1887

Commodity Prices, Aid and Debt

Implications for LDCs, Small Vulnerable States and HIPCs

image of Commodity Prices, Aid and Debt

This study reveals the extent of persistent downward trends in commodity prices on least developed countries (LDCs), small vulnerable states (SVSs) and heavily indebted countries (HIPCs) and proposes a Joint Diversification Scheme exclusively for export diversification schemes in the commoditydependent poor countries. The report also proposes and outlines the establishment of a Joint Diversification Fund, in addition to regular aid flows as a longterm solution.

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Conclusion

Most LDCs, HIPCs and SVSs rely predominantly on commodities for domestic production and export. Excessive dependence on commodities poses a severe development challenge to these countries. The surge in supply vis-à-vis depressed demand has resulted in a secular decline in commodity prices relative to those of manufactured goods.

English

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