In a letter captioned “Guyana is likely to become the largest exporter of logs in this region while plywood exports fall“ the writer raises important issues related to the accelerated rate of deforestation that is currently taking place in Guyana. In pursuing its Timber Sales Agreements, the percentage of the selling price from the Sales Agreement that goes into the national treasury is unclear, while fees from direct and indirect Exploratory Leasing of the forest through concessions are not reported.

The emphasis on the exploitation of non-renewable forestry resources would eventually lead to unsustainable economic growth and economic collapse. Guyana’s vulnerabilities and risk of catastrophic losses in timber, as it is in flooding and environmental degradation, are magnified with accelerated use of its stock of non-renewable timber resources.

Similarly, accelerated use of stocks of gold that do not make its way into the local jewellery industry, raises the risk of economic collapse. In the Dominican Republic, during the 1980s a severe crisis erupted ’as its sugar exports collapsed and its gold resources were exhausted.’.

The requirement for growth sustainability and growth with equity would be frustrated with accelerated use of scarce resources in Guyana. For Guyana to minimize its potential for catastrophic losses and economic collapse, a commensurate share of its wealth should accrue to the nation. This requires careful long term economic planning of the use of its scarce resources in both the non-renewable and its renewable agricultural sectors.

In Finance and Development, March 2006 issue, dealing with ’Understanding Growth,’ three brave economists, in an obscured way, pointed out the link between natural resources and the economic growth process： “Although one cannot be definitive about the underlying (growth) mechanisms, a possible explanation (of growth) is that growth in manufactured exports benefits a cross section of the population in a way that natural resource-based growth does not..."

It is clear that Guyana’s construction sector and various communities in the country could be adversely affected through resource exhaustion and high local manufactured sawn timber prices as the quantities of logs are exported. Building costs of homes, bridges, fences, log cabins, local employment in construction would suffer as well.

The small gains from accelerated use of Guyana’s scarce forestry resources plus its environmental losses should be weighed very carefully. Even the shift to exporting plywood and Guyana’s cut of the gains may not compensate for the eventual drop in local construction income and employment. These developments will make Guyana a high cost producer in a low wage economy.