For use of information media - Not an official record

21 November 1996

At Midrand, governments recognized that "developing countries which are heavily dependent on commodity exports face special challenges in promoting through trade their economic growth in the context of sustainable development" and agreed that UNCTAD should address "issues of particular relevance to commodity-dependent countries by [...] promoting the management of commodity resources, in the context of sustainable development". In order to further debate on these issues, the Secretary- General of UNCTAD, Mr. Rubens Ricupero, convened a group of experts to help him review development policies in resource-based economies. The group met in Geneva on 21-22 November 1996 and was comprised of experts from academia, the private sector, and international organizations, in addition to policy-makers from developed and developing countries.

One surprising feature of the development process over the last few decades has been that countries with abundant natural resources tend, on average, to have grown less than natural-resource-poor countries. This apparent negative relationship between resource abundance and economic growth is somewhat puzzling since natural resources are valuable assets for an economy which could stimulate a country´s investment and growth rates. The issue of how to achieve industrialization on the basis of producing and exporting manufactures retains all of its relevance for resource-based economies. However, the fact that many developing countries still depend to a very significant extent on the primary sector for exports, income and employment raises the question as to how to maximize the contribution of a sustainable exploitation of natural resources to these countries´ economic development.

Some economists and other observers have come forward with explanations for this feature, implying that natural-resource abundance can be a curse rather than a blessing. However, if such pessimism is not well-founded, governments of resource-based economies would be ill-advised to allow it to influence policy decisions. A related issue concerns the rate of resource exploitation. If non-renewable natural resources, such as fuels and minerals, are used up quickly, a country´s national patrimony may be depleted before the groundwork has been laid for sustainable development on the basis of other economic activities.

For some countries, such as Botswana, Israel, Kenya, Malaysia and Thailand, the exploitation of their natural resource base has made a crucial contribution to economic growth. Experts from these and other countries evaluated their countries´ experience with a view to helping suggest policies for other resource-based economies. The expert group evaluated national experiences relating to both renewable (agricultural) and non-renewable (fuel and non-fuel mineral) resources, and considered the developmental role of resource-based technology and education and skills in resource-based economies.

For more information, please contact:
Brian Chambers, Chief, Resource Development
Division on International Trade in Goods and Services, and Commodities
T: +41 22 907 5786
F: +41 22 907 0047
Andrew Whitley, Chief,
Office of the Secretary General of UNCTAD,
T: +41 22 907 5809/05


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