Marginalisation of LDCs and Small Vulnerable States in World Trade

image of Marginalisation of LDCs and Small Vulnerable States in World Trade

There are indisputable concerns over the ineffective participation of LeastDeveloped Countries (LDCs) and Small Vulnerable Economies (SVEs) in the process of global integration, and their failure to derive benefits from the ongoing process of trade liberalisation and globalisation. This paper explains the theme of 'marginalisation' of LDCs and SVEs in the international trade arena, and their declining relative importance in world trade. Statistical analysis is used to determine the longterm declining share of LDCs and SVEs in world merchandise exports. The study argues that the process of marginalisation of these countries is mostly the result of the failure of LDCs and SVEs to diversify from their static comparative advantage related to the production of primary products, the significance of which in world trade has declined considerably during the past decades. The analysis emphasises the need for diversification of exports and an expansion of the manufacturing export base in these countries.



LDCs and Small States in World Trade: Volume, Growth Rate and Share

During the last 50 years world exports of merchandise goods grew by more than 100 times from approximately $62 billion in 1950 to $6,327 billion in 2000 (Table 2.1); between 1950 and 2000, exports from developed countries multiplied by 106 times and developing economies fared even better, multiplying by 112 times. By these standards, the trade performances of LDCs and small states were very modest: their exports grew by 19 and 46 times respectively, but these increases were minimal when compared with the performance of developed and developing countries.


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