Natural resource endowments such as oil, gas, and minerals can serve aspotent drivers of development. Global demand for scarce naturalresources is mounting rapidly. Industry experts argue that we are in themidst of a “super cycle” of commodity prices, driven by demand fromfast-growing emerging economies. Natural resource extraction is capitalintensive,with annual global investments approaching $1 trillion, henceoffering the potential for rapid infrastructure development and structuraltransformation in developing economies. Riches from the sectorpromise to be massive, with resource rents, that is, the difference betweenrevenues and extraction cost, estimated at about $4 trillion annually, or7 percent of global GDP. More than 50 World Bank client countries—representing more than 1.5 billion people and such diverse settingsas Afghanistan, Brazil, Equatorial Guinea, Ghana, and Mongolia—arecurrently characterized as “resource-dependent.” Nonrenewable naturalresources are disproportionately important to poor and fragile countries,as typically they are their main endowment and revenue source...
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