On the Priorities of Comparative Advantage of Agro-industry Commodities: the way towards Economic Transformation

Yagoub Elryah


Economic development in Sudan has been facing more challenges than ever before in 2011 after South Sudan gets independence, where Sudan lost 75% from oil revenues. As a result, Sudan underwent structural reform that favored the concentrating in non-oil sector. Considering that agriculture has been largely contributing to the GDP, it seems that the main drivers’ of economic growth. One of the most important questions regarding the New Structural Economics framework is (a) why industrialization becomes one the most determinants of country’s economic development, (b) has Sudan’s economic structure change over the years from 1980-2015, and (c) what the nature of that change? The purpose of this work is to identify the priorities of agro-industry commodities that Sudan has to focus on. It develops theoretical framework to investigate the sectoral composition trends of output and employment, and discusses these on the New Structural Economics framework. This study adopted two empirical models to analyze the collected data, which are obtained from different sources. Many of the hypotheses were supported. Major findings of this study are as follows. The analysis of RCA and PAM revealed that Sudan had lower costs in producing of agricultural and agro-industries commodities, except textiles manufacturing. The share of industrial sector in total employment and total output has declined during 2001 and 2015 period. Further analysis reveals that structural change has a negative impact on Sudan’s economy and growth of labor productivity, the share of service in output has steadily increased, reflecting reallocation of employment away from agriculture towards service and trade activities. This study finds evidence of negative structural change on Sudan’s economy and the share of value added manufacturing sector has decreased dramatically.

Full Text:



Ahmed, E., et al. (2012). Mechanism of Poverty Incident in Agricultural Sector of Sudan. Journal of Development and Agricultural Economics, 4(14) , 371–383.

Ahmed, M. M. (2010). Sudan Phase 2. London: Overseas Development Institute (ODI).

Ali, A. A. (2009). On the Challenges of Economic Development in Post-Conflict Sudan. Journal of Arab Planning Institute.

Andrei A. Levchenko and Jing Zhang. (2014). Ricardian Productivity Differences and the Gains from Trades. European Economic Review, 65, 45-65.

Andrei A. Levchenko and Jing Zhang. (2016). The Evolution of Comparative Advantage: Measurement and Welfare Implication. Journal of Monetary Economics, 78 , 96-111.

Anthony Bebbington, T. B. . (2013). Political Economies of Agro-industry: From Documenting Complexity to Informing Current Debates Introduction to Development and Change Virtual Issue 2. Development and Change, 00(0), 1-16.

Balassa, B. (1977). Revea Comparative Advantage Revisited: Analysis of Relative Export Shares of the Industrial Countries 1953-1971. The Manchester School, 45, 327-344.

Barro, R. J., and X. Sala-i-Martin . (1995). Economic Growth. Massachusetts : Massachusetts Institute of Technology Press .

Benhabib, J. and M. M. Speigel . (1994). The Role of Human Capital in Economic Development: Evidence from Aggregate Cross-country Data. Journal of Monetary Economics, 34(2), 143-173.

Bernard Andrew B., Jonathan Eaton, J. Bradford Jensen and Samuel. (2003). Plants and Productivity in International Trade. American Economic Review, 93, 1268-1290 .

Borensztein, E., J. De Gregorio and J. W. Lee. (1998). How Does Foreign Direct Investment Affect Economic Growth? Journal of International Economics 45(1), 115-35.

Brandt, L., Hsieh, C., & Zhu, X. . (2008). Growth and Structural Transformation in China". In L. B. (Eds.), "China's Great Economic Transformation (pp. 683-728). Cambridge: Cambridge University Press. doi:10.1017/CBO9780511754234.018.

CHIKAMAI, B.N., W.B. BANKS, D.M.W. ANDERSON and W. WEIPING . (1996). Processing of gum arabic and some new opportunities. Food Hydrocolloids 10 (3) , 309-316.

Cripps, T.F. and Tarling, R.J. (1973). Growth in Advanced Capitalist Economies 1950–70. Cambridge : Cambridge University Press.

Curtis, C. C. (2016). Economic reforms and the evolution of China's total factor productivity. Review of Economic Dynamics, 21, 225-245.

David Damiyano and Macleans Mzumara . (2013). Is it Oil only that Matters in Sudan’s Foreign Sector? Greener Journal of Economics and Accountancy, 2(2), 62-67.

Deardorff, A. V. (2010). Thoughts on Revealed Comparative Advantage. OECD Global Forum on Trade Chengdu. Beijing, China: OECD Global Forum on Trade Chengdu.

Dekle, Robert and Vandenbroucke, Guillaume. (2009). A Quantitative Analysis of China's Structural Transformation. Journal of Economic Dynamics and Control, 36(1), 1-168.

Duarte, M. and Restuccia, D. . (2010). The role of the structural transformation in aggregate productivity. The Quarterly Journal of Economics, 125(1), 129–173.

Elryah, Y. (2015). Back to the Agriculture - the Development of the Comparative Advantage of Sudan’s Commodities. Journal of Finance and Economics, 3(1), 1-5.

F., R. (1928). A mathematical theory of saving. The Economic Journal, 38(152), 543–59.

Fagerberg, J,. and B. Verspagen . (2002). Technology-Gaps, Innovation-Diffusion and Transformation: an Evolutionary Interpretation. Research Policy, 31, 1291–304.

FAO. (2014). Information System on Water and Agriculture . Khartoum, Sudan: Food and agriculture of the United Nation (FAO).

Felipe, J. (1999). Total factor productivity growth in East Asia: A critical survey . Journal of Development Studies, 35(4), 1-41.

Gisselquist, R. M. (2015). State capability and prospects for close coordination Considerations for economic policy in Africa. WIDER Working Paper 2015/035 World Institute for Development Economics Research, 1-16.

Gollin, D., R. Jedwab and D. Vollrath . (2016 ). Urbanization with and without Industrialization. Journal of Economic Growth, 21(1), 35-70.

Hag, A. (1997). Export Performance in Sudan: Recent Trends and Policy Impact. Journal of Economic Cooperation among Islamic Countries 18(4), 57-76.

Herrendorf, Berthold, Christopher Herrington, and Akos Valentinyi. (2014). Sectoral Technology and Structural Transformation. American Economic Journal – Macroeconomics.

IFAD. (2009). Republic of Sudan: Country Program Evaluation. Khartoum. 2060–SD: 136.: International Food Agricultural Development.

Imad Eldin Yousif, Azaria Elbushra, and Azhari Ibrahim. (2010). The Impact of the Economic Partnership Agreement with the European Union on the Agricultural Trade of Sudan. International Journal of Sudan Research, 1(1), 83-89.

Industry, S. M. (2005). The comprehensive industrial survey (Vol. 4). Khartoum: Sudan Ministry of Industry.

J., C. (1977). Modern Capitalism. Oxford: Martin Robertson.

J., M. M. (2003). The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity. Econometrica, 71(6), 1695-725.

JA, S. (1934). The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Cambridge, MA: Harvard University Press.

Johnston, J. and J. DiNardo . (1997). Econometric Methods, 4th ed. New York: Scribd.

Jones, Charles and Paul M. Romer,. (2010). “The New Kaldor Facts: Ideas, Institutions, Population, and Human Capital”. American Economic Journal: Macroeconomics, 2(1), 224–245.

Ju J, Lin J, and Wang Y. . (2015). Endowment structures, industrial dynamics, and economic growth. Journal of Monetary Economics, 76, 244–263.

JY, L. (2011). "New structural economics: A framework for rethinking development. . The World Bank Research Observer, 26(2), 193–221.

Kaikati, J. (1980). The Economy of Sudan: A Potential Breadbasket of the Arab World? . International Journal of Middle East Studies 11(1), 99-123.

Kaldor, N. (1967). Strategic Factors in Economic Development. Ithaca: Cornell University Press.

Kathuria V., and R. S. N. Raj. (2009). Is Manufacturing an Engine of Growth in India? Analyis in the Post Nineties. Paper for the UNU-WIDER/UNU-MERIT/UNIDO Workshop, Pathways to Industrialisation in the 21st Century. New Challenges and Emerging Paradigms.

Kongsamut, Piyabha, Sergio Rebelo, and Danyang Xie. (2001). Beyond Balanced Growth. Review of Economic Studies, 68 , 869–882.

Krugell, W. &. (2009). Measuring the Export Capability of South African Regions. Development Southern Africa, 26(3), 459-476.

Levine, R. (2005). Finance and Growth: Theory and Evidence. In P. Aghion and S. Durlauf (Eds.), Handbook of Economic Growth 1st ed (pp. 865-934). Amsterdam : Elsevier.

Lewis, W. A. (1955). The Theory of Economic Growth. Homewood, Illinois : Richard D. Irwin. .

Lin JY, and Chang HJ . (2009). Should industrial policy in developing countries conform to comparative advantage or defy it? A debate between Justin Lin and Ha-Joon Chan. Development Policy Review 27(5), 483–502.

Lin JY, and Monga C. . (2011). Growth identification and facilitation: The role of the state in the dynamics of structural change. Policy Research Working Paper 5313. World Bank. Washington, DC. .

Lin JY, and Treichel V . (2014). Transforming Economies: Making Industrial Policy Work for Growth, Jobs and Development. In N. I.-W. Salazar-Xirinachs JM, Making industrial policy work for development. . Munikh: International Labour Organiz.

Lin, J.Y., and H. Chang. (2009). DPR Debate: Should Industrial Policy in Developing Countries Conform to Comparative Advantage or Defy It? Development Policy Review, 27(5), 483–502.

Lucas, R. (1988). “On the Mechanics of Economic Development. Journal of Monetary Economics, 22(1), 3-42.

MACRAE, J. and G. MERLIN. (2002). The Prospects and constraints of development of gum arabic in Sub-Saharan Africa. Washington, D.C.: World Bank. .

Masters W & Winter-Nelson A. . (1995). Measuring the comparative advantage of agricultural activities: Domestic resource costs and the social cost–benefit ratio". American Journal of Agricultural Economics, 77, 243–50.

McMillan, M. and D. Rodrik. (2011). Globalization, Structural Change and Productivity Growth. In A. M. M. Bacchetta, Making Globalization Socially Sustainable (pp. 49-84). Geneva: International Labour Organization and World Trade Organization.

Miller, R.E., e P.D. Blair . (2009). Input-Output Analysis: Foundations and Extensions. Cambridge: Cambridge University Press, Second Edition.

Monga, C. (2012). The Growth Report and New Structural Economics . In J. Lin, New Structural Economics: A Framework for Rethinking Development (pp. 81-140). Washington DC: International Bank for Reconstruction and Development / International Developm.

Monke and Person . (1989). The Policy Analysis Matrix for Agricultural Development. Ithaca: Cornell University Press.

Morsy H., A. Levy and C. Sanchez . (2014). Growing Without Changing: A Tale of Egypt’s Weak Productivity Growth. Working Paper Series, No. 940, . Economic Research Forum.

Nour, S. (2011). Assessment of industrial performance and the relationship between skill, technology and input‐output indicators in Sudan. UNU-MERIT Working Papers.

Ranis G, and Fei JCH . (1961). A theory of economic development. The American Economic Review, 51(4) , 533–65.

Ricardo, D. (1817). Principles of Political Economy and Taxation. London: John Murray.

Rodrik. (2013, November 19). Structural Change, Fundamentals, and Growth: An Overview. Retrieved from mimeo: http://j.mp/1HgaMHD

Rogerson, R. (2008). Structural Transformation and the Deterioration of European Labor Market Outcomes. Journal of Political Economy, 116 , 235-259.

Rui, H. (2005). Development, Transition and Globalization in China’s Coal Industry. Development and Change, 36(3) , 691–710.

S, K. (1979). Growth and structural shifts. In: Galenson W, ed. Economic Growth and Structural Change in Taiwan. The Postwar Experience of the Republic of China . London: Cornell University Press .

Stephen, K. (1990). Framers and Failure of Agribusiness in Sudan. Middle East Journal, 44(4), 649-667.

Stiglitz, J., J. Lin, C. Monga, and E. Patel. (2013). Economic Policy in the African Context. Washington, DC: Policy Research Working Paper, World Bank.

Taha, A. (2016). Economic aspects of the transformational industries, an evaluation study of Sudanese . Applied Economics and Finance, 3(3).

Todaro, M. A. (2011). Economic Development (11th ed.). Boston: Addison Wesley.

DOI: https://doi.org/10.5296/rbm.v6i1.14377


  • There are currently no refbacks.

Copyright (c) 2019 Yagoub Elryah

Research in Business and Management    ISSN 2330-8362

Copyright © Macrothink Institute  

To make sure that you can receive messages from us, please add the 'macrothink.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.

If you have any questions, please contact rbm@macrothink.org