Journal of International Development Studies
Online ISSN : 2434-5296
Print ISSN : 1342-3045
Articles
Dutch Disease and Industrialization Policies in a Resource-rich Country
—The Case of Côte d'Ivoire (1970-1989)—
Toyomu MASAKI
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JOURNAL FREE ACCESS

2000 Volume 9 Issue 1 Pages 1-19

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Abstract

Cote d'Ivoire is considered a resource-rich country, which has been exporting cash crops, especially coffee and cacao for a long time and recently is exploiting natural resources such as oil, natural gas, and minerals. This paper is concerned with issues of the industrialization process and Dutch Disease in Cote d'Ivoire during the coffee and cacao boom in 1976-1986. At first, the author will try to review briefly the historical and institutional aspects of the industrialization process during the coffee and cacao boom. And, this paper will try to make clear that the government had better not to invest these foreign currencies earned from the boom into the boom sector, the highly protected industries, nor even non-tradable sector. But the government needs to invest them into the tradable sector, particularly, manufacturing sector or lightly protected industries from the view of balance of trade. Secondly, this paper contributes to analyze the obstacle to the country's industrialization from the view of capital-labor ratio in each of three sectors (tradable sector, non-tradable sector and boom sector). And it shows that its economic structure in 1980 tended to produce unfavorable effects on its tradable sector because of the speculation on the prices of boom goods at the world market. But, this paper also demonstrates that such unfavorable effects on the tradable sector may be diminished if this country is succeeded in lowering the capital-labor ratio of the boom sector.

Finally, the author concludes that the country which has earned only temporarily and by luck foreign currencies should not be interested in ambitious programs but should try to develop the labor intensive sector such as light industry. It may be the shortest way for the sustainable development.

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© 2000 The Japan Society for International Development
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