>>Such resignation reflects bitter experience of the way that dependency on natural resources can poison a country’s economic and political system. Inflows of hard currency push up prices, squeezing the competitiveness of non-oil businesses and starving them of capital. As a result, productivity growth withers (a phenomenon known as “Dutch disease” after the negative effects of North Sea gas production on the Netherlands).
That's an incorrect summation of the "Dutch Disease". Productivity growth doesn't suffer. Productivity growth, or GDP growth, increases with higher oil output.
The Dutch Disease is a politically slanted term to describe how other industries languish when one expands. But a rise in oil production is not associated with declining productivity growth, and the Dutch Disease theory does not include that proposition. A rise in oil production/exports makes an economy more capital-rich, which raises productivity.
That's an incorrect summation of the "Dutch Disease". Productivity growth doesn't suffer. Productivity growth, or GDP growth, increases with higher oil output.
The Dutch Disease is a politically slanted term to describe how other industries languish when one expands. But a rise in oil production is not associated with declining productivity growth, and the Dutch Disease theory does not include that proposition. A rise in oil production/exports makes an economy more capital-rich, which raises productivity.