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For people looking how not to handle enormous wealth like this, look up the Groningen gas field in the Netherlands[0]. It undoubtedly provided a lot of money w
by jaapz 2y ago
For people looking how not to handle enormous wealth like this, look up the Groningen gas field in the Netherlands[0].
It undoubtedly provided a lot of money which helped build our infrastructure and the Netherlands wouldn't be what it is today without it - it also shows exactly what happens when the generated revenues are spent immediately. Now that the gas supply has been turned off (due to earthquakes and the government's terrible handling of those), we are scrambling to look for other streams of revenue and other gas sources (because our home heating infrastructure is largely gas based).
As someone living in Groningen, the way the government handled this is a major reason why most people I know (and myself included) have mostly lost their faith in politics and the national government as a whole.
[0]: https://en.wikipedia.org/wiki/Groningen_gas_field https://en.wikipedia.org/wiki/Groningen_gas_field
- notahacker 2y agoIn economics, the phenomenon of a country making worse policy, business and investment decisions after discovering a massive source of natural resources is known as "Dutch disease"...
- Gys 2y agoInteresting! From wikipedia: The presumed mechanism is that while revenues increase in a growing sector (or inflows of foreign aid), the given economy's currency becomes stronger ("appreciates") compared to foreign currencies (manifested in the exchange rate). This results in the country's other exports becoming more expensive for other countries to buy, while imports become cheaper, altogether rendering those sectors less competitive. So the Netherlands should be thankful for the Euro, which took away those effects on their local currency.