–IDB report highlights

GUYANA is rapidly emerging as a key player in the Caribbean’s economic landscape, with its booming oil and gas sector setting the pace for unprecedented growth, according to a recent report published by the Inter-American Development Bank.
The report titled ‘Caribbean Development Dynamics 2025 report,’ positions Guyana as a vital contributor to regional development while highlighting its challenges and opportunities in balancing economic gains with sustainable practices.
“The oil and gas exploration and production sector in Guyana contributed markedly to the 62 per cent real GDP growth in 2022,” the report stated.

This growth, unparalleled in the region, underscores the transformative impact of effectively harnessing our natural resources, on the country’s economy.
Guyana’s offshore oil fields, developed in collaboration with ExxonMobil and its partners, have made the country a significant energy player on the global stage.

The South American nation has emerged as one of the most successful deep-water developments globally, driven by ExxonMobil Guyana’s unprecedented operational achievements since its first oil discovery in December 2019.
The Liza Phase 1, Liza Phase 2, and Payara developments now collectively produce over 600,000 barrels of oil per day, positioning Guyana as the world’s third-largest per-capita oil producer.
With five additional projects in the pipeline, ExxonMobil’s said that its production capacity is projected to reach 1.7 million barrels per day by 2030, with gross output surpassing 1.3 million barrels per day.

This growth trajectory cements Guyana’s place among the world’s top emerging oil producers, fuelling one of the fastest-growing economies globally.
Since achieving first oil, ExxonMobil Guyana has invested over US$2 billion in goods and services from more than 1,700 local suppliers, with over 6,000 Guyanese currently employed in high-paying industry jobs.

However, while the sector’s success is undeniable, the report also cautions about the risks of dependency on commodities.
“Caribbean countries are mostly service-based and commodity-exporting economies… tourism represented on average 25.4% of the Caribbean GDP between 2015 and 2019,” it notes, highlighting the importance of diversifying the economic base to build resilience much like what Guyana is doing.

Beyond oil, Guyana’s agricultural potential offers a strategic advantage in addressing one of the Caribbean’s most pressing issues—food security.
According to the report, “80-90% of all food consumed in the region is imported,” making intra-regional food trade critical to reducing costs and dependency.

With its vast land and rich agricultural heritage, Guyana is leading efforts to reverse this trend and is actively engaged in partnerships with organisations such as the Caribbean Community (CARICOM) to develop agricultural policies that benefit the entire region.
However, despite this, challenges persist.

The report highlighted, “Agriculture… faces slow productivity growth due to high trade costs and limited capacity to meet modern food safety standards.”
To combat this, the Guyana-Barbados Food Terminal Regional Food Hub is also being developed along with various initiatives to address logistics and transportation.

Modernizing agricultural practices and investing in infrastructure could enable Guyana to bridge these gaps, ensuring its farmers are well-positioned to feed the region.
Guyana’s growth also comes with an urgent need to mitigate the impacts of climate change, an area where the Caribbean as a whole is particularly vulnerable.

“The Caribbean is among the world’s regions most prone to climate-related extreme weather events,” the report warns, noting that natural disasters cost the region an average of 2.13 per-cent of GDP annually between 1980 and 2020.
In response, Guyana is exploring innovative strategies, including renewable energy development and nature-based solutions guided by the Low Carbon Development Strategy 2030.
The report highlights the importance of these measures stating that these “nature-based solutions… offer robust natural defences against climate risks by reducing the risks of coastal flooding during storms, improving access to water, increasing available fish stock, and introducing sustainable agriculture practices.”

Noticeably, Guyana is the first to be awarded TREES credits.
This innovative system of carbon credits is designed specifically for voluntary and compliance carbon markets to successfully prevent forest loss and degradation, a process known as jurisdictional REDD+.
The Caribbean Development Dynamics 2025 report stresses the importance of balancing growth with sustainability.

For Guyana, this means harnessing its natural resource wealth while addressing vulnerabilities and investing in long-term development.
President, Dr. Irfaan Ali has said that Guyana’s intention is to leverage its oil discoveries to foster strong global leadership in these critical areas.
Of particular importance is Guyana’s commitment to forest conservation and its role in combating climate change.

In February, Parliament approved the historic $1.146 trillion budget which aims to accelerate the improvement of the lives of Guyanese.
It was the third budget that would benefit from financing from the proceeds of Guyana’s growing oil and gas sector.

The National Assembly had approved the Fiscal Enactments Bill which balances immediate withdrawals and long-term savings from the National Resource Fund (NRF) which will support public infrastructure and social services development.

By continuing to diversify its economy, modernizing agriculture, and committing to environmental stewardship, the country can continue to lead the region’s economic transformation.
“Unlocking the Caribbean’s sustainable development potential… will come with economic, social, and environmental benefits,” the report said.