Export Diversification in Low‑Income Countries

This paper discusses major policy issues related to commodity dependence and export diversification in low-income countries. Contrary to some widely-held view, it argues that natural resources are not necessarily a “curse” — that they do not condemn low-income countries to underdevelopment but can provide rather a basis for sustained export-led growth. Natural resource-based sectors have potential for export diversification. The OECD “mirror” trade data suggest that many different routes to diversification exist, including resource-based manufacturing and processing of primary products. However, these opportunities are not being exploited in many low-income countries. This is because export diversification is typically a slow process, and this process needs to be sustained by an appropriate and coherent strategy, characterised by a combination of vision, co-ordination and management of conflicting interests. Moreover, the analysis of trade support services in two African countries ...