Does Having Natural Resources Necessarily Lead To Economic Growth and Essay

Does Having Natural Resources unavoidably Lead To Economic Growth and Development - Essay ExampleThe paper tells that sparing development is the sustainable increase in the peoples standard of living and measured using per capita income while stinting growth is the increase in the capacity of a given country to produce goods and services over time and is reflected by the GDP. Past decades have proved that valuable congenital resources much(prenominal) as immanent gas, oil deposits and minerals do not necessarily lead to economic growth. This is evidenced by oil-rich Afri female genital organ countries such as Angola, Nigeria, Congo, and Sudan. These countries earn several millions of dollars annually from oil exports yet the foreign exchange or the riches gained over the years has never been converted into a noticeable increase in GDP. In comparison, Asian countries such as Japan, South Korea, and Taiwan have experienced economic growth which can antagonist those of western c ountries. It is important to note that such countries do not have meaningful natural resources. The plosion of the car manufacturing industry in the twentieth century led to an increase in the demand for natural resources such as rubber and copper. Minerals were abundantly extracted in several countries like the Netherlands and in time replaced manufacturing as the dominant sector of the economy. With time, the Dutch economy and other similar ones suffered due to the specialization of production and affect of the main resource extracted. The discovery of natural resources did have a positive impact on economic growth but over time, such economies as Netherland became stagnant. The common trend of availability of natural resources unite with slow or stagnant economic growth has been termed the Dutch Disease type of economy. Natural resources can also be a blessing to a countrys economy. A good model of this is Norway, which is the second largest oil exporter. Norways oil exports h ave surpassed other sectors and its foreign direct investment change magnitude to 8% of GDP as of 1998. The manufacturing sector declined in relation to GDP since oil was discovered in the 1970s.