Role of Natural Resources in Economic Development

Visitor Question: Would you please discuss the role of natural resources in socio-economic development and how have they been utilized in their abundance to promote socio-economic development.

Editors Reply: There is no doubt that many societies have built their wealth on the basis of their natural resources.

This has had mixed consequences, as sometimes the natural resources have been exploited and therefore eventually depleted or destroyed. Frankly the use of natural resources as a development asset always must be viewed through the lens of whether the resource is renewable, and if so, in what time frame.

The decision about whether to rely on natural resources to develop a community and a nation should be based on informed and deliberative decision-making. Questions to ask would include:

1. What is the projected life of these natural resources if they are extracted or used up at different rates? Could a slower rate of natural resource reliance prolong the life of the resource?

2. What will happen to the economy after the resource has been depleted (or the practical rate of extraction, cutting, or other manipulation has greatly slowed)?

3. What are the environmental consequences of the extraction, cutting, or other use of the natural resources? For example, will you be left with abandoned mines, or spoiled land, or bare land that is subject to catastrophic flooding? Will the process itself release air pollution and toxins that negatively impact the health of the population?

4. Will the use of natural resources as a major tool in socio-economic development lead to an increase or decrease in social and economic divides? For instance, is one racial or ethnic group a source of cheap labor for an ownership class, and if so, does this create major social problems that need to be factored into the decision? Does one group within the society obtain much greater economic benefits than the groups that provide the labor, or sacrifice their land or their culture?

Having said all that, of course natural resources can be very helpful in allowing a society to provide jobs, especially those who may not be able to obtain other jobs, and also in allowing the region or nation to become economically self-sufficient and less dependent on other countries that may or may not be good trading partners and allies.

The presence of rich natural resources also allows a society to develop new products and entire industries that rely on the proximity of those natural resources. Minerals, for instance, can be both expensive to extract and sometimes very expensive to transport.

If we consider soil as a natural resource, as we should, then our soil becomes precious, and we see that no one can take it away from us, although our poor soil conservation practices could make the soil less valuable.

If we count our forests as a natural resources, as we at this website would like to promote, then we understand that again, these generally are not stolen from a society, but the society itself can engage in destructive lumbering practices that ultimately result in a depressed economy because of lack of jobs, and also in a devastated landscape that is more prone to flooding and soil erosion.

So you see that our perspective is that the role of natural resources in socio-economic development can be very positive, as demonstrated by the history of many nations. It is highly hypocritical for nations that have benefited from resource exploitation in the past few centuries to disapprove of any and all natural resource-based development for others.

However, we hope that other societies will learn from the mistakes of the past, and avoid over-reliance on natural resources as the principal vehicle for socio-economic growth and development. This topic demands some sincere and honest community or national dialogue about alternative futures that will be left for upcoming generations.

Of course this dialogue must be based in fact, so it is important to rely on impartial experts on the likely effects of the natural resource extraction that is being considered.

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