A Choice of Technology Framework, Foreign Direct Investment for Forestry Resource Exploitation in Guyana
The evaluation of foreign direct investment and technology decisions is premised on shareholder value maximization. Without reference to social and development goals and own account financing, resource depletion in Guyana’s forestry sector could occur without achieving these goals. Property rights reassignments liquidate valuable resources and satisfy the investor rather than the government’s goals.
A population based policy framework explicitly linked to a distributive share of liquidated wealth and development goals is proposed. The choice of financial investment criteria through debt or equity and the choice of physical investment technology are evaluated within a domestic population context.
If the rates of exploitation are targeted to global populations, the amount of debt to be repaid, and overseas shareholder requirements non-sustainable consequences are more likely to occur than if the rates of forestry resource exploitation are tied to the size of the domestic population and the development projects needed.
A choice of investment and technology policy that links net value contribution to the requirements of a government’s balanced annual plus development budget is being proposed. Contracts should therefore link the budget over the lifecycle of the depletable natural resource project plus the net contributions of all other projects taken simultaneously, rather than piecemeal.
Keywords: Choice of Technology, Forestry, property rights, natural resources, debt-equity finance, foreign direct investment, FDI, ICT, poverty reduction, Millennium Development Goals
Dr. Gangapersad Ramdas
Professor, Economics and Business Administration, Lincoln University