More commonly called the resource curse, this happens when a country is suddenly revealed to have lots of natural resources.
Its economy will shift towards production of these resources and expose the economy to shifts in the global prices for these commodities. The economy will be more fragile as a result.
More importantly, this 'curse' often results from government mismanagement of the resources - corruption and inefficiency often mean that the resources do not benefit the country as a whole, but instead funnel money to politicians and the elites, creating huge inequality. Examples of this can be seen in many African nations, where the leaders enjoy the riches of their nation's resource wealth, whilst the population suffers from neglect.
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More commonly called the resource curse, this happens when a country is suddenly revealed to have lots of natural resources.
Its economy will shift towards production of these resources and expose the economy to shifts in the global prices for these commodities. The economy will be more fragile as a result.
More importantly, this 'curse' often results from government mismanagement of the resources - corruption and inefficiency often mean that the resources do not benefit the country as a whole, but instead funnel money to politicians and the elites, creating huge inequality. Examples of this can be seen in many African nations, where the leaders enjoy the riches of their nation's resource wealth, whilst the population suffers from neglect.