Japan, Korea, Taiwan, Singapore, Dubai and even India (the knowledge economy) have clearly demonstrated as countries that have economically prospered in the last 25 years or so due to their high level of human resources and management competencies, said an industry expert.

“This is in spite of not having sufficient natural resources. On this basis, it is not surprising that countries with little or no natural resources are developing much faster than those blessed with ample natural resources,” added Hilmy Cader, the chief executive of MTI Consulting, an international management consultancy.

There seems to be an inverse correlation between a country's natural resources and human capital. The challenge these countries with abundant natural resources face, on average, is they tend to experience relatively slower growth rates in the past few decades as opposed to those with limited natural resources.

Interesting fact here is the paradox of such countries is not limited to their average performance, but their huge variation too. While there are countries prospering by means of plenteous natural resources, some of these countries experience little or no economic development.

Take Singapore for instance, the country has improved considerably after attaining independence. Despite the absence of natural resources, the country has prospered immensely - the credit goes to the government policies and the people of Singapore and of course the geo-strategic position, which facilitates shipment across the distinct continents.

By contrast, take countries like Nigeria, Myanmar, Venezuela, Sudan (to name a random few) - all with a very high level of natural resources, but have not been as successful in achieving widespread socio-economic prosperity. This is the paradox of poverty from plenty, often referred to as the 'resource curse'.

 Is it because these countries are bad at harnessing these natural resources for the benefit of its people? Or is it the domino effect that is created as a result of the mere existence of natural resources (i.e. corruption, inequality and poverty, authoritarian governance and then obviously the slowed economic growth rates).

For the reason that the natural resources do not charge the 'economic rent', governments tend to be wasteful, corrupt and autocrat. It is evident why such countries tend to make little or no investment in their human resources. Is it time to measure GDP based on the human capital index and management competencies? – TradeArabia News Service

This feature appeared in the September 28, 2014 edition of the Gulf Daily News, our sister publication.