I think this is a 700-level question. At least, this topic appears in the advanced chapters of the MGMAT SC
These are my reasons:
A) The structure of this sentence implies that you also can re-write it in this way: "The problems of management of water and resource..."
IMO, you cannot re-write the sentence in this way. The MGMAT SC
book mentions that if you cannot re-write the sentence in that way, the sentence is wrong. It seems that "problems" goes better with "in". That's why C is better.
(B) B sounds ackward.
(C) Correct: "Problems" goes better with "in".
(D) "Other" changes the meaning.
(E) Changes in the meaning.
I think I deserve kudos
Even choice (C) has "other" that changes the meaning. any thought?