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Does it help developing countries to be rich in resources?

There are some clear economic benefits to being endowed with significant natural resources. A lot of resources are in high demand across the world, and foreign firms will pay large amounts to purchase them from developing countries. This flow of money is of great help in providing employment and profits, which can both lift individuals out of positions of desperate poverty and be repurposed for investment to develop a more balanced economy. Ideally the profits could also be taxed to help fund the development of vital public goods like education and healthcare. The worry is that checks and balances on some governments are extremely weak, and corruption is rampant. Cronyism and corruption in some cases lead only to higher levels of inequality and exploitation. Having a large part of an economy be dependent on a single resource can also be a big source of instability, as commodity prices fluctuate dramatically on international markets. This is made worse by political instability within some countries, which prospective resource wealth for insurgent groups adds to. For these reasons, it has often been claimed that resource wealth can actually hinder economic development.

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