Another graph from Dr Don Elder, CEO Solid Energy.
Several points stand out.
One is that New Zealand is well endowed with coal and other minerals. It would be folly not to sensibly exploit them.
Another is that the world is not going to run out of hydrocarbons any time soon.
A third is that it takes more than natural resources for a country to grow rich. Saudi Arabia is not particularly wealthy: its per capita income is below New Zealand’s.
Institutions and policies (which New Zealand can improve) matter most for prosperity, but New Zealand also has abundant natural resources. We have no excuses for not doing better.
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This is an interesting graph from a presentation this week by Dr Don Elder, CEO of Solid Energy.
Many New Zealanders think Australia is ‘the lucky country’ because of its natural resources.
Dr Elder’s data suggest that New Zealand is actually ‘the luckiest country’ in terms of natural resources per capita.
The 2025 Taskforce in its report last year made it clear that Australia’s prosperity was not principally due to mining (although mining is obviously an important contributor). Mining accounts for only 5% of Australian GDP and less than 2% of its workforce. Australia has done well primarily because of its economic reforms that began in the mid-1980s.
By themselves, natural resources are not the key to prosperity – countries like Japan, Hong Kong and Singapore have few natural resources. Similarly, resource-rich countries (eg in Africa and Latin America) are often poor.
The quality of a country’s institutions and policies matters most for prosperity. But New Zealand would be foolish not to take sensible advantage of its natural resource endowment as highlighted by Dr Elder.
Click to enlarge