Page 87 - Azerbaijan State University of Economics

Iurii Korobeinikov: Dutch disease and Venezuelan economics in retrospective

dependent on the natural resources markets volatility. The management skills of the country’s

authorities experience obvious degradation due to the fact that national economic structure

simplifies and doesn’t need top-class management capabilities to compete in the high-tech and

complicated industries (Berry, 2008: 148-174). Indeed, managing the mono-economic with no

scarcity of the main resource is not comparable with the management of multi-sector integrated

industrial economic with the overall scarcity of numerous resources and high competition.

It is necessary to develop the symptoms of the Dutch Disease, which will be checked in the

economic development of Venezuela.

To analyze economics performance and development in the Dutch Disease analysis several

indicators are usually used, one of the sets are proposed by Algieri (2011: 243–277):

Symptom I: (yman/yserv) = f(prod;rpoil)

Symptom II: reer = f(prod;rpoil)

Where yman/yserv - relative production in manufacturing sector to service sector, prod – relative

productivity of manufacturing to services, roil – real oil price, reer- real effective exchange rate.

But for Venezuela not all statistical parameters are available. Therefore, a bit different

analytical approach is used. According to the numerous descriptions of the Dutch Disease the

following effects can be used as symptoms:

1) Volatility of the GDP with the respect to natural resources market

2) Booming of the natural resources exploration sector

3) Growth of the services sector

4) Declining or stagnation of the manufacturing sector and high value-added sector

5) Reinforcement (appreciation) of local currency

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