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CONSEQUENCES OF THE CRISIS 57


sumption (although prior to 2001, at least, the ability to pay for these imports had increased among the net food-importing developing countries but declined among the LDCs).


However, Aksoy and Ng (2008) give a more nuanced picture. They recal- culate both food and general agricultural net import bills for low-, middle-, and high-income countries, but they disaggregate within each category by oil exporters, conflict states, small islanders, and “normal” countries. The key findings of their study are as follows. First, once the three special groups are omitted, the average low- or middle-income country has gone from being a net food importer in 1980/81 to being a net food exporter in 2004/05. How- ever, Africa still contains a large number of oil exporters and conflict states, as well as other exceptions, meaning that most African countries (35 of 47) are still net importers of food, even though most are also net exporters of all agricultural goods (32 of 47). Third, only six low-income countries have food deficits that are more than 10 percent of their imports, so most net food- importing developing countries are marginal net food importers. Finally, Aksoy and Ng (2008) also identify countries with considerable potential to switch from being net exporters of nonfood agricultural products to net exporters of food. Of course, this switch is much less relevant to the short-term impacts of the crisis, because switching from cash crops to food production takes a considerable amount of time and may be prohibitively costly. So the basic message from Aksoy and Ng (2008) is that the severity of food dependence is often overstated. For these reasons one might regard the rise in oil prices as a more serious threat to macroeconomic stability in develop- ing countries. Indeed, oil import costs are 2.5 times larger than food imports for low-income countries and twice as large for middle-income countries. Consistent with this observation, IMF (2008a) simulations confirm that in the absence of policy responses, the impacts of oil prices are considerably larger than those of increases in food prices. The study estimates that for 33 net food-importing countries with available data, the adverse balance-of- payments impact of the increase in food prices from January 2007 to April 2008 is 0.5 percent of 2007 annual GDP (US$2.3 billion, or 0.2 months of 2008 imports of goods and services). During the same period, the impact of the increase in oil prices in 59 net oil-importing countries is estimated to be 2.2 percent of GDP (US$35.8 billion, or 0.7 months of 2008 imports of goods and services). Moreover, IMF (2008a) also finds that further oil price increases in 2008 and 2009 would have had much larger adverse effects on foreign reserves than would equal rises in food prices (see Table 3.1). As it turns out, both oil and food prices have declined since mid-2008. Finally, although we have no data on overall terms-of-trade movements that factor into other commodities, we know that many net exporters of


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