many developing countries rely on exporting primary products to generate income
this is a barrier to economic development because
the prices of primary products are volatile - due to sudden changes in the factors of demand and supply e.g. weather
this can impact farmers' incomes and government tax revenues
this means people will not have the ability to improve their health and education
which is fundamental to the development of an economy
A* point
Terms of trade refer to the ratio of export prices to import prices. A deterioration means that a country has to export more to import the same amount of goods.
the Prebisch-Singer hypothesis suggests that the prices of primary goods (such as raw materials and agricultural products) usually stay low or fall whilst the prices of manufactured goods increases over time
those producing manufactured goods can benefit from economies of scale such as better technology - which you can't get with primary products which rely on a fixed amount of land
primary products are also inelastic in YED - as incomes increase, demand for fruit etc. stays the same, whereas the demand for manufactured goods e.g. phones/ cars increases.
those who produce primary products as main source of income will fall behind and this will increase inequality within countries and between countries