Evaluating the impact of water resources on the economic growth of countries


Keywords: economic growth, agricultural sector, virtual water, region, state.

Abstract

Purpose. The purpose of the article is to determine the impact of domestic renewable water resources in the country on the formation of GDP, i.e to identify the relationship between the country's water potential and its economic growth in the future, due to the growth of water-intensive technologies in the world and agricultural development.

Methodology / approach. The traditional and special research methods were used in the study, including: historical and logical – to analyze the dynamics of water use in the world and ways of forming the flow of virtual water; theoretical generalization, analysis and synthesis – to form an understanding of the “principle of globality of water problems” and derive consistent pattern of “principle of globality of water problems”; statistical analysis to assess the level of needs of countries (regions) in water resources and to assess the level of GDP of countries in comparison with their water potential; method of econometric analysis (correlation analysis and linear regression) – to prove the relationship between the water potential of the country and its economic growth in the future.

Results. The main idea of the study is to identify the relationship between the country's water potential and its economic growth in the future. It was found that almost all areas with the highest economic growth have the largest total number of inland renewable water resources. the knowledge and dynamics of virtual water trade in the world was described and summarized. According to the principles of the concept of “virtual water”, regions with water scarcity and spatial mismatch between water resources and the availability of arable land can increase their food security by meeting part of their food needs through trade in agricultural products and reducing local food production. A new principle of development of the territory “the principle of globality of water problems” has been substantiated in the study. It is determined that the very availability of domestic renewable water resources in the country does not have a significant impact on GDP growth, but the total catchment per capita in the country already has a significant impact on GDP, i.e, indeed, after reaching a certain water scarcity threshold, the country begins to demand for grain imports, which increases as water resources decrease. The consistent pattern of the “principle of globality of water problems” was proved mathematically, using econometric analysis.

Originality / scientific novelty. The formation of the principles of territorial development was further developed, namely the “principle of globality of water problems” was formulated – the change of humanity's attitude to the water resource has formed an understanding of its limitations and possible global scenarios of world development. The development of the laws of economic theory was improved, namely the consistent pattern of the “principle of globality of water problems” – “axes (corridors) of development of the territory, which together with the poles of growth determine the spatial framework of economic growth, in the light of the globalization of water problems, are determined by the presence of the total number of domestic renewable water resources”.

Practical value / implications. The results of the study allow a comprehensive assessment of the risks of the agricultural sector associated with the large-scale use of water resources and make effective management decisions on the development and implementation of water-efficient technologies in Ukraine and in the world. The study actualizes the thesis of infrastructure regulation as water-intensive technologies will require significant infrastructure projects and the appropriate quality of water and water supply and sewerage infrastructure as the basis of water efficiency of the region and the country.

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Published
2021-12-20
How to Cite
Fedulova, S., Dubnytskyi, V., Myachin, V., Yudina, O., & Kholod, O. (2021). Evaluating the impact of water resources on the economic growth of countries. Agricultural and Resource Economics: International Scientific E-Journal, 7(4), 200-217. https://doi.org/10.51599/are.2021.07.04.11
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Articles

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