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Published online by Cambridge University Press: 02 July 2024
Although exports of underdeveloped countries (UDCs) are currently for the most part primary products, with manufactured exports accounting for only about 15 per cent of the total, the future growth of these exports is crucial to the success of efforts to achieve economic development in these countries. This proposition holds regardless of whether one accepts the widely held view that the outlook for primary product exports is extremely bleak. That view may turn out to be too pessimistic. The proposition that there is a secular tendency for the prices of primary products to decline relatively to those of manufactured products is not well supported by either the empirical evidence (unless that evidence is presented rather selectively) or by theoretical argument. The claim that prices have a long-run tendency to move against primary products and in favour of manufactured products is often the premise to an argument that the UDCs will have to move out of specialization in primary products towards the production and export of manufactured products. But the conclusion does not depend upon this premise. Production of primary products will not be a sufficient basis for economic development even if the trends in primary product prices turn out to be extraordinarily favourable. A few countries in specially favourable circumstances may be able to raise income per head to high levels by achieving high levels of productivity in the production of primary products and obtaining their requirements of manufactured products through international trade.
Readers interested in a deeper and more technical discussion of the questions discussed in this note will find it in H. G. Johnson, Economic Policies towards Less Developed Countries, Unwin University Paperback. The report of the United Nations Conference on Trade and Development is highly relevant, and a useful statistical source. Volume IV is on Trade in Manufactures. cf. also Economic Nationalism in Old and New States, ed. by H. G. Johson, Unwin University Paperback.
page 69 note 2 Perhaps this is just because primary products' is a huge collection of disparate goods subject to different influences, hence not a useful way of classifying exports.But the manner in which exports should be classfied to conform to the pessimistic view is not clear.
page 71 note 1 From data prepared for the United Nations Conference on Trade and Development (UNCTAD) 1964 it is known that exports of manufactures grew relatively more rapidly than other exports in the period 1955‐61 (about 5 per cent per annum).However, this rate applies to all exports.The extent of exports of manufactures varies greatly between the UDG.The countries with rapidly growing exports in this area are also often those that already have high levels of exports.
page 74 note 2 Of course the UDC could combine protection with policies designed to discourage capital inflows; e.g.punitive taxation of the profits of foreign‐owned companies.That such policies are not usually adopted merely reflects the fact that the official stance of most UDCs is to favour more private investment inflow, which is not to say that they find the formthat it now takes ideal from their point of view.
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