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7. CONCLUSION
2017 marked the first year that world trade increased significantly over the last five years. Thus
world trade volume increased by 4.7 per cent in 2017 which represents 2.4 percentage points
higher growth rate compared to the average growth rate of the previous three years.
The strong performance world trade volume in 2017was mainly due to cyclical factors including
robust global economic activity, increases in commodity prices which led to higher incomes in
commodity exporters (which increases import demand) and investment in the energy sector.
On the other hand some structural factors such as the maturation of global value chains and
slower pace of trade liberalization continue to constrain world trade growth. In 2017 import
demand from both developed and developing economies increased but growth rate of
developing economies imports was more remarkable.
The total OIC exports increased strongly by 17.1 per cent to 1.6 trillion dollars in 2017
representing an increase for the first time since 2012. Meanwhile total OIC imports, which fell
by 11.3 per cent and 6.6 per cent in 2015 and 2016 respectively, picked up by 8 per cent and
amounted to 1.7 trillion dollars. Thus total OIC trade increased by 12.3 per cent to 3.4 trillion
dollars in 2017 which was still 813 billion dollars below the level of total OIC trade recorded in
2013.
Several factors accounted for the strong performance in total OIC exports in 2017 including the
revival of global economic activity and rising commodity prices. Rising commodity prices
especially that of oil price led to increased export revenues of resource based countries and
increased their import demand. On the other hand ongoing political developments in many
countries in the Middle East constrain further increases in the OIC trade. Besides, OIC export
volume (i.e eliminating the effects of exchange rates and prices) indeed increased slightly by 1.8
per cent indicating that the most of the increase in total OIC exports stemmed mainly from the
rise in commodity prices, in particular oil prices in 2017.
The share of intra-OIC trade in total trade peaked at 19.0 per cent in 2017. However, it is still
below its potential and there is a substantial variation amongst the OIC countries in terms of the
share of intra-OIC trade to total. Considering that it is aimed to achieve 25 per cent of intra-OIC
trade share in the total OIC trade by 2025 according to the OIC-2005:Programme of Action, the
Member Countries need to enhance their cooperation in order to increase the share of their
intra-trade.
Total OIC exports are highly concentrated. Although mineral fuels, oils and distillation products
has still the highest share in total OIC exports, its share decreased by 18 percentage points
between 2012 and 2016 due to fall in oil prices. However the share of mineral fuels and oils in
total OIC exports increased to 45.0 per cent in 2017 owing to rise in oil prices Commodity
concentration is even more apparent when countries examined specifically. Fuels was the main
exported item in many members ranging between 42 to 96 per cent of total exports. Yet some
other member states heavily depend on specific primary commodities such as metalliferous
ores, or agricultural commodities. Examination of export product diversification using
Herfindahl index in the OIC yields that there a little tendency towards increasing product
diversification and there is a wide variation among OIC countries. Moreover, the product
concentration of the OIC countries exports is well above world averages.
Market concentration of OIC merchandise exports is also high. Although OIC exports are mainly
destined to developed countries. China alone accounted for 11.3 per cent of total extra-OIC
exports. The high commodity and country concentration in total OIC exports is a major