Wednesday, July 28, 2004

What Makes A Country Rich

Several times in my life I have spoken to people that have expressed the opinion that a country that has lots of natural resources should be a rich country. 

People in Argentina are perplexed by their 2nd world status when at the same time they percieve their country to be rich in resources.

People in various provinces say, "We have all these natural resouces, why are we a 'have not' province?"

In my geography of Africa class, everyone aknowledged that Africa has tons of natural resources but is stuck in poverty.

It seems to me that the idea that an abundance of natural resources is so, well, antiquated.  It may have been true 100 years ago, or even 50 years ago.

The thing is, raw materials aren't actually worth any thing.  Take lumber for example.  Would you be willing to pay more for a pile of logs or a house?  What could I possibly do with a pile of logs?  Why one earth would I buy them, I don't need them, I wouldn't know what to do with them if I had them.  2x4's are a little more valuable, but still lumber isn't really that useful to people who aren't doing construction.

The point is, the further you go along the chain the more valuable your product or service is.  Sure a tree is nice,  but a chair made out of that tree is worth a lot more.

-Gary Milner

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