Despite being home to the river Nile, Egypt could face extreme water scarcity in the next decade according to a report by MIT.
The report concluded that Egypt will need to import more water than is currently supplied by the Nile due to the pressures of economic growth and an increasing population.
With the Egyptian economy growing rapidly since the 1970s, the burden on scarce resources such as water has increased dramatically. Economic growth has led to the development and creation of a whole host of new industries and economic activity. In particular, the Egyptian government has worked hard to improve the country’s agricultural sector.
Economic development in the extremely arid African nation has significantly increased prosperity but also given rise to a fundamental economic problem. That is indeed the basic economic problem itself: that the world has finite resources but humans have infinite wants.
THINK LIKE AN ECONOMIST!
Q1: What is the basic economic problem?
Q2. Explain why increased economic activity will lead to more prosperity.
Q3. Explain why increased economic activity will also lead to the scarcity of resources. (Give some examples in your answer)
Q4. What are the possible economic and political impacts of the scarcity of resources?
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