The term describes a raw material or primary agricultural product that is shipped out of a country for sale or trade in another. These items often represent a significant portion of a nation’s overall economic activity, especially in developing countries. A nation richly endowed with mineral resources, for instance, might rely heavily on sales of those materials to other countries, thereby establishing them as its main economic engine. Coffee beans grown in Brazil and sold internationally serve as a prominent example.
Reliance on these resources is both beneficial and carries risks. It can provide substantial revenue, stimulating economic growth and enabling investment in infrastructure and social programs. Historically, trade in these resources has shaped geopolitical landscapes, influencing trade agreements and international relations. However, over-dependence can render a nation vulnerable to price fluctuations in global markets. Furthermore, it can discourage diversification and development of other sectors of the economy.