Question

Critically comment on the following statements as they refer to middle-income developing countries (1 page )

"If dutch disease is not neutralized, a countries current account may be nonetheless in equilibrium. However, if the dutch disease is fully neutralized, the current account will definitely be in surplus."

Answer 1

If any country suffers from any particular disease then the country will need higher amount of money and facilities for the welfare of the citizens of that country for various expenditure like anti-tode for that disease which prevails in the country ,hospital expenses etc .

Any middle income developing country may fails or not able to fulfill all the needs demanded by the country to fight with the disease but if in the same country the disease is fully neutralized it's not means that the current account of that country will definitely in surplus because the middle income developing country may not think about the disease at the time of planning so they had not makes any provision for these type of disease.

But if we talk about any country which is economically strong and the disease is fully neutralized then there current account will be in surplus because they may already made provision for these type of things .