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https://freedium.cfd/https://medium.com/the-dock-on-the-bay/russias-paradox-of-plenty-03d1243e8d57>
'The paradox of plenty, also known as the resource curse, goes against our
intuitive understanding of wealth.
The discovery of a massive natural gas reserve in Groningen, Netherlands, in
1959, presented a fascinating economic paradox. While the prospect of exporting
this resource promised prosperity, it triggered a phenomenon known as Dutch
disease. This term describes the unintended consequences of a resource boom on
other sectors of the economy.
Fueled by gas exports, the Dutch currency gained value. This made other Dutch
exports, like manufactured goods, more expensive on the global market. As a
result, these industries struggled to compete, leading to job losses and
decline. The Dutch economy, heavily reliant on gas, became vulnerable to
fluctuations in global energy prices. This overdependence, coupled with the
weakened manufacturing sector, ultimately contributed to a recession.
In essence, Dutch disease highlights the potential pitfalls of relying too
heavily on a single resource, even when it seems like a windfall.
The International Monetary Fund classifies 51 countries as "resource-rich,"
which are defined as countries that derive at least 20% of exports or 20% of
fiscal revenue from nonrenewable natural resources; 29 of those countries
are low- and lower-middle-income. Common characteristics of the 29 countries
include (i) extreme dependence on resource wealth for fiscal revenues,
export sales, or both; (ii) low saving rates; (iii) poor growth performance;
and (iv) highly volatile resource revenues. — Wikipedia'
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
