The worsening shortage of resources is one of the true underlying causes of the escalating and latent maturing local, regional and global problems of the new millennium. The existence or absence of the necessary natural resources directly affects the living standards of earthlings, the prospects for the socio-economic development of states, the stability of the world economy, and international security. Natural resources played a key role in the economic system of are Africa, the Middle East, Asia was the region where cycling was the key economic factor.
Africa is rich in valuable elements and occupies a leading position in the world in several minerals such as gold, diamonds, bauxite, and phosphorites — an absolute fact. In general, some African countries have overtaken other regions of the world regarding economic growth. In financial terms, the African continent is still heavily dependent on the commodity sector (Krugman & Wells, 2021). An abundance of heat, a favorable climate, and a slightly dissected relief of Africa are the essential prerequisites for possible rapid economic growth. For example, the most mineral-rich African country is South Africa (Kingsbury, 2019). However, African countries need to fight corruption and increase investment in human capital to get more financial inflows (Zallé 2019). In general, large reserves of oil, graphite, and natural gas are concentrated in North Africa and the south of the continent, the impetus for developing the mainland’s economy.
Perhaps it is in Asia that natural resources do not play such a key role, and their economy depends on some other aspects. For example, a country like Indonesia inherited a low level of resource dependence compared to the 1970s (Cornia 2020). The Asian financial crisis, coinciding with political changes, hit the country’s economy hard — in 1998, the economy shrank (Cornia 2020). The basis of the budget is formed today by taxes and income from non-primary state enterprises.
Possessing natural resources should be considered both a curse and a blessing from a country’s economic development perspective. As practice shows, the natural wealth of a country contributes to its successful development with strong institutions and blocks it with weak ones. Hence, states with large reserves of minerals but low-quality public institutions face a severe threat of a “resource curse” — the conservation of economic and institutional backwardness (Hubbard and O’Brien 2018). On the contrary, strong institutions make it possible to turn natural resources into a source of development. Consequently, it is not essential to possess natural wealth, but its connection with more fundamental factors.
In conclusion, it should be emphasized that natural resources play an essential and significant role in the economic development of Africa, the Middle East, and Asia. Africa stands out especially vividly because its natural wealth allows countries to increase capital. Asia is not so dependent on resources and relies on other sources of income, and a country like Indonesia is a vivid example of a resource curse.
References
Cornia, Giovanni Andrea. 2020. The Macroeconomics of Developing Countries: An Intermediate Textbook. Oxford University Press.
Hubbard, Glenn and O’Brien, Anthony. 2018. Macroeconomics. 7th ed. Pearson.
Kingsbury, D. 2019. Politics in Developing Countries. Routledge.
Krugman, Paul and Wells, Robin. 2021. Macroeconomics. Worth Publishers.
Zallé, Oumarou. 2019. “Natural Resources and Economic Growth in Africa: The Role of Institutional Quality and Human Capital.” Resources Policy 62: 616-624. Web.