Question

In the past half century, the developing countries have experienced major compositional shifts from exports of primary products (including agricultural and raw materials) to exports of manufactures. How might you explain this in terms of broad historical developments during this period?

Answer 1

World trade got huge fillip following world war 2. It was realized that international trade could start a high growth rate across the world. Developing countries started growth by exporting the predominantly agricultural goods.

Over a period of time, the technology started developing and it shifted from developed to developing countries. Now, these developing countries have adopted sophisticated technologies and exporting manufactured goods. Further, many MNCs have shifted their manufacturing units to these countries to reap the benefits of cheap labor.

Furthermore, the demand for agricultural goods is limited, thus there is hardly any scope to drive up the export through the agro products. Thus now these countries have witnessed a sharp rise in the manufacturing goods in the composition of export. The proportion of agro products is declining across the world.