This paper argues that, in the case of Equatorial Guinea, the negative impact of the Dutch Disease would be limited given the structure of the economy and on the contrary may even be a good thing because it fuels the structural transformational process of the economy, which is needed in Equatorial Guinea. The author argues that the ongoing Dutch Disease is a natural and necessary reallocation of resources in the economy of Equatorial Guinea. Given that Equatorial Guinea is a country where the manufacturing sector barely exists and the non-oil primary sector is structurally deficient, Equatorial Guinea has little to fear from the disease. The oil boom is a blessing, given that oil revenues when properly managed can play a special and critical role in overall economic development and poverty reduction in low-income countries. To promote good governance in the management of the country's oil wealth, the government may wish to adhere to clear standards of accountability and transparency; especially by complying with the Extractive Industries Transparency Initiative (EITI++).
"Referring to the original context of Dutch Disease, the term refers to the fears of de-industrialization that gripped the Netherlands as a result of the appreciation of the Dutch currency that followed the discovery of natural gas deposits. Expansion of petroleum exports in the 1960s not only crowded out other exports, it actually reduced other exports disproportionately and fueled the fears of dire consequences for Dutch manufacturing.
