3 ms·

I think I skipped a few steps in my first comment. Let me break it down. 1) Countries are considered to be under a "resource curse" if they are unable to reach

by acchow 4y ago

I think I skipped a few steps in my first comment. Let me break it down. 1) Countries are considered to be under a "resource curse" if they are unable to reach advanced economy status because of hindered growth over long periods of time caused by an abundance of resources. If a country is an advanced economy, it is not under a "resource curse" 2) One measure of how advanced an economy is is the GDP per capita. I don't think this is really sufficient tho because you can imagine a country that is so abundant in, say, oil that they do nothing but extract oil and STILL reach a GDP per capita of $30k. They can do this all without any advancement of their economy, and they can use imports to satisfy their desire for consumption. 3) So I actually prefer an alternative measure of "advanced economy" - the majority of the economy is service based. Because Australia meets criteria 3, it is an advanced economy. (Australia also has a high GDP per capita, in case criteria 2 is more convincing to you). You could propose that Australia will become resource cursed in the future if its other sectors stop growing over long periods and resource extraction continues to grow - eventually to the point that the services sector no longer represents the majority of output. I think this is possible but unlikely. And it would take a very long time....

robocat 4y ago
To repeat myself: you are arguing against a point I have not made, and I am certainly not saying that Australia has resource curse. That said, I will respond to yet another of your non-sequitur comments: the first heading in the Wikipedia article is about a type of resource curse called https://en.m.wikipedia.org/wiki/Dutch_disease https://en.m.wikipedia.org/wiki/Dutch_disease which does apply to advanced economies and could be relevant to Australia. My guess is that samatman is just saying that Australia’s increasing dependence on resource exports could have negative outcomes - a grey area rather than black & white thinking one or t’other. I would guess he isn’t suggesting 100% resource-curse (or Dutch Disease), but that the needle could move from 10% resource-curse to 30% resource-curse. The graph of percentage agricultural exports in the link I gave is what should be worrying - could resources have the same trend in value? Given that there are other first world countries (like Norway and petroleum) that seem to be managing their resource wealth, hopefully Australian politicians can avoid problems too. Australia’s people rely on exports and imports for their first world benefits. How many years would it take to become third world if the borders were closed? Disclaimer: I am not an economist, nor do I respect most people in that profession, but there are a few economists who are amazing and it can be a science.

by acchow 4y ago

robocat 4y ago

To repeat myself: you are arguing against a point I have not made, and I am certainly not saying that Australia has resource curse. That said, I will respond to yet another of your non-sequitur comments: the first heading in the Wikipedia article is about a type of resource curse called https://en.m.wikipedia.org/wiki/Dutch_disease https://en.m.wikipedia.org/wiki/Dutch_disease which does apply to advanced economies and could be relevant to Australia. My guess is that samatman is just saying that Australia’s increasing dependence on resource exports could have negative outcomes - a grey area rather than black & white thinking one or t’other. I would guess he isn’t suggesting 100% resource-curse (or Dutch Disease), but that the needle could move from 10% resource-curse to 30% resource-curse. The graph of percentage agricultural exports in the link I gave is what should be worrying - could resources have the same trend in value? Given that there are other first world countries (like Norway and petroleum) that seem to be managing their resource wealth, hopefully Australian politicians can avoid problems too. Australia’s people rely on exports and imports for their first world benefits. How many years would it take to become third world if the borders were closed? Disclaimer: I am not an economist, nor do I respect most people in that profession, but there are a few economists who are amazing and it can be a science.