The disruptive entry of China into the global economy, with its thirst for minerals and energy and its prowess in manufacturing, has had a major impact on the terms of trade. India's impending entry is likely to exacerbate this shift in relative prices. This shift in relative prices poses both challenges and opportunities for SSA, including constraining the prospects of the manufacturing sector.
The Making the Most of Commodities Programme (MMCP) addresses the opportunities opened for SSA minerals and energy producing economies. Its primary focus is on how to enhance these economic and social opportunities arising from the exploitation of primary commodities. This requires policies to exploit SSA mineral resources particularly through the alignment of the National System of Innovation with the commodities sector. Furthermore the MMCP will focus on the opportunities of an expanded commodities specialisation for other productive sectors (upstream and downstream linkages), inequality and governance.
With this distinctive focus on primary level research the MMCP addresses five knowledge gaps:
1. What are the strengths and weaknesses of the National Systems of Innovation (NSI) in relation to the commodities sector, and how might it be more effectively utilised to enhance the exploitation and value addition of the commodities sector?
2. What determines the size, nature and development of upstream linkages feeding into the minerals sector?
3. What determines the size, nature and development of downstream linkages using the output of the minerals sector?
4. What are the distributional outcomes consequent on the exploitation of commodities, including ownership, labour utilisation and size-composition of upstream and downstream linkages?
5. What are the implications of the entry of new foreign investors in the SSA commodities sector and policy levers can be employed to gain maximal national advantage?
This research agenda will be pursued in a context which strengthens research capabilities in SSA, builds and sustains research networks and interfaces closely with policy makers at the national, regional and global level. Primary research will be conducted with key informants in the NSI, and upstream and downstream linkages in the commodities sector.
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