On the journey to becoming one of the world’s largest energy suppliers in a few short years, Guyana is at a historic juncture. In this post, we offer a snapshot of what makes Aperian Global’s 97th GlobeSmart country unique, and how Guyana’s government and people are responding to change.
Check out our Infographic “A Glimpse at Growing Guyana” to learn more.
Though no stranger to foreign interests, Guyana is at a turning point in its economic development. Upstream operators from across the globe have already made significant investments to get to the Stabroek block, where seven world-class oil discoveries yielding an estimated 3.2 billion barrels of oil equivalent1 have been made.
The exploration of such vast recoverable reserves is significant and represents only the beginning for Guyana. Production is expected to come on stream in 2020, at which point the government of Guyana expects up to USD $1 million per day from the profit oil, retention tax, and royalties.2 Guyana is on “The Journey to the Good Life,” as dubbed by the Minister of Finance, whose 2018 Budget calls out the need for macroeconomic stability, green state development, and better governance.3
Inevitably, tremendous economic opportunities and challenges face the country, and the government is responding to its best ability with prudent measures. Some of these include: establishing Guyana’s first Sovereign Wealth Fund (SWF), revising its existing Production Sharing Agreements, and devising the Green State Development Strategy (GSDS) as a framework for sustainable economic, social, and environmental development.
For Guyanese citizens, there is both eagerness and skepticism to see how the green economy will be implemented and corruption will be avoided. With two short years to production, the country is on a precipice for change.
In the last century, Guyana experienced two marked periods of economic growth, with the first following the discovery of gold in the late 1800s. Migrants from all across the Caribbean region arrived seeking opportunity, and still today, gold is one of the country’s largest industries. The second period of growth followed Guyana’s independence in 1966. Rampant nationalization helped the country in the short term, and increased government spending in areas like education was seen as a good thing across the Caribbean.
In less than a decade, however, the “cooperative republic” took complete control of industry, pushing foreign owners and foreign management out.4 When global commodity prices took an unfavorable turn in the 1970s, Guyana’s productivity and export revenues ﹘ most notably from bauxite, sugar, and rice ﹘ fell significantly.
The economic crisis that ensued was marked by ineffective government regulation and unsustainable debt, ultimately leading an estimated one-tenth of Guyana’s most skilled workers into the diaspora, the social and economic consequences of which are still felt today. The United Nations ranks Guyana as a country of Medium Human Development, at 127 out of 188.5
Many are hopeful that the Sovereign Wealth Fund and Green State Development Strategy will be structured and managed well, allowing Guyana to prosper as an oil-rich state. On the other hand, “What rain can’t full, dew can’t full.” This Guyanese Creole proverb means “if after all that time and work it wasn’t successful, then nothing will make it successful.” Some remain skeptical that the government has the wherewithal to keep up with such quick and enormous sums of money.
The optimistic outlook for Guyana is that, at a minimum, the country’s newest industry and the dollars that follow will attract great minds, bring new skills development opportunities, and boost other economic activities.
Ashley Coombs is Aperian Global’s Houston, Texas-based staff who stewards large-scale talent development projects in the energy industry. Lyndell Danzie-Black is the Managing Director of Cerulean Inc., a training and business consulting company in Georgetown, Guyana.