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Developing Countries and Primary Product Production


Discuss whether or not developing countries benefit from producing mainly primary products.


International Trade and Exchange Rates

Preview Answer


I. Introduction
- Definition of primary products
- Significance of primary product industries

II. Advantages of producing primary products for developing countries
- Comparative advantage
- Source of economic growth, employment, tax revenue, and export earnings
- High quality and low-cost production by developed countries
- Revenue for development through exports
- Reduction of average costs through specialization
- Increasing demand and high prices for some primary products

III. Disadvantages of producing primary products for developing countries
- Slow demand growth and less value-added compared to manufactured products and services
- Adverse effects of weather and diseases on production and income
- Poor working conditions and low pay for unskilled jobs
- Trade restrictions imposed by developed countries
- Risks of over-specialization and lack of economic diversification
- Dependence on other countries for manufactured goods and services

IV. Conclusion
- Balancing the advantages and disadvantages of producing primary products for developing countries
- Importance of economic diversification for long-term growth and stability.

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