturing
Middle level manufacturing
Sophisticated manufacturing
Knowledge-based services
Exports by level of sophistication
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Developing
economies
Developing Developing Developing Developing
economies: economies: economies: economies:
Africa
America
Asia
Oceania
Resources-based
Low-tech manuf
Sophisticated Manuf.
knowledge-based services
Least
developed
countries
Mid-levelManuf.
Landlocked
developing
countries
Economic Complexity Index (ECI)*
A. Diversity of Exports (No. of distinct products a country
produces and exports)
B. Ubiquity of Exports (No. of countries that produce and
export a given product)
For Comparison: Mauritius
Mauritius Exports by Technology Classification, 1995-2012
100%
90%
Share of exports (%)
80%
70%
60%
50%
40%
30%
20%
10%
0%
1995
1996
1997
PP
1998
RB 1
1999
RB 2
2000
LT 1
2001
LT 2
2002
2003
MT 1
2004
MT 2
2005
MT 3
2006
2007
HT 1
HT 2
2008
Other
2009
2010
2011
2012
Vietnam….
Vietnam Exports by Technology Classification, 1995-2012
100%
90%
Share of exports (%)
80%
70%
60%
50%
40%
30%
20%
10%
0%
1995
1996
1997
PP
1998
RB 1
1999
RB 2
2000
LT 1
2001
LT 2
2002
2003
MT 1
2004
MT 2
2005
MT 3
2006
2007
HT 1
HT 2
2008
Other
2009
2010
2011
2012
China……
China Exports by Technology Classification, 1995-2012
100%
90%
Share of exports (%)
80%
70%
60%
50%
40%
30%
20%
10%
0%
1995
1996
1997
PP
1998
RB 1
1999
RB 2
2000
LT 1
2001
LT 2
2002
2003
MT 1
2004
MT 2
2005
MT 3
2006
2007
HT 1
HT 2
2008
Other
2009
2010
2011
2012
III. Challenges & areas for policy
action
•
•
•
•
•
Trade facilitation
Infrastructure
Trade and investment policies
Productive capacities
Institutions
II. Trade Facilitation
i….Ease of trading across borders for LLDCs….
Figure 5(b): Lead time to... (days,
median case)
Figure 5(a): Number of documents to...
12
14
12
10
8
6
4
2
0
10
8
6
4
2
0
Export
Import
Export
Import
Figure 5(d): Cost to... (US$ per container)
5000
Figure 5(c): Time to... (days)
60
4000
50
3000
40
2000
30
20
1000
10
0
Export
0
Export
Import
LLDCs
Transit countries
Import
Other developing countries
II. Trade Facilitation
ii….Logistics Performance Index for LLDCs….
3,5
3,0
2,5
2,0
1,5
1,0
0,5
0,0
Ability to track and trace Competence and quality
consignments
of logistics services
LLDCs
Ease of arranging
competitively priced
shipments
Transit countries
Efficiency of customs
clearance process
Frequency with which
shipments reach
consignee on time
Other developing countries
Quality of trade and
transport-related
infrastructure
Overall score
II. Trade Facilitation
Ease of Doing Business ….
Rank
1
Other developing countries
25
LLDCs
48
Transit countries
72
95
119
142
166
189
Ease of Doing
Business
Rank
Starting a
Business
Dealing with
Construction
Permits
Getting
Electricity
Registering Getting Credit
Property
Protecting
Investors
Paying Taxes
Trading
Across
Borders
Enforcing
Contracts
Resolving
Insolvency
II. Infrastructure
Roads, paved (% of the total roads)
80
70
60
50
40
30
20
10
0
LLDCs
Transit countries
Other developing countries
II. Infrastructure…
Median Road density (km of road per 100 sq.km of land area)
40
35
30
25
20
15
10
5
0
LLDCs
Transit countries
Other developing countries
II. Infrastructure…
Median Rail density (Rail lines per 100 sq.km)
0,8
0,7
0,6
0,5
0,4
0,3
0,2
0,1
0,0
LLDCs
Transit countries
Other developing countries
Capital accumulation…
FDI Stock in selected country groups (% of
Percent
Percent
60
50
60
Other developing
countries
40
Transit countries
European LLDCs
50
40
30
30
20
20
Asian LLDCs
LLDCs
10
0
0
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
10
South American
LLDCs
African LLDCs
1
1
5
6
0
2
7
9
0
3
8
2
4
200 200 200 200 200 200 200 200 200 200 201 201 201
IV. Policy Conclusions and Recommendations
•
•
•
•
•
Commodity-based policies ;
Facilitate investment inflows to sectors of development interest;
Encourage or enhance the role of the private sector (domestic);
Foster industrialization, value addition & diversification;
Build productive capacities and accelaerate structural economic
transformation;
• Address main constraints on doing business;
• Take advantages of RVCs and GVCs by carefully examining regional
and global supply and demand chains along exports of their strategic
interest;

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