COMCEC Trade Outlook 2019
16
Product concentration of total OIC exports is very high. The
exports of mineral fuels, oils and distillation products in
total OIC exports has been leading sector or groups of
commodities during 2016, 2017 and 2018. This is
particularly due to the rise in oil prices since 2017. This
sector was followed by electrical machinery and equipment, pearls, precious stones, ores, slag
and ash and machinery, mechanical appliances. These five sectors as a whole accounted for 64
per cent of total OIC exports in 2018.
Figure 15: Evolution of OIC Exports to World- Top 5 Items
Source: ITC Trade map
The resilience of a country against external economic shocks varies depending on among others
the degree of export diversification. One common measure of concentration is Herfindahl-
Hirschmann Index (HHI) 13 which can take values between 0 and 1 where being close to 0
indicates well diversified exports while a higher value indicates greater concentration of exports
on a few commodities.
Figure 16 illustrates the evolution of product diversification in the OIC compared to world and
developed and developing countries for the period 2009-2018 measured by HHI. Developed
countries export product diversification has not changed much as these countries have more
stable and mature export structures 14 . This measure shows a modest tendency towards
increasing product diversification in the OIC countries whereas developing countries achieved
a more diversified exports structure in the same period. Moreover, the product concentration in
the OIC countries exports are well above than those of world and developing countries. OIC has
a HHI of 0.27 whereas world and developing countries have HHI of 0.07 and 0.10 respectively
in 2018.
Figure 16: Evolution of Herfindahl-Hirschmann Index (Product HHI)
13 The Herfindahl-Hirschmann Index (HHI) is calculated by taking the square of export shares of all export categories in the
market: This index gives greater weight to the larger export categories and reaches a value of unity when the country
exports only one commodity
14 WTO World Tariff Profiles, 2018
0
200
400
600
800
1000
1200
Mineral fuels, mineral
oils etc.
Electrical machinery
and equipment and
parts thereof etc.
Natural or cultured
pearls, precious or
semi-precious stones
etc.
Machinery,
mechanical
appliances, nuclear
reactors, boilers; parts
thereof
Plastics and articles
thereof
Billion Dollars
2016 2017 2018
“Product concentration of
total OIC exports is also
very high”