Interplay of Natural Resources, Distribution and Development:

The effective and  relevant use  of natural resources, however,  is determined by  the distribution of resources across the country as well  as across people. The nature and the type  of  use  that the  natural  resources  are  put  to will  depend  on  the  demand structure which  is  in  turn based  on  the  income distribution of  the  population. As pointed out earlier, in a country with a high degree of income inequality, demand for industrial goods will be limited. The production structure would be small  in which case these natural resources will be of  limited use. Another possibility would be that the country's production  structure will be based on demand  in  other markets where the natural resources in  taw or processed forms are exported. In  recent decades, most of the developing countries have adopted an export-oriented strategy for growth, as their  domestic market  for goods  and  services  is  relatively small.  In  effect, the domestic population is being denied the use of the natural resources available in their country. If the export earnings are not reinvested to provide employment and income to the local population, the deprivation and denial of access to goods and services is further accentuated. The effective use of natural resources for equitable development would depend on the pattern of demand where the end product of these resources  is first  used  in  the domestic market.  This would  improve  the quality  of  life of the domestic population.

Lack of egalitarian distribution of resources can  lead  to an  inefficient allocation of assets. Luxury  consumption and wasteful expenditure leads to use  of  resources  in producing such  items which do not meet the requirements of the vast majority.  It  is observed that  increasing global income concentration amongst the  rich  nations has shifted the pattern of consumption all over the world. One of the stark examples of such a trend  is the global dependence on cars which  is creating  the problems of over crowding, vehicular pollution besides  accidents  and  other  problems. Economic growth based on  the growth of car  industry has diverted significant resources from investment in public transport and other mass projects. A similar trend is observed in the investment pattern related with  educational and health  care  institutions. Super specialty hospitals and  institutions of higher learning, which demand much  larger investments, have diverted resources away  from public health  and public education system.