Global crisis catches up with developing countries

Developing countries, which seemed to have escaped the worst of the world financial and economic crisis, are now being hit, with a knock-on effect on trade and transport volumes. Case studies on Zambia, Benin and Cambodia show that “the recent economic and financial crisis severely weakened the abilities of many LDCs to maintain steady income and spending,” a United Nations Conference on Trade and development (Unctad) expert told the organisation’s Trade and Development Board recently. Both exports and imports have fallen significantly since the boom of 2008. For African countries, although showing an increase in export revenue overall, the bulk of earnings is from oil, with exports of food and manufactured goods in particular falling. The findings are contained in a report presented to the Board. Teffere Tesfachew, director of the organisation’s division on Africa, said that in Zambia “it was estimated that the loss in mining production and reduced exports – which meant low royalty payments as well as temporary closure of some production activities – led the country to lose up to 22% of its government revenue between 2009 and 2010.” He added that the largest copper mining company in Zambia had reported a 40% reduction in all supplier contracts. Between June 2008 and June 2009, the total job loss in Zambia’s mining sector amounted to 30.4% of the total labour force engaged in mining.