Dutch Disease, Resource Curse and Development*
Dutch Disease, Resource Curse and Development*
Dutch Disease, Resource Curse and Development*
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2. What are the Issues<br />
• the “Economist” (26 November, 1977: 82-83) first coined<br />
the natural gas boom in the Netherl<strong>and</strong>s in the 1970s as<br />
a “<strong>Dutch</strong> <strong>Disease</strong>”<br />
• This boom had caused a real appreciation which<br />
dampened manufactured exports <strong>and</strong> GDP growth. The<br />
new boom sector crowded out export-oriented industries.<br />
• Adam Smith (<strong>and</strong> others) had suspected that rentier<br />
economies, based on mineral resources rather than manmade<br />
goods cannot generate the wealth that capitalist<br />
nations are capable to produce<br />
• Many of the oil-rich countries experienced unambiguously<br />
less growth over many decades, despite occasionally<br />
mushrooming oil prices, than other developing or OECD<br />
countries.<br />
• DD in the long run: natural resource curse (RC) rather<br />
than a blessing, since technical progress, linked to<br />
UNCTAD Division on Technology <strong>and</strong> Logistics - Knowledge Sharing, Training <strong>and</strong> Capacity Development Branch<br />
4
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