E2 Tradability profile

Topic

The tradability profile of the Resources/Extraction sector combines two elements that appear together in other tracks: the extracted commodity is highly tradable—much like the goods produced in the Manufacturing sector—and is exported globally; yet the extraction site is geographically fixed—a constraint that neither the high-tradability profile of Manufacturing nor the low-tradability profile of Services faces in the same way.

In Manufacturing, high tradability means that both the origin and the destination of the good can shift; in Services, low tradability implies by default that the provider and the client cannot be separated in time and space. In Resources/Extraction, by contrast, the extracted commodity does travel—just like a manufactured good—but the rents and employment associated with extraction cannot be relocated, as they remain tethered to the geographically fixed extraction site.

This combination explains why the "resource curse" specifically afflicts the location of the extraction site rather than spreading alongside the commodity to its final consumption destination: while commodity prices and export revenues travel globally via the aforementioned export gateway, the excessive dependency—measured by the resource sector's share of GDP—remains concentrated in the economy where rents and employment are geographically anchored.

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