A country is commodity dependent when it derives at least 60 per cent of its merchandise export revenues from the commodity sector. In 2018–2019, about two thirds (64 per cent) of developing countries were commodity dependent compared to 13 per cent for developed countries (see chapter 2). This implies that commodity dependence is particularly a developing country phenomenon. The analysis of commodity dependence has attracted interest from development economists in view of the challenges associated with this characteristic. Indeed, commodity dependence is associated with problems such as slow growth, an undiversified economic structure, low human development, income volatility, macroeconomic instability, Dutch disease, political instability, poor political and economic governance, illicit financial flows, low social development, as well as high exposure to shocks, including those resulting from climate change and pandemics such as the coronavirus disease of 2019 (COVID-19).

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