Beware The Dutch Disease
“This isn’t a medical blog!”, I hear you
proclaim. Indeed, it isn’t, but the Dutch Disease isn’t a medical issue either.
Granted, there is much debate among Economists as to whether the Dutch Disease
is even a disease, a topic that I shall address in a future post. Coined by The
Economist in 1977 to explain the decline in the manufacturing sector in the
Netherlands due to the discovery of natural gas reserves in 1959, the Disease
describes the relationship between the abundance of a primary commodity and the
corresponding decline in other sectors in the economy. So what is this Disease?
How do countries catch it? Can we prevent it?
