Because Guyana is in Maduro’s sights
Venezuela would like control of the Essequibo region, a region of Guyana. Thanks to oil, this South American country can exhibit the fastest growing economy in the world. The article from El Pais
At Georgetown's most exclusive restaurant, Amici, a plate of wagyu beef to share costs $350. Jamaican Gregory Lynch, a huge man dressed in black from head to toe, opens the door every day to ministers, tycoons, oil company employees, Indian singers, soap opera actors and men of dubious fortune. Construction trucks cause traffic jams day and night. A flight from a country in the region costs $1,500. A hotel on the beach costs $700 a night. Taxi drivers grimace if you offer them less than 30. Supermarkets are full of imported products that cost an arm and a leg. A new stadium will be built next year for the local cricket team, the Amazon Warriors. In the small country of Guyana, money comes out of the ground.
GUYANA HAS MADE A FORTUNE FROM OIL
For decades, this former British colony was hidden from the eyes of the world. It would have been difficult for an outsider to locate it precisely on a map. It was the second poorest country in Latin America when its fortunes suddenly changed in 2015: it is now the fastest growing economy in the world, according to the IMF.
US-based ExxonMobil and its partners, Hess and China's Cnooc, have found more than 11 billion barrels of oil off its coast , an amount the country could live on comfortably for the next 20 years. Foreign investment and infrastructure construction have increased. Experts predict that the country's 800,000 people will have one of the highest per capita incomes in the world.
THE THREAT FROM VENEZUELA
However, a problem from the past has come to disturb this honeymoon. Venezuela, a neighboring country, claims Essequibo as its own, a region that is two-thirds of Guyana and which was assigned to Guyana in an 1899 arbitration award. Off the coast of this jungle, twice the size of Portugal, have been made some oil discoveries. The president of Venezuela, Nicolás Maduro, has drawn a new map of his country that includes the Essequibo, a declaration of intent. Maduro and his Guyanese counterpart, Irfaan Ali, will meet on Thursday in Saint Vincent and the Grenadines, the country that temporarily chairs Celac and acts as a mediator. The international community has expressed concern that the disagreement could escalate into a military conflict.
“The Venezuelan threat has caused concern in Guyana, I'm not going to lie,” Mark Phillips, the country's prime minister, said in his office. “But Venezuela cannot stop our prosperity. He cannot annex Essequibo, what Maduro says is not possible. We will never, ever accept any requests from Maduro and his government. We respect the work of the [International Court of Justice, where the dispute is being resolved],” says Phillips.
THE EFFECT OF OIL ON THE ECONOMY
The effect of the oil boom is impressive. In 2022, GDP grew by 62% and is expected to grow by 37% this year. It currently produces 400,000 barrels per day. Authorities and oil companies plan to increase production to 1.2 million by 2027. Oil experts have never seen such an explosion until now. The prime minister explains that with this money we want to improve education, infrastructure (currently very poor), universities and hospitals. The government plans to connect Georgetown, the capital, directly to other cities and to bring a highway to the border with Brazil. The country is filled with cranes, scaffolding and laborers working 24 hours a day.
Going from the dark night of Georgetown, where there is little light, to the halls of the Carnival Casino produces a few moments of blindness. Customers play poker, roulette and slot machines. Bling bling. Chinese dishwashers can spend $10,000 in one evening. Musa Deveci, Turkish, 47 years old, married, three children, Fenerbahce fan, with his hair tied to one side, is one of the casino managers. “It's always full, there are many foreigners, from Canada, from the United States…. There are people who come from abroad to open restaurants, shops…. You can see that Guyana is in fashion,” says Deveci. Upstairs is another manager, Metin Kaya, also Turkish. Why are the leaders here all Turkish? Where there is a casino, there is a Turk. We manage them very well,” says Kaya, who is married to a Colombian and speaks five languages. He is more skeptical about the consequences of the oil boom, he doesn't notice it much at the gaming tables, even though his boss, an Israeli tycoon with villas in the best capitals of the world, will build a hotel-casino with more than 300 rooms next year. Vision of the future.
Theodore Kahn, analyst for the Andean region at Control Risks, has seen Guyana's growth firsthand. Overall, he says, opportunities have expanded and the situation is expected to continue to improve. The state budget has multiplied. However, a bottleneck is occurring on the administrative side. Investments and the influx of foreign companies have exceeded the capabilities of public agencies, resulting in slow procedures and permits. It is not easy to obtain labor or building materials. The economy is growing beyond its capacity. “Dependence on oil, which already accounts for 70% of the economy, is increasing. This creates risks in the event of a market crash. At some point the price will collapse. The big question is how Guyana will respond,” says Kahn.
THE PROBLEM OF CORRUPTION
Another challenge is to ensure that the money that comes out of the ground is distributed and does not end up in the hands of a corrupt elite, as has happened in other countries that have had a surge in wealth. Two political movements alternate in government, one led by Afro-Guyanese, descendants of slaves, and the other by Indo-Guyanese, not without racial tensions and accusations of corruption. Currently in power is the Indo-Guyanese People's Progressive Party (PPP), which campaigned criticizing the Exxon deals but hid any controversy when it came to governing. William Scott, a clothing seller in Anna Regina, a town in the disputed Essequibo region, believes the bonanza is not felt by poor people like him. The government predicts that the average per capita income of $10,000 will rise to $30,000 in a few years. Scott, however, sees the present as a burden that will weigh just as heavily in the future: “I feel like it's going to be the same old people who benefit from this.
The streets have been filled with ExxonMobil billboards touting job creation and promising cheaper energy. The company has invested $1 billion in community programs. The advertisement shows smiling, modern people in idyllic, almost movie-like spaces. This is not yet the reality of Guyana, which faces a 48% poverty rate, poor roads, precarious access to jobs and runaway inflation. Oil paints a rosy future for a country still under construction.
(Extract from the eprcommunication press review)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/guyana-venezuela-cosa-succede/ on Sat, 16 Dec 2023 06:29:25 +0000.