Primary commodities : historical perspectives and prospects
This paper treats four themes, intended to provide an historical framework for the analysis of national commodity export dependence. The first reviews the significance of primary commodities in the overall economy at different stages of economic development. The second theme tracks the long run decline in bulk transport costs, and explores the implications of this for the establishment of markets with a global reach. The third considers the 50-year wave of deep public intervention and control, in commodity production and trade, in the middle of the 20 th century. The fourth theme reviews commodity prices, both long run trends and short run instability. A final section of the paper summarizes the historical findings and looks forward in an attempt to provide some insights of relevance for nations heavily dependent on commodity exports. 1. Primary commodities in the economic development process The significance of the primary sector in a national economy is regularly reduced in the process of economic development. Long historical series to vindicate this statement are hard to come by. However, Simon Kuznets (1966) presents the following assessments of the shares of agriculture and mining in GDP in selected countries over extended periods of time. The contraction in the primary share emerges starkly from his figures: Australia c:a 1860 36%