Dutch disease

As a Dutch disease (Dutch disease) is called today a foreign trade paradox, according to which it can come about exchange rate movements to an economic decline in successfully exporting (and thus really prosperous ) economies.

The Dutch disease occurs when a country goods (mostly raw ) exported on a large scale. This creates a foreign trade surplus, by which it comes to an appreciation of the currency of the country. This brings sales problems of goods of other export industries themselves. The decline in exports of these goods then leads to the decrease or disappearance of the affected industries and thus to fundamental economic problems such as unemployment.

This phenomenon was observed in the Netherlands in the 1960s after the discovery of natural gas deposits.

• An increase in demand in the territory of the country, as imports become cheaper,
• The import of goods as a result (possibly strong) increases, leading to an erosion of production and thus to a weakening of other export sectors (eg the industrial sector ) (see the case of Nigeria )
• A deficit in the current account trade comes about because exports become more expensive, which leads to a decline in exports and thus profits and
• Results in a factor price increase, because the domestic production of factors (ie production of goods or the payment of labor ) is also more expensive - which, together with those mentioned in the first point rise in demand, resulting in a potentially significant cost growth. This cost growth also affects the ( weak or non- subsidized ) industrial and other non- expanding sectors. The industrial sector can consequently no longer afford (but also due to the described in the third point of trade deficits ) the required factors, without incurring losses or losing profits, with the result that he no longer appropriates certain factors. This competitiveness is reduced, and there are accordingly sales problems.

This circumstance increased migration of factors from the production of industrial goods is favored in the field of creation of non-tradable goods, because these are not as strongly affected by the pressure of competition. The degree of industrialization as a result, - measured by the share of industrial production in the total economic production of goods and services - fall sharply or disappear, thus creating an "extreme distortion and deepening of structural heterogeneity ".

Current Latin American example of the Dutch disease is the oil exporter Venezuela. The country has the problems not the first time. Since the discovery and the start of industrial production in the 1910s, stand or fall prosperity and political stability to oil prices, which the Venezuelan economic and social structure determined. Another example represents Azerbaijan