Daily Management Review

16 countries most vulnerable to the export crisis


04/12/2017


The world is gripped by an export crisis. Stagnation of world consumption and decline in commodity prices have led to increased instability and a decrease in security in countries that are highly dependent on exports.



The origins of the export crisis lie in the economic recession experienced by the US and European countries due to the financial crisis of 2008. These countries were the largest consumers of Chinese goods, mainly industrial products with low cost. The decline in profits slowed the growth of the Chinese economy, which led to a decrease in demand in China for raw materials and goods. This led to a drop in prices for raw materials, as well as a sharp decline in the level of world exports.

The list of most vulnerable countries includes Russia, Kazakhstan, Mongolia, South Korea, China, Taiwan, Germany, Azerbaijan, Turkmenistan, Saudi Arabia, Australia, Nigeria, Angola, Zambia, South Africa, Chile.

These countries can be divided into several categories:

- "Heavyweights" (China, Russia, Germany, Saudi Arabia)

- Important peripheral countries (Azerbaijan, Kazakhstan, Turkmenistan, Mongolia, Nigeria)

- Pacific countries (Chile, Taiwan, Australia, South Korea)

- African countries (South Africa, Zambia, Angola)

The first group includes countries that are major regional powers. Their economies have a significant impact on neighboring countries, and problems in one of them can lead to a domino effect in neighboring countries.

The economies of the countries of the second group depend heavily on regional powers and on their relations. In case of instability or economic crisis, these economies will be subject to negative influence from the large neighboring countries, and their situation in the economy will significantly worsen.

The group of Pacific countries is traditionally vulnerable to the export crisis, but so far they have not felt the full effect of this crisis.

As for the African countries, the export crisis could give an impetus for changes in the economic situation that has developed over the decades.

Yet, there’s still a hope. Exporters can only hope that the importing countries will help them get out of the export crisis.

However, experts note that the recovery prospects are not so bright as importers are not buying enough goods to help compensate for the effect of the crisis. Another way out of the situation for exporters is to increase domestic demand. However, it is very difficult to do.

Therefore, experts predict that exporters will remain in a state of crisis as long as current trends in the world economy continue.

source: geopoliticalfutures.com






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