You are an economic advisor to the government of 'Xylandia,' a nation characterized by abundant, untapped rare earth minerals, a low-skilled workforce, a nascent manufacturing sector, and a stable, centralized political system. The government's primary goal is to achieve rapid, long-term economic diversification and technological advancement. Based on this scenario, evaluate the potential effectiveness of adopting a strategy where the government actively guides economic growth through targeted investments and subsidies. Justify your evaluation by discussing at least one major potential benefit and one significant potential risk of this strategy for Xylandia.