By Dr David Lewis
Last week’s move by Latin American countries to invoke the Rio Treaty in response to the Venezuelan catastrophe is encouraging news. New tools are now available to hold Nicolas Maduro’s regime accountable for its long-running abuses of human rights and of democracy itself. Though things will almost certainly get worse before they get better, this is a significant step toward addressing the Venezuelan catastrophe through diplomacy.
As we continue to work to bring relief to the suffering Venezuelan people, the importance of engagement with its small neighbor Guyana is only growing. For just as Venezuela represents the failures of the past – thanks to the Maduro regime’s corruption, political repression, and disregard for the rule of law – Guyana stands as the opportunity of the future. Yet it, too, faces political uncertainty that could derail that potential.
On September 25, president David Granger announced that Guyana’s general elections will take place on March 2, 2020. This comes after a lengthy period of political turmoil which kicked off in December of last year when the country’s governing coalition lost a vote of no-confidence in the National Assembly. The government challenged the vote in court, prompting months of legal battles which culminated in a June ruling by the Caribbean Court of Justice (CCJ), which affirmed the motion was valid. After frustrating delays, president Granter’s announcement, hopefully, means that the corner has been turned.
Free, fair and timely elections in Guyana are critical given the expected production of [first] oil early next year. As many know, after years of unsuccessful exploration by numerous companies, ExxonMobil’s massive 2015 offshore discovery has prompted a spree of activity. Current reserve estimates are north of six billion barrels of extractable crude oil, with many other operators planning to drill exploratory wells in the coming years.
The scale of the discoveries has already had a major impact on the small Caribbean nation. Experts at the independent energy research company Rystad Energy estimate that the government of Guyana could generate more than $5 billion in production revenue per year by the mid-2020s, more than doubling its annual GDP. The IMF estimates real GDP growth to reach 4.4 percent plus for 2019 and 86 percent rate of growth in the economy in 2020.
The question now is, will Guyana be able to capitalize on this incredible opportunity?
Unfortunately, the long-running political battle has taken valuable time and energy away from preparation and planning. Guyana has made some progress on developing a new Sovereign Wealth Fund to govern the use of oil revenues, and the third draft of a local content framework was recently released. Now is the time for Guyana to undertake structural reforms to support economic diversification, address skilled labor shortages, achieve inclusive growth, advance much-needed infrastructure development and advance investments in health and education sectors.
Progress starts with a plan. The coming campaign is a pivotal moment for Guyana to determine, and unite behind, a forward-looking agenda to capitalize on its new energy resources. The good news is Guyana has long been home to a strong civil society and an entrepreneurial and dynamic business community, now bolstered by support from the region’s most qualified and successful diaspora community. The Consortium developing the Stabroek oil block is stepping up with programs to boost workforce development, ensuring that local workers and local suppliers benefit from energy development.
But ultimately the people of Guyana and their representatives must chart the path forward. It is incumbent on political parties to begin laying out their plans to upgrade healthcare, education, and infrastructure, and ensure government is ready to manage revenues wisely and transparently.