Developing countries' resource constraints

Developing countries’ resources have helped to feed and fuel the world’s developed countries. As the developing countries themselves industrialize, and as their populations grow, the demands on these resources increase, and the issues of resource constraints and environmental degradation rise on the political agenda.

Background

Developing countries are a diverse group, with tremendous variety in size, income, and industrial development. China and Singapore reflect the size disparities, with the former measuring about 9.6 million square kilometers and the latter approximately 1,000 square kilometers. Of the 210 countries the World Bank categorizes, 135 were categorized as low or middle income. Collectively, these nations made up roughly 84 percent of the world's population in 2022. Although many of these countries are still very dependent on primary goods, a small number, including South Korea and Venezuela, have undergone significant industrialization.

Resource use in developing countries is conditioned by a web of global, national, and local factors. The nature of their economies and their relative lack of economic power combine to determine their pattern of resource use. This pattern is closely associated with the asymmetric economic relations between developing countries and industrialized countries. patterns in industrialized countries highlight the variety of goods and services associated with a consumer culture; conversely, in most developing countries the focus is on basic needs. Industrialized countries are far greater consumers of commercial energy resources such as oil, natural gas, and coal. Developing countries, however, consume more wood and wood products, primarily as fuel wood and charcoal, and clear more of their forests, primarily for agriculture. Resource use patterns change over time: In the past, industrialized countries engaged in substantial deforestation, and as developing countries industrialize during the twenty-first century, their use of commercial energy sources will increase significantly.

In their efforts to satisfy both the interests of the industrialized countries’ capital and their own needs, some developing countries extend the boundaries of their economies by exhausting soils, removing old-growth forests, or overexploiting fisheries. A combination of forces operate at the global, national, and local levels to shape policies regarding development, trade, and investment—often with disastrous consequences for the environment.

Local Factors

Inequalities within the societies of developing countries result in skewed patterns of access to land and other assets, with elites benefiting disproportionately. Short-term needs can force landless families to farm fragile mountain slopes and torch rain forests in order to plant foods. In Brazil, poor people clear the forests to farm. Because of the fragility of the soils, in a short time yields diminish, and farmers must move on to other areas of rain forest. Similar practices result in the depletion and degradation of freshwater resources, soils, forests, and habitats.

The poor are both agents and victims of environmental degradation, whether it is a result of their own actions or a consequence of consumption by higher-income groups. The poor have few or no alternatives when the environmental resources on which they depend are degraded. Dwindling food supplies, unsafe drinking water, polluted air, and unsanitary conditions contribute significantly to reduced life expectancy and high child mortality. Moreover, long-standing traditional social and economic patterns encourage poor Third World people to have many children. The result is a vicious cycle: A large population leads to more poverty and increasingly threatens the renewable resources on which local populations depend.

Thus, development and environment are inextricably linked: Development that alleviates poverty is essential if renewable resources are to be preserved in developing nations, and material redistribution is necessary. For sustainable use of natural resources to be feasible, people need to have some measure of control of, and access to, resources. Case studies indicate that small holders who own their land tend to take care of it, unlike squatters and tenant farmers, who tend to deplete soils, forests, and water resources more rapidly because they assume or fear they will lose access to them.

National Factors

Problems at the local level are often reinforced by national policies that neglect or discriminate against the poorer members of society, with negative consequences for the environment. For example, tax laws may favor the rich, or the structure of development investment may favor urban areas. Sometimes farmland near cities is taxed at its development value rather than as agricultural land. As a consequence, poor farmers who cannot afford the higher taxes are forced off the land. In addition, government enactments intended to manage common property resources can have negative effects on both the poor and the environment. For example, in a number of West African countries, colonial and subsequent governments claimed all the trees as their own. Farmers could cut them only after a laborious permit process, and certain species could not be cut at all. While this slowed the process of deforestation, it also dissuaded farmers from planting trees. Recently, this practice has been reversed, and countries such as Burkina Faso, Mali, and Niger are encouraging farmers to mix trees and crops, an ancient farming practice in West Africa.

Governments have also been slow to implement adequate land-planning policies and environmental impact assessment. In many Caribbean states, environmental legislation is fragmented into several disparate regulations, and responsibility for its administration is distributed among various departments. As a consequence, developing countries are repeating some of the environmental problems associated with the industrialized countries, such as air and water pollution, toxic emissions, and waste disposal problems.

Global Factors

Global factors combine with local and national factors to exacerbate unsustainable resource-use patterns. At the global level, developing countries’ options are constrained by a number of interrelated forces, such as declining terms of trade, oppressive debt burdens, and inappropriate investment strategies. These forces have significant consequences for resource consumption.

With their dependence on primary products, developing countries are often among the losers when trading systems are liberalized. The market prices of primary products have fallen rapidly, while the prices of the manufactured goods that they import have risen significantly. In the effort to make up such financial shortfalls, developing countries may feel forced to tap their natural resources more extensively.

One result of a focus on free trade, with its emphasis on growth, is the exploitation of natural resources for short-term profit. This exploitation may mean the clearing of rain forests for cattle ranching or the shifting of agricultural land from domestic food production to export crops. In addition, environmental standards and resource regulations can be challenged as barriers to trade. Regulations produced by the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT) are illustrative. Under NAFTA, each country has to provide other parties with the same access to its resources that it provides to its own citizens and other domestic parties. The Uruguay Round of GATT resulted in some provisions with direct implications for environmental regulations. One of GATT’s objectives is to limit most restrictions on trade: Therefore GATT can be used to challenge the rights of nations to use import and export controls to conserve threatened resources such as forests and fisheries. The new trade provisions also discourage the use of strong environmental provisions by states, because these could be judged as being in violation of GATT rules. These regulations work against the concept and practice of sustainable use of resources.

International institutions, such as the World Bank and the International Monetary Fund (IMF), encourage export-led development as a priority, but this export-led strategy has reduced many countries’ capacity to address their environmental problems. The World Bank, as the principal single source of funding for Third World development, can have a profound impact on environmental policy in developing countries. Its development model has emphasized large-scale schemes dealing with water management, power generation, and transport infrastructure. Many of these projects have resulted in serious disruptions of local ecosystems, in environmental stress, and in the displacement of thousands of people. The World Bank, and the other multilateral development banks, such as the InterAmerican Development Bank, the Asian Development Bank, and the African Development Bank, allocate more than one-half of their project loans to areas that can have marked effects on the environment, including agriculture, rural development, dams, and irrigation schemes. Oversight of the projects’ environmental consequences is inadequate.

IMF policy has also had significant environmental consequences for developing countries. The IMF has responded to the Third World debt problem by requiring the countries to adopt structural adjustment programs. These programs include a wide range of policy measures intended to restore creditworthiness: cuts in government expenditures, reduction or elimination of subsidies, currency devaluation, and reduction of trade barriers. The intent of these programs is to increase foreign exchange earnings so that the countries can make debt payments. However, structural adjustment can have disastrous impacts on the environment. The emphasis on boosting exports to earn foreign exchange can result in the destruction of natural resources such as forests, wetlands, and mangroves and in the excessive development of ecologically damaging industries such as mining. The pressure for countries to reduce government expenditures drastically can cause the elimination or postponement of programs to manage wildlife or enforce environmental laws. Additionally, structural adjustment programs that hurt the poor will often also hurt the environment: As a last resort, unemployed people might farm fragile hillsides or engage in slash-and-burn agriculture in forest areas.

In recent decades, some developing countries have experienced more rapid economic growth than industrialized countries have. In part, their growth reflects an increasing transfer of basic production to developing countries and the expansion of manufacturing there. These shifts create additional economic value and employment, but they also increase the environmental burden. Corporations are shifting complete industrial operations to the Third World. The end products are then shipped back to the developed country, where consumers get the benefit of the product while shifting the environmental costs of production to others. For example, there has been a significant shift of plant investment for organochloride manufacture to the developing world. In the 1980’s and 1990’s, U.S. companies relocated more than two thousand factories to Mexico, where enforcement of environmental laws is minimal.

Transnational corporations play a major role in this industrial transition. These corporations are the principal beneficiaries of a liberalized trading system. Because they control the bulk of world trade and investment, they are major environmental actors. They can affect the environment in Third World countries, both directly and indirectly. In order to attract investment from these corporations, a Third World country might adopt inadequate environmental regulations or might choose not to enforce existing laws. Virtually all commercial enterprises have direct environmental consequences because of process and product pollution. The former includes pollution generated by the chemical, iron and steel, petroleum, and paper industries. The latter variety is found in agriculture.

Because agriculture is the primary economic sector for many developing countries, examining transnational agribusiness is important. Agribusiness interests have made alliances with research institutes, agricultural colleges, regulatory agencies, government ministries, and aid agencies. These relationships enable them to shape agricultural practices and policies significantly. Their practices usually reflect a cost-benefit analysis that marginalizes environmental costs.

Corporate policy can have negative consequences for resources such as land, forests, and water. Transnationals control 80 percent of the land used for export crops worldwide. This fact is reflected in land-use patterns in countries such as Brazil and India. In Brazil, corporations own more land than is owned by all the peasants combined, and in India, some of the more wealthy farmers grow maize and sunflowers for Cargill and tomatoes and potatoes for Pepsi. Corporations specialize in monoculture, with heavy use of chemical fertilizers and pesticides. With the focus on production for export, developing countries become dependent on food imports. This focus has also aided in the destruction of tropical rain forests. More than one-quarter of Central America’s rain forest has been turned to grass for cattle ranching. Almost all the beef raised has been exported. In the 1970s, beef production in Latin America attracted more than $10 billion from the World Bank and the InterAmerican Development Bank. In Africa and Asia, corporations are also at work in the forests, but for timber rather than beef. These activities have meant the destruction of ecosystems and a decrease in biodiversity.

Prospects for Sustainable Development

As global awareness of resource limits and environmental damage grow, developing countries are under increasing pressure to adjust rapidly to environmental circumstances. Developed countries have been the major contributors to common property problems, such as depletion and change, but they cannot address these problems adequately without the cooperation of developing countries. As a result, developing countries are being pressed to minimize their use of the processes and commodities that enriched the industrialized countries.

During negotiations over environmental management regimes, developing countries have been able to bargain for some financial assistance to help them make the transition to more sustainable processes. Still, this small fund will not have a major impact on their transition to a more sustainable consumption pattern. Developing countries need to protect their endangered renewable-resource base. Accomplishing this will require reorienting development to alleviate poverty and enable poor people to meet their basic needs in ways that do not degrade water, soil, and forest resources or reduce biodiversity. This task will be extremely difficult as long as large amounts of their natural resources are owned or controlled by foreign entities. In the present global economic context, many developing countries recognize only two viable economic options: exploiting their natural resources to the point of exhaustion or importing “dirty industries.” Consequently, the structural inequities that distort global and national societies and economies jeopardize the transition to sustainable development. If these inequities are not addressed, sustainable resource use will be an ever-receding mirage.

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