Page 80 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 1, 2014, pp. 80-98

DUTCH DISEASE AND VENEZUELAN ECONOMICS IN RETROSPECTIVE

Iurii Korobeinikov Iurii
MBA in Resources and Environment, TU Bergakademie Freiberg Master’s Degree in Ferrous
and Non-ferrous Metallurgy, National Metallurgical Academy of Ukraine
Tel.:+4917998628177
e-mail: [email protected]

Received 39 January 2014; accepted 22 May 2014; published online 15 July 2014

Abstract

“Dutch Disease” is a wording to explain a specific economic development whenever a

country witnesses a large inflow of financial resources, often resulting from the exports of

natural resources. Author develops simplified graphical model of Dutch Disease and examines

economics performance of Venezuela in a retrospective on the basis of most recent open

statistical data despite the implications in availability of some statistics. Analysis shows clear

presence of main symptoms of Dutch Disease.

Key words: Dutch Disease, Resource curse, Venezuela, financial resources, price.

JEL Classification Codes: F 36; L7

Introduction

“Dutch Disease” is a concept describing economics phenomenon when growth of natural

resources sector in the country leads to decline in manufacturing or agriculture sector (de-

industrialization). The term Dutsch Disease was coined in The Economist in 1977 (1977, 26

November) where they analyzed the economics growth problems that Netherlands faced after the

discovery and exploration of North Sea gas fields. Since that time Dutch Disease problem is in

focus of investigations regarding the economic development of resource rich countries.

Dutsch Disease is a part of another phenomenon called Resource curse or Paradox of Plenty,

what means countries rich in mineral resources perform slow growth rate in comparison with

80