{"id":114741,"date":"2023-10-09T05:41:00","date_gmt":"2023-10-09T09:41:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=114741"},"modified":"2023-10-09T11:57:16","modified_gmt":"2023-10-09T15:57:16","slug":"natural-resources-and-wealth","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/natural-resources-and-wealth\/","title":{"rendered":"Linking Natural Resources and Wealth: For Richer or Poorer"},"content":{"rendered":"\n<p>Do natural resources make a country wealthy? What if natural resources are the primary driver of a nation&#8217;s economy?<\/p>\n\n\n\n<p>A key factor of geography theory is access to natural resources\u2014everything from farmable land to oil to fresh water. These resources can determine whether a nation becomes rich or poor. But, it&#8217;s not necessarily a straightforward proposition.<\/p>\n\n\n\n<p>Continue reading to learn about the complex link between natural resources and wealth.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-natural-resources-make-nations-rich\">How Natural Resources Make Nations Rich<\/h2>\n\n\n\n<p>Journalist Tim Marshall\u2019s <a href=\"https:\/\/shortform.com\/app\/book\/prisoners-of-geography\" target=\"_blank\" rel=\"noreferrer noopener\"><em>Prisoners of Geography<\/em><\/a> argues that in some cases, <strong>simply <\/strong><a href=\"https:\/\/shortform.com\/app\/book\/prisoners-of-geography#geography-influences-development\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>having more natural resources makes a nation richer<\/strong><\/a>. Resource-abundant nations can generate more wealth through extraction and then use that wealth to develop faster than their neighbors. For a modern example, <a href=\"https:\/\/www.washingtoninstitute.org\/policy-analysis\/understanding-gulf-states\" target=\"_blank\" rel=\"noreferrer noopener\">Saudi Arabia and other Persian Gulf states became some of the richest nations in the world in just a few decades due to their abundant oil reserves<\/a>.&nbsp;<\/p>\n\n\n\n<p>Some geography theorists make a similar argument about natural resources and wealth on a more historical scale. In <a href=\"https:\/\/shortform.com\/app\/book\/guns-germs-and-steel\/1-page-summary\" target=\"_blank\" rel=\"noreferrer noopener\"><em>Guns, Germs, and Steel<\/em><\/a>, anthropologist Jared Diamond argues that, early in the history of civilization, <a href=\"https:\/\/shortform.com\/app\/book\/guns-germs-and-steel\/1-page-summary#it-started-with-adequate-food-production\" target=\"_blank\" rel=\"noreferrer noopener\">access to natural resources gave some nations a head start on development that snowballed into greater differences in wealth<\/a> over time. Specifically, Diamond suggests the availability of domesticable plant and animal species in Eurasia made larger-scale agriculture easier to develop, starting the \u201csnowball\u201d of international inequality.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-resources-make-nations-poor\">How Resources Make Nations Poor<\/h2>\n\n\n\n<p>While more resources can mean more wealth, some geography theorists argue things aren\u2019t always so simple. Economist Paul Collier\u2019s <a href=\"https:\/\/shortform.com\/app\/book\/the-bottom-billion#trap-3-being-landlocked\" target=\"_blank\" rel=\"noreferrer noopener\"><em>The Bottom Billion<\/em><\/a> argues that, <strong>in the modern world, <\/strong><a href=\"https:\/\/shortform.com\/app\/book\/the-bottom-billion#trap-2-the-natural-resource-trap\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>economies based primarily on natural resources<\/strong><\/a><strong> are often more likely to be poor<\/strong>. He offers a couple of reasons.<\/p>\n\n\n\n<p><strong>1)<\/strong> <strong>Nations dependent on natural resources are vulnerable to shifts in <a href=\"https:\/\/www.shortform.com\/blog\/globalization-and-economy\/\">the global economy<\/a><\/strong>\u2014if prices for their resources drop, their economy will shrink massively overnight. For example, Venezuela\u2019s <a href=\"https:\/\/www.shortform.com\/blog\/maturity-continuum-7-habits\/\">dependence<\/a> on oil revenue meant that <a href=\"https:\/\/www.cfr.org\/backgrounder\/venezuela-crisis\" target=\"_blank\" rel=\"noreferrer noopener\">a 2014 plunge in oil prices severely damaged the nation\u2019s economy<\/a>.<\/p>\n\n\n\n<p><strong>2) Nations dependent on natural resources are prone to government corruption<\/strong>. When there\u2019s a sudden massive influx of wealth in an otherwise poor country (from discovering and exploiting a new natural resource, for example), the lure of personal gain through bribery and grift can overwhelm existing underdeveloped political institutions. Under a corrupt government, wealth from natural resources will benefit a few elites rather than raising the nation as a whole out of poverty.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Do natural resources make a country wealthy? What if natural resources are the primary driver of a nation&#8217;s economy? A key factor of geography theory is access to natural resources\u2014everything from farmable land to oil to fresh water. These resources can determine whether a nation becomes rich or poor. But, it&#8217;s not necessarily a straightforward proposition. Continue reading to learn about the complex link between natural resources and wealth.<\/p>\n","protected":false},"author":9,"featured_media":101283,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[81,39],"tags":[1286],"class_list":["post-114741","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics","category-history","tag-the-master-guides-the-global-wealth-gap","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Linking Natural Resources and Wealth: For Richer or Poorer - Shortform Books<\/title>\n<meta name=\"description\" content=\"A key factor of geography theory is access to natural resources. But, the link to wealth isn&#039;t necessarily straightforward. Learn more.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.shortform.com\/blog\/natural-resources-and-wealth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Linking Natural Resources and Wealth: For Richer or Poorer\" \/>\n<meta property=\"og:description\" content=\"A key factor of geography theory is access to natural resources. But, the link to wealth isn&#039;t necessarily straightforward. 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