Dear Editor,
Forgive my taking us back to step one of the economics education, as I ask for space to develop a
certain tract that I believe may be of interest to readers. For the purposes of this stream of consciousness, let me first say this in establishment: the economist is the master of rates and their interactions. An operation, say a farm, a mine or an oil field, typically has a rate of production. There is also a rate of transport from the place of production. The rate of transport is characterised by the load-bearing capacity of the transport together with its speed. Taken together, the following picture is drawn: a transport oscillates between production and stockpile at a certain rate. For an operation to be considered ‘efficient’ in this very simple analogy, the rate of production should not be allowed to exceed the rate of transport. For that matter, the transport cycles should not exceed the rate of production. The former gives rise to an ‘over-extractive’ farm, mine or oil field. The latter gives rise to an ‘under-performing’ farm, mine or oil field.
These two things, production and transport, must be optimized through investment, in the context of opportunity costs. This means that we cannot indefinitely invest in either transport rate or production rate for a given operation, because we usually have a future to consider. In the future, we may need certain resources over others to make crucial decisions. This situation gives rise to a horizon of possibilities which we must face as we control the rates of our operations. We can control the rates of production and transportation through investment, so long as we do not sink unrecoverable costs into either. We can then expend our stockpile, typically along the lines of research and value-added production activities like refrigeration, packaging and manufacturing. At each stage, we also have the option to convert the transformed or extracted value into cash. This describes a simple model of an efficient operation where each transport cycle lifts off the full production since the last transport cycle. With this model in mind, it may become clear that we can use this baseline to assess the peculiar shape of our own economic situation.
Allow me to invite readers to consider this question: do we, as Guyanese, really want a well-functioning economic system in Guyana? Based on our simple model, we can elicit a multitude of needs, many of which we are yet to live up to. Are we ready to embrace legibility of operations through data? Or do we not want to know what our true rates are? Will we continue to ignore the fact that services expand when our needs expand, reflecting further growth? Or, will we ignore the role the IT sector has yet to play in employing thousands more? Are banks in Guyana progressively seeking to invest in the technology that facilitates online payments? Are we ready to embrace connectivity and internet adoption in our businesses so that we can reduce the transaction costs that keep us from having well-oiled machines? Is our tax policy ever going to reflect rates that preserve our incomes, increase our spending power and encourage our investments? Are we going to stop excluding sidewalks and efficient mass transit from the city planning agenda? Or, are we going to clog the roads with endless numbers of cars while our produce wait in traffic? Editor, I should end here in the hopes that I asked the right questions and in the right order.
Sincerely,
Emille Gidding