At present, economic development in resource-rich developing countries focuses on the use and export of these resources as a primary source of government revenue and economic growth. Even though such economic strategy has a positive effect, including substantial income and increase in jobs, it also entails negative changes in the environment.
Exporting mineral resources provides two significant benefits. One of them is a substantial economic income generated from this approach. This approach to enhancing economic conditions can be used to invest received money to improve infrastructure, maintain national projects and raise public service. Furthermore, various employment opportunities are created by factories and companies specialized in different spheres, such as processing and extraction of raw minerals. These companies generate a wide range of jobs, from manual labor to managerial posts. Such measures to employment issue can help them reduce poverty and achieve sustainable growth. For example, the UAE and Qatar have exploited their oil and gas reserves to achieve high levels of economic growth and development.
On the contrary, the negative consequences of resource-oriented economies can be quite serious. This approach to stabilizing the economic situation is dependent on various factors related to price fluctuations on international arena. This price instability might be caused by changes in demand, geopolitical tension or environmental regulations. Such volatility can result in economic uncertainty, as seen in the case in Nigeria faced significant economic challenges due to falling oil prices, which heavily impacted its oil-dependent economy in 2018. Nevertheless, the environmental repercussions of this strategy cannot be overlooked. The extraction and exploitation of natural resources frequently lead to significant environmental harm, including deforestation, soil erosion, and water pollution. This environmental degradation can lead to significant impacts on ecosystems and biodiversity, disrupting the natural habitats of various species.
In conclusion, economic development in resource-rich developing countries relies heavily on the utilization and export of these resources as a key driver of government revenue and growth. While this strategy can yield significant benefits, such as increased income and job creation, it also brings about detrimental environmental impacts.