Three plagues: Covid-19, Dutch Disease and Natural Resources Curse

Three plagues: Covid-19, Dutch Disease and Natural Resources Curse

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Three plagues: Covid-19, Dutch disease, and natural resources curse 

International workshop hosted by the Getulio Vargas Foundation’s Center for Studies on New Developmentalism, Columbia University’s Center for Sustainable Development, and the UN Sustainable Development Solutions Network (SDSN) to be held July 29th (by Zoom).

This is a workshop on three plagues that hurt most countries: Covid-19, Dutch disease, and natural resources curse. Whereas Covid-19 hurts the whole world, the Dutch disease and the natural resources curse are particularly relevant for Latin America. These problems block industrialization or cause de-industrialization in countries that mainly export commodities as is the case of the region. As we know,  East Asian countries have grown fast for a long time and Latin Americans deaccelerated dramatically its growth rate since the 1980s; the insufficient advance of the knowledge economy in the region is likely to be an explanation for it, along with the lack of importance given to the Dutch disease and the natural resources curse. These constraints are presently reflected in the difficulties that the Latin American countries face to fight against Covid-19 nowadays. 

Corden and Neary wrote the first model on the Dutch disease in 1982. In 2001, Sachs discussed the consequences of Dutch disease. In 2007, Humphreys, Sachs, and Stiglitz edited the book Escaping the Resource Curse. In Brazil, Luiz Carlos Bresser-Pereira published a second model of the Dutch disease in 2008, and in 2020, “Neutralizing the Dutch Disease”. In this workshop, we will use these and other works as references to discuss these major competitive disadvantages in the framework of the United Nations Sustainable Development Goals. 

Web seminar preliminary program – please note that it is subject to changes and that panel schedules have not yet been defined  

July, 29th, 2020. 

Keynote speaker - Jeffrey Sachs: The knowledge society and the Covid-19 

Keynote speaker - Luiz Carlos Bresser-Pereira: The Dutch disease and the natural resources curse

First Panel: Natural resources curse and the need for developing a knowledge economy  
The abundance of natural resources can generate economic and human development in a country, but the reality shows that resource misallocation and rent-seeking are usual characteristics of economies that present these comparative advantages. One common characteristic of these economies is the obstacle to improve the skills of the society and create knowledge which benefits the production, employment, and stimulates a sustainable society. What is the relation of the abundance of natural resources with these constraints?  

Second Panel: Dutch disease and its neutralization
The literature shows that Dutch disease implies reduced economic growth due to its impact on the productive structure. Which are its impacts on inequality and the creation of good jobs in a sustainable society? How to neutralize the Dutch disease? Should countries adopt a variable export tax on the commodities that originate it, or a variable tariff on the imports of manufactured goods combined with a variable subsidy to its exports – the tax, the tariff and the subsidy varying according to the prices of the commodities?  

Keynote speaker - Joseph Stiglitz: Subject to be defined 

Third Panel: The fight against Covid-19 in Latin America 
What can be the economic consequences of Covid-19 in Latin America? How could countries respond effectively? 

Bresser-Pereira, Luiz Carlos (2018) “Neutralizing the Dutch disease”, Texto para Discussão EEESP/FGV, 476, January 2018. To be published in the Journal of Post Keynesian Economics in 2020. 
Bresser-Pereira, Luiz Carlos (2008) “The Dutch disease and its neutralization: a Ricardian approach” (2008) Brazilian Journal of Political Economy 28 (1): 47-71. 
Corden, W. Max and J. Peter Neary (1982) “Booming sector and de-industrialization in a small open economy”, Economic Journal 92 (368): 825-848. 
Sachs, Jeffrey D. (2001) “Tropical underdevelopment”, NBER Working Paper n.8119, February 2001. 
Humphreys, Macartan;  Sachs, Jeffrey D.;  and Stiglitz, Joseph E. eds. (2007) Escaping the Resource Curse, New York: Columbia University Press. 
Karl, Terry Lynn (1997) The Paradox of Plenty, Berkeley: The University of California Press. 


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