Forex Dictionary Terms

Resource Curse

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Definition – What does Resource Curse mean?

Resource curse refers to a nation that is rich in natural resources but slow to develop other areas of the economy. A nation with large reserves of minerals or oil may focus entirely on exporting those resources rather than developing processing capabilities, financial services and so on.

ForexTerms explains Resource Curse

Whether a wealth of natural resources can ever truly be a curse is an open question, but many countries do mess up when they focus too much on selling raw materials. As selling natural resources makes up more and more of the economic activity in a nation, the natural resources begin to drive the economic agenda. The currencies of countries “suffering” a resource curse are often called commodity currencies because their market value closely follows the market values of the resources they trade.

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