Challenges and Opportunities of Oil, Gas, and Mining

Jeffrey Sachs notes that it is, on the whole, good to have mineral resources or coal, oil, or gas resources as major inputs to the economy; major inputs to economic development to countries that are bereft of these resources have major challenges of producing other goods that they can export in order to be able to import these vital commodities. But natural resource wealth can also lead to issues. First: extractive resources are finite. Second: the resource curse or the paradox that resource-rich countries, despite their wealth, are doing poorly. In part, this is caused by high consumption resulting from that wealth, pulling resources away from other areas. The other piece of the puzzle for the resource curse is politics, as evidenced by the wars associated with natural resources. Third: the extractive sector can cause inequalities of income and social exclusion. Fourth: The environment, as resource extraction can be highly toxic and polluting.

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