Thank you to Aadil for spotting this piece about another manufacturing plant closing in Australia.
When you guys see questions about primary product dependency, this is another factor (besides the ones listed below) that can cause problems for both developed and developing countries.
Primary Product Dependency Issues:
Dutch disease - relying on one primary product appreciates currency and makes manufacturing uncompetitive
Worsening terms of trade - the real price of primary goods falls with respect to manufactured good. (Singer–Prebisch theory)
Inelastic demand - Causes price fluctuations
Low value added product - makes it difficult to generate income to re-invest
Can you think of any more?
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