Resource curse
The resource curse also known as the paradox of plenty,resource trap or the poverty paradox is a paradoxical situation in which countries with an abundance of non-renewable natural resources experience stagnant economic growth or even economic contraction. That is countries endowed with a rich source of natural resources can struggle to make effective use of these and often end up with low levels of economic development than countries with low levels of natural resources. A resource curse is generally caused by too much of the country’s capital and labor force concentrated in just a few resource-dependent industries. By failing to make adequate investments in other sectors, countries can become vulnerable to declines in commodity prices, leading to long-run economic underperformance. Although there may be multiple reasons to explain why a resource curse happens, it may also result from government the government might abuse its regulatory powers, such as by awarding valuable contracts based on bribes, country begins to focus all of its production means on a single industry, such as mining or oil production, and neglects investment in other major sectors. An overabundance of labor and capital that flow into just a small handful of sectors may weaken the rest of the economy and harm the country overall.
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