Striking oil can make a country poorer, a trap called the resource curse
A sudden gush of money from mining or drilling sounds like pure luck. Yet the flood of cash can drive up prices and wreck other industries, a pattern nicknamed Dutch disease, while also feeding corruption and inequality. Economists call the overall trap the resource curse, and Norway is often held up as the country that avoided it.
Natural resources are whatever people draw from nature with little alteration: sunlight, air, water, land, minerals, plants and animals. At bottom, every manufactured object is built from them. Some are used just as they are, like fresh water or fish. Others, such as metal ores, petroleum, timber and rare-earth elements, only become useful after extraction and processing. Hunting, mining, forestry and oil drilling, together with farming, form the primary sector of any economy.
Geologists and economists sort resources in several ways. Biotic ones come from living things, a group that includes coal and oil because they formed from decayed organisms; abiotic ones include land, water and metals such as iron and copper. A potential resource is known to exist but untouched, like oil still locked in sedimentary rock. Reserves are the portion that could be developed at a profit, while stocks have been surveyed but await technology to make them usable. Renewability is a matter of rates: a resource counts as renewable only while nature replaces it faster than people consume it. Fossil fuels take perhaps millions of years to form, and uranium dwindles even without human help, decaying into other elements. Metals can be recycled; burned coal and oil cannot.
Wealth from extraction does not automatically bring broad prosperity. Norway's defenders credit its strong institutions and lively public debate, including participation in the Extractive Industries Transparency Initiative, a global standard for governing oil, gas and mining revenue. In divided societies, by contrast, valuable resources can influence whether civil war breaks out and how long it lasts.
Depletion adds a longer-term worry. By one estimate, deforestation and degradation affect 8.5 percent of the world's forests, and roughly three quarters of prescription medicines contain plant-derived ingredients, so losing rainforest could mean losing undiscovered drugs. The United Nations adopted a World Charter for Nature in 1982, and the field of conservation biology took its name from a 1978 conference in La Jolla, California.
Source: Natural resource
