Sustainable and Resource Based Economies

A New Economy

Our current global economy is hugely disbalanced. It is increasing the divide between the extreme poor and the rich, and is placing an unsustainable pressure on our natural world.

The World Bank recently reported that despite economic growth in resource-based countries “growth helped increase average incomes, yet it did not increase median incomes or lift the poorest 40 percent of the population.” A report by the UNDP cites that in coastal Caribbean economies, poverty occurs despite high GDP and investments in social systems such as education and health.

While larger global institutions continue to push traditional models of lending and foreign investment, these models create long-term consequences for regional economic growth. Analysis shows that human welfare losses due to pollution are more than $4.6 trillion USD per year, which is equivalent to 6.2% of global GDP ( Landrigan, P.J. et al. (2018). The consequences of economic, social and environmental loss in current global economic models have a considerable impact on long-term geopolitical stability as well. As these models continue to push for loans and foreign investments, they import foreign policies imposed on the region, increasing geopolitical instability and threatening young democracies. Often countries are left locked-in to financial policies that do not promote local and regional sustainability, with the dependence on foreign aid, lending themselves to models which depend on negotiating with third parties who rarely take into consideration the resilience and health of natural resources, long-term sustainability goals or their own political will and policies. They in effect weaken the regions resilience to self-sustaining economies and policies, cause huge environmental degradation and social impact.

For many countries, particularly resource dependent countries, economic development and human development are tethered to the health of their natural resources. This web of interdependent factors leaves many nations with the burden of shouldering the cost of resource exploitation and increasing the need on foreign dependence with negligible local benefit. International organizations and banking systems continue to prioritize economic growth, while leaving human, social and environmental factors to foreign aid and investments, which in themselves are bundled into an economic benefit for global organizations. What we see is a current global model which profits from fast economic benefits, and then again profit from the repair programs implemented in return.

Short-term economic benefits which take no account environmental factors, fossil intensive energy process, and low-wage labor for example, leads to long-term social, economic and environmental decline. Our current global model prioritizes short-term economic benefits which carries a huge built in cost to the region. This cost then, is analyzed and implemented as an investment. Rather than sound economic policy and investments which stabilize the region from onset, we deal with a ‘build, recover, repair’ model which destabilizes and degenerates the regions social, environment and economy and long-term ability to self-sustain.

A sustainable model should focus on the resilience of our natural resources, ecosystems and society for economic benefit as its core economic model. This models potential increases resilience, longevity, increases stability, and improves long-term socioeconomic benefits. That potential is inherent from the values that our air, land and water provide for society. A healthier environment, the healthier the people and society leads to sustainable economic growth and prosperity of the nation, creating a future for our global economy and planet which promises to ensure the long-term success, wealth, and well-being of our Earth.