Will Guyana become the new Qatar of Latin America?
One of the smallest countries in South America is growing at a breathtaking pace. It has overtaken Germany in terms of per capita income. Global industrial groups are very interested in gaining a foothold there.
by Alexander Busch, Latin America correspondent for Handelsblatt and Neue Zürcher Zeitung
Just ten years ago, Guyana was still one of the poorest countries in South America. The per capita income of the Caribbean state was barely higher than in Bolivia or Nicaragua. This changed in 2015 when the oil company ExxonMobil discovered huge oil reserves off the coast. Four years later, the company began producing oil there.
Guyana currently produces around 650,000 barrels per day – almost as much as Venezuela, the country with the largest oil reserves in the world. Soon Guyana will be the third largest oil-producing country in Latin America after Brazil and Mexico. Exxon has just received the license for a sixth production field 150 kilometers off the coast. In three years’ time, Guyana will be producing 1.3 million barrels of oil per day, as much as Qatar does today.
The oil boom is causing the economy to grow rapidly: Guyana’s gross domestic product has tripled since 2020. Last year, Guyana grew by 62 percent, this year it will be around 30 percent. And the pace of growth is set to continue: The International Monetary Fund expects Guyana to grow by an average of 20 percent annually at least until 2028.
Oil revenues have been flowing into the national budget since 2022. In the meantime, Guyana’s position in the global income rankings has improved: the per capita income of the Caribbean state’s 800,000 inhabitants is now higher than that of Germany. By the end of this year, it could overtake that of the USA in terms of purchasing power.
In Guyana’s capital Georgetown, however, there is not yet much evidence of the new wealth: New housing estates, hotels and office complexes are growing upwards. But the capital, with its estimated 200,000 inhabitants, has so far seen little of the oil boom – apart from the high prices for housing, transportation and food.
This makes the interest of foreign companies all the greater. ExxonMobil and its consortium of Hess Corp (USA) and Cnooc (China) dominate oil production, i.e. the upstream sector. The entire oil supply industry is already in the country, including from Europe.
However, foreign investors are also active in the non-oil sector of the economy. The retail sector has changed hands in a short space of time. Today, Chinese owners dominate the supermarkets, but also the construction industry. Indian companies are just as active there as investors from Qatar, who are building new hotels in the capital.
Impatience is growing among the population: there are too few jobs and hardly any of the oil revenues reach the people, many complain. Immigrants from Venezuela and Brazil are preferred to locals as cheap labor.
It is not yet clear where Guyana is heading with its sudden wealth: The ambitious President Irfaan Ali seems to want to turn Guyana into a kind of Qatar in South America.
The government has negative examples of what Guyana should not do in its neighborhood: Venezuela, despite its large oil reserves, is a country from which the population has been emigrating en masse for ten years. Trinidad & Tobago on its doorstep has also done little with its reserves to alleviate the poverty of its population.
