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The resource curse, also known as the paradox of plenty or the poverty paradox, is the hypothesis that countries with an abundance of natural resources (such as fossil fuels and certain minerals) have lower economic growth, lower rates of democracy, or poorer development outcomes than countries with fewer natural resources. [1]
Natural resources can be a substantial part of a country's wealth; [7] however, a sudden inflow of money caused by a resource extraction boom can create social problems including inflation harming other industries ("Dutch disease") and corruption, leading to inequality and underdevelopment, this is known as the "resource curse".
A resource boom affects this economy in two ways: In the "resource movement effect", the resource boom increases demand for labor, which causes production to shift toward the booming sector, away from the lagging sector. This shift in labor from the lagging sector to the booming sector is called direct deindustrialization.
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The resource consumption rate of a nation does not usually correspond with the primary resource availability, this is called resource curse. Unsustainable consumption by the steadily growing human population may lead to resource depletion and a shrinking of the earth's carrying capacity .
Advancing technology: Increasing technology sophistication enables faster rates of natural resource extraction. For example, in the past, it could take a long time to log a small amount of trees using only saws. Due to better technology, the rates of deforestation have greatly increased. [6]
Miami Heat forward Haywood Highsmith (24) defends Oklahoma City Thunder guard Shai Gilgeous-Alexander (2) during the second half of an NBA basketball game, Friday, Dec. 20, 2024, in Miami.
Resource justice (also referred to as "resource equity" or "resource governance") is a term in environmentalism and in environmental ethics.It combines elements of distributive justice and environmental justice and is based on the observation that many countries rich in natural resources such as minerals and other raw materials nevertheless experience high levels of poverty (resource curse).