Guyana, currently one of South America’s smallest and least developed countries, is bracing for important national elections. These elections will have a profound impact on its burgeoning oil market and its relationship with the United States. Economic rivalries and territorial disputes make the stakes unusually high for next week’s elections. This election will have dynamic consequences not only for Guyana’s future but also for the US investment and security interests across the region.
Guyana’s economy has been booming — by some measures it has just celebrated its fifth straight year of double-digit growth. With all those dollars flying around, FY 2024 GDP shot up by a staggering 43.6%. This astonishing increase came on the heels of two previous record growth rates — 63.3% in 2022 and 33.8% in 2023. That incredible turnaround began in 2015. That’s exactly when ExxonMobil hit pay dirt, discovering close to 11 billion barrels of oil on the deep waters off its coast. With production just starting at around 650,000 barrels of oil a day, Guyana’s economic fortunes have changed completely.
With elections fast approaching, the incumbent President Irfaan Ali fights hard to win re-election. He is under ever-growing concern for outside threats from Venezuela and economic competition from China. The US has ramped up military deployments in Caribbean waters near Venezuela, which has raised alarms in Georgetown regarding security and territorial integrity. Venezuela’s long-standing claim to the Essequibo region—a territory that’s now been discovered to be rich in oil—now presents an existential threat to Guyana. The Essequibo conflict originated with the 1899 Paris Arbitral Award. Yet it continues to stoke animosity between the two countries even now.
Implications of Guyana’s Oil Boom
This sudden economic boom, fueled by the country’s burgeoning oil production, has placed global scrutiny on Guyana’s development. The US views a stable, prosperous Guyana as a key regional ally. This is particularly critical in light of the ongoing geopolitical tensions with Venezuela and China.
Ryan Berg, a senior fellow at the Center for Strategic and International Studies, emphasized the importance of the upcoming elections: “Guyana’s current growth rate is truly impressive.” The way in which the next government chooses to use this economic bonanza will be key he elaborated.
If the next government manages this boom with transparency and stronger institutions, it could be an example for the entire region. That’s why these elections are so consequential,” said Imdat Oner, a specialist in Latin American politics.
Guyana’s oil wealth not only positions it as a key player in energy markets but as a strategic partner for the US, which is keen to counter China’s growing influence in South America. The US has made a wise investment in our alliance with Guyana, understanding its importance to our economic prosperity and regional security.
Rivalry Between Superpowers
China’s investments in Guyana extend well past the oil industry. One of the best recent demonstrative examples of this was building a new Demerara River bridge currently under construction. These projects underscore China’s desire to increase its political influence and guarantee resource access in the region. Yet as Guyana walks the line between these two superpowers, it’s already embroiled in a more complicated economic matrix.
The US Treasury Department has expressed concerns about potential exploitation of Guyana’s resources, stating that some entities could “exploit Guyana’s underdeveloped gold sector for personal gain.” This perspective underscores the need for Guyana to establish a governance framework that ensures transparency and accountability in managing its natural resources.
As the elections draw near, candidates including Aubrey Norton and Azurddin Mohamed will vie for leadership positions amid this backdrop of economic opportunity and geopolitical strife. The result will go beyond the future of domestic policy, though, as they’ll dictate the nature of Guyana’s foreign relations and economic partnerships.
Territorial Tensions with Venezuela
Guyana’s longstanding territorial dispute with next door-neighbor Venezuela is another major factor in Guyana’s prickly political landscape. The Essequibo region is rich in resources, including large oil reserves, so the Venezuelan government has long claimed rights over it. Guyana’s government has characterized these assertions an “existential threat,” baking in fears over national sovereignty amidst escalating anxieties.
In light of these tensions, Ryan Berg suggested that a stable government could “guarantee that the status quo prevails and that the Maduro regime cannot attempt any adventurous policy with Guyana.” This optimism is informed by a deeper appreciation for how electoral results might affect the stability of the region.
The international community will be watching closely as Guyana approaches this critical juncture. With rising oil production transforming the economy, how political leaders respond to external pressures will be pivotal in shaping the nation’s trajectory.
