ABSTRACT
Malaysia and other countries that are generously endowed with natural resources would seem to have a nature-given advantage in economic development. Yet some of the fastest growing economies are those with virtually no natural resources. Singapore and Hong Kong are well-known examples. Moreover, many resource-rich developing countries have achieved little more than transient “resource booms.” Their economies expand rapidly while there are resources to exploit, but they contract once the resources are exhausted. An oft-cited example is the Pacific island nation of Kiribati, where phosphate production mined much of the nation out of existence (Ward 1982, Stauffer 1986, Repetto et al. 1989).
