Introduction

Natural resources may be regarded as a free gift of nature to the humanity for fulfilling its certain basic needs of life. Eric Zimmermann stated, Natural resources may be defined as that part of mans physical environment on which he depends for support in obtaining the means to attain certain needs. All physical things that are found within the approach of mans activities, i.e., about twelve miles above the surface of the earth and for miles below it, are considered natural resource. Natural resources includes automatically a countrys land, soil, minerals, water, climate, forests, oceans, rainfall and rivers which play a very important role in the economic development of a country .

Role of Natural Resources in Economic Development

Natural resources play a very important role in economic development of a country. But some development economists consider physical resources as rather an unimportant phenomenon in economic development. Prof. Simon Kuznets in his Towards Theory of Economic Growth observes, Every country has some natural resources. The Factors that induce Formation of adequate reproducible capital as a basis of economic growth are unlikely to be inhibited by an absolute lack of natural resources. Japan and Israel are the historical examples of economic development which are advanced in development in spite of meagre endowment of resources. The economists of this view, hence, believe that the natural resources, as a matter of fact, do not play any decisive role in development of a country. On the other side, some other economists regard resources endowment of a country as an important determinant of its economic development. Prof. Lewis believes that natural resources are significant determinant of the rate of economic growth; a country endowed with rich natural resources can progress at a faster rate than the countries having insufficient natural resources. Most of the advanced countries in the world are found to be rich in natural resources and their economic development has largely been based on their adequate resource base. They support economic development by curbing agricultural productivity, human efficiency and industrial development of the country.

Objectives of Natural Resource Development

The rational utilization of natural resources would require to exploit them within well-defined objectives. Joseph L. Fisher has presented the following main objectives of natural resources development: 1. Maximum Economic Growth. The most important objective of natural resources development, as observed by Williamson and Buttric, must be to secure maximum sustained contribution to the economic growth of a country. Economic development generally is regarded as the growth of per capita real income. Therefore, the main objective of the resource utilization is to make the largest possible progress towards a sustained growth in per capita income. 2. National Security. Another important objective of resource utilisation is to achieve the maximum possible security of the nation. It would be possible when two things are adopted: Firstly, the basic or key resources must not be exported and must be preserved for future. Secondly, the natural resource utilisation programme must maintain self-sufficiently so as to strengthen the national defense by all means. 3. Sufficient Supply at Minimum Cost. It is also an important objective of resources utilisation that it should ensure sufficient supply of resources at minimum cost so that the growing needs of a developing economy may be fulfilled. 4. Conservation and Proper Use. The use of resource utilization, particularly in case of renewable resources, such as, water, land, and forests is to maintain their conservation and proper use. This is essential in

order to protect the nation against the pollution and the risk of resource exhaustion. 5. Minimum Cost. The entire resource utilisation scheme must be centralized at the principle of minimum cost analysis. The objective must include the development and utilisation of resources at least possible cost. In other words, there should be optimum utilisation of all resources and wastage should, thus, be avoided.

Conditions Necessary for Resource Development

There are certain conditions which are necessary for resource development and effective utilisation of natural resources in a particular region. In this respect, the awareness of the people, nature of social-traditional or non-traditional, technical progress and experience and pre-conditions for resource development in a country. Besides these factors, the presence of following conditions is essential for resource development and effective utilisation of natural resources in an economy. 1. Feasibility of Resource Development. The first condition for successful resource development is to select such a project which is economically feasible. The economic feasibility depends on the extent of scientific and engineering information to be applied for this purpose. In addition, the administrative and social feasibility is also essential. 2. Project Knowledge of the Resources. It is important for any effective programme of natural resource development that there must be a perfect knowledge of the natural resources. The collection of data regarding the resources is a primary step for effective resource development. In this

respect, the data may be related with the quality of deposit of physical and mineral resources, the extent of deposit, the depth below the surface and the character of surrounding materials. 3. Importance to Market and Economic Research. The marketing survey and economic research are other essential conditions for the development of natural resources. These furnish the primary enquiries; and in this way may be useful for the best development of resources. For this purpose, it is only the research programme which may guide us in respect of the costs of development, processing, transportation and the nature of potential markets for the resources. It may also guide us ensuring about the economic feasibility of the projects. 4. Labour, Capital and Technological Requirements. The availability of essential labour, capital and technological skill are other important condition for the development and utilisation of physical resources. In absence of these inputs, a country cannot launch any fruitful programme for resource development. The choice of best technology for the exploitation of a particular nature resource is decided by the number and quality of labour-force, quality or status of management and the availability of capital stocks in the country. 5. Favourable Domestic and International Environment. The programme of natural resource development also requires a favourable domestic and international environment. The state can play an important role in creating suitable environment for resource development for resource development. In a free enterprise economy, the state can provide favourable environment for private sector by giving it basic information, undertaking research, promulgating laws for regulation and control. Most of the governments

also carry on techno-economic surveys in different regions, so as to undertake exploration of new resources, regulate conservation of resources, develop social and economic overheads and attract foreign capital in order to drive a move for natural resource development. Resources may be idle or not be used to the full extent because the necessary cooperating factors are not available or are wasted in other less productive uses. In this regard, the shortage of capital is one of the most important factors that restricts the optimum utilisation of natural resources in a particular country. In underdeveloped countries, the natural resources generally remain undeveloped for a long time for the system want of capital. Defective marketing organization, improper distribution system and insufficient market research are some of the limitations for the resource development in these undeveloped countries

References The Economics of Development and Planning - M.L. Jhingan Economic Planning Theory and Practice M.L. Seth Wikipedia*