ning in resource-based economies. Countries such as Indonesia that are heavily dependent on exhaustible natural resources must diversify their asset base to preserve a sustainable long-term growth path. Extraction and sale of natural resources must finance investments in other productive capital. It is therefore relevant to compare the figures for GDI with those representative of natural resource depletion. If gross investment is less than resource depletion, the country is drawing down, rather than building up, its asset base and using its natural resource endowment to finance current consumption. If net investment is positive, but not enough to equip new workers with at least the capital per worker of the existing labor force, then increases in output per worker and income per capita are unlikely. In fact, the results from the Indonesian case study show that the adjustment for natural resource asset changes is large in many years relative to GDI. In 1971 and 1974, the adjustment is positive, due to additions to petroleum reserves.¹ In most years during the period, however, the depletion adjustment offsets a good part of gross capital formation. In some years, net investment was negative,