Not many years ago many Guyanese were fleeing this small Caribbean nation on the northern tip of South America with the mantra “anywhere but Guyana” and opting for a life in the winters in Europe or North America.

Guyana is actually in South America but is considered a part of the Caribbean because of close cultural and political ties. It is the only country in South America that speaks English, has a smaller Latin American population than other Latin American countries, and is a member of Caricom, the economic organisation of Caribbean states.

Guyana’s long-struggling economy was radically transformed in 2015 with the discovery of a rich offshore oil field in Guyana’s Stabroek Block that promised to spur growth in other economic sectors and to dramatically raise the country’s standard of living.

There is little said about this, if at all, by the media, which tends to focus on crime, inflation, and other economic problems.

Prior to 2015

The economic picture of Guyana has not always been rosy. Following independence in 1966 Guyana remained locked into colonial economic dependency on sugar cane and bauxite. The economic reforms that were tried by a socialist-leaning Government followed by a privatisation programme from another Administration in the 1990s were of minimal effect and Guyana continued to be plagued by the loss of skilled labour, an unstable infrastructure and a large external debt.

Oil

With its new-found wealth, according to the International Monetary Fund, Guyana’s gross domestic product (GDP) tripled to 180 per cent between 2020 and 2022, and became the fastest-growing economy while, because of the novel coronavirus pandemic, GDP in the rest of the world contracted to under 2 per cent, less than the historic average of 3.5 per cent.

One-third of all oil discovered is from Guyana and it is estimated that by 2027 it will produce 11 million barrels a day to make it one of the top 20 oil producers in the world.

The Dutch disease

The discovery of oil is no guarantee of future success if it is not properly managed. The sudden demand for Guyanese dollars pushes up the price of the currency and makes other exports more expensive, which could lead to a recession. This ill effect is called the Dutch disease, named after the discovery of vast reserves of natural gas in the Netherlands in 1959, which led to a downturn in the rest of the economy. This is the main problem confronting Guyana.

The best way to avoid the Dutch disease is to diversify the economy and to unite the country. The president of Guyana is Dr Irfaan Ali. He is one of the most astute political leaders in the Caribbean and is aware of the need to diversify. He has been investing in some sectors of the economy which are also booming. So, in 2022, agriculture grew at the rate of 10.9 per cent, petrol at 73.5 per cent, bauxite at 31.9 per cent, other minerals at 36.3 per cent, services at 7.6 per cent, and construction at 20.4 per cent.

In addition, the Government is wisely investing the oil revenue in health, education and infrastructure.

In 2012 the Guyanese population was 1.2 million people (made up mostly of 39 per cent East Indian and 30 per cent Afro Guyanese). There is no love lost between these groups as they support opposing political parties.

Dr Ali has set up a Sovereign Wealth Fund in which to invest the people’s money. He is aware of the need to unite disparate elements in the country and is pursuing a one-Guyana policy in order to stave off the Dutch disease and spread progress to everyone regardless of differences — unlike previous administrations that tried to divide the people on the basis of race.

In collaboration with the Government of Barbados, Dr Ali is setting up a food and water storage terminal which will be owned by the youth, the disabled, and the elderly, who are the people most vulnerable in times of food shortages.

The diversification programme and the one-Guyana policy will help to avert future obstacles, and if present trends continue the economy is expected to grow at the rate of 25 per cent until at least 2027.

With the right policies in place, an astute leader, and the people behind him/her, and committed, Guyana could become the richest country in the world and be a role model of development for the rest of the Caribbean.

Victor Dixon is a social scientist from Jamaica. Send comments to the Jamaica Observer or victoradixon@yahoo.com.