THE PRIMARY COMMODITY PROBLEM IN THE SHORT- AND LONG-RUN FOR DEVELOPING COUNTRY EXPORTERS : A COMPARATIVE STUDY OF SELECTED ASEAN COUNTRIES

Abstract

This academic exercise is an attempt to examine the long and short-term commodity problems facing developing countries. The approach is mainly descriptive in order to provide an easy reading for the readers. The focus of the problems is on the long-term deteriorating terms of trade and the short-term export instability for the developing countries. These two problems arise from the long-term commodity price movements and short-term variations in commodity prices and export volumes. A study on the selected Asean countries is conducted. The findings of this study suggest that the long-term deteriorating terms of trade and the short-term export instability had adversely affected the Asean countries' economies from 1960 to 1987. Thus, the countries should take some action to solve these commodity problems in order to have long-term economic development.