A brief explanation of the resource curse, aka: Dutch Disease that has become a huge challenge for the global south: resource exports, (normally in the form of oil/diamonds or other extractables) cause the country's currency to rise against other global currencies; this, in turn, makes the country's other exports uncompetitive, and thus, cripples the rest of the broader economy of a developing nation. This curse has been seen all over the world, but has been most prominent in the new oil producing states of West Africa, which have seen their standards of living actually contract after decades of enormous oil-based inflows of wealth. The situation also causes the "renter state" mentality, in which a nation's rulers, by the lucky chance of geography, become unaccountable to the people, as they are not depending upon the people for power; they are, in fact, only accountable the the minerals being extracted under the ground for the power and rule. Thus, authoritarianism and corruption become the rule, the norm, ala Chad, E. Guinea, Nigeria, Libya, Saudi Arabia, etc etc.
Collier explains, "Dutch disease can damage the growth process by crowding out export activities that have the potential to grow rapidly. The key activities are labor-intensive manufacturing and services, the sort of exporting now done by China and India." (40). And thus, with the tested means of economic advancement in the modern world, aka: manufacturing and services, which have created the most massive unburdening of poverty in world history in the past decades ruled out (as these nations simply cannot compete with the dynamic economic cohesion, infrastructure, and governmental benevolence of the far east) what do we have left to answer the puzzle of growth? Is it aid? I think not: aid cant actually create the same problems as mineral extraction; ie: they can cause the same artificial imbalance in a country's import/export earnings/currency valuations. Aid becomes a key source of foreign exchange, and for a poor country, especially a nation languishing in the bottom billion, exports lose their value domestically, and the local currency is driven up, making daily life and existence harder and harder for the local populace, which bears the brunt of the macro-economic geopolitical realities.
Collier explains, "Dutch disease can damage the growth process by crowding out export activities that have the potential to grow rapidly. The key activities are labor-intensive manufacturing and services, the sort of exporting now done by China and India." (40). And thus, with the tested means of economic advancement in the modern world, aka: manufacturing and services, which have created the most massive unburdening of poverty in world history in the past decades ruled out (as these nations simply cannot compete with the dynamic economic cohesion, infrastructure, and governmental benevolence of the far east) what do we have left to answer the puzzle of growth? Is it aid? I think not: aid cant actually create the same problems as mineral extraction; ie: they can cause the same artificial imbalance in a country's import/export earnings/currency valuations. Aid becomes a key source of foreign exchange, and for a poor country, especially a nation languishing in the bottom billion, exports lose their value domestically, and the local currency is driven up, making daily life and existence harder and harder for the local populace, which bears the brunt of the macro-economic geopolitical realities.
