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THE RESOURCE CURSE: EXPLORiNG THE EXPLOiTATiON OF NATURAL RESOURCES
Introduction:
There are many hurdles to consider when discussing a country’s development, but one major frustration in its development is the “resource curse.” The countries with the lowest developmental growth – evaluated through poverty, inequality, and deprivation (Patrick 2012) – are rich in natural resources. These countries are unable to fully benefit from their natural resource wealth. The term “resource curse” was coined to capture the underperformance of these resource-rich countries (Venables 2016) and to articulate why this is such a common pattern amongst them.
Context：
A resource curse is when a country places too much investment into one non-renewable natural resource and thus it experiences stagnant economic growth or economic decline when focusing on one industry, like mining or oil production, which would lead to neglecting investments in other major sectors. Additionally, the dependence on the price of a specific commodity makes it difficult to navigate economic development. Resource-rich countries have poor economic performances compared to countries with few natural resources (Stiglitz 2012), specifically in how they grow slowly and face greater inequality.
Although one may expect to see better development outcomes from countries that discover natural resources, resource-rich countries lean toward having higher rates of conflict and authoritarianism, and lower rates of economic stability and growth, compared to non-resource-rich countries. This report will explore these most commonly associated factors contributing to the development of the resource curse and what next steps can be taken to mitigate its effects on developing economies ...
Author: Karen Kan