Economic Problem That Egypt Is Facing

Topics: Scarcity, Economics terminology, Economics Pages: 2 (461 words) Published: November 9, 2008
The economic problem in every country does not change, but its level varies from one country to another. This problem is the problem of scarcity. To clarify more, it is the scarcity of resources versus people's unlimited needs and wants. Every country has this problem; people can never be satisfied with what they have, they always want more, and hence their demands for goods and services are endless. Personally I believe that in Egypt, one of the major factors that contributes to a higher or increased economic problem, compared to other countries, is that our allocation of resources is inefficient. If someone studies the Production Possibility Frontier of Egypt, he/she would directly notice that Egypt does not operate on the PPF, instead it operates below it. This indicates one thing, and that is that Egypt is either using its available resources inefficiently, or that it has resources that are simply not being fully employed. Therefore, the economy is operating with low productivity. The economic problem then results to economic problems, such as unemployment, inflation and trade deficit. The major problem, from these economic problems, that Egypt is facing these days is unemployment. If its scarce resources are not being fully utilized, this means that production is low and therefore the supply of goods and services is little. If there is little production, then there are a countable number of people who are going to be working, i.e. employed. There are very limited job opportunities these days, and this is simply a result of inefficient production; this gets us back to the PPF and the allocation of resources. Logically, if scarce resources were allocated more efficiently and put to use, there will be a need for more people (employees) in many various fields to help in production. Thus unemployment will gradually decrease. Another problem is that, in some Egyptian industries, the technology used is inadvanced. Technology, equipment and materials are not being...
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