Environment and Development

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The environment is where we all live and development is what
we all do in attempting to improve our lot within that abode.

The two are inseparable.

 There is a very strong relationship between the

environment and development.

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There is a two-way relationship between development and the
environment.
 One, the protection of the environment is an essential
part of development.
Without adequate environmental protection
development is undermined
 Two, without development environmental protection
will fail.
That means, under-development implies poverty,
which in turn leads to over exploitation of
environmental and natural resources.

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Here, it is important to differentiate between development and
growth.
Development refers to a qualitative change or well-being
improvement.

Regarding the concept of development two things become

very evident;
Firstly, development involves continuous growth
and
Secondly, development is concerned with human
and environmental well being.

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However, growth is a physical expansion (increment) in

physical output of goods and services.

So, growth and development are related, but by

no means synonymous concept.

 It is possible to have growth without development and

development without growth.

Of course, growth can be a pre-requisite for

development.

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In principle and reality, the primary objective of development is
to eliminate poverty- Aristotle
 Alleviating poverty is both a moral imperative and a
prerequisite for environmental sustainability
B/c the poor are both victims and agents of
environmental damage.

Consequently, controlling the natural resources degradation is

seen as a path out of poverty trap or a key for sustainable
development.
Hence, Natural Resource Based Poverty Alleviation becomes
the middle idea of many thinkers.
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Natural/Environmental resources can be used as pathway out
of poverty.

At a micro level, natural resources may serve several functions.

It can be used as a means of poverty mitigation
 They may provide an important supplement to
everyday consumption.

 They may serve as “gap filler”, or fulfill a “safety net

function “in times of emergency.

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 Again, natural resources may even provide a “pathway out
of poverty.”
 In this case income from natural resource can be used
to help lift the household out of poverty.
 This is called “poverty elimination”.

Poverty mitigation and poverty elimination are jointly called

“poverty alleviation”.

At macro level Natural and environmental resources

 have a potential to contribute to economic growth.
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Natural Resource Curse/ Paradox of Plenty

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Definition

The paradox of plenty

 It is also called resource curse/ natural resource curse

 refers to the paradox that countries and regions with an

abundance of natural resources, specifically non-
renewable resources, tend to have less economic
growth and worse development outcomes than countries
with fewer natural resources.
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Evolution
The term resource curse was first used by Richard Auty in 1993
 To describe

how countries rich in natural resources were

unable to use that wealth to boost their economies
and
how these countries had lower economic growth
than countries without an abundance of natural
resources.

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The famous work by Sachs and Warner, 1995, popularized the
idea of natural resource curse.
 This influential work identified a negative impact of
natural resource abundance on economic growth over
the 1960-1990 periods.

 After this work, several theoretical and empirical

studies were conducted to understand why and how
natural resources can become a “curse” for a country
rather than a “blessing” like the beliefs of the classic
economic theory.

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The main challenge in this area is to understand how natural
resources abundance can affect negatively growth.

Gylfason (2001) identified four factors that responsible for

crowding out effects.
1. Dutch Disease and low foreign capital

2. Low Saving, Investment and physical capital

3. Low Education and human capital

4. Low Social Capital and Institutional quality

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 THE END

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