The severity of the economic crisis has created the need to investigate all alternative scenarios for the development of the Greek economy and the debt deal. One of the options is formulated but requires more detailed investigation. The exploitation of natural resources of the country has been proposed as the solution that would allow the Greek economy to recover in a short time. But how effective is the use of natural resources to growth and economic development of a country? Is the existence and exploitation of natural resources such as oil, gas, etc. necessary for the welfare of society?
In 1959, the Dutch discovered a large gas field. The resulting exploitation led to an increase in revenue for the country, which resulted in increased demand for its currency and ultimately the appreciation of the exchange rate relative to the currencies of its trading partners. The impact of this appreciation was felt in the manufacturing sector of the Dutch economy, as products became more expensive than those of competitors. The above phenomenon, ultimately, increased unemployment. This phenomenon has been observed in other cases both developing and developed countries.
Further problems can arise in those countries that have weak institutions and lower quality manpower. Multinational energy companies want to acquire natural resources at the lowest possible cost. This often slows the process of political and institutional maturation of these countries. It is no coincidence that one of the few countries that managed to exploit its natural resources was Norway, a country with a high level manpower and developed institutions. Both certainly stood and matured before finding oil.
An additional risk may erode the human resources of a country: countries and societies are addicted to natural resources, rearing attitudes and behaviors reduced work ethic. This notes the OECD when comparing the performance of new 15 years in maths, sciences and analytical skills in 65 countries. Students from countries poor in natural resources like Singapore, Finland, South Korea, Hong Kong and Japan achieve a higher score than those from countries rich in natural resources like Saudi Arabia, Kuwait, Oman, Algeria, Bahrain.
Is not oil or gas or any other natural resource that leads an economy to prosperity. The factors that are important for long term growth are institutions and human capital. Greece does not need to dig deep into the earth to find black gold. The real gold is in the mind, experience, talent and education of its people. We need incentives and strong institutions that will allow the talent to emerge through innovation and technology.
By Nicole P.