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The triple crisis of debt, demand and decarbonisation: a preliminary analysis of the impact of COVID-19 on commodity-dependent developing economies

Keston K. Perry (Department of Accounting, Economics and Finance, University of the West of England Bristol, Bristol, UK)

International Journal of Development Issues

ISSN: 1446-8956

Article publication date: 7 December 2020

Issue publication date: 6 July 2021




This paper aims to offer a preliminary overview and analysis of the impact of the COVID-19 crisis on commodity-dependent developing economies (CDDEs). Using debt, decarbonisation and demand as empirical and analytical prisms to understand impacts and dynamics, the paper offers “rent space” as a theoretical tool to appreciate the changing possibilities for using resource rents for capital accumulation and expand development frontiers. It maps out the certain common features among this group of developing countries facing an increasingly adverse and uncertain situation. It offers a political economic perspective on the global dynamics and internal political situation that constrain these countries’ ability to manage the effects of this external shock that date to the 2008 crisis, and to therefore shore up an effective recovery in the coming years.


The paper draws together secondary literature and evidence from a number of sources including the World Bank, United Nations and International Monetary Fund on the empirical situation in these countries in view of COVID-19. The paper uses a thematic approach to understand how the current crisis has exposed these embedded and worsening vulnerabilities in this group of countries.


Results demonstrate the wide-ranging effects of COVID-19 as an existential crisis of demand in short and medium term, the explosion of debt due to actually occurring financialisation and the looming medium and long-term consequences of decarbonisation that may oblige countries to abandon exploitation of fossil fuel resources.


In the final analysis, COVID-19 has revealed a number of lingering effects of the commodity boom and global financial crisis. The increased indebtedness that resulted not only underscores the long-term unviability of commodity-based development as a strategy but also reveals new unprecedented weaknesses and challenges. Given the current configuration of global and domestic political economy dynamics, the paper shows that the “rent space” in fossil fuel exporters is particularly constrained and shrinking, compared to mineral exporters, but all showing a trend towards concentration in commodity production overall and worsening prospects for green recovery or industrial pathway.



This paper has benefitted from discussions with colleagues and attendees at the “Economics of COVID-19” Seminar Series at the Department of Economics, SOAS University of London. The author thank the Department for the invitation to participate and members of the Open Economics Forum at SOAS as well as the attendees and supporters for their engagement and interest in this paper. He appreciates the unwavering support and encouragement of family, colleagues and friends, especially Jevon, Danielle, Zophia, Janelle, Kamilah, Joannah, Richard, Jenna, Shantelle, Ben and Stacy-Ann, all of whom in one way or another have kept him sane during 2020. All omissions and errors are the sole responsibility of the author.


Perry, K.K. (2021), "The triple crisis of debt, demand and decarbonisation: a preliminary analysis of the impact of COVID-19 on commodity-dependent developing economies", International Journal of Development Issues, Vol. 20 No. 2, pp. 226-242.



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