How Guyana's big oil boom turned it into the world's fastest-growing economy

Guyana, a tiny South American nation house to greater than 800,000 folks, made big headlines in December.

The cause? Its neighboring nation, Venezuela.

Venezuela’s autocratic chief Nicolás Maduro known as for a referendum in the first week of December 2023 to hunt approval to annex Essequibo, which makes up two-thirds of Guyana’s land. Venezuelans approved it regardless of the dispute already being resolved by a world tribunal in 1899.

“What has occurred is that it’s been exacerbated by the discovery of oil (in Guyana),” stated Dr. Terrence Blackman, founder and CEO at Guyana Business Journal. “This discovery has made it appear extra enticing to Venezuela to pursue this plan of action.”

The 2015 oil discovery made Guyana the world’s fastest-growing economy, recording the world’s highest actual GDP development fee in 2022 and 2023. The story is totally different throughout Guyana’s border. Venezuela has the world’s largest oil reserves, however that hasn’t stopped its economy from collapsing since Maduro took energy in 2013.

“Venezuela would not really have sources of assist in its ambitions to take over that territory of Guyana, whereas Guyana, it appears, has worldwide public regulation on its aspect, in addition to the alliance with the United States,” stated Valerie Marcel, director at New Producers Group. “So I feel that at this stage, the fears that Guyana felt in the previous are a lot much less. It feels extra assured in opposition to its big neighbor.”

Guyana’s sudden financial progress has additionally been on the watch checklist for oil specialists. While Guyana’s exceptional GDP development seems spectacular on paper, critics spotlight that the nation’s weak democratic establishments and deeply divided politics alongside ethnic traces may trigger the solely English-speaking nation in South America to endure from the so-called useful resource curse.

“Guyana is at a crossroads in its historical past,” stated Gregory Brew, power analyst at Eurasia Group. “It is about to turn out to be one in all the most fun and vital oil-producing nations in the world.”

Watch the video above to dive deep into Guyana’s oil economy, its ongoing escalation with Venezuela, what the nation’s oil means for the U.S. and extra.

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