Singapore was expelled from Malaysia in 1965 with no natural resources and virtually no industrial base. At the time, 70 percent of households lived in severely overcrowded conditions, while one-third of the population resided in slums on the urban fringe. Unemployment stood at 14 percent, GDP per capita was only around US$516, and half of the population was illiterate.
Yet six decades later, its GDP per capita had reached US$90,674, according to 2024 World Bank data. Far away in Europe, Switzerland recorded a GDP per capita of US$103,670 in the same year, despite having no oil reserves, natural gas, or strategic minerals.
These two countries are not anomalies. They are part of a pattern repeated across the world: countries without the shortcut of commodity wealth are often forced to build more durable economic foundations.
Scarcity That Forces Choices
When a country has no oil or mineral resources to export, there is no easy revenue stream to support the state budget. Policy options therefore narrow to one path: investing in people and industry.
Since 1961, Singapore has allocated around 40 percent of its total development expenditure to the social sector, including public housing, education, and healthcare, based on the State Development Plan prepared with technical assistance from the World Bank.
South Korea followed a similar path. Its research and development (R&D) spending reached 5.21 percent of GDP in 2022, the second-highest among OECD countries, according to World Bank data.
South Korea's public R&D budget for 2025 was set at 24.8 trillion won, the highest in the country's history, with a focus on semiconductors, artificial intelligence, and biotechnology.
Taiwan took a similar route. Starting from a simple textile manufacturing base and possessing few natural resources, Taiwan now produces more than 60 percent of the world's semiconductors and more than 90 percent of its most advanced chips.
In 2025, Taiwan's GDP per capita reached US$37,827 according to IMF data, surpassing South Korea (US$35,960) and Japan (US$34,720) for the first time in 23 years.
Switzerland, meanwhile, ranked first in the Global Innovation Index for 15 consecutive years through 2025, according to WIPO, with the pharmaceutical industry contributing 5.8 percent of GDP, making it the country's single largest industrial sector.
A Striking Contrast
The concept of the resource curse, the idea that abundant natural resources can actually hinder long-term economic growth, has become one of the most consistent findings in development economics.
The main mechanism is straightforward. Countries that rely heavily on raw commodity exports often have little incentive to develop downstream industries, preventing the growth of manufacturing sectors that generate innovation and high value-added output.
A study covering 128 developing countries between 1990 and 2019, published in Comparative Economic Studies in 2024, found that dependence on natural resource rents consistently hinders the growth of manufacturing value added and industrial employment.
When an economy is centered on extraction, the processing sectors that produce higher-value goods are often crowded out.
Countries without significant natural resources never entered this pattern in the first place. Instead, they were compelled to build industries, develop skilled workforces, and create value on their own.
Read also: Why Are Many Resource-Rich Countries Still Poor?
Not a Coincidence, but Not the Norm Either
This pattern does not automatically apply to every country.
Singapore benefited from its strategic location along the Strait of Malacca. South Korea received substantial support from the United States during the Cold War. Taiwan had an established textile industry that served as a stepping stone for industrial upgrading. Switzerland spent centuries building its competitive advantage in banking.
These contextual factors are real and cannot be ignored.
Yet one common thread remains consistent: the absence of natural resources forces governments to make long-term policy choices that cannot be postponed by commodity revenues. In 2023, the average GDP per capita of the world's 44 least developed countries was US$1,257, according to World Bank data, while Singapore recorded US$84,734 in the same year.
None of those 44 countries lacked natural resources.
