Developing Countries Experience A Natural Resource Curse

Economic growth comes form the use of natural resources. In the 1930’s, natural resources are what fueled the growth of the U.S. economy. The use of resources such as water, timber, coal, oil, and minerals were in very high demand. Even now there is still a market for these resources. The use of natural resources was very high in the 1930’s and the possible damage that the use of these resources was of little concern, or not even known at the time. In the 1930s the growth of the U.S. economy would become a burden due to the use of natural resources, how the resources were collected and extracted, and the impact that harvesting had on the environment. The main point of this article, is that the mass consumption and mass production is not always ideal.

From the earliest civilizations natural resources have shaped the course of Humanity. Some resources have allowed us to rise up, invent new machines, and build mighty empires. While others have taken hundreds of lives and forced humanity to take a step back on the path of progression.

My paper on natural capital was written in response to an essay written by Paul G. Hawkins about natural capital. The essay discusses problems like human waste and states that we should be able to fix the problem by recycling better and trying to reduce the waste humans produce. This is a big problem that we as a society face today that needs to be fixed. Another problem that we have with natural capital is poverty and how it is affecting us and our everyday lives. I suggested that we try to make more governments start programs to try to put an end to poverty once and for all. The point of this essay what to become educated about natural capital and to broaden our minds to new ideas and thoughts. Writing this essay came with its own set of challenges.

Similar to the societal explanation, the cognitive explanation for the effects of the resource curse suggests that the wealth from resource abundance causes countries to be riskier with their money. Instead of investing in multiple sectors and foreign bonds, African countries tend to indulge in the wealth and focus solely upon it with no consideration of sustainability or possible busts. Since policymakers become shortsighted, they do not realize that that their economy is falling apart until it is too late.

For instance, most of the developments in the developed countries are based on growth, that is, they are depend on natural resources like minerals, gas and oil for their economic development. Moreover, the emerging developing countries such as India, china and brazil need a lot of natural resources to develop. This means that countries which are rich in resources in Latin America have emphasized and focused on the extraction of natural resources for their development and export. Neo extractivisim has been coined to refer to policies and regulations which strengthen states role in the ownership and exploitation of natural resources, a development which has gained great momentum inmost parts of the developing nations (Burchardt, Hans-Jürgen, and Kristina, 2014). Extractivisims is a development model that has political, natural and socioeconomic influences (class structure, interaction between public and state and gender) within a country majorly in countries with abundant resources in the

Despite all these positive economic impacts, this industry is plagued with contention and conflict. (Sagebien, 2008) Anti-development effects of mining thought of as the “resource curse” includes twisted economics, unfavourable social and environmental consequences at the community level, domestic economic dependence on extraction to the exclusion of other more sustainable industries, loss of

Countries that do not promote accountability and state competence to benefit from resource booms are at risk of the resource curse. The resource curse is when resource-rich countries benefit from its wealthy natural resources (i.e. oil) and do not help with its people welfare. Its government officials are less likely to meet the demands of its people because they are too busy pocketing the cash. These countries are more deceptable to authoritarianism, low levels of economic growth and stability. Wealthy natural resources can promote power conflicts and corrupt governments. Countries that have a resource curse are more likely to transition to democracy when its large revenue comes from citizens ' taxes.

Iceland and Gabon are very unique countries with different statuses. Iceland has a very small population but is highly developed and a model of efficiency socially, politically, and economically. Whereas Gabon has the potential to be one of most developed African countries, with their discovery of oil and the associated profit, but the population trends of the transitional period of development and the social and political endeavours attached to such a change have hindered the countries progression. As a result of this, Iceland has a better economy, quality of life, and social and political structure while Gabon is developing these benefits slowly but with success with signs of development problems in population and infrastructure that

This is means the depletion or destruction of this natural resources means the end of the life for this countries hence the increase in the rate of complacency. The point also explains why developing country usually relies on foreign aid as means of sustaining their own economies.

While natural resources have played an important role in creating wealth and powering development, recent research shows an inverse correlation between the abundance of natural resources and growth and development. This has been true of many of the economies in Latin America, Africa and the Arab world, regions characterized by high levels of natural resources endowments, be they minerals, oil or timber. The inverse correlation between endowment and wealth creation—dubbed as the natural resource curse hypothesis—has been the subject of intense study and has yielded valuable insights into political economy issues.

Natural resources are raw materials extracted from the earth. They are useful in many different ways for its diversified opportunity of benefit and profit for economic development. Examples of natural resources are mineral, oil, waterways, land, timber, diamonds, coals, coltan and genetic. Majority of developing countries, distributions of natural resources vary from one geographic location to another. The variability of location has caused greed and grievances in economic development. This was attributed to more risk of conflict, weak governance, and poor economic performance.

In a world run by different resources, we will never have enough for ourselves. In the modern world, resources such as rare earth elements, oil, and water are always in demand. The United States of America alone consumes more resources and energy than it produces. But what about other nations? Some nations such as Japan, Great Britain, and South Korea are industrialized nations with many advantages over resources. Other developing nations such as Haiti, Ethiopia, Angola, and even Afghanistan are not as industrialized. Why? Many of the world’s resources is almost unable to reach the most poorest and unindustrialized parts of the world. This can be due to factors such as hostile terrorists, lack of transportation, lack of basic necessities and so forth. Unequal distribution of resources is not just a world issue but the reason why this exists is because literally, resources are used more than what is produced and it cannot uphold the current population of over seven billion. The issues concerning unequal distribution of resources towards poor parts of the world won’t stop others from solving this issue. There are already plans that are taken into action to help industrialize and strengthen the poor parts of the world.

Lack of resources and access to safe drinking water are another factors that hinder the development of countries. The Presence of oil in many of the Gulf countries has pushed their economy despite the bad climate. Often any resources are sold abroad as cash crops, for instance in Kenya tea and coffee is grown on the best farmland. Kenya has to spend valuable wealth on importing food.

It is argued that a country’s development is reinforced by ‘democratic good governance '. ‘Democratic good governance’ refers generally to a political regime based on the model of a liberal-democratic polity, which protects human and civil rights, combined with a competent, non-corrupt and accountable public administration (Dauda and Oladoyin, 2008). I will first look at their different colonial experiences and the governments that took over after these countries became independent. With this I will discuss how different political regimes can influence ‘development’. Secondly, I will look at each country’s economic and social development and argue how the different management of natural resources can have different economic impacts. Thirdly, I will reflect on how Nigeria’s large ethnic groups have affected democratization and economic development in a way that other ethnic groups became to dominate others. With this, I will dispute that Nigeria’s economic and social development has been affected by corruption and lack of accountability. I therefore argue that South Africa is more successful in terms of the level of development and democratization as compared to other Sub- Saharan African countries, especially Nigeria. This is partly due to its long years of colonialism and its post-colonial transition into democracy. Kesselman etal (2013) argues that South Africa’s political

With economic growth comes a growth in consumption, more resources are needed reducing the remaining supply of non-renewable resources such as fossil fuels ( oil, gas and coal ), metal ores and other natural resources. As these are used up at a faster rate, there are fewer supplies left for future generations. Thus the finite pool is more rapidly becoming exhausted. The growing affluence of consumers has led to for instance, the ever increasing rates of depletion of rain forests across the world. 3.