constraints on growth and economic development:
absence of capital markets, primary product dependency, savings gap, foreign exchange gap and capital flight, corruption, absence of stable government, infastructure , lack of education and training.
primary product dependency is where a country is reliant on exporting hard and soft commodities.
problems of primary product dependency include:
price fluctuations given their inelastic price elasticity of demand and supply ( use cobweb theorem here ).
fluctuations in producer incomes and foreign exchange earnings
difficult in planning investment and output
protectionism by developing countries - such as the EU CAP ( domestic subsidies to producers in developed countries make it hard for…