The Rise of the Resource Rich Periphery

There is currently a lot of talk about about a looming global recession due to U.S indebtedness and rising oil prices. However, economic growth in China and India is also causing a rise in commodity prices that is boosting the economies of resource rich counties such as Russia, Argentina, Chile, Brazil, Australia and Saudi Arabia. In the 1980s and 1990s many resource rich countries including Russia, Argentian, New Zealand and Canada suffered serious economic decline as commodity prices plummeted due to overproduction and insufficient demand. However, the process of industrialisation and population growth has now taken up much of the slack in world commodity markets.


With most industrial production now shifting to China, India and South-East Asia, heavily populated industrial countries like Germany and Japan are stuck in ongoing recessions. Great Britain defied the odds in the 1990s by managing to run its economy primarily on financial services. However, now that North Sea oil and gas are running out the U.K also appears to be sliding into a prolonged recession- as Karl Mark once pointed out, all wealth ultimately comes from production. In contrast, countries like Canada, Argentina and Australia, with smaller populations and greater reserves of natural resources, are less affected by industrial decline.

In the 1990s Canada and New Zealand maintained economic growth through wealth based immigration- bringing in wealthy immigrants to encourage a spending boom in property. However, in the 21st Century such a short-term solution is likely to back-fire. Large numbers of immigrants will consume resources that the world needs to survive on and which resource rich countries need to trade for essential manufactured goods. Consumption patterns in developed resource rich countries like Canada and Australia are also more extravagant than in densely populated developed countries like Japan and Holland. Hence, large scale-immigration into Australia and Canada will have an adverse effect on such things as global co2 emissions.

From a military perspective the resource rich countries will become tempting targets for invasion and piracy. Australia and New Zealand are dangeroulsy isolated in the South Pacific and vulnerable to attack from resource hungry Asian neighbours- especially with the U.S unable to maintain current levels of defence spending. As a result it is likely that Australia, Canada and parts of South America will increase their defence spending and become more assertive in global politics in the coming decades. With German technology the Russian Federation will also become a much stronger military power as it tries to deter Chinese intervention in Central Asia.

The current dominance of the United States and Britain is now being challanged by an industrially powerful China and a countervailing assortment of resource-rich nations that are feeding off Asian economic growth.