Basing economic growth solely on resource exports can be problematic and lead to __________.

Question

Quizplus · Accepted Answer

Basing economic growth solely on resource exports can lead to the resource curse, where the economy becomes highly dependent on the export of a single resource, leading to economic instability, corruption, and social and environmental problems. It can also lead to hollow growth, where the economy appears to be growing but is largely driven by resource extraction, with little benefit to the broader population or diversification of the economy. Resource dependency can also become an issue, where the government and economy become overly reliant on resource revenues, and may neglect other sectors of the economy. Mercantilism, on the other hand, refers to the economic policy of maximizing exports and maintaining a trade surplus, and is not necessarily tied to resource exports.

Basing Economic Growth Solely on Resource Exports Can Be Problematic