ECO102E Economic Resources PDF

“Empowering Growth, Harnessing Resources: Creating Tomorrow's Economy Now!” Economic Resources “Sustainability Approach” Dr. Khaled A. El-Mattrawy First Edition, 2024 Cairo, Egypt ...

“Empowering Growth, Harnessing Resources: Creating Tomorrow's Economy Now!” Economic Resources “Sustainability Approach” Dr. Khaled A. El-Mattrawy First Edition, 2024 Cairo, Egypt  About the Author “The sustainable utilization of Dr. El-Mattrawy has 36 years of academic experience, scientific research, and consulting resources provides in the fields of sustainability, econometrics, the way for long- economic policy, economic development, sources of economic growth, economic term economic reform, and labor economics. With a broad prosperity.” range of experience in Africa, Europe, Asia and North America, and Arab countries, as well as a thorough understanding and perception of economic policies, He has contributed directly or indirectly to the promotion and growth of these regions' economies. Other Books: 1. Microeconomic Analysis 2. Macroeconomics Analysis 3. Money & Banking 4. Computer Applications for Economics 5. Public Administration 6. Growth & Economic Development 7. Economic Planning & Development. 8. Managerial Economics. 9. Public Finance 10. Feasibility Studies. “An economy thrives 11. Public Private Partnership (PPP). when its resources 12. The Encyclopedia of the Egyptian Economy: 1887-2024 are valued and 13. Research Methodology optimised.” 14. Human Capital, Knowledge and Technology. 15. History of Economic Thoughts Economic Resources Chapter One: Constant Pressures C H A P T E R - O N E CONSTANT 1 PRESSURES Constant Pressures Learning objectives: Upon completion of Chapter one, students will have a comprehensive understanding of: 1. Economic Problem, Scarcity & Economic Resources. 2. The Economic Resource Main Future Challenges. a. Population Growth. b. Sustainability & Ecological Degradation. c. Globalization & Geopolitical Tensions. d. Market Failure. e. Government Failure. f. Circular Resource Nationalism. g. Disadvantages of Artificial Intelligence [AI]. 3. The Need to Act. Economic Resources Chapter One: Constant Pressures CONSTANT PRESSURES " Don’t trust in length of years. What has been neglected may be lost."- Ancient Egyptian Say 1. Introduction Economic resources, including natural, human & capital resources, are the cornerstone of any economy. They drive output, fuel growth, & support livelihoods. However, as we progress, various significant challenges endanger the security & sustainability of these resources, causing serious concerns among politicians, corporations, & communities worldwide. Natural resources including minerals, fossil fuels, & fresh water are few. The increased consumption caused by industrialization & population development has led to severe depletion. Ex., the globe is facing a water crisis, with many regions experiencing acute scarcity. Similarly, over extraction of fossil fuels depletes reserves & increases ecological deterioration & climatic change. To solve these difficulties, it is critical to establish sustainable management techniques & transition to renewable energy sources. The circular economy is increasingly recognized as a successful solution for addressing key economic, social, & ecological issues. As the world progresses beyond the Sustainable Development Goals (SDGs) & into the post-2030 era, actively implementing circular economy ideas into the future global development agenda becomes critical. This chapter explores the circular economy as a model for future international development. While technological advancements offer solutions for more efficient resource utilization & alternative resources, they also present challenges. Automation & artificial intelligence (AI) create a potential threat to traditional job markets, leading to significant unemployment & economic disruption. To prevent widening economic disparities, it is crucial to provide workforce training in skills that are relevant for the future & to ensure equitable implementation of technology. The global population is likely to reach nearly 10 billion by 2050, with the majority residing in urban areas. Population growth & urbanization lead to higher demands for resources, placing stress on infrastructure, housing, & services. To sustain this growth without compromising living standards, it is essential to focus on sustainable urban planning, invest in smart cities, & efficiently allocate resources. The distribution of global economic resources is uneven, leading to significant disparities between & within countries. These differences can worsen social 2 Copyrights ©Professor, El-Mattrawy 2024 Economic Resources Chapter One: Constant Pressures instability, migration pressures, & geopolitical tensions. It is crucial to address these inequalities through fair trade, equitable resource allocation, & inclusive economic policies to promote global peace & prosperity. Political turmoil & economic uncertainty can restrict access to economic resources. Conflicts over resources, poor governance, & economic consequences can all hinder effective resource management & fair distribution. To overcome these challenges, we need to enhance international cooperation, support good governance, & establish robust economic systems. Market failure to offer all needed items, a widespread economic problem, occurs when markets do to distribute resources properly. Externalities are major issues in which costs or advantages affect third parties, resulting in either overproduction or underproduction. Public goods that are not exclusive or competitive are frequently underfunded. Monopolies restrict competition, resulting in higher pricing & less innovation. Transactions are unfair due to information asymmetry. Furthermore, income inequality stems from unequal resource distribution, exacerbating social & economic inequities. Addressing these concerns is critical to keeping the economy healthy. Until now, governmental policies & activities have resulted in poor resource allocation & unintended consequences. This might result from bureaucratic inefficiency, corruption, or misaligned incentives, all of which induce economic distortions. Regulatory capture, in which industries persuade regulators to issue favorable regulations, worsens the situation. Furthermore, a lack of skill & inappropriate policy design hamper effectiveness. The future management of economic resources will bring about various challenges that will require proactive & collaborative solutions. Critical factors such as sustainable natural resource management, climate change adaptation, technological innovation, & equitable economic policies are essential to ensure that economic resources are available for future generations. Politicians, corporations, & communities need to work together to address these challenges & create a resilient, inclusive, & sustainable economic future. In this chapter, we will analyze all of the elements indicated in the introduction to better understand the existing & future issues affecting economic resources. 3 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures 2. Economic Problem, Scarcity & Economic Resources: Economics is a social science that investigates how societies use limited resources to generate & distribute valuable goods to different people. The core economic contest, known as scarcity, derives from the central fact that, while human needs are almost limitless, the resources available to fulfill them are finite. The disparity between limitless requirements & limited resources involves economic research & the development of efficient resource allocation strategies. Scarcity is at the heart of the economic issue, sometimes known as the central economic problem. 2.1 The Economic Problem: The basic economic dilemma, also known as the major economic problem, is described by a scarcity of resources in line with people' & society' infinite demands & needs. It is the basic dilemma in economics, arising from the disparity between what people needs & the resources available to meet those needs. The economic problem highlights the tests that civilizations have in allocating limited resources to meet limitless needs. Understanding the link between resources & economic problems is essential for researching economic decision-making, resource allocation, & economic performance. Basically, the core economic dilemma can be described by three main questions:  What to produce: Determining which goods & services to produce “The three main might be challenging due to finite resources & unlimited demand. questions: What to produce, how to  How to produce: Identifying efficient production processes & produce, & for whom technologies requires consideration of resource availability, pricing, to produce.” & technical advancements.  For whom to produce: Societies must decide how to distribute commodities & services to meet various wants & preferences. The test for any economy is balancing scarcity with resource allocation to maximize production & distribution. This includes making strategic decisions on how to use limited resources efficiently & fairly. Economic systems play a major role in balancing resource allocation & scarcity management efficacy. 2.1.1 Scarcity & Economic Resources: “Scarcity is a central economic concept Scarcity is a fundamental economic concept that describes how the explaining how the available of supply, raw materials, or labor is crucial to the availability of supply, raw materials, or labor production & pricing of goods & services. Natural calamities, impacts production & consumer preferences, international relations, & other factors can all pricing.” contribute to shortages. Essentially, the core economic challenge can be stated by three major concepts. 4 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures 2.1.1.1 Types of Resources: Resources are classified as renewable or nonrenewable based on their depletion rate. The economy uses both renewable & nonrenewable resources. Renewable resources, like solar, “Resources Types: renewable & nonrenewable.” wind, & biomass, replenish spontaneously & are long-term sustainable. Nonrenewable resources, such as coal, oil, & natural gas, are finite & depleted with use. Another way to classify economic resources is by their economic usage, or as inputs to economic activities. Economic resources, also known as factors of production, are the inputs used to produce goods & services that satisfy human needs. These resources are essential for economic activity & play a key role in the production process. Economic resources are classified into four types: land (natural capital), labor (partly human capital), physical capital, & entrepreneurship. 2.1.1.2 The Limitation Problem: Economic activities require finite or scarce resources, in contrast to the limitless aspirations & needs of people & society. To improve societal welfare & achieve economic objectives like growth, efficiency, & equity, it's crucial to allocate resources efficiently. Different economic systems, such as market, command, & mixed economies, use different strategies to allocate resources & address economic problems. 2.1.1.3 The Opportunity Cost: The term "cost" refers to the scarcity of resources in relation “Opportunity cost is the expense to human needs. Opportunity cost is the expense of forgoing of forgoing the next best option the next best option when making a decision. In other words, when making a decision.” when resources are allocated to a specific use, the opportunity cost is the value of the benefits that could have been gained by using those resources in the next best alternative. 2.1.1.4 Types of Scarcity: As mentioned before, scarcity, which is a fundamental “Scarcity Types: Natural scarcity, economic problem, appears in different forms, & each of these human scarcity, & capital influences how resources are allocated & economic decisions scarcity.” are made. Natural scarcity refers to the limited availability of physical resources like minerals & land; human scarcity refers to shortages in labor & talent; & capital scarcity refers to the financial & physical capital needed for production. 5 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures Understanding these categories helps society develop effective resource management techniques & deal with the root causes of scarcity. 3. The Main Future Challenges: As we discuss the complexities of the 21st century, effective administration & long- term utilization of economic resources faces major challenges. These challenges are complex & intertwined, demanding wide approaches & coordinated efforts to address. The main possible challenges for economic resources include: 3.1 Population Growth: “The way economic The link between population dynamics & economic resources is resources are allocated, complex & multifaceted. Population growth, distribution, & distributed, & utilized is demographic trends all impact how economic resources are available, significantly impacted by population growth, distributed, & used. distribution, & demographic trends. “ The rapid rise in population is leading to higher demand for natural resources like food, water, energy, & raw materials. With more people needing homes, transportation, healthcare, & education, the demand for economic resources is also growing. This increased demand could possibly result in overexploitation of resources, ecological degradation, & resource depletion, posing a threat to long-term economic growth. Urbanization is a significant trend that is allied with population growth. As more people move to cities in search of better opportunities, there is “Rapid population, & an increased demand for reliable infrastructure such as transportation, Urbanization trends housing, water supply, & sanitation. Cities need to invest in sustainable lay emphasis on our resources. “ infrastructure to support rising populations while reducing ecological impact & ensuring efficient resource allocation. 3.1.1 Debates between developed & underdeveloped States: 3.1.1.1 Develped States: Many developed countries are facing the challenge of aging populations due to declining birth rates & longer life expectancies. This demographic shift is causing several economic issues, including labor shortages that can negatively impact productivity & economic growth. 6 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures The Population Data Sheet (2024) Box One of the key findings of the 2023 Data Sheet is that the world's current population No. of more than 8 billion is predicted to increase to more than 9.8 billion by 2050. The 1.1 population of Eastern Europe is expected to fall by 10% by 2050. Africa is estimated to contribute around 60% of the global population increase between 2024 & 2050. The key country-specific conclusions are: 1. By 2050, the Russian Federation's present population of approximately “The population of 147 million is expected to decrease to 133 million. Eastern Europe is 2. Niger's population is predicted to rise from 27 million todays to 67 million expected to fall by by 2050, a 146% increase. 10% by 2050. Africa 3. By 2050, the DRC's population could have more than doubled, from is estimated to approximately 102 million to 217 million or more. contribute around 4. China's current population of 1.4 billion is projected to fall to 1.3 billion by 60% of the global 2050. China remained the world's most populous country until 2023, when population increase India's population surpassed that of mainland China. between 2024 & 2050. “ According to the survey, 10% of the world's population is 65 years or older, while 25% are under the age of 15. Sub-Saharan Africa is the world's youngest region, with 40% of its population under the age of 15. Western Europe & Southern Europe are the world's oldest regions, with 21% of the population aged 65 & older. The Data Sheet shows that the global total fertility rate is 2.2 percent lower than in 2022, with considerable regional variations. For example, in Middle Africa, this rate is 5.6, but in East Asia, it is only 1.1. Total fertility rates vary by country, with Niger at 6.7, Yemen at 3.7, Kenya at 3.4, Timor-Leste at 3.0, Venezuela at 2.2, India at 2.0, the United States at 1.7, Germany at 1.5, & Japan at 1.3. Source: https://sdg.iisd.org/news/world-population-data-sheet-2023-supports-climate-resilience/ As the workforce ages & a significant portion retires, industries such as healthcare, technology, & skilled trades are experiencing shortages in labor supply. This scarcity is leading to wage & productivity pressures, prompting businesses to consider automation, offshoring, or hiring immigrants. Addressing this issue requires policies that promote workforce participation, retraining programs, & initiatives to bridge demographic gaps. When the population ages, there is a growing fear about increased healthcare & social security costs. This places a strain on state finances, leading to the need for extra efficient resource allocation. Wealthy states with aging populations are experiencing higher healthcare & social security costs. As the older population grows, there will be a higher demand for medical services, long-term care & retirement benefits. This surge creates pressure on state finances, requiring extra taxes or resource reallocation. Also, with fewer working-age contributors, these costs place increased financial strain. Policymakers need to address these issues by considering 7 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures options such as raising the retirement age, improving healthcare efficiency, & cheering private retirement savings. Table 1.1: Population of the 50 Most Populous States High dependency ratios can Country 2050 2075 be a tricky, mainly in wealthy India China 1,668,475 1,316,946 1,677,814 1,034,617 countries with aging USA 375,085 389,171 populations. This occurs Nigeria 374,711 491,187 Pakistan 365,678 452,094 when there are more retirees Indonesia Brazil 316,968 230,972 316,042 214,277 related to the number of Democratic Congo 215,056 336,841 working-age people, which Ethiopia 213,190 283,418 Bangladesh 203,638 202,222 can lead to a cut working Egypt Philippines 159,574 157,313 190,469 177,373 population & lower savings & Mexico 143,734 136,563 rates This demographic shift Russian 133,354 120,324 Tanzania 128,652 192,234 impacts output & Viet Nam 107,003 101,581 Japan 104,140 86,065 sustainability as it needs a Iran Turkey 98,945 95,744 92,070 92,564 smaller labor force to support Uganda 86,907 117,075 a rising number of elderly Kenya 84,724 104,440 Sudan 83,779 117,007 persons. To address this gap, Germany 79,064 72,981 Iraq 73,996 97,122 policy actions such as rasing Afghanistan South Africa 73,492 73,381 98,357 76,585 worker sharing, raising the United Kingdom 71,660 71,624 retirement age, & boosting Angola 71,606 106,510 Thailand 68,075 56,171 immigration to support the Niger 66,102 117,226 France 65,863 63,534 labor market are needed. Mozambique 62,482 88,528 Myanmar 59,919 57,716 Developed states produce Algeria 59,772 66,173 Colombia 56,986 53,748 twice as much garbage per Yemen 54,942 68,639 Italy 52,428 42,852 capita as poor countries. Ghana 51,916 65,225 “Wealthy countries are facing the challenge of Argentina Madagascar 51,564 51,189 51,666 70,082 This stresses the importance aging populations. Such Côte d'Ivoire 50,914 72,563 for both industrialized & as: Labor Shortages, Cameroon 50,837 71,741 Increased Healthcare, & Saudi Arabia 48,236 50,684 developing states to Mali 46,949 70,551 Social Security Costs & Republic of Korea 45,989 33,819 "decouple" prosperity from High Dependency Ratios. “ Canada 45,801 50,323 CO2 emissions while Uzbekistan 45,442 50,027 Morocco 44,964 46,472 ensuring a fair low-carbon Spain 44,340 36,457 Peru 41,928 44,155 transition. World 9,687,440 10,365,079 Source: World Population Prospects. 2022 Revision Developed states should step up their efforts to attain a low- emissions future while developing countries should be provided with the technologies, skills, & financial resources they need to transition their economies to less polluting industries & sectors. This must be a priority during the COP annual climate summits. 8 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures Economic Resources & Old Age Population Box Economic resources can help to ease some of the dangers linked with old age. People No. with scarce financial resources are more vulnerable to the popular of the problems 1.2 linked with old age since it is hard to secure their health care. The level of difficulty is determined by each country's legislation & the chance that the elderly may require family assistance. Assets & income are examples of economic resources, & in some “Economic resources can nations, children provide significant financial support. Retirement pensions, help to ease some of the government programs, savings, investments, & assets are common sources of dangers linked with old economic assistance in highly industrialized nations. More agricultural nations rely age. “ primarily on ongoing work & financial assistance from family members. The sufficiency of income & assets is relative. Survival requires less absolute money in areas where multigenerational households are prevalent. In such circumstances, the stress of property ownership is reduced, & economies of scale lower the expense of living for each individual. In contrast, in cultures that value autonomy & privacy, the elderly must assume greater personal financial responsibility. Regularly, government establish a poverty limit below which people cannot "sensibly" subsist. Poverty limits can be tricky since they are often arbitrary. In the USA, many elderly people are classified as 'near poor' even if they don’t meet the poverty level because they receive a government pension. Marital status, gender, education, health & rural vs. urban residence are all vital factors in predicting economic stability in old age & early life. Poor children usually become poor adults. 3.1.1.2 Underdevelped States: Underdeveloped economies, unlike developed states, the ratio of people living in developing countries riased from 66% in 1950 to 83% in 2022, & is projected to reach 86% by “Underdeveloped economies, 2050. While rapid population growth in developing states unlike developed states, the presents various challenges, it can also open up new ratio of people living in developing countries raised economic opportunities, as demonstrated in Africa, where from 66% in 1950 to 83% in the working-age population is expanding in proportion to 2022, & is projected to reach younger & older generations. However, if the world fails to 86% by 2050. “ break the link between pollution & affluence, the problems will undoubtedly outweigh the benefits for the entire planet. Opportunities: The young workforce can contribute to economic growth through their education & employment. Also, the large population in emerging economies provides opportunities for businesses due to the rising demand for consumer products, services, & infrastructure from a growing middle class. This growth potential encourages foreign direct investment, innovation, & economic diversification. Moreover, the diverse skill set of the younger workforce promotes entrepreneurship & technological innovation. 9 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures Capitalizing on these opportunities can lead to long-term success & significant benefits for the global economy. Challenges: Growing population in the underdeveloped nations “Every night, an estimated 828 underline many problems, such as hunger, access to clean million people go hungry, with the vast majority living in developing water, sanitation, & health care, internal, legal, & illegal countries. “ international migration, as well as connecting people to low- cost sources of renewable energy & the Internet.  Every night, an estimated 828 million people go hungry, with the vast majority living in developing countries. These countries, particularly those in Africa, bear the weight of socioeconomic inequality & poor living conditions, according to UNCTAD's Inclusive Growth Index. In more than 75 percent of African countries, half of the population does not have access to safe drinking water. In some developing countries, only one in every hundred people has access to broadband Internet.  The rapid population expansion in emerging countries makes addressing the climate issue even more vital. Developing countries are now struggling to meet expanding food & energy demands, & they will need help to meet future demands from a growing population without overusing natural resources, harming the ecology, “In emerging economies, unlike in or producing waste. wealthy countries, a surge in the number of young people may lead to unemployment & internal, legal, &  Rising the number of young people may result in high illegal foreign migration. “ unemployment. Unemployment causes societal instability, economic inefficiencies, & a waste of human resources. Thus, investing in education, vocational training, & job creation is crucial for helping young people achieve their full potential.  Human migration, at its most fundamental, is the movement of people from one geographic location to another. Migration can be defined in a variety of ways, depending on its origin & scope. People may move for a range of causes, including push & pull factors. Pull factors "pull" people into an area & are usually more beneficial, e.g. economic or educational opportunities, higher living standards, & personal relationships. 10 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures Push factors, alternatively, "push" people away from a “People may move for a range of location & might include issues such as unemployment or causes, including push & pull. low wages, lacking education or healthcare systems, & Pull factors "pull" people into an area poor living. Conflict, persecution, & food insecurity are all & are usually more beneficial, while Push factors, alternatively, "push" vital push factors that can lead to refugee crises. people away from a location. “  However, internal, legal, & illegal international migration poses numerous challenges for developing countries. Internal migration can lead to economic disparities, as some regions experience labor shortages while others grapple with crowded cities & overburdened infrastructure. This imbalance can hinder regional development & place pressure on urban services. “Illegal international migration can  Legal international migration can lead to increased lead to economic issues as demand for housing, healthcare, & education, placing undocumented labor may drive stress on public resources in host states. down wages & working conditions. “  On the other hand, illegal international migration can lead to economic issues as undocumented labor may drive down wages & working conditions. These migrants often work in the informal economy, reducing tax income & making it hard to enforce labor laws. Also, the costs of border enforcement & charitable aid can strain receiving states financially. Effective policies are needed to manage this migration patterns & lessen the economic impact. “Immigrants as a % of population: United States: 52 million Most reports show that USA has the greatest rate of illegal immigrants, 15% Germany: 16 immigrants by country in 2024. With a population of over million immigrants, 18.8% Saudi Arabia: 14 million immigrants, 39% 330 million, the United States is believed to have about 52 Russia: 11 million immigrants, 7.9 % million immigrants. Germany ranks second in the world for United Kingdom: 9 million the number of immigrants, owing to its central location in immigrants, 14 %. “ Europe & progressive society, which provides a safe haven for many people fleeing terror or in need of asylum or refugee relief from their own country. Saudi Arabia is also a prominent location with a booming economy, making it a popular choice for immigrants. This country has the third-highest proportion of illegal immigrants per country. Russia is fourth on the list with 11 million immigrants, while the United Kingdom is fifth with 9 million immigrants, tied with the UAE for 9 million. 11 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures Balancing Population: Box The demographic balancing equation is a method for determining overall No. population change from one year to the next, as well as estimating an unknown 1.3 component of population change, provided that other parts are known. The equation is a mass balance equation: end population = starting population + natural increase + net migration. Natural increase equals births minus deaths, “The demographic while net migration equals immigrants minus emigration. Globally, there is no net balancing equation is migration. The balancing equation is simple: end population = starting population a method for ± natural rise. determining overall population change Population Balancing The equation calculates population rise over two time from one year to the periods. It tests the factors affecting the growth of a certain population. It is vital to next, as well as know that this equation only calculates the current population, not the population estimating an change between the two periods. The equation is simple: total population +/- unknown component natural increase +/- net migration = balanced population. Natural rise is calculated of population change, as the number of births (-) the number of deaths, where net migration is the number provided that other of immigrants (-) the number of emigrants. parts are known. “ Matching population growth & ecological sustainability is vital. Sustainable resource managing methods, e.g. renewable energy adoption, preservation initiatives, & circular economy models, are vital to ensuring that resources can support current & future population without hurting the environment. 3.2 Sustainability & Ecological Degradation: Sustainability, ecological deterioration, & finite resources are all essential challenges that interact with economic resources & shape global development. As the world's population grows & industrialization & urbanization accelerate, these tasks become more pressing. Addressing them needs a collaborative effort to strike a balance between economic development, ecological conservation, & resource management. 3.2.1 Sustainability & Sustainable Practices: 3.2.1.1 Sustainability Sustainability refers to meeting current demands without risking future generations' ability to meet their own needs. Liable natural “Sustainability is defined as resource management, economic development, & social well- meeting present demands being are all crucial for long-term ecological health & economic without risking future generations' ability to meet sustainability. The key aspects of sustainability are: (1) ecological their own needs. “ sustainability, which protects natural ecosystems & biodiversity while reducing pollution to maintain the earth's life-support systems; (2) economic sustainability, which ensures that economic activities donate to long-term prosperity while not depleting natural resources; & (3) Social sustainability is a vital 12 Copyrights ©Professor, El-Mattrawy 2024 Economic Resources Chapter One: Constant Pressures aspect in promoting social justice, human rights, & access to basic necessities including education, healthcare, & clean water. There are numerous components to sustainable practices, “The key components including: (1) Renewable Energy: switching from fossil fuels to of sustainable renewable energy sources e.g. solar, wind, & hydroelectric power; practices include renewable energy, (2) Sustainable Agriculture: implementing practices such as crop sustainable rotation, organic farming, & precision agriculture to improve food agriculture & security while reducing ecological impact; & (3) Resource resource efficiency.” Efficiency: using resources more efficiently through recycling, waste reduction, & the adoption of circular economy principles. 3.2.1.2 Resources Degradation: Unsustainable resource misuse leads to ecological degradation, such as deforestation, pollution, & climate change. The sustainability of resources is vital. This includes shifting to renewable energy, developing sustainable agriculture methods, & enacting legislation to promote conservation & reduce carbon emissions. Addressing ecological wear is critical for keeping the natural capital required for long-term economic stability & health. Ecological degradation causes the following effects: (1) loss of biodiversity: species extinction & habitat destruction decrease ecosystem resilience & biological diversity. (2) health risks: pollution & ecological toxins cause respiratory ailments, waterborne illnesses, & other health issues; & (3) economic expenses: degraded habitats reduce agricultural output, raise catastrophe recovery costs, & reduce tourism earnings. The following are some issues concerning resources problems. Climate change is one of the world's most key ecological issues, today & in the future. Rising temperatures, altering weather forms, sea-level rise, & severe weather events all pose key risks to ecosystems, agriculture, water resources, infrastructure, & human “Issues concerning health. Mitigating climate change & addressing its costs will need resources problems coordinated measures to cut greenhouse gas emissions, transition include: Climate change, The to renewable energy sources, & rise resilience to climatic risks. depletion of natural resources, Water The depletion of natural resources, including fossil fuels, scarcity, The loss of biodiversity, Large- minerals, freshwater, & biodiversity, jeopardizes sustainable scale logging & development. Population growth & economic expansion raise the Pollutants.” demand for limited resources, which leads to overexploitation, degradation, & ecosystem loss. Sustainable resource management measures such as conservation, recycling, & the development of 13 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures alternative resources will be crucial in combating resource shortages & preserving future generations' well-being. “Water scarcity occurs when demand for water Water scarcity is another resource issue. Population growth, exceeds supply, causing resource rivalry, conflict, & urbanization, pollution, & climate change all contribute to the ecological harm.” growing issue of water scarcity. Many parts of the world are suffering water stress, which occurs when demand for water exceeds supply, causing resource rivalry, conflict, & ecological harm. Water scarcity will need better water management practices, conservation measures, investments in water infrastructure, & efforts to promote water efficiency in agriculture, industry, & cities. The loss of biodiversity caused by habitat destruction, pollution, climate change, invasive species, & overexploitation jeopardizes ecosystem stability, resilience, & the delivery of ecosystem services. Biodiversity loss has major implications for food security, human health, livelihoods, & cultural heritage. Conservation activities, protected area management, sustainable land use practices, & ecosystem restoration are all essential for protecting biodiversity & ecological integrity. In addition, Large- scale logging & land clearance for agriculture reduce forest cover, reducing carbon sequestration & biodiverse. Pollutants e.g. particulate matter, nitrogen oxides, sulfur dioxide, & volatile organic compounds risk human health, ecosystems, & the ecology. Poor air quality has been linked to respiratory harms, cardiovascular disorders, & premature death, plus ecological effects e.g. acid rain, smog, & ecosystem degradation. 3.3 Globalization & Geopolitical Tensions: Globalization(1) & geopolitical tensions have a profound impact on how “globalization provides numerous economic economic resources are managed & distributed. While globalization has benefits; it also introduces linked economies & facilitated the interchange of goods, services, & vulnerabilities that can be information, it has also created new vulnerabilities & dependencies. exacerbated by geopolitical crises. Diversifying Geopolitical tensions, on the other hand, can worsen resource scarcity, resources, endorsing disrupt supply networks, & threaten global economic stability. technological innovation, Understanding the interplay of these factors is critical for properly & strengthening international cooperation managing economic resources in a continuously evolving world. are all viable ways to handle these challenges.” Despite some advocates find a few benefits of globalization: (1) Economic Growth: Access to broader markets allows countries to grow 1 Globalization is the process by which world markets & enterprises become more integrated & interdependent. It is distinguished by the unrestricted movement of products, services, capital, technology, & labor across boundaries. 14 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures their economies, increase commerce, & raise economic production, (2) Efficiency & Innovation: Global competition promotes innovation, efficiency, & the adoption of new technology, finally (3) Resource Allocation: States can specialize in producing goods & services where they have a comparative advantage, hence maximizing global resource utilization. Yet, globalization presents some challenges: (1) Resource “Good examples of Dependency: States may become unduly dependent on imported geopolitical tensions: resources, exposing them to supply interruptions, (2) Ecological Tariffs & trade Impact: Better production & transportation lead to ecological damage restrictions between the US & China have & CO2 emissions, & (3) Inequality: The economic gains of globalization disrupted global trade are frequently unevenly distributed, resulting to growing income & flows, technology wealth disparities within & across countries. transfer, & supply chains. Russia & Ukraine dispute: The dispute has disrupted Geopolitical tensions are caused by political & economic conflicts energy supplies in Europe between states, which can include territory disputes, trade problems, & & damaged global grain markets, emphasizing competition for resources. These tensions can have a large impact on vulnerabilities in food and global economic stability & resource availability. Impact on Economic energy security & the Resources: (1) Supply Chain Disruptions: Conflicts & trade conflicts can South China Sea. conflicts: Territorial conflicts in the disrupt global supply networks, causing shortages & higher pricing for South China Sea affect raw materials & finished commodities, (2) Energy Security: Geopolitical marine commerce routes tensions in key resource-rich regions, such as the Middle East, can risk & access to underwater resources.” the stability of global energy supplies, influencing oil & gas prices, & (3) Investment Risks: Uncertainty & instability can discourage investment, resulting in slower economic growth & resource development. China–United States Trade War. Box The economic conflict between China and the United States has been ongoing since No. January 2018, when US President Donald Trump imposed tariffs and other trade 1.4 barriers on China to force it to change what the US claims are longstanding unfair trade practices and intellectual property theft. The Trump administration contended that these measures could contribute to the US-China trade deficit, and that the Chinese government requires the transfer of American technology to China. China responded to US trade policies by accusing the Trump administration of nationalist protectionism and retaliating. After the trade war had raged throughout 2019, the two sides reached a harsh phase one agreement in January 2020. By the end of Trump's presidency, the trade war had been universally regarded as a failure for the United States. His successor, Joe Biden, has kept tariffs in place. In early 2024, the Trump presidential campaign discussed imposing a 60% tariff on Chinese goods. 3.4 Market Failure Market failure occurs when a free market allocates goods & services inefficiently, causing a net loss in social welfare. This could be caused by externalities, public goods, information asymmetries, or market power. In such cases, markets fail to produce outcomes that maximize 15 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures public well-being, necessitating government intervention via laws, regulations, or other means to remove inefficiencies & improve overall economic performance. 3.4.1 Causes for Market Failure: Market failure is caused by a number of variables that disrupt effective resource allocation. Externalities occur when third-party costs & benefits aren’t reflected in market prices. Uprovision occurs when public goods aren’t excludable or rivalrous. Information asymmetries, in which one party has extra data than the other, result in suboptimal decisions. Monopolies & other kinds of market power stifle competition & raise prices. These factors prevent markets from achieving socially optimal outcomes, necessitating corrective interventions. “A public good is a Market failure occurs when the production or consumption of goods product or service that is & services generates external costs or benefits that are not reflected freely accessible to all in market prices. For example, industrial pollution imposes costs on members of a society. society in the form of ecological degradation & public health Typically, the government provides a public good & implications, but these costs are not borne by producers or funds it through taxes. A consumers, thus they are not reflected in market prices. public benefit can include a town road, a park, or a school. National defense is In addition, Market failure can arise when items have non- a public good. Access to excludability & non-rivalry qualities that prevent private clean air & water is one marketplaces from efficiently delivering them. Public goods such as example of a public good that is also a basic need.” national defense, public parks, & clean air are instances of market undersupply because they are free to use, resulting in underinvestment & bad outcomes. Information asymmetry & monopolistic power can cause market failure. When one party in a transaction has more information than the other. This can lead to adverse selection & moral hazard difficulties, particularly in the insurance, banking, & healthcare sectors, resulting in inefficient outcomes & markets. While Monopolistic Power can also lead to Market Failure, this occurs when a firm has monopolistic power & engages in anti-competitive behavior such as price fixing & collaborative obstacles. Monopolies can distort resource allocation, limit competition, & reduce consumer welfare by charging higher prices & producing less than would be expected under competitive conditions. “Market failure prevents the efficient allocation of economic resources, with 3.4.2 Market Failure: Economic Implications: catastrophic costs. E.g. negative externalities, Market failure prevents the efficient allocation of economic limit access to critical products, slowing resources, with catastrophic costs. When markets fail due to growth.” externalities, public goods, information asymmetries, or market 16 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures power, resources are misallocated, resulting in either excess or underproduction of goods & services. This inefficiency slows economic growth, reduces overall well-being, & may exacerbate inequality. For example, negative externalities like pollution can deplete ecological resources, but monopolistic behavior might limit access to critical products. To overcome market failings, regulations, taxes, subsidies, or government action must be utilized to match resource distribution with societal well-being, resulting in a more equitable & efficient economy. Example on Externalities as a Source of Market Failure(2): Assume that 2 firms are located near a river. The 1st produces steel, & the 2nd operates a resort hotel. Both use the river, but in different ways. The steel industry utilizes it as a rubbish disposal facility, while the hotel uses it to lure tourists searching for aquatic activities. If the two facilities have different owners, they are unlikely to use water efficiently. When making judgments, the steel plant may fail to account for the cost of reduced resort business as a result of river rubbish disposal. As a result, surplus waste may be discharged into the river, limiting efficient distribution. “Externalities occur when This scenario is known as an externality. Externalities occur when the welfare of one agent, the welfare of one agent, such as a firm or a household, is influenced such as a firm or a not just by their own actions, but also by those of another agency. household, is influenced The resort incurred external costs as a result of increasing debris in not just by their own actions, but also by those the river, which the steel company failed to account for when of another agency.” determining how much rubbish to discharge. Figure 1.1 shows the influence of external expenses on the steel industry & its markets. Steel production contributes to pollution. The demand curve D displays steel demand, whereas MCp represents the private marginal cost of manufacturing (excluding pollution control & damage). The societal marginal cost function (MCs) accounts for both pollution costs & steel production costs. If the steel sector had no external control over its emissions, it would seek to generate 50 unites. In a competitive setting, this option maximizes private producer surplus. 2 Tietenberg, Tom & Lewis, Lynne (2012), Environmental & Natural Resource Economics, Pearson. 17 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures However, this strategy is inefficient P because the net benefit occurs at 40 80 rather than 50. Figure 1.1 shows five MCs facts about market allocations of 60 goods that cause ecological MCp externalities: 40 20  The commodity's output is D abnormally high. Q  Excess pollution is 20 40 60 80 generated. FIGURE 1.1: The Market for Steel Revisited  Polluting products are underpriced.  When external expenses are included in, the market provides no incentives to minimize pollution per unit output.  Polluting substances should not be recycled or reused because of their inefficient discharge into the ecology. The conclusion is that market imperfections in one item may influence demand for raw materials & labor. The economic repercussions are far-reaching. 3.5 Government Failure: When markets fail, governments can act to correct defects & promote “Markets are not the main cause of efficient resource allocation. This may involve implementing inefficiency. Political regulations, taxes, subsidies, & public provision of goods & services. procedures are equally Other policy actions include internalizing externalities, offering public to blame.” benefits, assuring competitiveness, & rising market data openness. However, markets do not bear complete responsibility for inefficiency. Political procedures are equally to blame. Some economic troubles are the result of political failures rather than economic issues. To completely grasp institutions' ability to manage economic resources, we must first understand the underlying reason of inefficiency. Improper incentives are at the heart of both government & market failures. Special interest groups take use of the political system to extract rent. Rent-seeking is the use of resources to lobby & pass protective “Rent-seeking isn’t the key reason behind legislation. Rent-seeking behaviors may benefit one group, but they failing government frequently lower the overall surplus for society. Rent-seeking can take programs. Inadequate various forms. Producers can insulate themselves from import data can lead government to device competition by establishing price floors that maintain prices higher wrong policies.” than their efficient levels. Consumer organizations may demand price controls or subsidies to shift costs onto taxpayers. Rent-seeking is not 18 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures the primary cause of unsuccessful government programs. Inadequate information can drive governments to adopt poor policies. Profligacy Gov. Support Societal Programs: Government may support societal programs that result in ecological wastefulness. Consider Figure 1.1. Assume the government subsidizes steel industrial for national security purposes. Figure 1.2 shows the outcome. Shifting the private marginal cost curve to the right causes better output, lower prices, & higher pollution levels. The subsidy moves us further away from the optimal surplus position at 40 unites. Without the subsidy, the black triangle A represents inefficiency or deadweight loss. The subsidy causes an increase in deadweight loss in areas A, B, & C. This societal strategy adds to extra inefficient resource practices. These cases call into question the premise that government action always improves efficiency or sustainability. The economic premise that “The economic concept resource problems are caused by a P that resource constraints arise from a mismatch conflict between personal & public 80 between personal & interests is a powerful descriptive MCs public goals is an tool. As a cure, it suggests 60 effective explanatory B tool. It proposes realigning personal incentives A MCp realigning personal with the public interest. But, this 40 MCp (subsidy) incentives to accord with C public goals as a solution. technique is debatable. However, 20 Yet, this technique is the economic stance determines D contentious.” that, while government action can Q improve efficiency, inefficiency 20 40 60 80 doesn’t justify intervention. FIGURE 1.2: The Market for Steel with Government Subsidies. Any repair method involves transactional expenses. Accepting inefficiency may be preferable if the transaction costs are high & the value of correcting the inefficiency is low. 3.6 Circular Resource Nationalism: “Circular resource Circular resource nationalism is a policy strategy in which a country nationalism is a policy prioritizes sovereign control over its secondary material resources (at strategy in which a all stages of their life cycle) & enforces this sovereignty through circular country prioritizes economy principles. This typically includes using circular economy sovereign control over its secondary material approaches to maximize the value of local primary & secondary resources.” resources, reduce reliance on foreign resources & technologies, & 19 Copyrights ©Professor, El-Mattrawy 2024 Economic Resources Chapter One: Constant Pressures increase economic security. A strategic securitization approach to circularity, domestic targets for recycling & processing of strategic raw materials, state support for domestic recycling businesses, & export control measures targeting secondary materials & products containing valuable materials to ensure availability for domestic industries, particularly those in energy, transportation, & defense, are all examples of circular resource nationalist policies. Resource nationalism, in which nations try to control their natural resources by imposing limits on foreign firms, has returned to prominence. This has a wide-ranging influence, including the oil, gas, mining, agriculture, & forestry industries. Essentially, resource nationalism refers to a nation's policies for securing, managing, & distributing the benefits of its resources. It might manifest as a variety of government initiatives, including export duties or limits on resource exports, local content requirements for input sourcing, gaining state ownership through nationalization, or renegotiating mining contracts to maximize government revenue. Lately, the global focus on vital raw materials required for renewable industries & military uses has increased resource nationalism, resulting in conflict between mining companies & governments. The 2023 Resource Nationalism Index(3), recognized the growing threat of resource nationalism. The index assesses the possibility of expropriation or the introduction of more stringent fiscal regimes & has identified 39 countries at higher risk. This list is dominated by Latin American & African countries with abundant minerals such as Zambian copper, Democratic Republic of the Congo cobalt, & Bolivian lithium. In Namibia, the government's participation in the extractive industry in 2023 includes a decision to prevent the export of unprocessed lithium & other minerals critical to the green transition. Traditionally, Latin America has seen waves of resource nationalism, as evidenced by noteworthy battles between governments & extractive sectors, particularly the oil industry. Lately, there has been a renewed movement by Latin American governments to assert control over national resources. This time, the focus moves beyond traditional energy sectors to include minerals needed for the clean energy transition. Bolivia illustrates this pattern. Resource nationalism has been a recurring theme in the country's contemporary history, from the founding of the Nationalist Revolutionary Movement in the 1950s until the Morales administration's quasi-nationalization of the natural gas industry in 2006. Morales implemented a strong resource nationalism 3 Developed by global risk intelligence firm Verisk Maplecroft. 20 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures policy for lithium in 2008, to dominate the domestic lithium & battery cell industries while barring private enterprise & outside involvement. This movement emphasizes the complex difficulties confronting resource-rich countries: for many mineral-rich countries, the change to resource nationalism policies is linked to a focus on mineral value addition as a key engine of modernization. However, achieving long- “As governments term developmental goals & accessing high-tech value chains such as around the world strive for more resource battery production requires strategies & roadmaps that go beyond control, businesses in short-term revenue collecting using resource nationalism tactics. the natural resources & Another challenge is maximizing national economic benefits & value- mining sectors must cope with the risks of added industrial production with limited resources while avoiding resource nationalism, discouraging international investment. As governments around the which can result in the world strive for more resource control, businesses in the natural loss of mining concessions & have a resources & mining sectors must cope with the risks of resource significant influence on nationalism, which can result in the loss of mining concessions & have investment returns.” a significant influence on investment returns. 4 Others “According to a poll of 156 decision-makers in 5 Ourtight expropriation the global mining & metals industries conducted 9 Forced equity trsnsfairs between December 2022 & January 2023, 28% of respondents believe growing taxation will be 12 Restrections on exports the most likely indicator of resource nationalism 19 Cotract recogntion in 2023—an extra 23 % of respondents identified 23 In state beneficiation with the expected resource nationalism expression of in-country beneficiation.” 28 Increased Taxes 30 20 10 0 FIGURE 1.3: Expected effects of resource nationalism worldwide in 2023 3.6.1 Circular Resource -Inferior Resource Security The circular economy, which reduces waste by reusing & recycling things, is gaining popularity globally. A research done by Chatham House & UNIDO found that over 75 national circular economy roadmaps & strategies had been published, with 14 more on the way. As political support for the circular economy grows, governments increasingly regard it as a tool for resource nationalism. Circular resource nationalism extends the classic concept of resource nationalism by add in circular economy principles that value not only virgin natural resources but also critical secondary raw materials, wastes, & leftovers. Generally, resource 21 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures nationalism prioritized governing primary resources such as “'security-sustainability nexus' refers to the interconnected minerals, oil, & gas, without seeing secondary resources' potential and interdependent value. This prevalent technique frequently ignores the relationship between security considerable economic, security, & ecological benefits that can be and sustainability. This concept emphasizes that efforts got by recycling, reusing, & repurposing goods. to achieve security (in terms of national, human, or Critical minerals, particularly those needed for the low-carbon environmental security) and sustainability (particularly transition, renewable energy, & military applications, are environmental, economic, and increasingly problematic drivers of circular resource nationalism. social sustainability) are Reshoring lithium mining & battery manufacture support low- closely linked and often mutually reinforcing.” carbon technology, creating a 'security-sustainability nexus'. Global North governments & multinational firms promote lithium on shoring with a focus on sustainable sourcing. For politicians & corporate executives, 'secure' lithium is becoming synonymous with ' sustainable' lithium. Governments are increasingly attempting to regulate not only mining & supply networks but also secondary resources such as domestic waste. The goal is to protect critical raw materials & mineral commodities from future cutoffs by foreign firms. “The economic battle between This shift toward cyclical resource nationalism relates to a China and the United States resurgence of isolationist & nationalistic economic practices. This has been ongoing since trend is primarily driven by geopolitical competition between the January 2018, when US President Donald Trump United States of America & China & its implications were most placed tariffs and other trade visible under the Trump administration, damaging economic barriers on China in an globalization & the multilateral trading system. In this ecology, attempt to force Beijing to modify what the US alleges the growing need for resource security appears to support & drive are longstanding unfair trade circular economy initiatives, with secondary materials practices and intellectual increasingly recognized as vital assets that must be protected & property theft.” preserved. The major goal has shifted from just limiting ecological consequences & increasing local industry & jobs to assuring resource security for national businesses, reducing reliance on other states, & updating technology capabilities for a viable edge. A strategic securitization method to circularity, domestic targets for recycling & processing of strategic raw materials, state support for domestic recycling businesses, & export control measures targeting secondary materials & products containing valuable materials to ensure availability for domestic industries, particularly those in energy, transportation, & defense, are all examples of circular resource nationalist policies. 3.6.2 Circular Resource - State Action Plans: The convergence of resource nationalism & circular economy initiatives is becoming more visible in recent policy statements, 22 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures reflecting a global necessity for safe supply chains. The Biden “The Biden administration's administration's '100-day assessment' underlined the importance '100-day review' emphasized of resilient supply chains in ensuring national & economic the necessity of resilient security, with a focus on recycling & reusing industrial waste supply chains in guaranteeing national and economic streams as well as vital material recovery. Equally, the US security, with an emphasis on Department of Energy's plan indorses diversifying supplies while recycling and reusing boosting reuse & recycling, in line with circular economy concepts. industrial waste streams, as well as critical material President Biden's use of the Defense Production Act highlights recovery. this concentration by granting monies for domestic lithium, nickel, cobalt, graphite, & manganese mining & recycling. The US government intends to sign a critical minerals deal with the EU, which is expected to boost the EU's extraction, processing, & recycling capacities in concert with the EU's newly enacted Critical Raw Materials Act. The UK's 'critical Materials Refresh' highlights the importance of domestic abilities for national security, with a focus on circular economy efforts to sponsor recycling & recovery of vital materials. Also, the EU's Critical Raw Materials Act aims to improve resource security, boost circularity, & reduce dependency on imports, with goals for recycling & self-sufficiency. While sustainability remains at the forefront of Europe's circular economy transition, self- sufficiency & resource security are gaining importance. Several European countries, working with the European Defense Agency through the Incubation Forum for Circular Economy in European Defense (IF CEED), have begun to incorporate circular economy principles into their defense sectors. These developments can be viewed as preparing Europe for "selective fortification" in an era of heightened geo-economics competition. China, is a global leader in circular economy legislation, has “China, a global pioneer in reinforced its circular policies to indorse resource security & circular economy legislation, reduce reliance on imports. The 'dual circulation' policy illustrates has strengthened its circular China's promise to self-sufficiency & defense its home market policies to promote resource security and minimize from global volatility. This approach, spurred by chronic trade dependency on imported conflicts & a desire for economic autonomy, prioritizes domestic goods. The 'dual circulation' resource recovery & recycling above imports, in line with circular policy demonstrates China's commitment to self- economy ideals. xi Jinping's vision for the country's economic sufficiency and protecting its security, 'new quality productive forces', is intrinsically linked to domestic market from global domestic green technology production & the restructuring of volatility.” traditional industries & value chains. Finally, China's dominant processing capacity for certain important minerals, particularly rare earth metals, along with recent limitations on exporting rare earth processing technologies, can be read as a circular resource nationalism strategy. 23 Copyrights ©Professor, El-Mattrawy 2024  Economic Resources Chapter One: Constant Pressures Circular resource nationalism is gaining regard beyond Box No. 1.5 government initiatives & law, with industrial firms representing circular trades advocating for export bans & domestic recycling requirements. Ex., British Steel's request to lift export limits aims National Circular to boost domestic green steel production while minimizing Economy Action Plans: ecological impact. The European Recycling Industries Association In 2024, over 75 state circular urges that the EU classify lithium-ion battery garbage (also known economy action plans, as 'black mass') as hazardous, so limiting exports & growing local roadmaps, & strategies had been developed to advance the recycling. As circular methods evolve, Europe aims to grow its domestic circular economy lithium-ion battery (LIB) recycling capacity to 400,000 tons per agenda (with another 14 under year by 2025, thus enhancing resource security & reducing development). reliance on imports. By the end of 2023, the EU's capacity for the first stages of LIB recycling will have grown to 160,000 tons/year, distributed among 37 sites. Since 2020, capacity has amplified by more than 100,000 tons/year with the building of 13 huge recycling services. Another 16 plants are planned, offering more capacity rises. In an era of greater geo-economics effectiveness, executing circular economy ideas into national resource strategies signifies a concerted effort to enhance supply chains, reduce reliance on external sources, & improve domestic abilities. Circular resource nationalism, pushed by both the government & corporate stakeholders, highlights the importance of self-sufficiency & economic resilience in an increasingly unified world. “There is much debate regarding However, there is much debate regarding whether self-sufficiency whether self-sufficiency via the through the circular economy is possible & how significant it is in circular economy is conceivable comparison to addressing global ecological challenges. Policy and how significant it is in addressing global environmental shifts in the United States, the European Union, the United challenges.” Kingdom, & China suggest that advanced industrialized countries may begin hoarding recovered key resources through circular economy strategies. One concern is that it may result in a 'circularity divide' between wealthy industrialized states, low- & middle-income states. 3.6.3 Costs of Circular Resource Nationalism A growth in circular resource nationalism has the potential to severely harm economic & human progress. Some degree of circular resource nationalism that merely aims to rise domestic circular ability & resilience, as well as to help home commerce & inventors while achieving an overarching globalization goal, is justified & crucial. However, more extreme forms can result in 'fortress economy '-style circular economies; depending on where 24 Copyrights ©Professor, El-Mattrawy 2024 Economic Resources Chapter One: Constant Pressures a nation falls on the spectrum (& how many nations choose to sit at either end), these difficulties will be exacerbated. a. High-income countries' efforts to collect & process secondar