Extraction of Natural Resources and Production

Introduction

Earth has played a fundamental role in providing natural resources for man’s needs, and technological advancements of many countries are based on the reliant on natural resources. (Bleischwitz, Bringezu,nd). Countries have benefited from the abundance of natural resources to achieve some economic goals such as using earning from natural resources, and sources of foreign exchanges. Typically, natural resources have become mainstay for economic development of some countries especially developing countries that wholly rely on availability of natural resources.

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However, some commentators believe that with present exploitation of natural resources, the results of exploitation may lead to the scarcity of natural resources, and time will come when men will exhaust all available global resources. However, Mahatma Gandhi did not believe that global natural resources could be exhausted. He echoed his belief from his statement “The Earth has enough for every man’s need, but not enough for every man’s greed” (World Union Organization, 1968 pp 30)

The objective of this research is to examine Mahatma Gandhi’s statement with relevance to global mineral extractions.

Overview of the current state of natural resources

Present state of global natural resources reveals that there is abundance of global natural resources, and natural resources ought to induce economic growth, and accelerate economic development. For example, resources rich countries can improve their per capita income with proper management of natural resources. (Auty, 2003, Bleischwitz, Bringezu,nd).

However, debates have arisen among academic scholars about extraction of global natural resources, and their human sustainability. Bleischwitz, and Bringezu argue that given the present level of demand for global natural resources, the will be time when the available global natural resources will not sustain the human generation. Authors belief that there will be scarcity of natural resources such as lead, copper, tin and zinc in the next few decades, and their scarcity may affect some key industries such as electronic, and steel that use these resources as raw materials. However, Stijns (2006) disagree with argument presented by Bleischwitz, and Bringezu.

According to the author, it is not only minerals such as crude oil, metals, and coal classified as natural resources, however rich land, river water, and sunlight are also natural resources that have contributed to human growth and have also played important roles in human development. He pinpoints that development of arable land has contributed to economic development of some countries, and many countries have realised some benefits with development of agricultures, and this has generated foreign exchanges for sustainable economic growth.

To extend this line of these arguments, it is essential to provide research aims.

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Statement of aims

This section provides aims of the research paper.

To examine current level of extraction of natural resources and production.

To investigate factors responsible for excessive exploitation of natural resources.

To investigate the group using more of natural resources globally, and the reasons for this exploitation.

To investigate the effect of the rate of extraction of natural resources.

To examine the government policies on the management natural resources.

Description of the Topic

This section examines the major components, and the technological, social, economic, political, cultural and environmental factors that relates to the topic.

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Exhaustion of natural resources has been the great concerns since industrial revolution where there are overwhelming demands for natural resources because of sprang of industries by all developed countries in Europe, North America, and some countries in Asia. Typically, some observers belief that with the global rate of exhaustion of natural resources, there will be a time when man will eventually exhaust the present global resources.

However, Blackman, and Baumol (2008) argue that despite current exhaustion of natural resources, there is no indication that global minerals resources will be exhausted. There is immense contribution that natural resources have contributed to human welfare, and the stocks of resources have contributed to extraordinary growth and increase in living standard of people.

For example, since industrial revolution, global demand for resources has grown at alarming rate where humankind has continued to increase demand for coal, aluminium, iron and steel, oil, natural gas, and other resources to sustain current state of industries. Records have shown that demand for resources continue to accelerate. Thus, with increase in scientific breakthrough for innovation in the recycling of natural resources, reduction waste during extractions, and processing, there cannot be exhaustion of particular resources.

However, Brunnschweiler (2006) line of argument points to the benefits from extraction of natural resources. He argues that many developing countries have not benefited from presence of abundance of resources, and the presences of rich natural resources have rather become curses in their respective countries. Evidences have revealed that countries with little availability of natural resources have better economic growths those countries rich in natural resources.

Typically, general believes from historians, scientists, and economics show abundant of natural resources enhances corruptions among policy makers, non-transparency, and general decrease in the quality of governments. Thus, empirical evidences reveal that availability of resources in developing countries lead to decline in the economic performances. For example, in Sub-Sahara region of Africa, there is considerable evidence that presence of natural resources is a source of conflict and civil wars in the region. However, with the consumption of raw materials, industrialized countries consume largest part of natural resources produced by the developing countries.

Data reveals that 20% of world population lives in the countries with high standard of living, and these countries use 50% of world reserve of natural resources. Data from table 1 reveal that developing countries are mostly endowed with natural resources, however, most developing countries have very low per capita income and low Gross Domestic Product (GDP) compared to developed countries, which have higher GDP as revealed in fig 1.

Thus, while developed countries consume most of the world natural resources for industrial development, research, and innovations. It is revealed that their level of consumption improve technological development of these countries. Although, developing countries also consume raw materials, their dependency on natural resource has been consequence of negative economic and social impacts. (Muilerman, Blonk, 2001).

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Table 1: Oil reserve of OPEC members (Billion barrels).

Nation Oil Reserves Production capacity
Algeria 11.8 1305
Indonesia 4.7 960
Iran 125.8 3900
Iraq 115.0 1900
Kuwait 105.0 2500
Libya 39.0 1600
Nigeria 32.3 2300
Qatar 15.2 800
Saudi Arabia 261.9 11000
United Arab Emirates 97.8 2500
Venezuela 77.2 2600

Apart from negative effects that presence of natural resources has on economy of developing countries, researches have revealed that exploitation of natural resources have led to environmental degradation in several countries, especially developing countries.

Report conduct by world bank reveals that extraction of natural resources has been the major causes of environmental pollution that lead to climate change, carbon emission, acid rain, and other environmental hazard that can lead problems of human health. Typically, progressive exploitations of mineral resources lead to the release of pollutants that have serious effect on the eco-system, and increase in global demand for natural resources has accelerate the trends in the environmental impact.

Population and GDP capita of developing and developed countries.
Fig 1: Population and GDP capita of developing and developed countries.

Report from European Environmental Agency (2005) reveals that extraction of certain construction minerals such as clay, limestone, natural stone lead to noise and air pollution. Moreover, the use of environmental-intensive mining technology for extractions of many metals such as gold, copper, and nickel have caused several negative effects on biodiversity, destruction of soil and landscape. Muilerman, and Blonk (2001) argue that the extraction of natural resources lead to various environmental problems. For example, the use of fossil fuels can lead to acidification, and this has been the common environmental problems in most advanced countries.

Moreover, minerals such as copper, zinc, and lead have been noted to cause disaster during extractions, and large natural degradation..For example, there are cases of regular disaster due to minerals extraction in Spain, Romania, Hungary, and serious oil spill in Russian that have serious environmental effects.

With various environmental problems caused from extraction of natural resources, various organizations have been set up to alleviate the problems caused by natural resources. Next section discusses various contemporary government policies, international agreements, and regulations, economic, environmental, and technological policy related to natural resources exploitations.

Evaluation

Various governmental and non-governmental organizations have been set up for the management of natural resources. For example, an Intergovernmental Panel on Climate Change (IPPC) set up for the green house effects the mandates for all member countries to heightened green house effect by 50%-70%. In addition, the Kyoto protocol signed in 1997 mandate all members, especially industrialised countries to reduce the effect of climate changes, and implored them to judiciously make use natural resources in order to reduce the effect of climate changes. (European Environmental Agency, 2005).

Moreover, United Nation organised a conference called Rio de Janeiro in 1992. The objectives of the conference are to encourage the member states to find methods of halting the destruction of natural resources, and global pollution.

The decision made by member states in Rio was to ensure healthy global environment. Part of the objectives of the conference was to find ways of reducing poverty caused by exploitation of natural resources because evidences have revealed that countries with abundance of natural resources are those experience excessive level of poverty and low standard of living. The two-week summit was to educate all member states to achieve sustainable blue print in the case of extraction of natural resources that will enhance economic and social development of member states. (United Nation Organization, 1997).

In addition, European Union has also adopted the sixth environment action programme (6EAP) to enhance sustainable use and management of natural resources. Objectives of sixth environmental action programme are to achieve overall reduction of waste generated because of extraction of natural resources. In addition, it is noted that extraction of natural resources cause hazardous to air, water, and soil, and there is need for more sustainable production, and consumption of natural resources in order to enhance sustainable environment. (European Environmental Agency, 2005).

In addition, various companies are initiating anti-corruption measures to increase transparency. For example, Extractive Industries Transparency Initiative (EITI) and

“Publish What You Pay” are trying to ensure that payments flow between governments of countries with rich resources and companies are used judiciously. EITI is ensuring that there is achievement of transparency among developing countries. As being indicated by Bleischwitz and Bringezu “Transparency of payments and revenues is an important goal of good governance. Through anti-corruption measures, a contribution can also be made to development, which benefits the public as well as small and medium-sized companies” (cited in p 4).

Despite various conferences adopted by various international organizations, and non-governmental organizations, it is still noted that the extraction of natural resources are still the causes of various environmental degradation, and source of poverty in many developing countries. Recent concluded war in Sierra Leone was caused by presence of diamond in the country. Most developing countries with rich natural resources lack transparency in their policymaking, and lack of transparency in these countries lead to corruption.

While some scholars belief that presence of natural resources can accelerate rapid economic development, numerous researches reveal that presence of natural resources has been rather a curse to many countries than blessings. Previous literatures point out that many developing countries in Asia and Africa have weak economy despite their abundances natural resources. For example, Nigeria has large abundance of crude oil yet more than 70% of Nigerian population live in abject poverty, and there are frequent violet crisis in oil rich state, Niger Delta in Nigeria. Apart from Nigeria, between 1980 and 2002, 50 OPEC members achieved the growth rate below the emerging economy and transitional economy. (Bleischwitz, Bringezu,nd).

All these problems can be attributed to greed of some policy makers of these developing countries. For example, Charles Taylor, former Liberian President looted the country’s treasury, and amassed billions of U.S dollars before American government helped Liberian citizens to remove him from government’s seat.

Despite the entire problem that arises from the exploitation of natural resources, commentators believe that there can be amelioration of the problems caused by extraction of natural resources. Next section provides recommendations management of natural resources.

Recommendations

To break vicious circle of poverty caused by resources extraction, there should be participation of all stakeholders, business, governments, and international organization to ensure that there should be full transparency on behalf of resources rich countries. United Nation should set up an organ to ensure transparency of resources rich countries.

In addition, there should be establishment be global police that will execute the decision of United Nation on different countries, and the global police will carry out the executions to ensure transparency. Five developed countries such as USA, UK, Japan, France, and German should execute the decision of UN on any countries’ leader accused of corruption. United Nation or USA should stop embargo on overall country, instead they should punish policy makers suspected to divert wealth of countries realised from natural resources into their own pocket.

Finally, UN should set up powerful global organizations to foresee effective use of natural resources for the reduction of environmental hazard. This organization should be given power to sanction business organizations that use raw materials to cause environmental problems.

Conclusion

The research has substantiated the statement of Mahatma that “The Earth has enough for every man’s need, but not enough for every man’s greed” (World Union Organization, 1968 pp 30). The statement of Mahatma Gandhi is true because this research reveals that global resources has never exhausted since Mahatma Gandhi had altered this statement more than 60 years ago. Typically, many countries that have not discovered natural resources before 60 years ago have discovered natural resources.

The whole problems surrounding the management of natural resources are greed that beset human nature. Research shows that many resources rich countries are among the poorest countries in the world. While their citizens are wallowing in abject poverty, the policy makers of these countries are busying looting the treasuries. Natural resources should be used for development of humanity and not for the sources of misery as the cases of many rich-resources developing countries.

The research enhances the knowledge of policy makers, business organizations and scholars on the management of natural resources for development of humankind.

List of references

Auty, R, M, (2003) Natural Resources, Development Models and Sustainable Development, ENVIRONMENTAL ECONOMICS PROGRAMME, Discussion Paper 03-01.

Blackman, S, A, B, Baumol, W, J, (2008), Natural Resources, The Concise Encyclopaedia of Economics.

Brunnschweiler, C, N, (2006), Cursing the Blessings? Natural Resource Abundance, Institutions, and Economic Growth, Social Science Electronic Publishing Inc.

Bleischwitz, R, Bringezu, S (nd), Global Resource Management Conflict Potential and Characteristics of a Global Governance Regime, Social Science Electronic Publishing Inc, Policy Paper 27 of the Development and Peace Foundation.

European Environmental Agency, (2005), Sustainable use and management of natural resources, EEA Report, Office for Official Publications of the European Communities.

Muilerman,H,.Blonk, H, (2001), Towards a sustainable use of natural resources, European Commission.

STIJNS,J (2006), Natural Resource Abundance and Human Capital Accumulation, World Development, World Development, Inc, Vol. 34, No. 6, pp. 1060–1083.

United Nation Organization, (1997), UN Conference on Environment and Development (1992), Department of Public Information.

World Union Organization, (1968) Mahatma Gandhi statement.

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