Is Guyana becoming the Qatar of Latin America?
Massive Oil Fields Bring Rapid Economic Growth to Guyana. The Oil Boom is Transforming the Country. What Role Do We Play?
Guyana is rich in oil. Massive oil fields lie off the coast of the Essequibo region, discovered only in the last nine years. And this black gold is driving the country's economy: In 2022, Guyana was the fastest-growing economy in the world, with a growth rate of around 62 percent.
Currently, Guyana's economy is growing by nearly one-third annually. Experts expect further growth of 20 percent per year until 2029. Edwin Schuh, an economist at Germany Trade & Invest, believes that, in the best-case scenario, Guyana could even become "a kind of Latin American Gulf state," he says in the podcast "Wirtschaft Welt & Weit."
The largest player in Guyana's oil boom is the U.S. company Exxon Mobile, which holds the extraction licenses. Guyana itself benefits from billions in royalties. If these funds are invested in healthcare, road construction, and infrastructure projects, German companies could also benefit, says Schuh.
"Money Sunk in Corruption Swamps"
However, unlike the construction of hospitals, road construction projects divide the population. Guyana is more than 80 percent covered by protected rainforest, and environmentalists strongly oppose such interventions. Christian Cwik, a Latin America expert, is also deeply concerned about Guyana's nature. He also finds the plans for a highway through the rainforest impractical: "The money has just been sunk in corruption swamps," he observes in the podcast.
Moreover, Cwik warns against radical changes in Guyana. He believes that the oil boom's revenues should be distributed in a way that allows Guyana to develop "softly." "We'll see if that's possible in the 21st century," says the historian. "It wasn't possible in the 20th century."
Is oil both a curse and a blessing? What role does Germany play as a consumer of fossil fuels in the context of the energy transition? And how sensitive is the border dispute between Guyana and its western neighbor Venezuela, which claims the resource-rich Essequibo region? These and many other questions are discussed by host Andrea Sellmann with her guests Edwin Schuh and Christian Cwik in the new podcast episode.
Edwin Schuh is an economist for Mexico and the Caribbean at Germany Trade & Invest, the federal foreign trade agency. He observes developments in Guyana from Mexico. Christian Cwik is a historian at the Center for Inter-American Studies at the University of Graz. He has been to Guyana himself on his research trips and reports from his own experience about the country.
The economic growth in Guyana, driven by its massive oil fields, has made it the fastest-growing economy globally in 2022. However, concerns about the distribution of oil revenues and environmental impact persist due to potential corruption and radical changes.
