Bangladesh’s case is extreme amongst the lower-income countries. More than 80% of the country’s exports are garments, and garment demand has plummeted. But the leverage that exports provide in addressing the economic crisis is common across lowerincome countries. Export industries are a natural lever for several reasons. First, there is evidence that firms that export are more skill- and capitalintensive, and pay higher wages, even conditioning on skills (Bernard et al., 2007). Thus, in terms of income flowing into communities, each job is more valuable. Second, exports are a source of foreign currency that will be particularly important for countries that import food that is part of the basic diet.
Figure 1 shows the distribution of exports and imports in selected countries in SA and SSA. In Africa the majority of exports are in minerals (including oil) and food, with manufactured goods accounting for a modest share of exports. In Asia, a larger share of exports come from manufacturing goods. In all of the countries - except Bangladesh, which imports fabric to export garments - food and oil make up the largest share of imports. Most of the countries shown in Figure 1 are net exporters of food. However, exports and imports do not substitute for one another. Exports are concentrated in a few products that are not part of the basic diet - coffee and cacao, for example - while imports are concentrated in grains and other basic staples. The countries and the international community must make sure that this adherence to comparative advantage does not become a disadvantage during the crisis.
Commodity prices have softened but have not collapsed, and demand for food remains robust. So international markets should not have a large effect on the ability of countries to export. However, there are several other potential sources of disruption to exports that warrant some diligence. First is the logistics of ports and international transport. Of more direct control by governments is disruptions in the domestic part of supply chains. Restrictions on internal migration may be important for health reasons, but may also disrupt mobility of workers required for seasonal agricultural work. Restrictions on travel may disrupt local transport.
Figure 1a. Exports and imports by category for select sub-Saharan African countries (millions USD)1
Figure 1b. Exports and imports by category for select South Asian countries (millions USD)
