The Effect Of Natural Resources Rents On Human Development At Selected Southeast Asia Countries, 2000-2021

Abstract

This research analyses the effects of natural resource rents on human development in selected Southeast Asia countries. A panel of five countries have been selected for the period 2000–2021. The pooled OLS, fixed effects model (FEM), and random effects model (REM) were employed in the analysis. Based on the the Hausman test, FEM have been chosen, while to correct diagnostics problems, generalized least square (GLS) is more preferred. The results indicate that total natural resource rents have an impact on human development and this impact is negative. More specifically, forestry rents, mineral rents and natural gas rents also have negative impacts on human development, while coal and oil rents have positive impacts. To ensure long-term development, natural resource rents must be used efficiently to finance infrastructure, health and education. Economic diversification must be promoted to reduce dependence on resources, additionally governance institutions must be strengthened to promote transparency and sustainable resource management.