Role of Natural Resources in Economic Development
Dr. A K M Nazrul Islam
Associate Professor
September 7, 2022
Dhaka School of Economics
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Natural Resources as Natural Capitals
• Natural capital (NC) is the land, air, water, living organisms and
all formations of the Earth's biosphere that provide us with
ecosystem goods and services imperative for survival and wellbeing.
• Natural capital is the basis for all human economic activity and
well-being.
• Unfortunately, traditional measures to measure economic
performance, such as man-made and human capitals, neglected
natural capital leading to a depletion of natural environments and
the loss of valuable ecosystem services.
• NCs can be broadly described as renewable or non-renewable
(Costanza & Daly, 1992).
• NC Approach is a means for identifying, quantifying and valuing
ecosystem services leading to better decision-making for
managing, preserving and restoring natural environments.
Types of Ecosystem Services (MA, 2003)
How Society’s Assets Complement Each Other
Wealth of Nations
• The wealth of a nation is determined by 3 components
(a) Produced assets,
(b) Natural Capital; and
(c) Human resources.
• These three components complement each other and
contribute to the societal well-being
• Dominant source of national wealth may vary between the
3 components
What is the problem then?
1. Most of the developing country economies have been
experiencing rapid depletion of natural resources,
mainly due to:
- lack of awareness
- information gap on the values of natural capitals for
an economy
- free riding problem
- lack of appropriate and timely policy measures and
weak implementation
- corruption, etc.
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What is Way-out?
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Question??
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