Despite growing signs of a dramatic and global economic downturn stemming from the coronavirus pandemic, the small South American country of Guyana appears poised for a period of spectacular economic growth. In its recent semiannual report on Latin America and the Caribbean, the World Bank forecasts a 4.6 percent contraction for the region’s economy in 2020, followed by an expansion of 2.6 percent in 2021. However, the World Bank sees Guyana’s economy skyrocketing by 51.7 percent in 2020, before leveling off to 8.7 percent in 2021.
The reason for this very rosy outlook? In December, ExxonMobil began pumping oil from the first in a series of deepwater wells being developed off Guyana’s coast. Before the recent drop in oil prices, the International Monetary Fund projected that oil revenues would lift per-capita income in the former British colony nearly four-fold by 2024—from just over $5,200 to $19,400. By 2030, the government’s share of earnings from oil could reach $10 billion in real terms, the IMF predicts. That is more than twice the country’s current GDP.
While these estimates may fall a bit short depending on how long the current slump in crude prices lasts, oil will nonetheless continue to be the dominant factor in Guyana’s economy. With a population of approximately 780,000, the country could soon produce a barrel of oil per person per day. Even if the price per barrel languishes in the $30 per barrel range, $9.5 billion will be generated per year—a staggering sum for a country like Guyana.