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