Abstract:

The Dutch disease is one of often features of the economies with rich mineral resources. It has a number of negative consequences and there are examples of many countries (Norway, the UK, Indonesia, Canada, Australia, Nigeria, Azerbaijan, Kazakhstan and others) in the world that facing the problems related to that phenomenon and applying efforts to eliminate them. If in short term increasing revenues from resource sector and widening of service sector support a growth of GDP, concealing processes of economical structure deformation, in long term   it directly leads to deindustrialization. The resource movement effect accompanying the Dutch disease exposes manufacturing industries in favour of extract and service sectors. Moreover, lingering dependence on export of mineral resources decreases incentives for development of manufacturing industries and creation of new technologies.  

The most dynamic science intensive branches are the first who degrade and lose their positions due to necessity of continuous huge investments in technologies and products. In conditions of the Dutch disease an increase of foreign currency inflow brings to an increase of the real exchange rate of the national currency and thus to a drop of incomes of exporting companies. Less income – less possibilities to invest and more possibilities for technological lagging and leaving the market. Traditional branches can hold out longer as they have longer technology-living cycle.