How to reduce the degree of dependency on natural resources?

Muhamad, Goran M.; Heshmati, Almas; Khayyat, Nabaz T.

doi:10.1016/j.resourpol.2021.102047

Cited by 30 publications

(11 citation statements)

References 83 publications

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“…The study findings suggest that extraction of natural resources has an adverse impact on EQ. Our study findings are supported by the literature offered by [35,[146][147][148]. There are some possible ways that NRR has played a destructive role in degrading environmental quality: First the extraction of resources may have substantial adverse effects on the environment, such as deforestation, habitat degradation, soil erosion, and water contamination [38,149].…”

Section: Discussionsupporting

confidence: 85%

“…As a result, other sectors of the economy may suffer adverse effects, impeding the process of economic diversification and general advancement. Furthermore, mismanagement of the income derived from natural resources may lead to corruption, political volatility, and societal turmoil [156], which signifies profits derived from natural resources may lead to corruption and the pursuit of economic gains via unproductive means by both government officials and commercial businesses, which may lead to a dearth of transparency, responsibility, and equitable allocation of resources, hence exacerbating socioeconomic disparities and undermining democratic government [147].…”

Section: Discussionmentioning

confidence: 99%

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Nexus between Innovation–Openness–Natural Resources–Environmental Quality in N-11 Countries: What Is the Role of Environmental Tax?

Qamruzzaman,

Karim,

Kor

2024

Sustainability

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This research investigates the intricate relationship between financial openness, natural resources, and carbon neutrality in the N-11 countries. It provides insights into how environmental tax and innovation can drive carbon neutrality in these nations, thus advancing our understanding of the nexus among financial openness, natural resources, and carbon neutrality. The study aims to offer policymakers perspectives on formulating policies to foster sustainable economic development and environmental conservation in the N-11 nations. The discourse highlights the environmental implications of foreign direct investment (FDI) and trade openness, revealing a complex interplay between economic development, technological innovation, and environmental sustainability. While FDI can facilitate technological transfers and managerial advancements that enhance resource efficiency and promote environmentally friendly practices, its environmental impact varies based on regulatory frameworks and enforcement mechanisms. In countries with weak environmental regulations, FDI may lead to negative outcomes such as pollution hotspots, resource depletion, and ecosystem degradation. Similarly, trade openness can exacerbate environmental degradation through increased production, energy consumption, and waste generation. However, both FDI and trade openness can contribute positively to environmental sustainability when coupled with effective environmental policies, investment in green technology, and the promotion of sustainable practices. Thus, policymakers must strike a balance between economic development and environmental protection by implementing stringent environmental regulations, promoting clean technology transfer, and fostering sustainable development practices domestically and internationally. This research offers valuable insights for policymakers aiming to navigate the complexities of achieving carbon neutrality while ensuring sustainable economic growth in the N-11 countries.

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Section: Discussionsupporting

confidence: 85%

Section: Discussionmentioning

confidence: 99%

Nexus between Innovation–Openness–Natural Resources–Environmental Quality in N-11 Countries: What Is the Role of Environmental Tax?

Qamruzzaman,

Karim,

Kor

2024

Sustainability

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“…The decline in the economic contribution of natural resources in the long run can be caused by several factors. First, the exploitation potential of natural resources is limited and can be exhausted, resulting in a decline in production and income from this sector [ 77 ]. Second, depending on global demand, natural resource prices may fluctuate and decline over time [ 78 ].…”

Section: Discussionmentioning

confidence: 99%

Government infrastructure investment stimulation through booming natural resources: Evidence from a lower-middle-income country

Hidayat,

Supartoyo,

Setiawan

et al. 2024

PLoS ONE

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The dynamics of central government funding to regions depend on local investments. In regional autonomy, local governments are encouraged to be more self-reliant from the central government. For regions with high natural resource yields, they will not encounter difficulties in meeting their fiscal needs. Community welfare can be realized through fulfilling basic needs, one of which is infrastructure development. High-quality infrastructure will be able to contribute to further progress in trade, thus enhancing production efficiency. The objective of this research is to analyze the extent of the influence of central government transfer funds, especially the Natural Resource Revenue Sharing Funds (DBH SDA), on local government investments in infrastructure across 508 districts/cities in Indonesia. The method used is dynamic panel regression using the Generalized Method of Moment (GMM) Arellano-Bond approach. This study finds that the role of DBH SDA is still low in infrastructure spending. The role of the central government remains significant in determining infrastructure spending at the district/city level in Indonesia. This indicates that local governments rely more on other sectors in infrastructure investment. By enhancing the role of DBH SDA through technological advancements, it is hoped that the market value of natural resources can be higher through resource downstreaming. This strategy will have broader impacts, as labor needs can be absorbed not only in raw material production activities but also in the processing technology sector. Furthermore, the utilization of natural resources with modern technology can increase extraction efficiency, support sustainable development, and minimize environmental impacts.

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“…There is a voluminous literature on whether abundance of or dependence on natural resources is associated with resource curse or inversely with a resource blessing (e.g., Kolstad, 2008;Morrison, 2012;Robinson et al, 2014;Sachs and Warner, 2001;Smith, 2015;van der Ploeg, 2011). Natural resources dependence or abundance can help build economic resilience if countries utilize effectively and efficiently resource revenue to create opportunities and employment, develop the private sector, and transform the structure of the economy away from natural resource production towards high value-added products (e.g., OECD et al, 2013;Muhamad et al, 2021). In contrast, a high endowment in natural resources can hinder the development process by lowering levels of physical and human capital accumulated, lead to high corruption, bad institutional and governance quality.…”

Section: ➢ Effect Of Natural Resources On Economic Resiliencementioning

confidence: 99%

Effect of Productive Capacities on Economic Resilience in Developing Countries

Sk¹

2021

Preprint

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The COVID-19 outbreak and its economic, social and financial fallouts have generated a renewed interest in finding adequate policies and means to strengthen economic resilience to future shocks, particularly in developing countries. The latter are usually disproportionately affected by adverse shocks (compared to developed countries) and lack the adequate resources to weather these shocks. Strengthening economic resilience is now at the heart of the policy discussion both at the national and international levels. The present paper aims to contribute to this debate by investigating the effect of productive capacities on economic resilience in a panel dataset of 118 developing countries over the period 2000-2018. It constructs a regression-based economic resilience indicator, and makes use of the indicator of productive capacities recently developed by the UNCTAD. Results are quite interesting, including from a policy perspective. The development of productive capacities is associated with greater economic resilience. This is particularly the case for countries with greater trade openness, greater capital account openness, and those that promote a stable macroeconomic environment. Interestingly, development aid appears to matter for the effect of productive capacities on economic resilience. On the one hand, the magnitude of the positive economic resilience effect of productive capacities increases as countries receive higher Aid for Trade (AfT) flows. On the other hand, NonAfT flows (i.e., other development aid flows that AfT flows) hinder the possible positive contribution of productive capacities to economic resilience. These findings have important policy implications that are discussed in the paper.

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How to reduce the degree of dependency on natural resources?

Cited by 30 publications

References 83 publications

Nexus between Innovation–Openness–Natural Resources–Environmental Quality in N-11 Countries: What Is the Role of Environmental Tax?

Nexus between Innovation–Openness–Natural Resources–Environmental Quality in N-11 Countries: What Is the Role of Environmental Tax?

Government infrastructure investment stimulation through booming natural resources: Evidence from a lower-middle-income country

Effect of Productive Capacities on Economic Resilience in Developing Countries

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