Country that discovered marine treasure should grow 50% this year
- May 9, 2022
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You can count on your fingers the countries that are expected to achieve exponential growth this year — in a context dominated by new outbreaks of covid in the country. China and the impact of the war in Ukraine, the pace of expansion of the global economy should drop at least one percentage point, in the analysis of institutions such as the Organization for Economic Co-operation and Development (OECD) and the International Monetary Fund (IMF). A country escapes the rule. After discovering vast oil reserves off the coast, in the Caribbean Sea, Guyana is expected to register a GDP growth of 49.7%, according to the World Bank.
With only 800,000 inhabitants, the country neighboring Brazil has just received a check for US$106 million from the oil company Exxon Mobil for the rights to explore a superdeposit of 1 billion barrels of oil. In late April, the company announced the discovery of three new oil and gas reserves, which are expected to total 11 billion barrels. The American multinational and its partners in Guyana, Hess Corp and CNOOC, have won contracts to explore most of the fossil fuels found off the coast of Guyana.
Considered one of the poorest countries on the American continent, Guyana intends to use the sudden injection of resources for infrastructure improvements, with the construction of roads, bridges, power generation plants and housing. In recent years, GDP per capita has risen from just over US$4,000 to US$7,000. It’s still not much, but it already represents a result similar to that of countries like Bolivia and Morocco.
Currently, Guyana, on the Caribbean coast, represents the fastest growing economy in the world, according to the IMF. This year, the government should raise about 4 billion dollars from the exploitation of natural resources. By 2025, this amount is expected to total US$10 billion, according to estimates by the Guyanese presidency. This year alone, the country’s reserves should allow for the exploration of 340,000 barrels a day – in the next three years, that number should increase to 1 million.
To avoid pitfalls arising from vertiginous growth, the country must invest in transport logistics, health and education – at least that’s what President Irfaan Ali, elected in 2020, says. The construction of a highway between Guyana and Brazil is part of the government plans. The country intends to become an important logistical corridor for Brazilian exports in the Atlantic. For this, it must also invest in the structuring of a mega deep-water port, along the lines of the Abu Dabhi Ports, considered one of the most advanced in the world. The project is expected to cost more than 2 billion dollars. “For our growth, this partnership with Brazil is essential,” said Ali.
The country’s growth explosion and the new logistical planning represent, by the way, one of the main reasons for President Jair Bolsonaro’s visit this Friday, the 6th, to the capital, Georgetown. The agenda includes meetings on topics such as economic cooperation, energy integration and new transport interconnections. In January, the face-to-face meetings of the Brazilian delegation with the Guyanese authorities were canceled due to the death of the mother of the Brazilian head of state.
Regarding infrastructure works, there is a mutual interest, according to the Itamaraty, in enabling the paving of the Lethem-Mabura Hill road section, in Guyana, which should enable the creation of a road corridor between Boa Vista, in Roraima, and Georgetown. The idea is that there is a direct connection between the North Region and the Caribbean.
“The Brazilian government is interested in sharing knowledge about the oil and gas sector and building a purposeful agenda with the country,” said Ambassador Pedro Miguel da Costa e Silva, secretary of Bilateral and Regional Negotiations in the Americas, at the time. Itamaraty.
Since the start of massive oil exploration in Guyana in 2019, the economy has been taking off. In 2021, it grew by 20%. And, in 2020, when the world was skating amid the most severe phase of the pandemic, GDP recorded a jump of 43%.
In the political and social field, however, challenges persist. Basic sanitation is still precarious, as is the condition of public roads, where animals are spotted on the streets, and public services. The country lives with divisions between the majority of African origin and a minority population formed by descendants of Indian immigrants. After the end of slavery in the 19th century, the United Kingdom, which took possession of the country, took workers from India to replace African labor. Guyana gained independence only in 1970, after centuries of British rule. The son of educators with Indian ancestry, Ali took over the country’s government amid ethnic conflicts and the discovery of oil. Now, he has the mission of putting the country on the path of development.