After reviewing, in the previous articles, three indices of competitiveness, namely natural capital, social capital and intellectual capital — let us now focus on a fourth indicator, that of resource management efficiency…
What is Resource Management Effectiveness?
The concept of resource management efficiency refers to the ability of a country to properly manage the resources available on its territory (natural capital, human capital, financial capital). Resource efficiency is a cost driver that affects the competitiveness and, by extension, the wealth of nations. The overexploitation of natural resources also affects the country’s natural capital, that is, its ability to support its population and economy with the resources needed in the future.
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In addition, the non-renewable resources used today could become scarce and therefore more expensive tomorrow. And it will affect competitiveness, wealth and quality of life.
Resource Management Effectiveness Index World Map 2021 | Dark: effective management; Clear: inefficient management (Source: solability.com)
A number of factors point to an increase in the cost of resources in the future: depletion of energy, water and mineral resources ; rising consumption (particularly in non-OECD countries); financial speculation on commodities, as well as geopolitical influences.
Introducing the Resource Management Effectiveness Index
The purpose of the Resource Efficiency Index is therefore to assess a country’s ability to cope with rising costs and sustain economic growth despite rising commodity prices, to manage scarcity of other natural resources (especially water), while protecting the environment.
Vital natural resources include water, energy and raw materials. Most of the resources used today are either non-renewable or partially renewable (fossil energy and minerals). Groundwater and other natural products (e.g. wood) remain renewable as long as they are not overexploited and their renewal is not disrupted by resource depletion, loss of biodiversity, pollution or climate changes.
Resource management index indicators: energy, water, raw materials.
Indicators of the Resource Efficiency Index are assessed both in terms of intensity (per capita) and efficiency (relative to GDP). Indicators measured relative to population clearly favor countries that consume few resources and raw materials (i.e. less developed countries), while indicators rated relative to GDP measure economic efficiency. And on this criterion the developed countries are doing better.
Resource Management Index — Key Takeaways
The global average for resource intensity is 46, while the highest score is 64. Even the best performing countries are far from competitive when it comes to sustainability. However, the potential is immense for new activities and cost reduction. Around 60% of all indicators show a positive trend. Slow but steady improvements can therefore be expected in the future.
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The 2021 resource intensity ranking is dominated by countries associated with a low level of development which is reflected in low energy and material consumption per capita. However, the index is based on both per capita metrics and an assessment of efficiency (resource consumption per value generated):
– The resource efficiency index is dominated by Malawi, followed by Kenya and El Salvador.
– Highly developed economies also rank well: Switzerland (4), the United Kingdom (8). Sweden, France and Ireland are all in the top 20. Germany is in 52e
– USA ranks 92e China arrives at the back of the pack (150).
Full ranking of the Resource Management Efficiency Index 2021 (click to enlarge).
The main implications of the score obtained in the efficiency of resource management index manifest themselves in the stability of economic growth. If commodity and energy prices explode in the future (as the majority of studies suggest), the lowest-scoring countries will face much greater challenges to sustain growth.
Resource Management Index — Algeria’s Ranking
the Resource Efficiency Index 2021 of the think tank Solability attributes to Algeria the low score of 29.7 (out of 100). With this our very below average, Algeria is at the bottom of the ranking. She occupies the 166e world rank(out of 180 countries). This means that it is only ahead of 14 countries in the world.
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Other poorly ranked countries include China (150), South Korea (153), Russia (171), United Arab Emirates (172), Saudi Arabia (175), Qatar, before last (179). Iran, in 180e position, brings up the rear.
It is thus noted that the vast majority of these countries are among the producers and exporters of gas oil. It therefore seems that the fact that Algeria is a country whose economy is based on the exploitation of fossil fuels (hydrocarbons), and the forecast that this resource will run out in the future have greatly influenced the score and the ranking of our country.
