143 Countries Are Net Importers of Fuels Globally: Report

The United Nations Trade and Development (UNCTAD) in a conference recently unveiled a report on commodities and shared an update on its role in the development of emerging nations. This report sought to evaluate factors that bolster the adoption of eco-friendly industrial policies in developing countries reliant on commodities. It further expounds on UNCTAD’s mission, emphasizing the need for economies to evolve and diversify, particularly within the context of a low-carbon transition.

The report delves into the challenges faced by countries that rely on commodities, be it for exports or imports. The report underscores that both developed and developing nations have substantial dependencies on basic commodities, including food, fuels, and fertilizers. The data from 2019 to 2021, encompassing 195 UNCTAD member states, reveals that 131 countries were net importers of basic food, 143 of fuels, and 154 of fertilizers. The report states an example, of 2022, reduced gas supply to Europe pushed up liquified natural gas (LNG) prices globally – with dire consequences for some Asian countries. The report mentions that, among the 95-commodity dependent developing countries (CDDCs). The report elaborates that, moreover there are 73 countries that were net importers of basic food, 60 of fuels and 79 of fertilizers, and 42 were net importers of all three basic commodity groups.

Challenges for Nations Dependent on Commodities Import: 

The report defines the commodity-dependent developing countries (CDDCs), as countries that derive at least 60 percent of their total merchandise export revenues from commodity exports. The report adds that these countries have long over-relied on the extraction and export of natural resources to support their economies. While this concentration on the commodity sector has brought revenues to these countries, it has also created numerous challenges and vulnerabilities.

The report suggests that these countries are at a risk, as commodity importing countries, are often found to have volatile incomes and slow economic growth. The report suggests that these countries are at a risk for commodity importing countries, that are often found to have volatile incomes and slow economic growth. This is referred to as commodity trap, which refer to the prices fluctuate in international markets. It refers to the phenomena in which the developing countries that are dependent on exporting these commodities often have volatile incomes and slow productivity growth and can be politically unstable.

The report demonstrates other factors such as, after the onset of the war in Ukraine, import dependence is also a risk. The report illustrates an example of 2021, in Egypt that sourced 75 percent of its wheat imports from the Russian Federation and Ukraine. Whereas Mexico sourced 98 per cent of its maize imports from the United States of America; and Nepal sourced 99 per cent of its rice imports from India.

The report maps the journey to decreased emissions and sustainable development requires CDDCs to find the right balance between conventional and green energy sources. The report states that, while complete reliance on green energy may not be immediately viable, these nations should utilize the most accessible and reliable energy sources. Simultaneously, the report mentions that it must establish the infrastructure to transition seamlessly to green energy in the future. The report anticipates that, while over time, the demand for green products is expected to rise, as the appeal of traditional carbon-based products dwindles. Thus, the report answers that, during this transitional period, CDDCs should not merely be consumers of green energy systems but active participants, fostering the innovation and production of green technologies.