Less Dependence on other Nations
The discovery and exploitation of natural resources can insulate countries from the vicissitudes of the global economy and make them less dependent on other nations. This was evident in the case of many resource-rich countries during the 2008 global financial crisis when commodity prices held up relatively well compared to other asset classes. And while finding new deposits of minerals, oil, and gas is often a boon for resource-rich countries, it is not the only way that they can benefit from their natural wealth. Properly managed, existing resources can create significant fiscal space for government spending on infrastructure, health, and education, which can help reduce poverty and inequality and spur economic growth.
Ability to Trade Natural Resources
The ability to trade natural resources can make countries more prosperous because it provides them with a way to earn income and create jobs. It can also help them to develop their infrastructure and improve their standard of living. Additionally, it can provide countries with a way to diversify their economy and reduce their dependence on other sectors.
Improved Infrastructure
One way that having natural resources can make countries more prosperous is by improving infrastructure. When a country has an abundance of natural resources, it can use those resources to build roads, bridges, and other infrastructure. This improved infrastructure can then be used to transport goods and people more efficiently, which can lead to increased trade and economic activity. Additionally, improved infrastructure can make a country more attractive to foreign investors and tourists, which can also boost economic growth.
External Investment
There are a number of ways in which having natural resources can make countries more prosperous. One is by attracting external investment. This is because investors are often keen to put their money into countries that have good prospects for growth and development, and natural resources can be a key factor in this. For example, a country with significant oil reserves is likely to attract more investment than one without them.
Another way in which natural resources can boost prosperity is by providing the raw materials for industries that are vital to economic growth. For instance, a country with large supplies of timber or minerals can benefit from developing these industries, as they can create jobs and generate income. Additionally, exporting natural resources can also be a source of revenue for countries.
Cheaper Production Costs
There are a number of ways in which having natural resources can make countries more prosperous. One is by providing the raw materials for industry at a lower cost. This increases the competitiveness of businesses in the country and can lead to higher levels of employment and incomes. Another way is through the development of extractive industries, such as mining, which can bring in significant levels of investment and create new jobs. Finally, the sale of natural resources can provide a significant source of revenue for governments, which can be used to fund public goods and services or reduce levels of taxation. All of these factors can contribute to higher levels of economic growth and prosperity.