2 ms·
True but a bit too simple I think. In the article the Dutch disease is mentioned. It has three effects: 1. It makes the other exports less competitive (why bo
by _nalply 3y ago
True but a bit too simple I think.
In the article the Dutch disease is mentioned. It has three effects:
1. It makes the other exports less competitive (why bother with abundant resources?)
2. Imports financed by natural resources revenues increase, appreciating the currency (a double whammy for exports)
3. This causes a shift away from manufacture and similar industries rendering the economy more dependent on natural resources
I also think natural resources can be grabbed by individuals more easily than the skilfulness of a people leading to higher income inequality.