The Curse of Natural Resources Paradox of Abundance: the Case of Venezuela

Abstract

In the middle of the 20th century, interest in the study of growth arose and the development of the world's economies, especially those on the African continent. The independence of African people after the second world war showed how lack of industrialization and high dependency of natural resources brought a very low economic growth in most of these countries. Although the abundance of natural resources can mean wealth and prosperity to a nation, inefficient exploitation of these resources makes this event a curse and not a blessing. For this reason, the theory of the curse of natural resources appears, which explains the fact that countries rich in these resources are much more vulnerable to low rates of growth and development. In this sense, the present study examines how it materializes this economic phenomenon in Venezuela Finally, it will be shown how institutional weakness and inefficient exploitation of comparative advantage of the territory have become the biggest obstacles to get rid of the curse of natural resources.