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Water resources in economic Report

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Updated: May 24th, 2019


According to Addams, Boccaletti, Kerlin & Stuchtey (2009), there are more than enough water resources to meet and sustain the competing demands for scarce the resources. But the escalating water shortages and scarcity is seen as an industrial hazard, a main financial risk that can not be disregarded, and a universal precedence that influences human well-being.

Looking at the management of water resources, monetary statistics is inadequate, administration is not transparent and the stakeholders are unsatisfactorily connected. Because of this, majority of the states put more effort to outline and put into practice fact rooted water policies.

Water resources experience inadequate allotments and reduced investment arrangements due to the fact that investors do not have reliable support for financially realistically decision making. With no action taken in the direction of recovering water resource management, it will not be easy to encounter connected resource difficulties, such as supplying enough food or maintaining producing energy for the global populace.

Discussion on the economics’ of water

Despite water being a precious commodity, its value is hardly ever shown in numerical figures or categorized as an economic resource. Hermans, Halsema & Renault (2005) state that by employing financial figures in water management, as a way of portraying significant values in money flows and permitting financial trade to be the basis of distributing water resources and related costs and advantages among stake holders.

Hence, the stakeholders pay only for the amount of water that they use at a particular time. By putting into practice the financial payments for water usage in the market will result in a more utilized way of using the scarce water commodity. This will limit the wastage of water as people will feel the pinch in the pocket as they have to pay more for each drop of water wasted (Briscoe, 1996).

Know how or advancements recognize that financial preparations can be a factor to an additional cost-effective utilization of water resources but if simply precise requirements are met, correlated to a properly performing institutional structure and system that makes certain that use of monetary provisions is well adjusted through wide communal objectives.

Proposals on the economics’ of water resources

FAO (2005) states, the escalating responsiveness that water shortage has brought forth the acceptance of the opinion that “water is an economic good” as one of the four Dublin principles in 1992, which are broadly acknowledged as the foundation for integrated water resources management (IWRM). Economics purely focuses on the division of scant commodities over several contending demands hence then the aspect of scarcity of water reserves as economic commodities makes perfect sense. (FAO/ Netherlands, 2005)

Contrary, Perry et al (1997) argues that water is not an ordinary economic good, and that one should be familiar with possessions and consumer privileges may be multifaceted, in that the physical attribute of water makes it difficult to transport large quantities of water from one location to another and that water is a resource that cannot be replaced, once its used, its gone.


Water is a scarce resource and the situation continues to escalate day-in-day-out. Just like other scarce resources which are categorized as economic resources, so should be water resources. By giving water resources a price tag and placing market regulations, the commodity will be more valued and the resources protected.

Reference List

Addams, L. Boccaletti, G. Kerlin, M. & Stuchtey, M. (2009). Charting Our Water Future Economic frameworks to inform decision making. McKinsey & Company. Retrieved from:

Briscoe, J. (1996). Paper presented at the ICID World Congress in Egypt: Treating Water as an Economic Good. The idea and what it means in practice. Cairo: Elsevier.

FAO, (2005). Project Report FAO and Sokoine University of Agriculture: Water Productivity and Vulnerable Groups in the Mkoji Sub Catchment. Morogoro: Kasele, S.

Hermans, L. Halsema, V. G. & Renault, D. (2005). Paper presented at OECD Workshop on Agriculture and Water: Sustainability, Markets and Policies. 14th– 18th November 2005: Developing economic arrangements for water resources management-the potential of stakeholder-oriented water valuation. Adelaide: Sydney.

Perry. C.J., Rock, M. and Seckler, D. (1997). Research Report14: Water as an Economic Good: A Solution or a Problem? Colombo, Sri Lanka: International Irrigation Management Institute.

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