Ministers Information: Egypt avoids the commodity dependency trap thanks to the diversity of

Ministers Information: Egypt avoids the commodity dependency trap thanks to the diversity of
Ministers Information: Egypt avoids the commodity dependency trap thanks to the diversity of

Books – Masrawy:

Today, Saturday, the Information and Decision Support Center issued a mini-report entitled: “A glimpse into the phenomenon and concept of commodity reliability… a standard of discrimination or an opportunity to transform into a modern and digital economy?”

The report highlights this phenomenon of “commodity dependence”, in which countries may fall, noting that 60% of developing countries are characterized by this phenomenon, while only 13% of developed countries suffer from it, according to UNCTAD data that confirmed the danger of falling into the trap. commodity reliability.

The report of the Information Center clarified the recommendations made by UNCTAD to avoid this trap, the most important of which was the diversification of the export basket, first, through the expansion of manufacturing industries; Especially for countries that depend on oil exports or earth minerals, and secondly, industrial technological uses. Examples of manufacturing industries that contribute to staying outside the trap of commodity dependence are the industries of petroleum derivatives, chemical fertilizers, liquefied gas, petrochemicals… and others.

The organization also recommended the need to switch to a digital economy as a way to avoid this trap.

Reports indicated that Egypt is one of the countries outside this trap thanks to the diversity of Egyptian exports and the government’s interest in expanding manufacturing activities (for example: petrochemicals, fertilizers, and liquefied gas); The report attached an overview of the top 20 exported commodity categories in Egypt, and their diversity was noted, as well as what the goals of the 2022/2021 plan for the industrial sector contribute to keeping Egypt out of this trap.

This comes within the framework of the commercial dependence of a number of countries on one or two commodities in their exports, and sometimes these commodities may represent 60% or more of their total exports. This situation can be called “commodity dependency” or, as UNCTAD explained, “the commodity dependency trap.”

This situation represents a danger to these countries, as it can represent a trap for them that is difficult to get out of, as the country becomes economically exposed to the fluctuations in the prices of these commodities and the global demand for them. Over the years, countries may not succeed in getting out of it except with difficulty.

 
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