Guyana's Oil Prospects: The Bigger Picture
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Politics and Activism

Guyana's Oil Prospects: The Bigger Picture

What an Interest in Guyanese Oil Will do to the Country

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Guyana's Oil Prospects: The Bigger Picture

Recently, the South American country of Guyana has had a lot of attention in regard to the future of its oil market. Guyana has several hundreds of millions of barrels of oil beneath the surface and that number continues to increase rapidly as drilling continues to develop within the country. Guyana has a weak economy and a relatively small one with its Gross Domestic Product (GDP) standing in at roughly $3.4 billion, which is a small fraction of nearby Latin American countries such as Venezuela and Brazil. However, the suspected oil reserves have a combined value of roughly $41 billion, putting the small country in an interesting position to possibly become a player in the global oil market and develop economically. Investors are looking towards Guyanese oil as potentially more favorable in the immediate future. According to Forbes, Guyana does not have as many of the political risks as Venezuela, the largest oil producing country in South America. Regardless, Guyana has its own risks and potential negatives to the oil market, and those must be weighed as well with the benefits.

Guyana as a country has operated under a very corrupt regime for quite some time. Since Guyana's conception, it has had a very corrupt leadership in government with the first Prime Minister Forbes Burnham. With the exception of President Cheddi Jagan in the early 1990's, Guyana has continued to suffer from severely corrupt politics. Politicians in Guyana accept bribes at all levels and only assist the ultra wealthy classes, while the rest of the country suffers from heavy poverty. The current administration has made no significant effort to bring the country out of this corrupt regime and instead continues this agenda into the future. The recent Jagdeo administration in Guyana has shown the avarice and disgusting nature politicians can exhibit, showcasing the disregard most politicians and business owners have for facts about inequality and their choice to line their pockets at the expense of their constituents. This is one of the major reasons why Guyana has one of the highest suicide rates in the world.

This situation poses a significant risk to not only the citizens of Guyana who do not occupy the upper echelons of the socioeconomic spectrum, but also to investors themselves. Investors are interested in making a return on Guyanese oil, which seems very lucrative. Although Guyana's government does not suffer from the same political risks as Venezuela, the country itself does not have a proper economic infrastructure to be able to support such a venture. As a detriment to the citizens living in Guyana, most of the money generated by these oil ventures would go to the politicians themselves and the large business tycoons of the country. Most of the Guyanese population would not benefit from this venture and instead may suffer from it. As oil projects develop, cheap labor will then be sought after, putting many Guyanese workers at risk for exploitation without proper recourse. Although Guyanese oil is lucrative, the social costs far exceed any benefits that I can see. In order for Guyanese oil to be invested into properly, there must be government programs that ensure that revenue raised will be circulate throughout the country in order to improve the standard of living and quality of work. This effort would then yield into more oil being retrieved in a more efficient manner as the quality of work increases, generating a much larger rate of return.


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