Understanding where your money goes in Guam's economy
Thursday, January 29th 2015, 1:47 PM ChST
Guam - Many people don't realize that little decisions they make every day can either boost or drain the economy. University of Guam president Dr. Robert Underwood said his favorite example is every day decisions at the grocery store. When you buy an imported watermelon, for example, it might cost $0.80 a pound, whereas a local watermelon might cost a $1.05 a pound. Most people choose the imported, or cheaper, option.
"But in reality, the $1.05 watermelon is actually better for you in terms of being fresher, in terms of helping the local economy, and in terms of making the island more sustainable," he explained. Why? "The $0.80 that you buy for the watermelon from the States, that whole money goes back to the States - but when you buy that $1.05 watermelon here on Guam, that $1.05 goes to farmers, it goes to suppliers, it goes to people who are driving it around," he explained.
This creates a money multiplier effect that can improve the economy. UOG economics professor Roseann Jones said, "Just be aware that every dollar that is spent in this economy and that stays in this economy is about $0.50 to $0.75 more that others will have to spin through the economy."
Underwood urges people to reconsider their choices. Many of us tend to spend a little extra on our favorite brands of toothpaste, why not on our local produce, local clothing, or locally produced solar energy? "We here on the island export money - that's our biggest export," Jones stated. "We spend $300 million a year on diesel; as soon as we get $300 million, we ship it right out."
We also import 90% of our commodities. Now imagine if just 20% of our commodities and energy were produced locally. That would be at least an extra $60 million circulating through our economy.
Melanie Mendiola, executive director of Farm to Table, said simple decisions we can make every day to make a difference. "Create that demand in the grocery store for local produce," she explained. "If you're out and about visit your local farm stand like the Dededo Flea Market, for example."
Other ways might be to invest in solar energy for your home, or even to venture into entrepreneurship and create a local business of your own. All of these small actions, when put together, can have a tremendous effect on Guam's economy.