This will be the first lecture in module three.
DT here again.
If you recall, we've been asking a very important question,
why are some countries richer than others?
What are the factors that are related to economic development across nations and
across time?
We've asked that question,
we've explained the measures of economic wealth or economic development.
We've looked at GDP per capita principally.
And we've looked at some countries and seeing some interesting trends and
things that have changed over time.
What we haven't done yet, is start ask answering the question.
Why are some countries richer than others?
And so that's what we're going to start doing.
What I want you to do is think about that for a minute and maybe you've already,
you've already started to do that as we've looked at the list of countries.
One of the first answers that can,
may come to your mind if you reflected on this question that,
that frequently my students give me is that, that it's natural resources.
And what they mean by that is that countries that are wealthier than
others are blessed or are endowed with an amazing portfolio or
an amazing amount of a particular natural resource.
So let's look at that for
a second and have you think about it as I go over and look at our list again.
So if we look at our list at the top,
we do see some countries that are endowed with some very rich natural resources.
For example Norway and Qatar and Kuwait, for example,
are all nations that have very rich petroleum deposits.
And they've done a great job at exploiting their oil.
And so it's clear that in some cases,
some countries have done really well economically.
By just having and exploiting an existing natural resource.
So is that the answer to our question?
Is it true that all countries that are wealthy have some natural resource?
How could we answer that question?
What, what would we need to understand to see if that were true?
because if that's true, then some countries are stuck forever
where they are because they don't have natural resources,
and others are just lucky, they got the luck of the draw.
And they're set for life because they've got a great set of natural resources.
What I want you to do is think about that for a minute and
think if you can find over time or now, a country that is wealthy that's maybe
in the top 20% of this list, and you can feel free to look at it yourself.
The list on your own.
But see if you can find a country that is wealthy despite not having a great
portfolio, or a great abundance of natural resources.
Can you think of an example?
Can you think of a country that perhaps is geographically small.
Or that doesn't have the right conditions for natural resource development.
If you can think of a country like that,
then you probably will have to really start to reconsider whether it really is
natural resources that's the answer to economic development.
And a second question you might ask yourself is,
can we think of an example of a country that is not very well-off,
that is relatively underdeveloped economically,
despite having an abundance of natural resources.
Let's go back to our list and look at a couple of examples.
The country that is probably the wealthiest on this list that does
not have a great abundance of natural resources is Japan.
You may know that Japan is a small small country geographically,
has a relatively large po, population.
It exports very little in natural resources and
imports a lot in terms of natural resources.
Japan is wealthy.
Very well off economically despite not having a great
abundance of natural resources.
We could look at our counter example, or our second question.
Are there examples of countries that are not well off?
That also have a great abundance of natural resources.
We see a lot.
Brazil, for example, is a country that's probably considered middle income,
that is about the same size, geographically, as the United States,
that has you know, 20% the GDP per capita of the United States.
So there's an example of a country that has a great abundance of natural resources
that has not hit the same level of, of economic wealth as a country like Norway.
And as we go to the bottom we see all these countries from Africa that also the,
the, the continent itself has a great wealth of natural resources
that has not translated into a great abundance of wealth.
And so it can't be the case that natural resources is the answer to our question.
You know, the way I like to say that is to have you think
about it tn terms of a recipe or a formula.
What I would like to be able to give you as an instructor,
is to be able to give you a formula where I could say, if a country would do this,
this, and this, or have this, this, and this, it would be wealthy.
Instead, all I can give you is a recipe,
I can give you ingredients that seem to be helpful.
But they're not going to be a guarantee of success economically.
What we might say in a different manner is we can give you some conditions
that seem to be necessary but not sufficient for economic wealth.
Natural resources does not even seem to be a necessary condition for
economic wealth to develop because Japan is wealthy despite not
having that abundance of natural resources.
So I would say that we cannot say with any certainty that having or
possessing natural resources is the answer to our question,
what makes a country rich?
Or richer than others or richer over time.
