Question

Due to the discoveries of vast deposits of copper, coal and gold, the country of Mongolia in central Asia will be flooded with natural resource-related revenues for many years. According to a New York Times article (July 2012), “The surging mining trade has made Mongolia the world’s fastest growing economy…the country [is] on the brink of prosperity.” A. But some economists have questioned whether the exploitation of natural resources will lead to long-run economic growth. Why would the exploitation of natural resources and the export of commodities such as oil and minerals fail to generate substantial economic progress? B. What is the global experience with the exploitation of natural resources? Have increased oil exports, for example, resulted in increased economic growth? What is the evidence on this issue?

Answer 1

A) in the short run it is fine to exploit natural resources and can be exported, but in the long run if u go on using natural resources will get exhausted and all oil prices like petrol, diesel, etc rises and economy of the country falls suddenly.

people started saving fuels ,oils & using a substitute which brings economic progress in the long run.

people are consuming fuels effectively not wasting much. therefore exploitation and export leads to slowing down economic growth rate.

B) iraq, saudi arabia,iran, in these gulf countries or oil exporting countries , huge quantity of fuel is been existing in the ground when compared to other importing countries. hence even if these gulf countries export oil in more quantities in the long run there will be no fall of economic progress , infact economic growth has increased a lot

Recent studies say that, The Washington-lender revised saudi arabia 2019 economic growth forecast to 2.2 percent from 1.6 of this year