Brazilian economy becomes more dependent on commodities, Unctad says

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Brazil has clearly become more dependent on commodities exports. That is what a report by the United Nations Conference on Trade and Development (Unctad) to be released in September will show. By the UN agency’s concept, a country is “commodity dependent” when at least 60% of its export revenues come from those products.

In Brazil’s case, the report will point out that the country’s commodity exports represented 56.5% of total exports in 2008-2009. Ten years later, this share has increased to 66.6%.

The Unctad released Wednesday another study in which Brazil still does not appear as dependent on commodities, but Argentina does (about 70% of export revenues). But experts say that the situation is dynamic and needs to be monitored frequently.

According to this study, 64% of developing economies depend on commodity shipments, compared to 60% ten years ago. If there are no changes in the current outlook, the survey says that it would take a commodity-dependent country 190 years to halve the difference between its current commodity share of total exports compared to non-dependent countries, on average.

Most countries risk remaining in this situation unless they increase their technological capabilities to escape “the commodity dependence trap that leaves their populations in poverty and vulnerability,” says Unctad.

The UN agency shows that reliance on commodities is strongly associated with poor levels of technology. According to an index prepared by Unctad, Brazil has the highest level of technological development among commodity-dependent developing countries.

Janvier Nkurunziza, an economist in the commodities division of the UN agency, notes that Brazil’s index is 32.7, still low compared to the benchmark of 100 characterizing the technological capacity of the Unite States.

Source: Valor international