Nowadays, the majority of economies heavily rely on the exploitation of natural resources as a primary means of generating income and fostering economic development. Although it can provide significant benefits, including job creation and the prosperity of the economy, there are some notable challenges, such as a negative impact on the ecosystems as well as the excessive dependence of the companies on the resources.
On the one hand, economies exploiting the mineral resources may have two significant benefits. Among those is substantial economic growth that can occur due to the wealth of natural resources such as water, land and forest. They are considered to be the main basis of creating the product and it would be practically impossible to generate commodities without them. Another positive aspect of using natural resources is the numerous job opportunities it can create. Various industries might generate a wide range of jobs with different positions, which could eventually lead to the reduction of poverty and unemployment rates as well as contribute to economic growth. For instance, countries like Saudi Arabia, Australia, Canada and UAE are regarded as particularly successful nations, which managed to make a breakthrough and achieve higher results.
Nevertheless, despite the advantages above, there are also drawbacks of resource-oriented economies. A major problem closely tied to the export of natural resources is a detrimental effect it may have on the environment. If the company uses resources excessively, it might inevitably result in the lack of them. A depletion of at least one element can ultimately cause soil erosion, extinction of wildlife and drought, meaning the whole balance is disrupted. Another issue to consider is the dependence on the resources the economies may have. When there will be the limitation of mineral resources or a sharp decline in the prices of commodities, the economies may go bankrupt or suffer a severe loss.
In conclusion, while the dependency on natural resources can offer considerable economic advantages such as the boost of economy and job opportunities, it also may present significant challenges, including the destruction of the ecosystems along with heavy reliance on resources.