World Investment Report 2009: Transnational Corporations - Unctad

102 World Investment Report 2009: Transnational Corporations, Agricultural Production and Development
(e.g. Australia, Canada, France, Germany, the United
Kingdom and the United States) dominated in the
export of wheat (annex table A.III.2).
Agriculture also provides significant
employment opportunities in developing countries
and is a crucial source of livelihood for the rural
poor, in particular women (chapter IV; OECD, 2006).
In 19 developing countries, agriculture accounted
for more than 40% of total employment during
2002–2006. 8 More than 60% of the population
in Africa and Asia live in rural areas, and most of
them are employed in agriculture (table III.3).
While agriculture accounts for more than half of
employment in Africa, wide variations exist within
the region. 9 Similarly, large variations exist in Asia
where employment in agriculture accounted for over
40% of total employment in South, East and South-
East Asia but less than 25% in West Asia during
2002–2006. Effective agricultural growth could
therefore contribute to employment creation and
reduce poverty in developing countries, in line with
MDG-1. 10 Indeed, in poor countries, under the right
conditions, agriculture is at least twice as effective
in reducing poverty as compared to GDP growth
originating outside agriculture (World Bank, 2007: 6).
b. Agriculture as a neglected motor for
development
Despite the importance of agriculture as a
motor of development, it has been neglected in many
developing countries (FAO, 2008d; HLTF, 2008).
Region
Investment in agriculture, measured as a proportion of
gross capital formation (GCF), 11 has been declining in
both developed and developing countries over the past
few decades, although the absolute level of investment
has been increasing (table III.4). In 2007, agriculture’s
share in GCF in developing countries was 9.3%, with
significant variations across regions. 12 Much of this
relative decline has been due to underinvestment by
the domestic public sector, as well as the low level of
private investment. It has also been due to the falling
share of agriculture in total ODA, from a high of
13% in 1985 to less than 4% between 2002 and 2007
(figure III.2; UNCTAD, 2008g).
Agriculture’s relative economic importance in
developing countries has fallen significantly since the
1970s, as many developing and transition economies
have shifted or attempted to shift their economies
towards manufacturing and services (United Nations,
2006: 32). However, there is a significant difference
between those countries where the low/declining
importance of agriculture is due to their passing
through a process of agricultural transformation and
transition or diversification, and those where it is the
result of neglect, underinvestment and consequent
low productivity in agriculture. Low agricultural
commodity prices over a prolonged period of time
in the past have also affected developing-country
agricultural exports and terms of trade, resulting in
stagnant or low rates of growth and investment capacity
in commodity-export countries. In some countries,
national policies favouring rapid industrialization,
urbanization and other industrial activities over the
Table III.4. Estimated gross capital formation in agriculture, a 1980–2007
(Millions of dollars and percentage share in total)
Value ($ million) Share in total gross capital formation (%)
1980 1990 1995 2000 2005 2007 1980 1990 1995 2000 2005 2007
World 215 585.6 272 894.8 279 923.8 255 830.7 386 403.3 525 413.0 7.5 5.5 4.4 3.7 4.0 4.4
Developed economies 77 677.0 112 885.7 112 177.9 97 233.8 122 049.5 145 681.1 3.9 2.9 2.3 1.9 1.8 1.9
Developing economies 104 336.1 115 161.8 155 359.5 150 929.7 248 042.7 354 478.2 16.8 14.0 11.5 9.8 9.2 9.3
Africa 20 117.1 15 870.5 14 004.9 14 317.8 22 336.6 34 617.8 18.5 17.3 14.2 14.1 12.9 13.9
North Africa 4 757.1 6 115.4 5 375.6 5 836.2 7 525.8 11 754.8 12.1 15.1 11.7 11.8 10.3 11.6
West Africa 10 119.6 3 317.9 2 711.5 2 697.2 5 732.2 10 157.4 30.2 31.8 31.5 27.6 30.6 31.5
Central Africa 1 260.3 1 458.0 1 177.8 1 058.1 1 899.6 2 589.3 22.0 24.6 25.7 20.5 16.4 15.7
East Africa 1 751.2 2 796.1 2 512.9 3 030.8 4 654.8 6 630.7 37.3 40.7 36.2 34.4 33.1 32.0
Southern Africa 2 228.9 2 183.1 2 227.3 1 695.5 2 524.2 3 485.6 8.7 7.8 6.9 5.9 4.6 4.5
Latin America and the Caribbean 16 573.1 21 636.0 23 386.3 21 530.4 28 145.2 44 837.9 8.5 9.6 6.9 5.5 5.8 6.2
South America 10 600.1 15 683.6 18 669.2 13 771.3 19 390.0 33 620.3 8.4 10.1 7.0 6.1 6.7 7.1
Central America 4 850.0 4 432.5 3 839.7 6 663.3 7 620.6 9 767.7 8.9 8.5 6.8 4.8 4.6 4.6
Caribbean 1 122.9 1 520.0 877.5 1 095.7 1 134.6 1 449.9 8.8 7.8 4.6 3.8 3.3 3.4
Asia 67 272.5 77 235.1 117 414.2 114 662.8 197 028.2 274 435.0 21.2 15.3 13.0 11.0 9.8 9.7
West Asia 4 332.2 8 903.2 10 408.8 10 075.9 12 414.4 19 378.2 6.3 11.6 10.3 8.5 5.8 5.8
South, East and South-East Asia 62 940.3 68 331.9 107 005.3 104 586.9 184 613.7 255 056.8 25.2 16.0 13.3 11.4 10.2 10.2
Oceania 373.4 420.1 554.1 418.8 532.7 587.5 20.1 15.4 16.3 14.7 10.8 10.1
South-East Europe and the CIS 33 572.5 44 847.3 12 386.4 7 667.1 16 311.2 25 253.7 11.4 19.0 10.5 10.6 7.4 6.2
South-East Europe 3 109.4 2 038.8 1 478.3 1 269.1 2 556.9 3 517.3 13.6 17.2 18.8 14.9 10.5 10.3
CIS 30 463.1 42 808.5 10 908.1 6 398.0 13 754.3 21 736.3 11.2 19.1 9.9 10.0 7.1 5.8
Source: UNCTAD, based on data provided by the United Nations Statistical Office.
a Agriculture, hunting, forestry and fishing.
Note: Gross capital formation (GCF) data were available for 10 to 30 countries only, which account for 13%–18% of total GCF. For
other countries, the share of agriculture, hunting, forestry and fishing in value added was applied to total GCF to estimate GCF in
agriculture.