what is the role of natural resources in economic development ?

Answer 1

I'm not an econimist, so take this for what its worth, but....

Although I think Allen is right - natural resources might not play a huge role, the question was WHAT role does it play rather than how big of a role it plays.

That said, if you have natural resources, then you can produce stuff without needing to import raw materials.

If you make furniture, its better for the local economy (be that a small town, a single shop or a nation) to not have to pay someone else for the wood (be that another town, another business or another nation)

Its better to get that lumber from say a local business or your back yard or your own nation respectively.

A nation wants to export stuff it makes internally rather than import stuff made in another nation. For nations, when you export more than you import, you have a trade surplus - this is a good thing. If you import more than you export, you have a trade deficit - this is a bad thing.

America has a big trade deficit with other nations and that's why the Euro is becoming popular, its why China keeps buying our debt - if they don't there goes their biggest customer.

The same ideas can be applied to any scale to any good.

ipstrike is right as intellectual capital is also a resource - but you have to use it and invest in it. Take technical jobs. They are being outsourced. After a while, there will not be anyone with experience in this country to draw on and it won't be a matter of choice to outsource but a necessity. When that happens, prices go up as does the trade deficit.

America currently has a trade deficit of this resource - look at where all the great research was done in the past and look where its done now - it WAS all in America, but now its elsewhere.

Allen - If I'm wrong, please correct me.

Answer 2

Natural resources are a form of wealth. Accumulation of wealth is a pre-requisite for economic growth. The more natural resources you have, the greater potential for economic growth there is. People who live in the barren desert have no natural resources, no wealth, and hence, no prospects for economic development. Russia has immense resources. Add freedom, property rights, and the rule of law, and you have a huge potential for economic development.

Answer 3

Surprisingly, natural resources have very little to do with economic development. The most important factors the push economic development are those that rasie the productivity of workers -- producing more output with the same workforce. Those factors include property rights, rule of law, education, and free trade.

Answer 4

None. The resources are worthless unless the resource of High IQs are developed, through an immediate-reward incentive, to create the entire value of the otherwise worthless natural resources. Second, Japan has few natural resources and has progressed entirely by its human resources.