By Victor Cohen- The world’s fastest-growing economy isn’t in Asia or Africa, but in South America. Guyana, a small nation with less than 1 million inhabitants, has seen its economy soar in recent years, with a remarkable 42.8% annual growth in 2024, up from 33% last year.
Guyana, the world’s fastest growing economy
The discovery of one of the world’s largest oil reserves in a generation has made Guyana the fastest-growing country globally for two consecutive years.
Guyana is bordered by the Atlantic Ocean to the north, Brazil to the south and southwest, Venezuela to the west, and Suriname to the east. With a land area of 83,000 square miles, Guyana is one of the least densely populated countries in the world and the only English-speaking country in South America.
Guyana is believed to hold between 11 billion and 20 billion barrels of oil reserves. The country produced approximately 113.5 million barrels of oil from January to June this year, with daily averages reaching 624,000 barrels per day. The country’s oil exports are expected to generate around US$16.8 billion this year.
The South American nation is projected to produce more oil per capita than Saudi Arabia or Kuwait by 2027. It is also on track to surpass Venezuela as South America’s second-largest oil producer after Brazil.
The country’s economy grew by 49.7% in the first half of 2024, with the oil sector contributing 67% of that growth. With GDP now at US$21.18 billion in current prices, it is expected to reach US$31.27 billion by 2029, according to the International Monetary Fund (IMF).
Guyana’s GDP per capita has also experienced exponential growth; a decade ago, it was US$5,400 and is now US$26,590, according to the IMF, which expects it to rise to US$38,680 by 2029.
This year, Guyana has also been aiming to monetize its downstream energy sector, particularly gas. The country’s Natural Resource Fund is expected to exceed $3 billion by the end of 2024.
Venezuela and the temptation of oil
Guyana’s resources have provoked some envy from its neighbors, particularly Venezuela. The discovery of massive oil reserves in Guyana has rekindled an old territorial dispute between the two countries over the Essequibo region.
Once part of Venezuela, Essequibo was gradually annexed by the British Crown into its Guyana colony. The region makes up 75 percent of Guyana’s territory and is believed to hold a significant portion of the country’s massive oil reserves.
The Venezuelan government held a referendum in December 2023 on whether to recognize the jurisdiction of the International Court of Justice to resolve the dispute over the territory. One question explicitly asked if voters wanted the territory to be owned by Venezuela, to which they overwhelmingly voted “yes.”
This referendum sparked a diplomatic crisis in the region, with many fearing that Venezuela might resort to invading Guyana. These concerns have caused Guyana to strengthen its ties with the United States, which is also involved in the conflict due to its oil interests and its own adversarial relationship with the Maduro regime.
ExxonMobil is the majority shareholder in the consortium which is developing Guyana’s more than 11 billion barrels of offshore oil deposits. Hess and the China National Offshore Oil Company are also part of the consortium.
After Secretary of State Antony Blinken reaffirmed U.S. recognition of Guyana’s sovereignty over Essequibo, Washington committed to boosting Guyana’s military capabilities through training, drills, and equipment. Guyana’s military has only 5,000 soldiers. (Columbia One)
