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Natural Resources - Curse or Blesssing

Essay by   •  August 17, 2011  •  Essay  •  1,007 Words (5 Pages)  •  1,648 Views

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With recent rapid economic growth, more than half of the world's population has doubled its Gross Domestic Product(GDP) each decade. It seems that countries who grow the most are those with very few natural resources like Japan, Singapore,... This raises a question whether natural resources, including land, forest, fisheries, energy,...are the causes for resource-abundant countries not to prosper. However, I oppose this view. Natural resources actually brings about much more benefits, both economically and socially, than it is an obstacle to a country's development.

Natural resources are said to be a curse because it is often associated with a predatory government who has little concern for providing goods and incentives to facilitate investment while abusing their political power to capture natural resource rents to increase their own wealth. These countries, including Venezuela, Nigeria,... are those who suffer this corruption, which eventually lead to economic collapse. As shown in Table 1 in the Article("Do Natural Resources Limit Global Economic Development?"), the resource rich countries have a lower GDP growth while the total rent are much higher than the resource poor countries, especially the small, oil exporters whose GDP growth was -0.7 while the total rent was 21.22%. This happens mainly because of the government's greed to exploit from their own countries to invest in protected industry or government services. They also make use of their primary product exports for their own benefits and postponed competitive industrialization. Therefore, these countries stay in despair despite their natural gifts.

As being abundant natural resources, some countries, such as Angola have been the target of colonization by other countries. Being exploited since the very early days, these countries lost their chance to be industrialized and develop and in the mean time they have to feed the more powerful nations. Even after they have achieved their independence, they still have to face other issues raise up due to natural resources, especially in those countries without a developmental political state. An example would be the civil war in Angola. Funded by other more developed countries during the Cold War, the conflicts between two sides still persist due to their access to the country's natural resources, which are oil and diamond. This greed-driven conflicts prevent Angola from developing and hence the country is still in despair. The natural resources given to them appear to be the cause for their development's hindrance, especially in the hands of such corrupted government.

However, in fact, natural resources are actually the gift for a country. If considering being abundant in resources as being gifted by parents with a house worth a billion dollars, after selling the house, the person who will then have a billion dollars in his hand is a billionaire compare to those without the privilege, in this case, the resource poor countries. While others have to struggle for that amount of money, these countries are having a much better starting point thanks to this gift. In fact, there are just

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