What Happens When a Country Does Not Adjust to Terms of Trade Shocks? The Case of Oil-Rich Gabon

Gabon is currently one of the richest countries in Sub-Saharan Africa, having a GDP per capita of close to $4,000, and is characterized by a stable political climate and rich forestry and mineral resources, as well as a small population. Oil is the key economic sector, accounting for half of GDP and more than two-thirds of revenue. Discovered in the 1970s, oil windfalls have delivered spectacular wealth and financed public expenditure over two decades. However, the oil boom has led to the Dutch disease and the shrinkage of the industrial and agricultural sectors of the economy due to the appre... Mehr ...