Historically, countries that are rich in mineral and commodity resources, like oil, copper or coffee, for example, have had lower rates of growth compared to nations which don’t enjoy those advantages.

It’s a phenomenon dubbed the “natural resource curse.”

The reasons for the curse range from market volatility to crowding out of manufacturing, lack of institutional structures, to all out civil war.

Jeffrey Frankel is an economist with the United States National Bureau of Economic Research.

He tells Jocelyne Frank of the International Monetary Fund (IMF) that there are ways to deal with the so-called “natural resource curse” including what he calls “commodity bonds”.

Duration: 4’58”

Source: IMF