I'm posting this here, as it seems primarily to affect nations in the Middle East and Africa (but also Latin America).
I'd like to explore the theory of the resource curse, also known as the paradox of plenty on international development. Basically, the theory holds that in a developing economy, it is actually high damaging on an economy to be highly dependent on a limited number of high-value natural commodities: e.g. diamonds, oil, uranium, etc.
The United Arab Emirates is one country that I've identified that has more or less correctly develop a strategy to deal with the resource curse, by expanding their economy to include tourism, finance, and some industrial endeavors. Saudi Arabia and Nigeria would be examples of countries that have unsuccessfully dealt with issues related to overreliance on a natural commodity for economic well-being.
So, open discussion, with few questions:
From Wikipedia:
Source: Wikipedia
Resource curse - Wikipedia, the free encyclopedia
I'd like to explore the theory of the resource curse, also known as the paradox of plenty on international development. Basically, the theory holds that in a developing economy, it is actually high damaging on an economy to be highly dependent on a limited number of high-value natural commodities: e.g. diamonds, oil, uranium, etc.
The United Arab Emirates is one country that I've identified that has more or less correctly develop a strategy to deal with the resource curse, by expanding their economy to include tourism, finance, and some industrial endeavors. Saudi Arabia and Nigeria would be examples of countries that have unsuccessfully dealt with issues related to overreliance on a natural commodity for economic well-being.
So, open discussion, with few questions:
- what countries are suffering from the resource curse?
- what would be effective ways within practical means to deal with this issue?
- what countries have developed appropriate strategies to deal with this issue?
- what could these countries do more effectively do deal with the issue in a better way?
From Wikipedia:
The resource curse (also known as the paradox of plenty) refers to the paradox that countries and regions with an abundance of natural resources, specifically point-source non-renewable resources like minerals and fuels, tend to have less economic growth and worse development outcomes than countries with fewer natural resources. This is hypothesized to happen for many different reasons, including a decline in the competitiveness of other economic sectors (caused by appreciation of the real exchange rate as resource revenues enter an economy), volatility of revenues from the natural resource sector due to exposure to global commodity market swings, government mismanagement of resources, or weak, ineffectual, unstable or corrupt institutions (possibly due to the easily diverted actual or anticipated revenue stream from extractive activities).
Resource curse - Wikipedia, the free encyclopedia
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