International rivalry

Yet the most important cause of the 20th century breakdown was the collapse of harmonious

international relations, as rivalries among the great powers and the rise of communism and

fascism fragmented the globe.

we confront an alternative threat: mega-terrorism. it does not appear that the world’s response to September 11 will be to close borders. That would only exacerbate the desperation in the world’s less economically successful countries. Global cooperation to control terrorists and improved security measures seem a more appropriate and effective route. But the danger is a genuine one.It cannot be ignored.

Resource scarcity

If one accepts that the supply is, indeed, finite, then more demand by new consumers makes other consumers unambiguously worse off.The search for vital raw materials was a motivating force behind territorial expansion in the first half of the 20th century. It could easily become so again in the years ahead.

Role of natural resources for the development of modern world economy. Major types of naturalresources.Imbalances in production and consumption of natural resources between countries.

Economists now recognize that, along with physical and human capital, natural and environmental resources available to an economy should be viewed as important economic assets, which can be called natural capital and act as the main engine of the development of world economy through trading natural resources.

Economists defined sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (an increase in well-being today should not have as its consequences a reduction in well-being tomorrow)

While it is generally accepted by most economists that economic development around the world is leading to the irreversible depletion of natural capital, there is widespread disagreement as to whether this necessarily implies that such development is inherently unsustainable.

As a result, there has also been considerable debate over the role of natural capital in “sustainable” economic development. That is, does the environment have an “essential” role in sustaining human welfare, and if so, are special “compensation rules” required to ensure that future generations are not made worse off by natural capital depletion today?

One way of illustrating how unique are the various “goods and services” produced by natural capital is to examine the various economic values that arise through the functioning of a natural ecosystem.These two contrasting views are now generally referred to as weak sustainability versus strong sustainability

According to the weak sustainability view, there is essentially no inherent difference between natural and other forms of capital, and hence the same “optimal depletion” rules ought to apply to both. As long as the natural capital that is being depleted is replaced with even more valuable physical and human capital, then the value of the aggregate stock – comprising human, physical and the remaining natural capital – is increasing over time.

Maintaining and enhancing the total stock of all capital alone is sufficient to attain sustainable development. In contrast, proponents of the strong sustainability view argue the strong sustainability view suggests that environmental resources and ecological services that are essential for human welfare and cannot be easily substituted by human and physical capital should be protected and not depleted. Maintaining or increasing the value of the total capital stock over time in turn requires keeping the non-substitutable and essential components of natural capital constant over time.

Nevertheless, it is clear that the very minimum criterion for attaining sustainable economic development is ensuring that an economy satisfies weak sustainability conditions. That is, as long as the natural capital that is being depleted is replaced

With even more valuable physical and human capital, then the value of the aggregate stock –

comprising human, physical and the remaining natural capital – should be increasing over time.

First, environmental and natural resources must be managed efficiently so that the welfare losses from environmental damages are minimized and any resource rents earned after “internalizing” environmental externalities are maximized.

Second, the rents arising from the depletion of natural capital must be invested into other productive economic assets, simply because a developing economy is endowed with abundant natural resources, it does not necessarily follow that the country will exploit this natural wealth efficiently and reinvest resource rents in other productive investments. Ill-defined and lack of enforcement of property rights that create “open access” conditions for exploiting land and other natural resources in developing countries are part of the problem. In addition, rather than ensuring that any resource rents earned are re-invested efficiently into other productive assets, current policies in resource-abundant developing economies appear to work against this outcome.

Corruption, bureaucratic inefficiency and polices biased in favor of special interests that gain from excessive resource extraction or conversion also exacerbate these policy failures.

The result is that land expansion and increased exploitation of new resource “reserves” in many resource-dependent developing economies are not fostering a “takeoff” into sustainable development but rather a “boom and bust” pattern of economic growth and development.

Of course, it will always be difficult to determine what exactly is lost when we deplete natural resources and degrade the environment. But at the very least, economic policies should be in place to ensure that welfare-damaging environmental externalities are corrected, the rents generated from the depletion of natural capital are maximized, and that these rents are reinvested into dynamic and innovative sectors in the rest of the economy.

Types of natural resources:

Natural resources are derived from the environment. Many of them are essential for our survival while others are used for satisfying our needs. Natural resources may be further classified in different ways; on the basis of origin, resources may be divided into:

• Biotic - Biotic resources are those obtained from the biosphere. Forests and their products, animals, birds and their products, fish and other marine organisms are important examples. Minerals such as coal and petroleum are also included in this category because they were formed from decayed organic matter.

• Abiotic - Abiotic resources comprise non-living things. Examples include land, water, air and minerals such as gold, iron, copper, silver etc.

On the basis of the stage of development, natural resources may be called:

• Potential Resources - Potential resources are those that exist in a region and may be used in the future. For example, mineral oil may exist in many parts of India having sedimentary rocks, but until the time it is actually drilled out and put into use, it remains a potential resource.

• Stock are the materials in the environment which have the potential to satisfy human needs but do not have the appropriate technology to access them. For example, hydrogen and oxygen are two inflammable gases present in water, but we do not have the technology to use them from water.

• Reserved Resources are the subset of stock, where use has not yet been started and are saved for future use.

• Actual resources are those that have been surveyed, their quantity and quality determined, and are being used in present times. For example, petroleum and natural gas obtained from the Mumbai High Fields. The development of an actual resource, such as wood processing depends upon the technology available and the cost involved. That part of the actual resource that can be developed profitably with available technology is called a reserve.