(4) Guyana's International Trade Market

The four main exports of Guyana are sugar, gold, bauxite and alumina. Their economy has grown 3% over the last year (CIA world Factbook). Guyana’s main partners are the United States, Canada and the United Kingdom. Their exports are valued at about $800 million (CIA world Factbook). They import almost all of their resources in the areas of food and machinery. The main imports are manufacturers and machinery from the United States and Trinidad & Tobago. The idea of open trade has remained relatively constant since their independence from the United Kingdom in 1966. Guyana is dependent on their oil imports from other countries as they do not produce any oil but use a considerable amount in their country. One of the most prevalent tariffs in Guyana is that on the exportation of rice. It is in place to encourage those who produce within the country to also distribute within in the country. This is good for buyers, but bad for sellers because it reduces the incentive to sell at the world price due to the government issued tax.

The main factor that is holding Guyana back is its relatively late independence from the UK. With a constitution written in 1980, it is such a young country that they are still struggling to uncorrupt their political leaders. They import much of their food due to the small percentage of arable land. Due to the abundance of bauxite in Guyana they have developed a comparative advantage in this area, not because they produce the most of any country, but that because such few countries can produce it (Minerals UK). This in part with their outward oriented trade policy has allowed them to survive despite their inability to sustain themselves inwardly. The level of development of Guyana will remain relatively constant until they’re able to benefit from their investment in human capital. According to Principles of Economics, it is possible that once this is fixed their growth will at first be rapid and eventually stabilize at a level much higher than the level it currently sits. An increase in the perception of the living standards in Guyana will in the long term increase the reality of the living standard.

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.

3. Guyana (09/09)." U.S. Department of State. Web. Nov. 2009. <http://www.state.gov/r/pa/ei/bgn/1984.htm>.
4. Ramsaroop, Stella. "Stella says.... Let's turn Guyana 's brain drain into brain gain." The Guyana Groove. Web. Dec. 2009. .
5. "World mineral statistics." British Geological Survey (BGS) - Geoscience information and advice. Web. Dec. 2009. .

(3) Guyana's Savings and Investments

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.

3. Guyana (09/09)." U.S. Department of State. Web. Nov. 2009. <http://www.state.gov/r/pa/ei/bgn/1984.htm>.
4. Ramsaroop, Stella. "Stella says.... Let's turn Guyana 's brain drain into brain gain." The Guyana Groove. Web. Dec. 2009. .
5. "World mineral statistics." British Geological Survey (BGS) - Geoscience information and advice. Web. Dec. 2009. .

(2) Productivity Summary and Analysis of Guyana

Determining the well being of a country is often calculated through its ability to produce for itself. Measurements of natural resources, physical capital, human capital and technological knowledge are all key factors when determining a country’s productivity.

According to the CIA world factbook, Guyana’s main natural resources are bauxite, gold, diamonds, hardwood, timber, shrimp and fish. Only 2.23% of Guyana is arable land. In comparison, 18% of the land in the United States is arable. This is equal to 1,500 km² in Guyana and 223,850 km² in the United States. The previous numbers show that agriculture and farming are greater factors in the economy of United States than in Guyana. In terms of capital specifically, Guyana imports much more than it exports. They have built up a deficit of $362 million. They often have to import their machinery from Guyana due to the low amounts of physical capital within the country (U.S. Department of State). Guyana seems to be attempting to support its human capital. The adult literacy rate is currently 99% among educated adults. The country spends a great percentage of its GDP (8.3%) to try to ensure the success of its schools ranking it 13^th out of 182 countries. In comparison, the United States spends 5.3% of its GDP on education, ranking it 52^nd out of 182 countries (CIA World Factbook). With access to the rest of the world through ports of trade in the nation’s capital of Georgetown, the technological knowledge of Guyana grows with the technological knowledge of its main partner in trade – Canada. Effective developments in the mining of bauxite and gold have increased the production rates in Guyana. The lower standard of living in Guyana is in essence caused by the intellectual drain that the country is suffering. Even though much money has been put into the education system, students who are able to leave the country in search of higher learning often do. Some have even cited the Kaieteur News, a Guyanese news production, stating that as much as 89% of Guyana’s graduates live outside of the country. They know that the economic system of Guyana is faulty due to its vast deficit in exports compared to imports. This is bad because even though the country is spending much of its GDP on human capital through education, it is not receiving the benefits of this new educated work force. If all the country’s focus is kept on human capital no real progress will be made. With no arable land and impractical resources, Guyana is a country that is very dependent on trade.

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.

3. Guyana (09/09)." U.S. Department of State. Web. Nov. 2009. <http://www.state.gov/r/pa/ei/bgn/1984.htm>.
4. Ramsaroop, Stella. "Stella says.... Let's turn Guyana 's brain drain into brain gain." The Guyana Groove. Web. Dec. 2009. .
5. "World mineral statistics." British Geological Survey (BGS) - Geoscience information and advice. Web. Dec. 2009. .

(1) Guyana's Economic Background

The small South American country of Guyana ranks poorly in many aspects of my study. Its GDP is currently at $2.973 billion, ranking it 174^th of 228 in the world. Based on GDP alone, Guyana has a low standard of living in comparison to the World average. Guyana has a GDP real growth rate of 3%, ranking 126^th of 217. Its GDP per capita is $3,900 in comparison the United States GDP per capita which is $47,500.

Life Expectancy in Guyana is 66.68 which is slightly higher than the world average of 66.57, but wanes in comparison the United States’ expectancy of 78.11 years. The population growth rate of Guyana ranks better than its other aspects, the country ranks 185^th of 233 countries with a growth rate of 0.181%. According to Gregory Mankiv’s Principles of Economics, rapid population growth is unfavorable due to the stretching of resources and GDP that would occur.

An unusual trend in Guyana is that although they have a relatively low GDP per capita, it is not reflected in their population growth rate, which ranks the lowest of any of its statistics. This is indicative of possible growth. In most cases low GDP per capita corresponds to a high population growth rate, but in this country it is not the case. Most mothers are only having 2 children, so there is no indication that families are depending on family-run production to support themselves. Other reasons that mothers are having relatively few children are the monetary expense that comes with them on education and to support them in general. There are no signs of religion or culture making an impact of family planning. It is hard to say whether the low GDP of Guyana has an effect on the quality of living in this country. With an average life expectancy rate of 67 years, this country does much better than the below average GDP per capita would project. It also has a 98.8% literacy rate among its population. With such low GDP there are substantial gains that could be made in economic growth. Guyana’s high literacy rates, life expectancy rates, and favorable age structure could be a budding sign of growth in the near future. Even with all these good statistics a factor may be being overlooked. Guyana is ranked 26^th of 170 in their HIV/AIDs adult prevalence rate, which is 2.5%. The United States ranks 68^th in this category at 0.6%. A possible reason for the country’s overall low level of GDP may be this glaring statistic and its high risk level of major infectious diseases. Worker health has a direct correlation between GDP and standard of living. A sick or malnourished worked is often less productive. Human capital is a direct factor of productivity. Holding all other variables the same, when human capital falls so does a country’s overall productivity. A fall in productivity often leads to a lower standard of living. Even with 68.7% of the population of age to work, disease and sickness may be holding their production back from the level that all other statistics would convey. Another factor that may have led to Guyana’s slow growth is the fact that it recently gained dependence and is a young country. Guyana gained its independence from Britain in 1966 and did not establish a constitution until 1980 (CIA World Factbook). With a recently formed political system, those with power in Guyana often have different views on the direction the country should go in. This has been a factor holding the country back.

		Comparison to rest of the world
GDP	$2.973 billon	174
GDP real growth rate	3%	126
GDP per capita	$3,900	156
Population living below the poverty line	N/A	N/A
Life Expectancy	66.68 Men – 64.99 Women – 69.4	157
Adult literacy	98.8% Men – 99.1% Women – 98.5%
Birth Rate	17.56/1,000	117
Death Rate	8.31/1,000	102
Population Growth Rate	0.181%	185
Age structure	0-14: 25.7% 15-64: 68.7% 65 and over: 5.5%

Guyanese Data Table

Data derived from the CIA World Factbook.

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.