The Presence of Natural The Presence of Natural Resources and Economic Resources and Economic

DevelopmentDevelopment

Jacob Moy

Existing ArgumentsExisting Arguments

• “Dutch Disease” Theory• Impact on:– Education (Glyfason 2001)– Macroeconomic Reforms (World Bank 2009)– Civil War (Fearon 2005)

“We are in part to blame, but this is the curse of being born with a copper spoon in our mouths.”

-Kenneth Kaunda, President of Zambia

Defining Resource Defining Resource Abundance & ScarcityAbundance & Scarcity

• SXP & SXP 80– “share of exports of

primary products in GNP” (Sachs & Warner 1997)

• Other Methods:– Per capita cropland (Auty)– Oil production– Primary Exports

SXP SXP80

Bangladesh 0.01 0.02

Nigeria 0.14 0.30

Norway 0.10 0.22

Taiwan 0.02 0.01

The FindingsThe Findings

• Affirms “Dutch Disease Theory”

• Resource scarcity more conducive to growth than abundance

• Norway?.....

1970-80 1980-90 2006

World 3.8 3.2 4.0

Developing 5.8 3.9 7.1

Developed(Europe)

3.0 2.6 2.9

Nigeria 4.4 2.3 5.3

Norway 4.7 2.6 2.9

Bangladesh - 3.9 6.5

Taiwan 9.6 8.5 4.9 (est.)

Real GDP Growth Rates (USD-1990 Base)

Data: UNCTAD Handbook of Statistics 2008

Data: UNCTAD Handbook of Statistics 2008

ElaborationsElaborations

• Annual Compound Growth Rate of Per Capita GDP (1996-2006): – World Average= 2.12%– Bangladesh= 3.14%– Nigeria= 1.51%– Norway= 2.57%

• UN Human Development Index (HDI) 2009:– Norway 1st, Bangladesh 146th, Nigeria 158th – Bangladesh: notable positive HDI growth since ‘05– Nigeria: static HDI growth