Limited diversification is an underlying characteristic of many low-income countries (LICs). Concentration in sectors with limited scope for increases in productivity and quality may result in less broad-based and sustainable growth. Moreover, lack of diversification may increase exposure to adverse external shocks and macroeconomic instability. The SDN will have three objectives. First, to review and extend the evidence, from the existing literature and ongoing IMF work, that points to diversification as a crucial aspect of the development process. A major focus will be on cross-country and cross-regional differences in the pace of diversification. Second, to draw lessons from the experiences of those countries that have successfully diversified their economies. Third, to analyze the relationship between diversification, growth, and volatility.

Export structure is less diversified in low-income countries (LICs) and especially small states that face resource constraints and small economic size. This paper explores the potential linkages between export structure and economic growth and its volatility in LICs and small states, using a range of indices of export concentration differing in the coverage of industries. The empirical analysis finds that export diversification may promote economic growth and reduce economic volatility in these countries. Furthermore, the analysis demonstrates that the economic benefits of export diversification differ by country size and income level—there are bigger benefits for relatively larger and poorer countries within the group of LICs and small states.

Limited diversification is an underlying characteristic of many low-income countries (LICs). Concentration in sectors with limited scope for increases in productivity and quality may result in less broad-based and sustainable growth. Moreover, lack of diversification may increase exposure to adverse external shocks and macroeconomic instability. The SDN will have three objectives. First, to review and extend the evidence, from the existing literature and ongoing IMF work, that points to diversification as a crucial aspect of the development process. A major focus will be on cross-country and cross-regional differences in the pace of diversification. Second, to draw lessons from the experiences of those countries that have successfully diversified their economies. Third, to analyze the relationship between diversification, growth, and volatility.

Diversification and structural transformation play important roles in influencing the macroeconomic performance of low-income countries (LICs). Increases in income per capita at early stages of development are typically accompanied by a transformation in a country’s production and export structure. This can include diversification into new products and trading partners as well as increases in the quality of existing products.

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Despite strong economic growth since 2000, many low-income countries (LICs) still face numerous macroeconomic challenges, even prior to the COVID-19 pandemic. Despite the deceleration in real GDP growth during the 2008 global financial crisis, LICs on average saw 4.5 percent of real GDP growth during 2000 to 2014, making progress in economic convergence toward higher-income countries. However, the commodity price collapse in 2014–15 hit many commodity-exporting LICs and highlighted their vulnerabilities due to the limited extent of economic diversification. Furthermore, LICs are currently facing a crisis like no other—COVID-19, which requires careful policymaking to save lives and livelihoods in LICs, informed by policy debate and thoughtful research tailored to the COVID-19 situation. There are also other challenges beyond COVID-19, such as climate change, high levels of public debt burdens, and persistent structural issues.

Bachelor Thesis from the year 2020 in the subject Business economics - Trade and Distribution, , course: International Business, language: English, abstract: Export diversification on financial boom has been a controversial problem in the empirical literature for a long time. The motive behind this paper is to analyze, why Ethiopia battles to promote and diversify its exports and what are the engines of impressive boom of China’s foreign trade, assuming any; lessons can Ethiopia take from Chinas foreign exchange journey, since it has been the most profitable developing nation in this contemporary generation of globalization. The issue of accelerated financial increase has been the principal agenda in economic coverage formula for most of the Sub-Saharan Africa (SSA) and different developing nations of the world. The records of the financial overall performance of most SSA counties show off that they had been performing higher earlier than their colonial independence than today. The economic boom of existing day developed countries like the United States, Canada, Australia and New Zealand is mostly attributed to international exchange. International exchange has been given a great deal significance in the policy formulation of many LDC. Maddison (2007) and Mkandawire & Unies (2004) contended that International exchange has additionally performed a vital position in the historical development of the third world countries. South Korea, Taiwan, Hong Kong and Singapore have been generally attributed to the overall performance of the exterior sector. Ethiopia has actively pursued the import- substitution industrialization approach in the course of the Imperial and Derg regimes. After the fall of the Dergue regime, however, the contemporary regime initiated trade liberalization. An empirical investigation to discover out the contribution of exports to economic growth is very integral part. Export diversification has been the concern of most developing nations such as Ethiopia. Despite such a concern, few developing nations in East and South East Asia have managed to attain a diversified export shape with increased extent of manufactures. Diversification and structural transformation play vital roles in influencing the macroeconomic overall Performance of low-income countries (LICs) Diversification in exports and in domestic manufacturing has been conducive to faster economic boom in LICs. Accelerated diversification is additionally associated with decrease output volatility and larger macroeconomic stability.