Reuben (Year 9)
Editor’s note: Now in Year 10, Reuben carefully researched and wrote this interesting essay on the role that physical geography plays in shaping the economy. Geography, including natural resources and access to water, plays a crucial role in shaping a country’s economic growth and output by influencing its ability to export and develop industries. CPD
“If you know a country’s geography, you can understand and predict its foreign policy” -Napoleon Bonaparte. This insightful quotation by Napoleon Bonaparte demonstrates the power of geography to and influence wider geopolitics. This as well as a nation’s access to water and the wider oceans can be some of the most important geographical features for any nation. In this essay, we will dive into how these can affect a country’s economic growth and output, and which is the most crucial in determining this. In the 21st century, it is vital to have a robust economy to ensure a high quality of services, and a range of available products and resources to sustain an excellent quality of life for their citizens.
Multitudes of economists believe that one of the most prominent ways of increasing economic growth is through having a massive scale of exports. This has numerous advantages for an economy. Most prominently, with an increase in production, one can order in larger quantities and get a cheaper price per unit, thereby saving money. Successively increasing profits and leading to growth in the industry. This may then further increase production and promote a further increase their profits. Therefore, jobs and skilled labourers will enter the industry as it expands leading to more innovation and efficiency. Further boosting the economic growth of the country. It is essential to have a fully realised economy of scale to have a substantial amount of economic growth. For this reason, economic growth and output are fundamentally linked in relation to the two major topics I will further discuss. Therefore, what is the most important aspects of physical geography for a country’s economic growth and output?
Physical resources within our geography are incredibly valuable. Iron makes up approximately 5% of the Earth’s crust and is a necessary resource for a modern, industrialised nations. Iron is transformed into steel, the most used metal in developed nations as a key component in transport and logistics to construction. Since 1850, iron has been gargantuan in shaping the modern world through the industrial revolution. Therefore, for a resource so important that every country requires to build a thriving economy, what effects can it have on a country’s economic growth or output?
In 2021, Australia exported over 118 billion dollars’ worth of iron ore. This made up approximately 35% of all money generated from exports in 2021, which may then be used in public services and improve their citizens’ lives. This money, making up a sizeable proportion of their exportation and income for the country, is completely dependent on having these extensive natural iron deposits. The money generated is then invested to diversify the economy and get it less reliant on exporting minerals. This makes Australia a more resilient, growing, and modern economy. The industry has such an enormous impact on the economy, the exchange rate of the Australian Doller fluctuates often due to the price of iron ore. As well as supporting nearly 80,000 jobs, saying these gigantic reserves are important to the economy is an understatement. This demonstrates the massive importance of these natural resources in the Earth’s crust to turn nations into modern thriving nations and massive exporters.
On the contrary, Japan has imported over 15 billion dollars’ worth of iron ore in 2021. This is due to the low natural resources available in Japan meaning they must import almost all their natural materials. This can lead to the opposite result, where the lack of natural, physical resources makes a country less stable and more reliant on outside nations for vital resources to continue growing. Japan may be able to import these resources, but poorer countries such as Costa Rica must depend on other industries such as tourism which is not as stable and reliable an industry. It makes them extremely vulnerable to economic recessions, for example, during the Covid-19 pandemic. It is harder for them to build a strong economy of scale limiting their economic growth and output.
Despite the massive effects these natural resources within our physical geography can have, particularly on developing economies, there is one resource that is infamous for being able to completely shift an entire economy. Oil is the most exported resource globally due to the importance of the best ways to achieve a strong, large exporting economy of scale and are immensely important for every economy on Earth.
References
1. Quotefantisy Napoleon quote, accessed 29th Jan 2024
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3. Britanica Kids – Iron – accessed February 2nd, 2024
https://kids.britannica.com/students/article/iron/275091#:~:text=About%205%20percent%20of%20Earth’s,very%20small%20amounts%20of%20iron.&text=In%20the%20Earth%2C%20iron%20occurs%20mainly%20in%20iron%2Doxide%20ores dents | Britannica Kids | Homework Help
4. “Prisoners of geography” by Tim Marshall, edition, first published 2015
5. OEC, open education consortium, information from 2021
https://oec.world/en/profile/bilateral-product/iron-ore/reporter/aus rter/aus
6. Australian Government, department of foreign affairs and trade, Information from 2021, Trade and investment at a glance
https://www.dfat.gov.au/publications/trade-and-investment/trade-and-investment-glance-2021
7. Bank of Australia, published May 2023, Drivers of the Australian dollar exchange rate
8.Iron ore in Japan, The Observatory of Economic Complexity, OEC, Accessed Feb 2nd, 2024
https://oec.world/en/profile/bilateral-product/iron-ore/reporter/jpn?redirect=true
9. Published by Saifaddin Galal Dec 21, 2023, Oil and natural gas industry in Libya, Statista
https://www.statista.com/topics/9253/oil-and-natural-gas-industry-in-libya/#topicOverview
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https://www.un.org/ohrlls/content/about-landlocked-developing-countries
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14.Ctech, the $9.4 billion dilemma: Egypt will need to act against Houthis to protect Suez Canal, Published December 2023 https://www.calcalistech.com/ctechnews/article/hkpbd00alp
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