A country is considered export dependent when commodities make up a large portion of its exports. According to provided information, a country is commodity export dependent when more than 60% of its total merchandise exports are commodities.
In simpler terms, if a country relies heavily on raw materials or primary products for the majority of its export revenue, it's considered export dependent.
Here's a breakdown:
- Definition: Reliance on commodities for a significant percentage of export revenue.
- Threshold: More than 60% of merchandise exports consisting of commodities.
- Implication: The country's economy is strongly tied to the global prices and demand for those specific commodities.
To illustrate this, imagine a hypothetical country called "Mineria" whose primary export is iron ore. If iron ore exports consistently account for 70% of Mineria's total export earnings, Mineria would be classified as commodity export dependent. This reliance makes Mineria vulnerable to fluctuations in the global iron ore market.
