GEORGETOWN, Guyana, June 29, 2026 – A new report from the United Nations Development Programme has warned that developing countries are being forced to spend as much as US$1.1 trillion this year on fossil fuel subsidies and other measures to cushion citizens from rising global energy prices, a development that is squeezing public finances and reducing investments in health, education and long-term development.
The report, titled Military Escalation in the Middle East: Cushioning the Global Shock, highlights how governments across the developing world are implementing fuel subsidies, price caps, tax rebates and other interventions to shield households from soaring energy costs caused by instability in the Middle East. According to the UNDP, these measures provide temporary relief but come at a steep cost, diverting funds away from schools, hospitals and climate resilience initiatives.
UNDP Administrator Alexander De Croo warned that many developing countries are effectively sacrificing tomorrow’s investments to survive today’s economic shocks.
“Money that should be building schools, hospitals, and clean energy systems is being used simply to keep economies afloat,” De Croo said.
The report comes as nearly half of the world’s poorest countries are either in debt distress or at high risk of falling into debt distress. Developing economies are now spending an average of 9.53 percent of government revenues on interest payments alone, the highest level in a quarter century.
Guyana’s Contradictory Reality
Closer to home, the UN report raises important questions for Guyana, a country that is experiencing one of the fastest economic growth rates in the world due to its booming oil industry, yet continues to grapple with significant levels of poverty and inequality.
Recent estimates have suggested that approximately 58 percent of Guyanese continue to experience multidimensional poverty or vulnerability. Despite the country’s rapidly growing oil revenues and repeated declarations of prosperity, many households remain trapped by the high cost of living.
The Government of Guyana has introduced several targeted measures, including one-off cash grants, school uniform vouchers, transportation assistance and subsidies for school children. While these interventions have provided short-term support to many families, critics argue that they have done little to address the structural problems facing ordinary citizens.
Food prices remain stubbornly high. Transportation costs continue to consume a large share of household incomes, particularly for workers and families living outside Georgetown. Housing costs have increased dramatically, and many citizens report that their salaries have failed to keep pace with inflation and rising living expenses.
For low-income households, the monthly struggle has become one of survival. Parents continue to make difficult decisions about whether to spend limited resources on transportation, food, utility bills or educational expenses for their children.
Unlike many developing nations that are deploying broad-based energy subsidies and cost-of-living measures in response to global shocks, Guyana, despite being an oil-producing nation with rapidly expanding revenues, has not introduced a comprehensive package of permanent relief measures aimed at reducing the daily financial burden on its most vulnerable citizens.
Economists have long argued that sustained poverty reduction requires more than periodic cash transfers. It requires affordable transportation, lower food costs, higher wages, improved productivity, quality education, stronger social safety nets and deliberate policies that reduce inequality and expand opportunities for ordinary people.
The issue also speaks directly to the ambitions of the Sustainable Development Goals, which call on nations to end poverty, reduce inequality and ensure that all people enjoy peace and prosperity.
For many Guyanese families, however, prosperity remains an aspiration rather than a lived reality. As the country’s oil revenues continue to rise, questions are increasingly being asked about how the benefits of that wealth are reaching ordinary citizens and whether economic growth alone can be considered meaningful if a majority of people still struggle to afford the basic necessities of daily life.
