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Human capital and capital resources more significant than natural wealth

Speaking out: Financial consultant Mr G. Ramachandran, talking to students and faculty of the management department of B.S. Abdur Rahman Cresent Engineering College at a BL Club lecture.

Chennai , March 13

Why are some resource-rich countries poor and resource-poor countries rich? The answer is resourcefulness, according to Mr G. Ramachandran, financial consultant, who was speaking to the management students of B.S. Abdur Rahman Crescent Engineering College, Vandalur, at a Business Line Club lecture.

Elaborating on `Resourcefulness vs Resources - The New Core of Prosperity,' Mr Ramachandran said that countries with high per capita income had very few national resources and vice versa.

India, for instance, apart from being one of the fastest growing software exporters, exports gems and gold worth $14 billion without owning them. It only processes them, he said, illustrating his point.

The economic trend over the last four decades is striking. Human capital and capital resources have become more significant than natural wealth, Mr Ramachandran said.

US States such as Louisiana and Texas are rich in resources but their per capita income is lower than resource-poor States like Massachusetts.

Do you know that capital flows from the poor to the rich nations, he asked. The poor nations have become willing exporters of scarce, domestic savings, minerals, and resources to rich countries. The rich countries have become the gigantic processors of these resources.

Economics can be redefined as "the study of how to generate incomes for households, business and nations through the resourcefulness of the people."

For India to become a first-rate economy, its model income should increase, he added.

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