Economic transformation and progress towards the SDGs through trade

SDG indicators
Goal 8: Decent work and economic growth

Target 8.9: By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products.
Indicator 8.9.1: Tourism direct GDP as a proportion of total GDP and in growth rate (Tier II)


Goal 17: Partnerships for the goals

Target 17.11: Significantly increase the exports of developing countries, in particular with a view to doubling the least developed countries’ share of global exports by 2020.
Indicator 17.11.1: Developing countries’ and least developed countries’ share of global exports (Tier I)

Global trade can be a powerful source for economic transformation. As underlined by the Bridgetown Covenant, its rapid expansion has enabled the emergence of some nations from the periphery of the world economy and into the global spotlight and ...significant reduction of poverty -—
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. However, the impressive expansion of global trade, investment and technology registered over the past decades has unfortunately not resulted in benefits for all -—
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. Since 2011, the LDCs have hardly increased their share of global trade. Almost two thirds of developing economies remain commodity dependent1 or tied to lower-value activities in manufacturing or services sectors.

Trade in goods and services in developing economies and LDCs reached a record level in 2022

The COVID-19 pandemic has hampered international trade and led, in 2020, to the drop of exports of goods and services of developing economies and LDCs by about 9 per cent and 15 per cent, year-on-year, respectively. Since then, total trade recovered and, in 2022, hit a record high of US$13 trillion for developing economies and US$317 billion for LDCs (Figure 1). Trade in goods for both groups expanded at a faster pace than trade in services, registering, in 2022, 40 per cent growth from 2019. It was worth US$11 trillion for developing economies and US$268 billion for LDCs. In contrast, trade in services of developing economies remained relatively small and grew by 15 per cent compared to pre-COVID-19 levels, while for LDCs, trade in services dropped by about 1 per cent.

Figure 1. Positive trends in goods and services trade in developing economies and LDCs
(Billions of current US$)

Source: UNCTADstat -—
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Note: Year 2022 figures are estimates.

LDCs’ participation in world trade lags further behind other developing economies

In 2022, developing economies’ share in world exports has risen to about 42 per cent, compared to 37 per cent in 2010 (Figure 2). For LDCs, the SDG target 17.11 of doubling their share of global exports by 2020 from 2011 (2 per cent target) was not met. Despite the growth of their exports in absolute terms during the period, LDCs’ share in world exports of goods and services has hovered around 1 per cent since 2011. In comparison, the indicator averaged 39 per cent in the same period for developing economies. LDCs accounted for about 0.9 per cent of world goods exports and 0.2 per cent of world services exports.

Figure 2. LDCs are not on a track to reach SDG Target 17.11 as to significantly increase their share in global exports
(Percentage, SDG 17.11.1)

Source: UNCTADstat -—
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Note: Year 2022 figures are estimates.

Only a few developing economies significantly increased their share in world exports of goods and services from 2011 to 2022 (Map 1). There was a tenfold increase for Timor-Leste and a ninefold for Djibouti. Armenia, Cambodia, Benin, Lao People's Democratic Republic, Niue, Sao Tome and Principe, and Viet Nam also more than doubled their shares. Guinea increased its share in global exports from the small base of 0.006 per cent in 2011 to 0.04 in 2022. As for China, it increased its share by 1.4 times during the same period. The share in exports of goods and services declined in Lesotho, Malawi, and Vanuatu.

Map 1. Only a few developing countries’ cover a significant share of global exports of goods and services
(Percentage, SDG 17.11.1)

Source: UNCTADstat -—
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Note: Year 2022 figures are estimates.

In 2021, top export destinations for developing economies and LDCs included the United States of America, with about 17 per cent for developing economies and 8 per cent for LDCs, China with about 13 per cent and 23 per cent, respectively, and India with 4 per cent and 7 per cent, respectively (Figure 3).

Figure 3. China and the United States of America remain major exports destinations for developing economies and LDCs
(2021, percentage)

Source: UNCTADstat -—
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China’s exports growth of high-tech manufactured goods slows

Over the past decade, China has emerged as a prominent force in the exportation of high-tech manufactured goods. In 2021, China alone accounted for an impressive 19 per cent of global exports of high-skill and technology-intensive manufactures (Figure 4). To put this into perspective, the United States of America and Germany each held approximately 8 per cent share in the global exports of these goods.

Figure 4. China alone accounted for almost one fifth of global exports of high-tech manufactures, 2021
(Percentage)

Source: UNCTADstat -—
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Note: Manufactured goods by degree of manufacturing groups refers to the April 2023 classification, as specified in -—
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and is according to the three-digit level of SITC Revision 3.

After an unusually high export growth of 29 per cent in 2021, year-on-year, the growth of China’s exports of high-skill and technology-intensive manufactured goods slowed to 2 per cent in 2022 (Figure 5). On-going geopolitical tensions and global trends of supply chain diversification drive this slowdown. While exports of high-skill electronics and parts and components for electrical and electronic goods declined (about 8 per cent and 2 per cent, respectively), the exports of other high-skill goods, excluding electronics grew (15 per cent), including goods like miscellaneous chemical products and inorganic chemical elements.

Figure 5. Growth of China's exports of high-tech manufacturers slows after an unusual expansion in 2021
(Growth rate, percentage)

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Note: Manufactured goods by degree of manufacturing groups refers to the April 2023 classification, as specified in -—
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and is according to the three-digit level of SITC Revision 3.

Developing economies in Africa continue to struggle with trade diversification

Developing economies’ exports concentration index in 2021 stood at 0.09 (Figure 6), notably higher than for developed economies (0.06). Exports are most concentrated in Africa (0.21) (Figure 6). The export mix was more varied in the developing economies of Asia and Oceania (0.11). LDC’s export concentration stood at 0.19, and SIDS at 0.21. While the exports of these economies are still highly concentrated, developing economies have managed to reduce export concentration in the last 10 years. In 2021, top 25 countries with the highest concentration index were all developing economies, seven of them LDCs.

Figure 6. Exports concentration, even though reduced since 2010, remains highest in Africa
(Herfindahl-Hirschman Index (HHI)

Source: UNCTADstat -—
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Note: The concentration is measured by the Herfindahl-Hirschman Index (HHI). An index value closer to one indicates that a country’s exports or imports are highly concentrated in a few products. On the contrary, values closer to zero reflect a more homogeneous distribution of exports or imports among a series of products. The country grouping refers to the April 2023 classification, as specified in -—
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In 2021, manufactured goods accounted for about 70 per cent of total merchandise exports from developing economies, with China accounting for almost half of the total exports of manufactures of the group. The share of fuels has reduced from about 23 per cent in 2010 to 13 per cent in 2021, largely due to volatility of primary commodities prices. Ores, metals, precious stones, and non-monetary gold accounted for about 8 per cent of total exports of developing economies, followed by food (8 per cent) (Figure 7).

Merchandise exports of LDCs are largely focused on primary commodities and simple manufactured products, such as textiles and clothing. In 2021, manufactured goods accounted for 34 per cent of total exports in LDCs, an increase of 13 percentage points from 2010. Ores, metals, precious stones, and non-monetary gold were another largest product group in 2021 (29 per cent), followed by fuels (20 per cent). The share of agricultural products (agricultural raw materials and food) in LDCs' exports increased from around 9 to about 13 per cent during the same period.

Figure 7. Fuels' share in exports of developing economies and LDCs reduced significantly from 2010 to 2021, while the share of manufactured products increased
(Percentage)

Source: UNCTADstat -—
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Services exports are highly concentrated in a few countries

Trade in services is highly concentrated, with mainly the same countries ranking as leading services exporters since 2010. China, India and Singapore are the top three developing-country exporters and accounted for 15 per cent of global services exports in 2022 (Figure 8). China, the leading exporter of services among developing countries, ranked third globally in 2022. Singapore ranked eleventh in 2010, but increased its share to about 4 per cent, making it the eight largest exporter of services in the world in 2022. In 2022, three developing economies reached the global top 10 exporters group, while in 2010 there were only two.

Figure 8. Top 10 services exporters accounted for more than half of the global markets, increasing their share further from 2010 to 2022
(Percentage)

Source: UNCTADstat -—
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based on UNCTAD-WTO services dataset.

Note: Year 2022 figures are estimates.

From the beginning of the pandemic in 2020, the exports structure of developing economies as a group has been dominated by services other than transport and travel. By contrast, LDCs' international services sales have been dominated by travel, except for the pandemic years 2020 and 2021, in which transport topped LDCs’ services exports. (Figure 9)

Figure 9. Services exports of developing economies exceeded pre-pandemic levels in 2022, LDCs services exports still recovering
(Billions of current US$)

Source: UNCTADstat -—
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based on UNCTAD-WTO services dataset.

Note: Year 2022 figures are estimates. Other services cover a heterogeneous group of products dominated by various business services, telecommunications and computer services, and intellectual-property, insurance and financial services. They also include construction, personal, cultural and recreational services, goods-related services, and government goods and services.

Growth in trade of transport and travel services of LDCs follow the same tendencies as in the group of developing economies. In other services it has not been the case in recent years. In 2021 and 2022, developing states recorded 17 and then four per cent rise in other services, while LDCs registered decline for both years (Figure 10).

Figure 10. Among services exports, travel bounced back strongly in 2022
(Growth rate, percentage)

Source: UNCTADstat -—
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based on UNCTAD-WTO services dataset.

Note: Year 2022 figures are estimates.

Growing importance of telecommunications, computer, and information services in exports of developing economies

Exports of telecommunication, computer, and information services by developing economies have been steadily growing since 2010 (Figure 11). The pace of growth picked up further, as the pandemic closedowns solicited larger and innovative usage of these services. The trend has continued in the post-pandemic times. Since 2014, the growth of exports of telecommunications, computer, and information services from LDCs had been slowing down, but had picked up from 2020 on, with the pandemic.

Figure 11. LDCs lag further behind in exports of telecommunications, computer and information services
(Billions of current US$)

Source: UNCTADstat -—
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based on UNCTAD-WTO services dataset.

Note: Year 2022 figures are estimates.

Small and vulnerable economies hit harder by tourism losses during the pandemic

Tourism sector and its economic importance had been growing for most developing economies over the first two decades of the century, until the COVID-19 pandemic brought touristic activity to an abrupt plunge in 2020. In 2019, direct contribution of tourism to GDP stood at 3.8 per cent of GDP for developed countries and at 5.1 per cent for the developing (Figure 12). Tourism is very important for SIDS: before the pandemic in 2019, estimated at 7.1 per cent of GDP. With the pandemic lockdowns in 2020, developing economies lost more than half of the tourism contribution to GDP, while the developed world lost a third. For SIDS, the plunge was even more pronounced, as in 2020 the contribution of tourism to GDP had dropped to only one fifth of the level recorded in 2019.

Figure 12. SIDS hit hard as direct tourism contribution to GDP dropped to one fifth of 2019 levels in 2020
(Percentage, SDG 8.9.1)

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Inbound tourist arrivals to developing economies had steadily been growing up to 2020, when they plummeted to their lowest levels for decades (Figure 13). Then, in 2022, developing economies recorded 446 million inbound visitor entries, accounting for 50 per cent of the 2019 numbers. For 2022, LDCs also registered half of the pre-pandemic inbound arrivals. SIDS reported 54 million arrivals, representing a solid recovery though still 30 per cent below the 2019 level.

Figure 13. Inbound tourist arrivals still below pre-pandemic levels in developing economies, LDCs and SIDS
(Millions)

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Note: Year 2022 figures are UNCTAD secretariat’s preliminary estimates.

Inbound tourism expenditures (tourism exports) recuperated in 2022 but remained below the 2019 levels globally. Estimates indicate that developing economies recovered close to 85 per cent of the pre-pandemic tourism receipts, LDCs recovered 95 per cent, while SIDS surpassed the 2019 inbound tourism expenditures by some 8 per cent (Figure 14).

Figure 14. Inbound tourism expenditures rebounded in 2022, exceeding pre-pandemic levels in SIDS
(Billions of current US$)

Source: UNCTADstat -—
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based on UNCTAD-WTO services dataset.

Note: Year 2022 figures are UNCTAD secretariat’s preliminary estimates. Tourism exports (inbound tourism expenditures) include two BPM6 services items: travel and passenger transport.

★ UNCTAD in Action ★

TrainForTrade has a global impact: nearly 15 000 trained from over 200 countries

Map 2. People from 218 countries participated in TrainForTrade activities, 2018-2022

Source: UNCTAD TrainForTrade.

UNCTAD TrainForTrade provides bespoke technical assistance globally, with an emphasis on developing countries. It follows three goals:

  • Build sustainable networks of support and knowledge exchange to enhance South-South cooperation and national ownership;
  • Promote digital solutions and innovative thinking to strengthen the capacities of international trade players;
  • Encourage development-oriented trade policy to reduce poverty and to promote transparency and best practices in trade.

To accomplish these objectives, TrainForTrade combines e-learning, face-to-face and hybrid activities: an environmentally friendly and cost-efficient approach, providing mass access to high-quality education while allowing the training of individuals chosen for their capacity to impact their communities. TrainForTrade currently covers three areas: Port Management, e-Commerce and Trade Statistics. Between 2018 and 2022, it held 148 events, in which almost 15 000 people from 218 countries or areas took part (Map 1 and Table 1). These participants completed on average 7.5 days of training. Asia, Africa and the Americas accounted for the bulk of this capacity development, with respectively 43, 27 and 18 per cent of all attendees. TrainForTrade’s team led physical workshops in more than 43 countries, maintaining a strong field presence and an extended network.

Table 1. Nearly 15 000 participants trained by TrainForTrade between 2018 and 2022
Year(s)Number of
participants
Share of womenNumber of
certificates delivered
Hours of trainingDays of trainingNumber of countries
or areas covered
Average scoreSatisfaction
rate
201887136%39966 89210 5976677%87%
20192 93547%1 439127 64022 27516577%89%
20202 98443%1 38992 19617 79817178%88%
20214 45243%2 546145 06328 84717879%90%
20224 78638%2 417170 12732 66518978%92%
2018-202214 89843%8 190601 917112 18121878%89%

Source: UNCTAD TrainForTrade.

Note: For activities lasting longer than one year, the number of participants for each year is shown. For that reason, the number of participants does not add up to the 2018-2022 total. The number of certificates delivered should not be compared to the number of participants as not all activities lead to a diploma.

Building Port Resilience Against Pandemics was a very educative course. It empowered me and gave me the capacity of empowering others. I will share my knowledge and experience with fellow colleagues and the community at large.Ms Helena Newaka, Executive Secretary Commercial Department, NamPort, Namibia (2022)

Over the past five years, TrainForTrade has considerably boosted its global impact (Table B1). The number of participants per year has increased fivefold from 2018 to 2022, while the number of training days per year has tripled. In 2022, TrainForTrade delivered 100 000 additional training hours compared to 2018 and six times as many people obtained a certificate, attesting to the skills acquired. To achieve these results, TrainForTrade relied on the advantages of its longstanding e-learning experience and opened online courses to a broader audience. The Trade Statistics programmes accounted for 58 per cent of all participants, while the Port Management and e-Commerce activities represented 34 and 8 per cent, respectively.

Women’s empowerment is a priority. Overall, 43 per cent of all participants were female: an impressive figure given TrainForTrade’s activities related to sectors remaining largely male-dominant worldwide (i.e., port management). To multiply its impact and foster South-South Cooperation, TrainForTrade systematically trains future instructors who propagate their enhanced capacities and knowledge in their communities. Between 2018 and 2022, 308 high-profile candidates became “trainers” of the Port Management Programme, mostly in Africa and Latin America, after a series of intensive online and face-to-face seminars. With a satisfaction rate reaching almost 90 per cent and an average score approaching 80 per cent, TrainForTrade continues to promote achievement of SDGs (particularly goals 1, 5, 8, 9, 13, 14, 17) and aims to extend a world of opportunities for all.

Notes

  1. A country is considered to be export-commodity-dependent when more than 60 per cent of its total merchandise exports are composed of commodities.

References

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