By Kari Grenade, PhD, Caribbean Economist and Macroeconomic Adviser
GUYANA became an independent nation in 1966 after centuries of colonial domination. At the end of the colonial period, some of the important preconditions for future growth and development were in place in the country.
Guyana had the potential to transform itself from a low-income commodity exporter to a prosperous nation, given that it already possessed key development prerequisites such as its natural endowments, including vast arable lands and an abundance of natural minerals such as diamonds, gold, and bauxite.

In 1966, Guyana’s real per capita income (average income earned per person in the country adjusted for prices) was US$742.3, compared with the real per capita income of US$360.2 in Barbados for example (based on data from the World Bank). Barbados also gained independence in 1966.
With its higher per capita income and abundance of natural resources, Guyana seemed better placed to achieve accelerated growth. However, three decades after independence, Guyana was the second poorest country in CARICOM and Barbados was one of the richest, based on per capita income.
By 1999, real per capita income had plummeted to less than US$100.0 (reflecting the significant depreciation of the Guyanese dollar in the 1990s) and extreme poverty (severe deprivation of basic human needs) was estimated at 19.0%.
Several factors accounted for Guyana’s economic decline and generally poor development results in the three decades following its independence. Some of these were flawed internal economic policies, external economic shocks, natural hazards (major floods), weak institutions and governance, acute political and social divisions and unrest, and mass emigration.

They all contributed to declines in real income per capita in each year during the period 1976-1994 (based on data from the World Bank). The 1970s and 1980s were described as Guyana’s lost decades by some writers of the country’s post-independence economic history.
By the mid-2000s, Guyana’s economic performance had improved markedly as evidenced by positive trends in its Human Development Index, modest economic growth that averaged 3.5 per cent during 2006-2008, and reductions in poverty rates (extreme poverty was estimated at 18.6 per cent in 2006 by the Inter-American Development Bank).

Fast forward to 2023, Guyana’s economy tripled in size since the start of oil extraction at the end of 2019.
According to the International Monetary Fund (IMF), in 2023, Guyana’s economy was one of the fastest growing in the world, with an estimated expansion of 38.4 per cent and a real per capita income level estimated at US$20,564.6, ranking Guyana the fifth richest country in CARICOM, based on per capita income (it was the second poorest in 1999).

It is reported that Guyana has commercially recoverable petroleum reserves of over 11 billion barrels, which is projected to last about 40 years.
Guyana’s oil reserves per capita is one of the highest in the world. Oil production has been surging since 2020; in 2022, Guyana more than doubled its oil production to around 400,000 barrels per day.

The IMF projects that Guyana’s oil production will almost triple by 2028 to around one million per day, as four new approved fields are expected to come on stream by then.
Guyana’s recent economic expansion, while primarily fuelled by oil production and export, is also underpinned by its non-oil production and exports of agriculture products, bauxite, gold and diamonds, which are performing well. Guyana’s economy is projected to continue expanding in the short term; the IMF forecasts real GDP growth of 21.1 per cent and real per capita income of US$34,813.6 in 2026.

Guyana’s policymakers, key development stakeholders, and citizens at large must all be good stewards of their country’s economic improvement.
Oil revenues must be well utilised and managed, underpinned by strong governance and institutions to support people-centred and planet-friendly investments so that the country’s economic prosperity can be truly transformative, inclusive, and sustainable.