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For many decades, it was the second poorest country in South America, after Bolivia. Today it is the fastest growing economy in the world.
Guyana is perhaps one of the best examples of how the discovery of hydrocarbons can be transformative for a small country.
Nearly a decade after the discovery of large oil reservoirs on the coasts of the world Essequibo, a territory administered by Guyana but claimed by VenezuelaInfrastructure projects and foreign investments in this northern South American country have reached their peak.
Expectations are high. Guyana is expected to join, as Qatar and the United Arab Emirates have done, those countries with some of the highest per capita income rates in the world.
But this was not always the case in the only English-speaking country in South America.
After gaining independence from the United Kingdom in 1966, Guyana’s economy was one of the most underdeveloped on the entire continent.
“With independence, the Guyanese were able to control the economy, because until then it had been controlled by the British,” Sidney Armstrong, professor of economics at the University of Guyana, tells BBC Mundo.
“It was an economy based primarily on agriculture, especially sugar plantations left over from a period Slavery and indentured servitude“Continue.
Indentured servitude, also known as unpaid labour, was a system that prevailed in most European colonies in the Americas after the abolition of slavery, whereby young employees were hired and worked for years without pay to pay their workplace wages or for food and housing.
Multi-ethnic country
British colonialism left Guyana with great Ethnic diversity.
After the abolition of slavery, London used slavery in its colonies to obtain labor and most of the workers came from India and China.
Therefore, today the largest ethnic group in Guyana is Indo-Guyanesethe descendants of these workers, who represent nearly 40% of the population, follow Afro-Guyanesedescendants of slaves brought from Africa, who constitute about 30%.
The Native American population is also important, as are those who consider themselves of mixed race. There are also small groups of Guyanese of Chinese and European descent.
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Fragile economic past
The first three governments that Guyana formed after it became a republic under the 1970 Constitution were a socialist. They have established a close relationship with China and nationalized most of the country’s industries.
“After independence, we were for several years one of the countries with the lowest per capita GDP on the continent,” Thomas Singh, a Guyanese economist, told BBC Mundo.
But in 1992, the country’s politics changed when the Social Democratic Progressive Party came to power and opened up the economy.
“PPP had a slightly more capitalist approach and we started to see more private investment,” Sidney Armstrong explains.
However The biggest driver of the economy In the South American country, the sector continued to be the main one, especially agriculture and mining.
Until a few years ago, Guyana’s economic growth rate was about 3% per year.
But a series of events They changed the course of history the country in 2015.
That year, dozens of oil deposits began to be discovered in the coastal areas of Essequibo, a region that includes six of Guyana’s ten regions.
Since then, multinational ExxonMobil and its partners have made 46 discoveries that have brought Guyana’s oil reserves to about 11 billion barrels, representing about 0.6% of the global total.
Unexpected discoveries make this country, with a population of 800,000, one of the most promising economies in the world.
GDP is expected to grow by 25% this year, after expanding by 57.8% in 2022.
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“We are now the fastest growing economy in the world,” Armstrong says proudly.
In addition to oil, Essequibo has a large number of mineral resources, such as gold, diamonds, copper, bauxite and aluminium, among many others, which contribute money to the state’s coffers.
Between 1993 and 2005 alone, the Omai Gold Mine, one of the largest in Essequibo, produced more than 3.7 million ounces of gold.
Nearly half of the population remains in poverty
But Essequibo’s oil and mineral wealth has not yet reached all Guyanese.
“We did not see any significant improvement in quality of life “It can reflect GDP growth,” says Thomas Singh.
Beyond per capita income, Guyana still appears below the Latin American average on several social indicators.
In 2023, Guyana’s life expectancy at birth will be 69.8 years, lower than the regional average, according to the Pan American Health Organization.
“In Guyana, there is also a lot of inequality, which is very much felt. There are a few who have a lot of money, while the majority of the population is still trying to make ends meet,” Armstrong explains.
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Based on Guyana’s gross national income per capita, the country qualifies as an upper middle-income country.
But “you wouldn’t believe this if you lived in Guyana,” Kaieteur News, one of the country’s top media outlets, reported earlier this year.
“The living standards of the majority of the population are below average Signs of poverty everywhere“The newspaper reported.
The Government of Guyana reports that the poverty rate is 48%, which refers to those living on less than US$5 per day.
The highest rates of extreme poverty are found among the country’s indigenous population.
What has improved is recruitment. According to the Inter-American Development Bank (IDB), Guyana’s unemployment rate is 12.4%, down from 15.6% in the first quarter of 2021.
At the same time, foreign direct investment rose.
According to US State Department data, Guyana saw foreign direct investment grow by 47% during the first half of 2022, receiving nearly US$2 billion.
“I think it’s too early to see big changes in people’s quality of life in such a short time,” says economist Sidney Armstrong.
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The Government of Guyana is currently committed to improving the country’s infrastructure through the construction and expansion of roads, highways, and other projects to improve the connectivity of the national territory.
“We are seeing improvements in infrastructure and an increase in this sector and transportation, with very large projects,” Armstrong confirms.
“There are other energy projects under construction that will benefit Guyanese, in addition to investments in education, with all the money they are pumping into the University of Guyana and the scholarships they are offering,” the economist continues.
“everyone These investments will yield results in the long term.“.
However, he considers it so There is still a lot to do, Especially in the health sector.
“Our performance is very poor even compared to other countries in the region on issues such as infant mortality, and our health facilities are not up to standard, especially in rural areas,” he adds.
A large portion of Guyana’s population lives in cities near the coast. Georgetown, the capital and largest city in the country, is also located by the sea, and is home to about 20% of the population.
Racial tensions
Like the country, politics in Guyana are also ethnically divided.
Guyanese of Indian origin, who constitute the majority, tend to support the People’s Progressive Party (PPP), while Guyanese of African descent support the Association for National Unity (APNU).
In 2020, Irfaan Ali of the Pakistan Peoples Party took power after a fairly close general election.
In recent years, the APNU has accused the Irfaan Ali government of funneling oil wealth towards its constituents, the Guyanese Indo-Irfaan Ali government. Neglect of African Guyanese and other ethnic groups.
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However, Sidney Armstrong points out that, beyond political tensions, “the various ethnic groups in Guyana live in harmony.”
They are united by the Essequibo issue.
“We, the Guyanese, support our government’s position in seeking legal means to resolve this territorial dispute,” says Armstrong.
He added: “If Venezuela has a claim, we will study the evidence and allow an impartial body to make its ruling.”
“We will accept whatever is decided.”
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