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The Economic Importance of Natural Resources

In economics, the question has always been what is the most important and profitable sector to invest in to embark on a period of economic growth. The answer is that there is no single sector from which significant economic growth can be exploited, but rather a specific area or sector that, at a given moment in history, brings greater benefits not only in terms of economic growth but also in terms of geopolitical importance. Between the late 19th and early 20th centuries, heavy industry was synonymous with growth and great-power status. In the second half of the 20th century, countries focused on infrastructure and oil. From the late 1900s onward, growth could not be separated from technological investments. According to McKinsey’s report, current and future arenas of economic growth are characterized by six key metrics: growth in economic profits, investment in R&D, attraction of new entrants, concentration of large leading companies, international expansion, and competitive dynamism. The 18 potential arenas of the future are organized into five macro-themes: Technological foundation: semiconductors, AI software and services, cloud computing.

Digitalization: e-commerce, digital advertising, cybersecurity, video streaming, video games.
Electrification: electric vehicles, batteries, nuclear fission.
New biological frontiers: industrial and consumer biotech, drugs for obesity and related diseases.
Hard tech: shared autonomous vehicles, space, robotics, modular construction, and future air mobility.
According to estimates, by 2040, these 18 arenas could generate between $29 and $48 trillion in revenues, equivalent to 18-34% of global GDP growth, with potential profits ranging between $2 and $6 trillion.
However, all these arenas have one factor in common: natural resources’ need. In fact, the production of all technological, industrial, and military products requires materials acquired from mining sites, mostly rare earths.
Precisely in light of this analysis, a country’s future wealth can be estimated not only by GDP and planned investments, but also by its existing extraction sites. In addition to estimating the potential for economic growth and future wealth, the presence of large deposits of natural resources represents significant geopolitical power. In light of this, I believe it is useful to list the countries with the largest natural resources available within their territory:
Russia
Net value of resources: $75.7 trillion
Russia is one of the richest countries in natural resources in the world, with large reserves of iron ore, manganese, chromium, nickel, platinum, titanium, and other minerals. Siberian forests contain one-fifth of the world’s timber. Russia also boasts a wealth of non-fuel minerals and has been self-sufficient in industrial raw materials. Almost all its national wealth comes from natural resources, primarily oil and gas. It is the world leader in gas reserves and production, second in oil production, and possesses significant coal reserves. Russia is also one of the richest countries in gold reserves and is estimated to be among the top five in rare earth deposits.
United States
Net Resource Value: $45 trillion
The United States is rich in natural resources, including land, water, oil, and coal. It is among the top ten countries in rare earth deposits and is rich and first in gold reserves.
Furthermore, the country is characterized by a diverse population and contributes to economic and social development with its highly educated workforce in science, technology, engineering, and mathematics. This has helped drive innovation and economic growth in the United States.
Saudi Arabia
Net Resource Value: $34.4 trillion
Saudi Arabia is renowned as the world’s largest crude oil exporter, with 17% of proven oil reserves. Additionally, Saudi Arabia has 240 trillion cubic meters of natural gas reserves and significant deposits of minerals such as salt, sulfur, and rare earths.
Canada
Net Resource Value: $33.2 trillion
Canada has abundant natural resources that contribute significantly to its economy.
Canada’s oil reserves are the third largest in the world, and most of the oil is produced in Alberta. Furthermore, the country has the fifth-largest coal reserves. While natural resources are essential for economic growth, they can also have a negative impact on the environment and the rights of local and indigenous peoples. Therefore, land use plans and laws must be implemented to protect these resources, including using technologies on satellite imaging. Canada has numerous rare earth mining sites, which has attracted considerable US interest since President Trump took office.
China
Net Resource Value: $23 Trillion
China possesses natural resources worth an estimated $23 trillion, including coal, rare earth metals, timber, arable land, iron ore, gold, bauxite, hydropower, and diamonds. The country has the largest rare earth mining sites, a field in which it holds a virtual monopoly.
The country invests billions in geological exploration for resources, especially oil and gas, which are found primarily in the northeastern and northwestern provinces. Coal reserves are among the largest in the world.
Ultimately, while natural resources can be a tangible indicator of a country’s potential, resource exploitation itself represents the greatest challenge to economic growth. Currently, I believe that one of the best strategies implemented to fully exploit the potential of its own territory is that of China, while the United States is the most adept, albeit less discreet, at maintaining relationships to gain access to other countries’ natural resources. Currently, Russia seems to be doing only the bare minimum to live off its own natural resources, even though it is by far the country with the greatest potential.
By Domenico Greco

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