Abstract

Purpose The purpose of this study is to investigate the role of natural resources in economic growth by taking evidence from Pakistan. Design/methodology/approach Total five variables are used in this study, i.e. GDP, population density, water renewable resources, deforestation and the emissions of CO2, based on time series data from 1972 to 2016. The annual data is collected from World Development Indicators, Food and Agriculture Organization and Pakistan Economic Survey. Vector error correction model technique is applied to find out the long-run results. Findings Results depict that all variables have a negative and significant relationship over the long run at 5% level of significance. It is observed that 1% increase in population accordingly will degrade GDP by 0.334496%. Correspondingly, 1% increase of water renewable resources will degrade GDP by 0.450647%. Findings are aligning with the study of. Moreover, 1% increase in deforestation will diminish GDP by 0.127821%. If we increase 1% of CO2, GDP will be reduced by 0.802420%. Research limitations/implications Results depict that all variables have a negative and significant relationship over the long run at 5% level of significance. It is observed that 1% increase in population accordingly will degrade GDP by 0.334496%. Correspondingly, 1% increase of water renewable resources will degrade GDP by 0.450647%. Findings are aligning with the study of. Moreover, 1% increase in deforestation will diminish GDP by 0.127821%. If we increase 1% of CO2, GDP will be reduced by 0.802420%. Practical implications Family planning may be our last hope. Viable and fruitful family planning ought to be introduced. Status of ladies should be brought up in the society by providing education and employment opportunities. Time of marriage ought to be brought up to 25 years in case of males and 23 in case of females; this can help in decreasing the number of births. Having a large population will not automatically translate into economic prosperity. Investment in well-being, education, sound economic policies and good governance will bring about accelerated economic growth. Originality/value In recent years, the issue of worldwide water shortage has attracted increasing consideration within scholarly community, non-administrative organizations and the media. Water shortage is a significant and ever-increasing danger to the environment, human well-being, advancement, energy security and the worldwide food supply. This work will introduce real issues and requirements relating to water, environmental changes and their impact on economic growth of Pakistan.

Highlights

  • According to Barbier (2003), most of the economists recognize that by including physical capital, natural and environmental resources should be observed because these are the most important economic assets

  • Does the environment play a vital role in sustainable development and human welfare? If the concept is true, is there any specific “compensation rules” essential to ensure that the future welfare of the society is not deteriorated by natural resources reduction today? Secondly, the environmental Kuznets curve (EKC) theory has promoted the empirical finding of an “inverted U”-shaped relationship between environmental pollution indicators

  • Does the existence of such type of relationship of EKC advocate that environmental degradation will reduce with growth? modern economic theories questioned based on empirical findings whether low-income economies, which are endowed with natural resources, develop quickly as compared to the economies that are poor in sense of natural resources? The most important question filtered from all dimensions of the debate is how natural resources play a role in the economic growth of the economy?

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Summary

Introduction

According to Barbier (2003), most of the economists recognize that by including physical capital, natural and environmental resources should be observed because these are the most important economic assets. The most important question filtered from all dimensions of the debate is how natural resources play a role in the economic growth of the economy?. Water is a huge natural resource and it can be regarded as the essential ingredient and the source of life on earth. Access to water has always been considered essential to socio-economic development, sound environment, the strength of societies and civilizations and the survival of human race itself. Water availability has not got the consideration it deserves in a worldwide discussion of the feasible usage of natural resources. It has been analysed even less with regards to population growth

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