Guyana is currently saving and investing. The biggest investment is in their human capital. Their saving is reflected by their relatively low levels of output; however their economy has been able to continue to grow in this world recession. This hasn’t helped yet in the long run. Although Guyana is highly ranked in terms of the percentage of GDP spent on their educational system, this still doesn’t amount to as much as other countries due to the relatively low GDP of Guyana. Guyana should continue to save, but focus their investments in physical capital instead of human capital. Their investment in human capital has not proved beneficial in their growth of technological knowledge due to the lack of retention of its highly educated population. A focus on physical capital could better the tools without necessarily increasing technological knowledge. With more efficient or newer tools in the mining of bauxite or gold, exports of these items could increase and spark greater economic growth. Their economy is also heavily dependent on a few exports. An attempt to diversify in what they offer could also prove beneficial. At the same time if Guyana were able to gain comparative advantage through specialization this could also be a different, but as favorable route. In its current state, GDP of Guyana is growing, but if the country makes itself more attractive to its scholars they would no longer suffer from the intellectual drain that has put it in a vicious cycle. Ideally the money their spending in the school system would increase their human capital which would then increase productivity through technological knowledge. This would then increase the quality of their physical capital and pool of ideas to choose from.
Works Cited
1. "South America - Guyana." C.I.A. World Factbook. Ed. C.I.A. Web. Nov. 2009.
2. Mankiw, Gregory N. Principles of Economics. 5th ed. South-Western CENGAGE Learning, 2008. Print.
- Guyana (09/09)." U.S. Department of State. Web. Nov. 2009. <http://www.state.gov/r/pa/ei/bgn/1984.htm>.
- Ramsaroop, Stella. "Stella says.... Let's turn Guyana 's brain drain into brain gain." The Guyana Groove. Web. Dec. 2009.
- "World mineral statistics." British Geological Survey (BGS) - Geoscience information and advice. Web. Dec. 2009.
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ReplyDeleteI agree that having human capital, but not physical capital, won't allow the people of Guyana to properly use their skills and knowledge. Increasing physical capital, while still investing a good amount of GDP into human capital, will allow this country to further develop. With better tools Guyana will be able to have more output of natural resources. Guyana should also search for foreign investments since their GDP is relatively low compared to the rest of the world.
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