A perspective on the economic crisis: Catastrophe or opportunity

By Dr. Clive Thomas

Classic prototype
Continuing from last week’s column it should be noted that, worldwide, Guyana’s economy is regularly portrayed as a classic prototype of the small, poor, open economy highly dependent on the production and export sale of primary commodities, with limited industrial processing of these.

Indeed the bulk of Guyana’s income, value-added, employment, foreign exchange earnings, as well as exposure to modernized technological processes flow from primary commodity production and export sales. The principal sectors are mining and quarrying (mainly gold, diamonds, bauxite and silica); agriculture (sugar, rice, other crops and livestock), seafood products (mainly fish, shrimp and prawns) and several types of forest products (logs, sawnwood and roundwood).

A distinguishing feature of economies like ours is that over the past several decades the long-run trend has been for the prices of their principal products in global markets to lose substantial ground relative to the prices of manufactured consumer goods, capital equipment and services, the bulk of which they import. This tendency for what is termed as “adverse of trade effects” means that the exchange prices for our products relative to others limit the opportunities for sustained development, income growth, employment expansion and so forth……