Enclave effects Resource curse

economic diversification may delayed or neglected authorities in light of temporarily high profits can obtained limited natural resources. attempts @ diversification occur grand public works projects may misguided or mismanaged. however, when authorities attempt diversification in economy, made difficult because resource extraction vastly more lucrative , out-competes other industries. successful natural-resource-exporting countries become increasingly dependent on extractive industries on time. abundant revenue natural resource extraction discourages long-term investment in infrastructure support more diverse economy. lack of investment exacerbates negative impact of sudden drops in resource s price. while resource sectors tend produce large financial revenues, add few jobs economy, , tend operate enclaves few forward , backward connections rest of economy.