We resume our Latino Debates series, dedicated to understanding the hemisphere, its context, possibilities, challenges, and present, to think about the future of what we have defined as the Triangle of Opportunities—the shape we visualize geographically on the map from the lines that connect the regions of Iberoamerica with the U.S. Due to the diverse reality of the area, in addition to the Spanish-speaking countries in the Americas, we have included English and French-speaking nations to our series, as well as those of Netherland descent. This time, we focus on a country of English-speaking root: Guyana.
Despite being located on the north coast of South America, and bordering with Brazil and Venezuela—as well as with Suriname—we usually have little knowledge of the Cooperative Republic of Guyana. Moreover, there is scare information about that country circulating in the Spanish-language media.
Guyana is almost unknown to the majority of its neighbors. Therefore, it is worthy to state and order some relevant facts. Its surface is relatively small: nearly 215 thousand square kilometers, which makes it the 85th in the world ranking for expansion. Let us remember that Guyana could very well be the country with the largest percentage of its territory under dispute: almost 81.4%. A substantive part, which amounts to 74.2%, is made up of the Venezuelan claim over the Essequibo territory. The remaining 7.2% comes from its Eastern neighbor, the Republic of Suriname.
One of this country’s particularities is the high concentration of its population in the coastal region — around 90% of Guyanese live near the sea. Guyana’s total population is 790 thousand inhabitants. In its capital, Georgetown, administrative and business activities, as well as a substantial part of economic exchanges congregate. Through the port of Georgetown, which faces the Atlantic Ocean, most of the country’s imports and exports enter and leave.
Historically, Guyana’s economy was based on agriculture. Making use of the empoldering method, which consists of gaining land to the sea and then dedicating it to agriculture, they were able to produce rice, tubers, vegetables, and coconut trees. Other regions stand out for the production of sugar, coffee, and cocoa. Additionally, the country has mineral wealth, such as aluminum, gold, and diamonds. The Observatory of Economic Complexity (created at MIT Media Lab), which specializes in the collection and management of data related to international trade, recorded Guyanese exports in a table corresponding to 2017. As a result, we know gold in different presentations made up 41% of its exports; transport containers, 12%; rice, 11%; aluminum ores and concentrates, 7.6%; cane sugar, beets, and other derived products, 4.6%; raw wood and other derived products such as cellulose and pastes, 3.2%; Crustaceans—especially shrimp—3.1%. Evidently, it is an economy with a strong base in agriculture, wood, and mining. In 2017, according to this report, exports, which totaled just over 2 billion dollars, exceeded the number of imports that reached $1.88 billion, which resulted in a favorable balance of $173 million.
Various reports identify Guyana as one of the poorest countries in the world, whose per capita domestic product is around $8,000 per year. This statistic is similar to those for El Salvador and Guatemala (compare those numbers to those of Panama—which exceeds $25,000—Chile—$ 24,000—and Uruguay—$22,000). The chapter dedicated to Guyana, in the “Preliminary Overview of the Economies of Latin America and the Caribbean,” ECLAC reports a growth of 4.5% during the first half of 2018. It is based, among other factors, on the growth of domestic demand and the increase in agricultural, livestock, and mineral production, which offset the decline in sugar and gold production. The estimated annual inflation would be 2%.
In January 2017, the New York Times reported that Exxon Mobil and Hess successfully perforated a deep-water oil well, 190 kilometers from Guyana’s coast. The seafloor of this country contains significant deposits of oil and natural gas. The potential is of such magnitude means “Guyana could become the new great producer of the hemisphere.” Only one oil field, named Liza, has the potential of producing 1.4 billion barrels of oil mixed with natural gas, which qualifies it as one of the largest in the continent.
The NYT note adds a comment that has significance: since Guyana has a small population, it could export much of what it produces. From the time the article was published until now, expectations have grown. First we talked about deposits that would contain 4 billion barrels. Later, sometime in 2019, the figure has increased to 6 billion barrels, which could mean vast revenues of up to $300 billion. To achieve such ambitious goals, Guyana will have to start a program to build infrastructure and pipelines that will radically change the physiognomy and living conditions of at least a part of the northern region of the country. It is also worth mentioning the tensions that could arise if the exploitation of this resource extends to Atlantic waters that could be considered part of the Essequibo territory, as we said, in a claim by Venezuela.
This unusual, imminent, and immense bonanza makes the majority happy, but it is also a source of serious concerns for many. In May 2019, Simon Baybin of BBC News titled his report with this phrase: Can Guyana become the wealthiest country in the world? He then wrote: “The second poorest country in South America is preparing for an oil boom that could catapult it to the top of the richest nations not only on the continent but also in the world.” The estimates are deafening. For example, oil production could be 750 thousand barrels per day by 2025, and GDP can grow between 300 and 1000%. In the first stage, the expectation is there will be a significant drop in the unemployment rate, which until 2018 was around 12-13%, but very pronounced among young people. Likewise, they expect there will be a noticeable increase in working capital, consumption, and importation of goods of all kinds.
Environmental groups have warned of the high ecological cost that the operation could cause in that area of the Atlantic, in a country that has no experience in managing such risks. There are also legitimate concerns that the oil boom could become so disruptive and overwhelming that it will weaken or end the rest of the productive activity of the country—especially agriculture and fisheries—that required an effort of almost a century to establish and consolidate. It should be added that Guyana does not have a university structure that allows it to face, immediately, the demand for professional resources that will come from the oil sector, which will require importing professionals and services that can meet the productive urgencies. Perhaps the greatest concern expressed by academics, journalists, and social leaders, is that the arrival of oil wealth will boost corruption. Furthermore, they warn that the promised torrential wealth could not be transformed into structural benefits for society, but instead will be concentrated on a small group, specifically, in sectors of the political class and the business elite.
The tasks that Guyanese society will have to face are enormous and all significant. It is the first time the country is presented with an opportunity to solve its problems since 1966, when it was released from English domination. Among the issues facing the country are its very poor infrastructure and roads (paved roads account for less than 10% of the total), its precarious health system, and, above all, the state of its educational system (the poorest in the world, according to the investment that the State makes in it, equivalent, approximately, to less than 0.02% of GDP). This boom should contribute to solving social problems of great magnitude, such as the very high homicide rate (between 18 and 20 per 1000 thousand inhabitants); the also unusually high average of suicides (which exceeds three times the world rate); or expressions of inequality, such as the illiteracy rate, which reaches 15% of the population.
Throughout the more than five decades of Guyana’s republican life, politics have been marked by constant instability. It would be impossible to summarize the ups and downs, confrontations, frauds, crises, and accusations derived from the conflicting rivalry between the political parties. The National People’s Congress (NCP) responds to ethnic criteria among Afro-Guyanese people. And the Party People’s Progressive (PPP) represents the Indo-Guyanese. Again and again, spokespersons for these and other political organizations have publicly sustained the benefit of eliminating ethnic arguments from the political debate, but this does not finally cross the line of broken promises.
On March 2, Guyana will go to general elections, once the current government of David Granger (NCP), lost in parliament, “a vote of no confidence.” Granger will face Irfaan Ali, a former housing minister, who is the PPP candidate. The winner of the contest will have, among the decisions he will have to make together with his government team, immense responsibilities. If he fails in the path of sudden wealth, as has happened in many countries—the case of Hugo Chavez’s oil Venezuela is, right now, the most emblematic and close of all. Or if it succeeds—as happened in Norway with its “Petroleum Fund”—to make it a source of sustainable development and public policies to improve the quality of life of the inhabitants, and consolidate the rule of law and democracy of the country.