Since 2021, the tiny South American country of Guyana has been home to the world’s fastest-growing economy. And that growth has been fueled by oil. Guyana has lots of it.

In fact, Guyana has one of the largest oil reserves in the world on a per capita basis. And by 2035, Guyana could become the world’s fourth-largest producer of oil.

Guyana’s newfound fortune brings with it both promise and peril. And it’s the subject of the latest episode of our The Pivot podcast.

Listen to this episode of The Pivot on Amazon Music, Apple Podcasts, Audacy, Google Podcasts, iHeart RadioPocket CastsRadioPublicSpotify, TuneIn Radio, or YouTube Music.

In this episode, I speak with Jay Mandle, professor emeritus of economics at Colgate University, who has been studying Guyana for more than half a century. We discuss the transformative potential of Guyana’s oil wealth and whether this tiny country of 900,000 people can change its destiny.

Guyana’s Climate Paradox

Guyana has no shortage of hurdles along the road ahead. They include climate change, poverty, longstanding racial divisions, and renewed threats from neighboring Venezuela.

Most of Guyana’s population lives along its coastline. They face the imminent threat of rising sea levels. And herein lies a paradox: Guyana will rely on oil production to improve the quality of life of its people, but its major settlements face an existential threat due to greenhouse emissions that raise sea temperatures and levels.

Mandle says Guyana faces an additional paradox: it must resettle much of this population due to climate change, but that could endanger its rainforests — a vital carbon sink. (Guyana, to date, has been exemplary in protecting its rainforests.)

Avoiding the Resource Curse

Guyana is becoming a major energy player at the tail end of the fossil fuel industry era. The country is indeed racing against the clock. President Irfaan Ali says, “Time is not on our side.” While it has the benefit of learning from the mistakes of others, the sense of urgency with which it feels it must proceed and the compulsions of electoral politics raises the risk that it may squander this opportunity to steer clear of the “resource curse.”

The phenomenal economic growth rates of 30-60 percent Guyana has seen in recent years have yet to meaningfully change the lives of its ordinary people. There’s a risk that, at least in the short term, the billions in oil revenue that now make up a large share of Guyana’s budget could mainly amount to a transfer of wealth to state-friendly contractors part of the country’s massive public infrastructure building spree. Inequitable spending could also compound Guyana’s ethnic and racial divisions.

Mandle makes three recommendations for Guyana to avoid the resource curse: invest in education; reserve a portion of the oil revenue for direct cash transfers to the population — something akin to Alaska Permanent Fund dividend; and create a center of experts that can advise on decisions on expenditures and investments.

Episode Description

Jay Mandle, a professor emeritus of economics at Colgate University, joins host Arif Rafiq to discuss whether Guyana, now the world’s newest petrostate and fastest-growing economy, can leverage its newfound wealth to change its destiny and avoid the “resource curse.”

Guest Bio

Dr. Jay Mandle is a professor emeritus at Colgate University. After a teaching career of over 45 years, most of it spent at Colgate, Professor Jay Mandle retired as the W. Bradford Wiley Professor of Economics, Emeritus.

Mandle earned his Ph.D. from the University of Pennsylvania and joined the Colgate faculty in 1990 as the premier holder of the W. Bradford Wiley Distinguished Chair in Economics. He arrived at Colgate after a 20-year teaching career at Temple University where he established himself as a leading scholar in the fields of African American economic history, economic development, and the effects of globalization.

Mandle also taught at the University of California at Berkeley, Swarthmore College, Bryn Mawr College, Lincoln University, and the University of the West Indies. He taught as well as a Fulbright Scholar at the University of Guyana and Nankai University China.

Arif Rafiq is the editor of Globely News. Rafiq has contributed commentary and analysis on global issues for publications such as Foreign Affairs, Foreign Policy, the New Republic, the New York Times, and POLITICO Magazine.

He has appeared on numerous broadcast outlets, including Al Jazeera English, the BBC World Service, CNN International, and National Public Radio.

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