Resources and Third World
Development
Sustainable Development
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Attempt in recent years to understand poverty,
development and environmental degradation
interrelationships
Sustainable development seeks to achieve
lasting satisfaction of human needs and
improvement of the quality of life and
encompasses:
Help for the very poorest who are left with no
option but to destroy their environment to
survive; Idea of self-reliant development with
natural resource constraints
Cost effective development using different
economic criteria to the traditional –i.e.
development should not degrade environment
Importance of Resources in Development
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All forms of production make demands on the
resource base
Resources are consumed through human
activities in fulfilling basic needs
Predominant view is that resources are given
value in regard to functions they perform,
according to levels of development and
aspirations of a society
Environmental resources are viewed as stocks,
often fixed, limited and non-renewable, found in
nature
Debate over adequacy of resources to support
societal demands
Resources must reflect human appraisal; limits
no imposed by non-human environment but by
human ingenuity in perceiving value
Gasoline Prices in America
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In the 1950s gasoline
prices were 30 cents a
gallon and for this you
had your oil and tire
pressure checked
Today in California,
shown here, gasoline
prices have hit $3 per
gallon; Britain $5.43,
Germany $5.12, France
$4.38, Japan $3.66
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Is $7 a gallon possible?
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Oil as a Non-renewable Resource
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US imports roughly 50% oil that it uses
One-quarter of total imports come from
Persian Gulf
Easing our dependency on Middle Eastern
oil producers could simplify foreign policy
Is this possible?
Where are alternative sources of oil?
Alternative Sources of Oil
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Russia, second only to Saudi Arabia, produces
7mil barrels per day
Caspian republics, Kazakhstan and Azerbaijan,
produce 2mil barrels per day
Latin America expected to grow by 3mil barrels
per day by 2010
Technological advances make it now cost
effective to extract oil off West Africa and Gulf
Coast of US
Also refine oil in Canada and Venezuela
previously unusable
Fading Enthusiasm
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Much of newly extracted oil will simply replace
declining output from existing fields
Norwegian, second largest non-OPEC producer,
fields are rapidly declining
Production in Mexico has peaked
Much of Russia’s potential lies in Siberia where
country’s primitive pipelines make shipping
dangerous
Nigeria-8% of oil imports to US, can produce
one-third more by 2007 but conflict has
discouraged this possibility
Colombia similarly has been plagued by guerilla
attacks on its pipelines
This also is true in Indonesia where Exxon
operations have been held up by independence
movements
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Biggest Obstacle: Price
Biggest obstacle to freeing ourselves from
Middle Eastern oil has nothing to do with
politics, chemistry or engineering
Economics is the obstacle: price is
determined by global supply and demand
Any large producer can affect oil supply
and thus prices
Thus Persian Gulf states 600 bil proven
reserves will continue to dictate control
OPEC remains powerful force in
determining price of oil
Political Economy, Price, Demand for Oil
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Just as important as supply of oil is the
demand—greater and greater demand keeps
kicking the price upward- lack of conservation
practices
Oil prices in summer 2005 expected to reach
$60 per barrel and perhaps $80 or higher!
Two important demand points are China and
India both of whose production is stagnating or
declining
Lack of emissions controls applying to these
states
Human rights concerns are being abandoned as
these nations attempt to negotiate deals with
“pariah” states such as Myanmar and the Sudan
Security issues important too
U.S. Crude Oil Imports 2005
Declining Production
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Indonesia is the only
Asian member of OPEC
But relies on 1990s
investment in oil and gas
for production output
Populists call for
Indonesia to withdraw
from OPEC to save $2mil
annual dues
OPEC maintains that all
members must be
exporters
Oil Wasting Away in Indonesia
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Indonesia’s oil industry squandered resource for
many years
Few new wells have been drilled and production
has dropped by one-third
Unable to use windfall in oil prices to help
development
Meager output has forced China and other
buyers to look elsewhere: Sudan
But claim to be determined to be an exporter
again (imported oil in last quarter of 2004)
Again have raised prices and cut subsidies of
gasoline and diesel to cut waste (kerosene still
heavily subsidized as it is used for cooking)
Passed new laws and tax policies to encourage
multinational companies to invest
Indonesia
Promises and the Reality
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While new laws and tax rules have been passed
, regulations that would allow enforcement have
not been issued
More seriously a 29% increase in retail gas and
diesel prices still leaves both selling for under $1
per gallon
Thus subsidies still account for 1/6 of
government spending in 2005
One added problem is that few people have
education and training to take jobs in
Pertamina’s oil fields and refineries
Region surrounding West Java oil field is
desperately poor and is known as a source of
prostitutes for Jakarta’s many brothels
Pertamina and Exxon Mobil
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Pertamina slow to look for new wells and
multinationals are reticent to invest troubled by Bali
bombing incident and other unrest
In early 2000 Exxon Mobil found large field in
eastern Java drilling deeper wells that would
enlarge output by 20 %
But production has yet to begin as government
seeks to renegotiate greater share of revenue
To attract investment most important step is to
have clear rules for contracts-transparency
Developing oil fields in Indonesia is expensive (wells
are 4 miles deep), so companies reluctant to sign
away too much revenue before production begins
When you combine tough production sharing terms
with government uncertainty, big companies are
reluctant -need better terms in harsh environments
Alternative Energies
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Indeed we can reduce our dependency on oil by
encouraging the development of alternative
energies
Nuclear power- extremely costly and long time
horizons to build plants; safety issues
Wind power- wonderful but harnessing this in
sufficient scale is not feasible at this point
Best solution: ?
Rationalization
World Forest Cover, 2000
Deforestation, 1990-2000
Deforestation in Southeast Asia 1973-1985
Country
Forest 1973 (x106
ha)
Forest 1985 (X106
ha)
Percent Loss
Cambodia
5.25
3.98
24%
Laos
18.28
16.52
10%
Thailand
22.56
16.74
26%
Vietnam
19.92
16.15
19%
Burma
48.71
44.82
8%
TOTAL
114.70
98.21
14%
Deforestation in Thailand, 1973-1985
Indonesia: Natural Forest Cover Change in
Indonesia, 1985 - 1997
Indonesian Deforestation
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Average annual deforestation rate for 1985-1997
was about 1.7 million hectares.
In total, Indonesia appears to have lost more
than 20 million hectares of forest cover in this
time period-- about 17% of the forest area
existing in 1985.
Hardest hit during this period were Sulawesi,
Sumatra, and Kalimantan, all lost more than
20% of their forest cover.
If these deforestation trends continue (as they
have since 1997), non-swamp lowland forest will
disappear in Sumatra by 2005 and in Kalimantan
soon after 2010.
Indonesian Deforestation
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Most destruction is in Papua province, where
forest concessions have been granted to 15
companies.
If 1 cubic meter is equivalent to $100, then
Indonesia suffers a loss of $7.2 million per year
due to illegal tree-felling
Foreign illegal logging ‘mafias’ have joined
forces with crooked Indonesian cooperatives
and officials to plunder Papua’s rainforests
Corruption and lawlessness were fuelling the
epidemic of illegal logging in Indonesia.
Much of the illegal logging has been linked to
the Indonesian Defense Forces, which by its
own admission obtains 70% of its annual
budget from “a range of sources”.
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A huge problem in areas of
extreme aridity such as the
Sahara, Kalahari, Gobi, and
Taklimakan Deserts areas is
desertification
According to government
statistics, 42 billion trees
have been planted since
1982. Last year the effort
involved 560 million people.
In the latest phase of the
effort, announced two years
ago, China plans to plant
trees in an area of 170,000
square miles — just over the
size of California — over a
decade.
Chinese Efforts to
Halt Desertification
Planting Green Walls in China
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In Xinjiang, this western-most province,
which is home to some of the world's
biggest deserts, two million acres of
trees have already been planted
Jujube trees are particularly suited to the
harsh climate here, able to withstand
winter temperatures near minus 30
degrees while thriving in the scorching
summers.
Planting China’s Green Walls
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The Chinese Government reports that deserts
are expanding at a rate of 3,800 square miles a
year and some largest deserts appear to be
merging.
During a 1950's campaign to make China a
leading steel producer, part of the country's
disastrous Great Leap Forward, the countryside
was stripped of trees for fuel to fire backyard
furnaces, causing widespread floods.
No one expects that today's tree planting
efforts will have anything like these calamitous
side effects, but if the campaign is not
effective, the huge cost is, if nothing else, a
financial disaster.
The Results of Planting Green Walls
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Has tree planting on this scale done any good
and what has it cost?
During sandstorm season in China wind-borne
dust from the Taklimakan and Gobi deserts
plays havoc with aviation in northern China for
weeks, cripples high-tech manufacturing and
worsens respiratory problems as far
downstream as Japan, the Korean peninsula
and even the western United States.
According the UN Environmental Program, the
average number of sandstorms in China has
grown from 5 in the 1960's to 24 in the 1990's.
To plant trees on such a vast scale,
"economically and ecologically, it is a big waste
of money," he said. "There is a serious problem
of interests involved, and some people don't
care, because it is state money."