Yes, exactly. What Mr. Krugman means is that in order to have a manufacturing sector in any country, a number of fixed costs must already be covered. Research and development need to be done and an international market needs to be developed. Once that sector shrinks or contracts because the national currency has appreciated, it is possible that the sector will be gone for good. There have been many examples throughout history when it became clear that a resources boom destroyed productivity and competitiveness in many other sectors. As a result, it is extremely difficult to have a competitive manufacturing base in an economy that has a strong manufacturing sector. This has been observed all over the world. Countries that have a strong manufacturing base are not generally major exporters of raw materials.
On December 14th, 2010. See this statement in context.