Oil discoveries often spark great expectations in developing economies, but they can also lead to imprudent policies. Ghana and Guyana – two countries that struck oil in recent decades – provide cautionary tales of “petro promises” financed by central banks, with significant consequences for inflation and exchange rates. The paper “Central Bank Financing of Petro Promises: Inflation and FX Illiquidity in Ghana and Guyana” by Collin Constantine and Tarron Khemraj examines how, in both nations, political pressures following oil discoveries led to increased central bank monetization of fiscal deficits. The authors extend classic Dutch Disease theory by showing that when governments finance spending by printing money (anticipating oil revenues), the usual outcome of a resource boom – a real exchange rate appreciation – can be altered or even reversed. In Ghana’s case, monetization following the 2007 oil discovery contributed to currency depreciation and high inflation, whereas in Guyana’s fixed-rate regime, it fueled inflation and foreign exchange shortages. This review provides historical context on these practices in Ghana and Guyana, compares their experiences to those of other oil-rich developing countries, such as Nigeria and Trinidad and Tobago, analyzes the authors’ policy recommendations against current policy frameworks, and situates the paper’s arguments within the broader Dutch Disease and monetary economics literature.

Historical Context: Central Bank Monetization in Ghana and Guyana

Ghana – Oil, Politics, and Monetization

Ghana’s history illustrates how resource discoveries and political cycles can pressure central banks to finance government spending. In the early 2000s, Ghana enjoyed relative monetary stability – the central bank’s deficit financing was modest from 2000 to 2007 . The Bank of Ghana had adopted an inflation-targeting framework in 2002 under a market-determined exchange rate, aiming to contain inflation . However, this discipline began to unravel after Ghana discovered offshore oil in 2007. In the run-up to the fiercely contested 2008 elections (and subsequent ones), government spending surged on the back of “petro promises,” and the central bank became a primary source of financing . Net central bank claims on government quadrupled between 2007 and 2008 , and by August 2014 had ballooned to GH¢10.6 billion from GH¢1.4 billion in 2008 – a 640% increase in just six years . Figure 6 of a World Bank analysis vividly shows this spike in Bank of Ghana financing after 2007 .

The macroeconomic effects were immediate. Inflation, which had been brought down to single digits (around 8.5% in 2010), jumped to 18% by end-2014 . Inflation also spiked in late 2008, reflecting the monetized election-year spending. The Ghanaian cedi’s exchange rate against the dollar deteriorated rapidly as well, losing value whenever fiscal expansion overheated. Indeed, Constantine & Khemraj document that after 2009 Ghana’s real effective exchange rate actually depreciated (the cedi weakened faster than domestic prices rose) from 2009 to 2014 . This is the opposite of the usual Dutch Disease prediction of real appreciation, and it occurred because the central bank’s money-financing of deficits led to high inflation and nominal depreciation in a freely floating currency environment . In essence, Ghana “imported” inflation and exchanged a potential currency appreciation for instability – a symptom of fiscal dominance.

Political and institutional factors contributed to this dynamic. Ghana’s competitive two-party system incentivized large campaign promises funded by anticipated oil wealth. The discovery of oil intensified public expectations for infrastructure and social spending, and politicians were eager to deliver – or at least signal – these benefits quickly. With limited capacity to rapidly ramp up non-oil revenues, the government increasingly leaned on the central bank. Ghana’s laws did include limits on central bank deficit financing (reportedly capped at 5% of previous year’s revenue), but these were de facto breached under clauses allowing extraordinary circumstances . For example, in 2022 Ghana’s central bank again financed a huge portion of the budget (nearly GH¢38 billion) amid a fiscal crisis, far above legal limits – an action the Bank defended as necessary under emergency provisions . The result was a surge of inflation to over 50% and a collapse of the cedi in 2022, forcing Ghana into a debt default and IMF bailout . Ghana’s experience thus shows a pattern since the oil discovery: election-driven deficits monetized by the central bank led to recurrent bouts of high inflation and currency depreciation, undermining the very oil windfall’s benefits.

Guyana – From Fiscal Restraint to Petro-Fueled Overdrafts

Guyana’s path has parallels to Ghana’s, albeit with a different exchange regime and political trigger. Guyana historically had a tightly managed exchange rate (the Guyanese dollar has been held around G$208 per US$1 for years) and moderate inflation, thanks in part to strict IMF programs in the 1990s that curbed monetary financing. By the 2000s, Guyana’s public finances were relatively disciplined – indeed, its debt-to-GDP ratio fell sharply from over 100% in the early 2000s to around 60% by 2006 after debt relief . However, political developments in the 2010s set the stage for increased central bank financing. In 2011, Guyana’s general election produced a minority government (the incumbent party won the presidency but did not control Parliament) . Unable to get parliamentary approval to raise the debt ceiling, the government turned to the central bank for financing – initially by drawing down its deposits and later by running an overdraft at the Bank of Guyana . This was effectively deficit monetization through the backdoor. Constantine & Khemraj note that Guyana’s central government overdrafts at the central bank began around 2015 (just as oil was discovered) and persisted through 2021 . In other words, Guyana’s monetization commenced even before oil production, spurred by political gridlock, and then accelerated once the 2015 oil discovery raised expectations of future revenue .

Once ExxonMobil’s massive oil finds were confirmed in 2015, Guyana’s politics and fiscal stance shifted further. A new government in 2015 likewise did not immediately restore fiscal orthodoxy – it maintained high spending and, tellingly, failed to repeal the debt ceiling or significantly curtail central bank financing . A period of political uncertainty in 2018–2020 (including a no-confidence vote and delayed elections) saw the government continue to rely on the central bank. By 2020, when a new administration took office, the overdraft had grown enormous – about G$135 billion (over 12% of Gross National Income) owed by the government to the Bank of Guyana . Rather than repay this with accumulated oil funds, the authorities in 2021 converted it into a formal security (the central bank purchased a government debenture to clear the overdraft) . This accounting move briefly reduced measured monetization in 2021, but by 2022 the government resumed borrowing directly from the central bank (now via purchases of new government bonds) .

The macroeconomic impact in Guyana has been somewhat masked by the sheer scale of the oil boom since production began in late 2019. Oil revenues allowed the government to run a large overall fiscal deficit while still accumulating foreign exchange in a Natural Resource Fund (so the non-oil deficit has exploded to nearly 29% of non-oil GDP as of 2023 ). Inflation in Guyana has risen, though not to Ghanaian levels – consumer prices rose ~7% in 2022 and ~3% in 2023, totaling about 146% cumulative inflation from 2000 to 2023 . Notably, with the exchange rate fixed, even moderate inflation means a real appreciation: Constantine & Khemraj report that Guyana’s real effective exchange rate appreciated about 13.5% from 2004 to 2010, and continued a gradual upward trend thereafter . This real appreciation has been driven in part by excess liquidity from the central bank. The authors point out that Guyana’s money supply (monetary base) grew substantially once oil was discovered, even as the money multiplier fell, indicating the central bank was injecting cash faster than the economy’s financial deepening . With the exchange rate held stable, those monetary injections translated into higher domestic prices and import demand rather than nominal depreciation. Indeed, Guyana has experienced periodic foreign exchange shortages – banks and businesses often report difficulty obtaining US dollars at the official rate, especially before the oil boom fully ramped up. This corresponds to the authors’ finding that in a fixed-rate system like Guyana’s, deficit monetization “causes a foreign exchange shortage” . Essentially, if the central bank creates local money while trying to hold the exchange rate fixed, the excess money fuels import demand that drains foreign reserves unless offset by actual FX inflows. In pre-oil years, Guyana’s central bank had limited reserves, so monetization led to rationing of hard currency. Even now, with large oil inflows, the central bank faces a choice: either allow the Guyanese dollar to appreciate or partially sterilize the oil earnings (withhold some FX) – the latter policy can re-create FX scarcity in domestic markets even amid plenty. Guyana so far has chosen to keep the nominal exchange rate roughly unchanged, an approach similar to Trinidad & Tobago’s and (until recently) Nigeria’s, as discussed below.

In summary, Ghana and Guyana both illustrate how political pressures – competitive elections, high public expectations, and weak fiscal controls – led to central bank financing of deficits (“monetization”) after oil discoveries . Ghana did so under a floating exchange rate, resulting in high inflation and a depreciating currency. Guyana did so under a pegged or managed rate, leading to inflation, real appreciation, and periodic FX liquidity crunches. These histories underscore that the mere discovery of resource wealth can erode discipline (“pre-source curse”), especially when central bank independence is fragile.

Comparative Experiences: Ghana and Guyana vs. Nigeria and Trinidad & Tobago

How do Ghana’s and Guyana’s experiences compare with other resource-rich developing countries? Nigeria and Trinidad & Tobago offer instructive contrasts. Nigeria is a large African oil exporter with a long history of oil booms and busts, while Trinidad & Tobago (T&T) is a small Caribbean nation that has produced oil and gas for decades. Both faced the challenge of managing oil revenues and maintaining macroeconomic stability, but their policy choices and outcomes have differed – and provide useful context for Ghana and Guyana.

Oil Revenue Management and Fiscal Discipline

Revenue Funds and Saving: One key difference lies in how excess oil revenues are managed. Trinidad & Tobago established a Heritage and Stabilization Fund (HSF) in 2007 to save windfall revenues for stabilization and future generations . This sovereign wealth fund grew to about 20% of GDP in assets by 2023 , acting as a buffer during downturns. For example, when the pandemic and an oil price crash hit in 2020, T&T financed its 11% of GDP fiscal deficit by withdrawing from the HSF rather than printing money . In contrast, Nigeria’s attempts at oil savings have been much less effective. Nigeria set up an Excess Crude Account in the 2000s and later a sovereign wealth fund, but political pressures led to frequent drawdowns. Savings were often minimal or quickly spent when oil prices fell. Ghana falls somewhere in between – it created the Ghana Stabilisation Fund and Ghana Heritage Fund under its 2011 Petroleum Revenue Management Act. These funds accumulated some savings from the 2010s oil revenues, but Ghana drew heavily on the stabilization fund to plug budget gaps (and even the “heritage” fund was tapped during the 2020 crisis), leaving little cushion. Guyana, learning from others, established a Natural Resource Fund (NRF) in 2019 (operationalized in 2020) to handle its oil receipts. The NRF has a rule-based withdrawal formula: for example, of about US$1.6 billion received into the fund in 2023, the formula allowed $1.16 billion to be used in the 2024 budget (the rest remains invested) . By end-2023 the NRF still held roughly US$2 billion in savings . This approach is commendable on paper – Guyana is at least saving a portion of revenues – but the withdrawals are still very large relative to the non-oil economy, fueling a rapid increase in spending. Nigeria and Ghana, lacking strict rules, tended to spend all available revenue and more, often assuming high oil prices indefinitely. Guyana and T&T have formal mechanisms to save some of the windfall; the challenge is whether those mechanisms are politically protected in the long run.

Fiscal Deficits and Central Bank Financing: Another comparison is fiscal discipline and the role of central banks. Nigeria historically ran pro-cyclical fiscal policy – saving little during oil booms and running deficits when oil prices dropped. A critical issue was the Nigerian central bank’s practice of directly financing fiscal deficits through a “ways and means” facility. In the 2010s, the Central Bank of Nigeria (CBN) lent massively to the government – by 2022, CBN’s claims on the government were estimated at over 40% of the previous year’s revenues, far above legal limits, contributing to macro instability. This is very similar to Ghana’s experience of central bank financing post-2010. The encouraging news is that Nigeria’s new reformist government in 2023 ceased central bank financing of the fiscal deficit as part of sweeping changes . The IMF noted approvingly in April 2025 that Nigeria had ended CBN deficit financing, alongside removing fuel subsidies and improving the FX market . This policy U-turn is aimed at restoring monetary stability in Nigeria – a recognition that years of monetized deficits had stoked inflation and undermined the naira. Ghana, under its 2023 IMF program, similarly committed to “zero central bank financing of the fiscal deficit” . In both countries, these reforms came after severe crises (Ghana’s debt default, Nigeria’s inflation surge and currency collapse in 2022–23). They underscore the importance of central bank independence: neither Ghana’s nor Nigeria’s central bank had been sufficiently insulated from fiscal pressures. It took external pressure (and new political leadership in Nigeria’s case) to enforce discipline.

Trinidad & Tobago, on the other hand, offers a contrast. The Central Bank of T&T has generally not been a significant direct financier of government deficits in recent decades. Instead of printing money, the government of T&T has financed deficits by using saved funds and borrowing mostly from capital markets. During the 2020 downturn, T&T withdrew from the HSF and also issued debt, with the central bank largely playing a conventional role of bond market intermediary and liquidity manager . As a result, Trinidad’s inflation remained very low (under 1% in 2020) despite a double-digit deficit, because it was financed without large monetary expansion . T&T’s public debt rose to ~89% of GDP by 2020, but its debt is mostly in long-term instruments rather than central bank overdrafts . Guyana’s current trajectory is mixed: it is financing much of its ambitious development spending with actual oil revenues (withdrawn from the NRF) and some external loans, but as noted, it also relied on central bank overdrafts especially in the pre-production years . Importantly, Guyana’s overall fiscal deficit has been kept moderate relative to GDP (around 7% of total GDP in 2024) thanks to oil income . However, relative to the non-oil economy the deficit is extremely high (over 20% of non-oil GDP) , an imbalance masked by oil. The IMF has recommended that Guyana gradually trim its non-oil fiscal deficit over time to a more sustainable path (essentially to avoid overspending the oil revenues) . In practice, political pressures in Guyana – a country with pressing development needs and competitive politics – push toward maximizing spending now, similar to Ghana a decade earlier.

Inflation and Exchange Rate Outcomes

Inflation Control: The experiences of Ghana and Nigeria versus Trinidad & Tobago starkly illustrate how policy choices affect inflation in resource-rich economies. Ghana and Nigeria have both suffered recurrent bouts of high inflation, often in the double digits or higher. Ghana’s inflation was over 50% in 2022 amid its crisis , and even after stabilizing, it remains above 20% in 2025 . Nigeria’s inflation likewise hit around 23% in 2023 (and food inflation even higher) due to a combination of money growth and a large currency devaluation . By contrast, Trinidad & Tobago has historically kept inflation low, typically mid-single digits or less (near 0.6% in 2020 as noted) . T&T’s strategy of sterilizing or saving a portion of revenues and avoiding monetary financing helped prevent the excessive money supply growth that plagued Ghana and Nigeria. Guyana falls in between: its inflation in recent years has been moderate (3–7%), but there are warning signs. The authors note that Guyana’s CPI rose 146% cumulatively from 2000 to 2023, while the exchange rate barely moved (only 17% depreciation in that period) . This implies a substantial real appreciation and hints that inflation could rise further if spending continues to outpace the real capacity of the economy. Indeed, the IMF warns of overheating risks in Guyana – if the economy grows too fast and policies aren’t tightened, inflation could accelerate and harm the non-oil sectors .

Exchange Rate Regimes and FX Liquidity: Another important contrast is how countries manage their exchange rates in the context of oil booms or busts. Nigeria has long operated a managed exchange rate with capital controls, often leading to an overvalued official rate and the buildup of FX backlogs. During high oil prices, Nigeria would peg or only slowly adjust the naira, which kept inflation somewhat in check but also made non-oil exports uncompetitive (a classic Dutch Disease symptom). When oil earnings dropped, the central bank often ran down reserves trying to defend the peg until it inevitably devalued in a sharp step, causing a spike in inflation. This stop-go approach contributed to Nigeria’s notorious FX shortages – importers frequently could not get dollars at the official rate, fueling a parallel market. In fact, Constantine & Khemraj’s description of Guyana’s managed rate and FX shortages could well describe Nigeria: the combination of deficit monetization and a quasi-fixed rate “creates foreign exchange shortages” . Recently, Nigeria moved toward exchange rate liberalization (allowing the naira to depreciate significantly in 2023 to unify multiple rates), which eased some shortages but sent inflation higher in the short run .

Ghana has taken a different approach: a floating exchange rate. The cedi’s value is determined by market forces, with the central bank intervening only occasionally. The float meant that when Ghana monetized its deficits or faced external shocks, the currency could depreciate continuously rather than hit a wall of shortage. The upside is that Ghana did not typically have an official-versus-parallel rate problem – the price of dollars simply rose. The downside, however, is evident: the cedi lost a lot of value (e.g. a sharp depreciation in 2014–2015, and again in 2022), which passed through to higher import prices and inflation . Interestingly, Ghana’s real exchange rate (adjusted for inflation) depreciated in the early oil boom years . This suggests that the cedi fell faster than domestic prices rose, temporarily making Ghana’s non-oil sectors more competitive externally – a very different outcome than the typical Dutch Disease appreciation. However, that competitive gain came at the cost of macroeconomic instability and was not sustainable; Ghana’s continual inflation has since eroded many of the benefits.

Trinidad & Tobago maintains an “implicit peg” to the US dollar, keeping the T&T dollar around TT$6.7–6.8 per US$1 . The central bank supplies FX to the market to uphold this rate. This has delivered long-term currency stability – T&T’s nominal exchange rate has moved only marginally in decades – helping anchor inflation expectations. But it too has a trade-off: when oil/gas revenues dip, the fixed rate becomes hard to sustain and the central bank can run down reserves. In 2020, for instance, T&T faced “heightened currency pressures” as energy exports fell, and FX supply was constrained such that some businesses had delays accessing hard currency . The central bank held the line on the peg (reserves remained ample at 8 months of import cover ), and shortages were modest compared to Nigeria’s experiences. Still, the IMF has encouraged T&T to consider greater exchange rate flexibility over time to alleviate persistent FX shortages . The lesson here is that even with sound fiscal policy, a fixed exchange rate in a resource economy can lead to imbalances if the currency is misaligned.

Guyana currently mirrors some of T&T’s and Nigeria’s traits in its exchange regime. The Guyanese dollar is effectively pegged (around G$208) and the central bank tightly manages the market. Before oil, this often meant rationing FX in a chronically dollar-scarce economy. Now with oil, Guyana has a massive inflow of foreign currency – its current account surplus was 25% of GDP in 2024 – yet the central bank still intervenes to smooth any upward pressure on the exchange rate. As a result, the Guyanese dollar has not meaningfully appreciated despite the oil boom. That choice protects sectors like agriculture from a sudden loss of competitiveness, but it also means domestic liquidity has expanded (from spending oil funds in local currency) without an offsetting currency adjustment. The outcome, as Constantine & Khemraj warn, can be higher inflation and an appreciated real exchange rate that squeezes non-oil tradable sectors . In effect, Guyana could import a Trinidad-style Dutch Disease: stable nominal exchange rate, low measured inflation initially, but gradually rising prices and costs in the economy that undermine other exports and create dependency on the oil sector.

Ghana and Nigeria demonstrate the perils of loose monetary/fiscal policy in oil booms – they experienced high inflation and/or currency collapse. Trinidad & Tobago demonstrates the value of saving windfalls and maintaining a stable currency – achieving low inflation – but even T&T must manage occasional FX shortages due to its peg. Guyana is at a crossroads, trying to spend on development without stoking runaway inflation: its early signs of real appreciation and central bank financing indicate a need for caution. The contrasts suggest that central bank independence and prudent fiscal rules are as important as the existence of a sovereign wealth fund in determining whether oil wealth leads to stability or volatility.

Policy Recommendations vs. Current Frameworks in Ghana and Guyana

Constantine and Khemraj conclude that better management of resource wealth requires political commitment to central bank discipline . They argue that a sovereign wealth fund alone is not a silver bullet if politicians can bypass it by pressuring central banks to finance deficits . Key policy recommendations from the paper include:

Limit central bank financing of budgets by law – essentially a fiscal rule against monetization. The authors suggest the “most critical element of an effective fiscal rule is to limit the growth of the non-resource fiscal deficit to the size of foreign borrowing and withdrawals from a wealth fund”, thereby explicitly preventing central bank money-printing to fund the gap .
Strengthen central bank independence through legislation that protects the bank from political pressure . This might involve stricter limits (with no easy “emergency” escape clause) on central bank lending to the government, longer tenure for governors, and clear price-stability mandates.
Political reforms to instill moderation: The authors even allude to deeper constitutional or electoral reforms to curb the winner-takes-all, high-pressure environment that leads governments to overspend after oil discoveries . In countries like Ghana and Guyana, where elections are zero-sum and often along ethnic lines, the temptation to use public spending (financed by any means available) for short-term gain is high. The paper implies that more consensus-based political systems or stronger checks and balances on executive power could help tame this impulse .

How do these recommendations stack up against what Ghana and Guyana are actually doing?

Ghana’s Current Framework

After its recent crisis, Ghana is implementing some of these recommendations, at least temporarily. Under the IMF-supported program (2023–2026), Ghana’s government has agreed to zero central bank financing of deficits . The Bank of Ghana is now required to strictly adhere to the limit (and indeed, through 2023 the central bank reportedly did not extend new financing to the government). This external enforcement is effectively a fiscal rule in practice – if followed, it forces the government to fund any deficit via real revenues or external borrowing, not the printing press. In addition, Ghana passed a Fiscal Responsibility Act in 2018 (setting a deficit ceiling of 5% of GDP) and though it was suspended during COVID, there are efforts to reinstate such rules. The challenge will be credibility: Ghana had rules on paper before, but broke them under pressure. True central bank independence in Ghana remains a work in progress. The recent change of central bank governor (in 2023) might strengthen the perception of a fresh start. The new Governor, in early 2025, emphasized that inflation is still “uncomfortably high” and that balanced monetary policy is needed to durably lower it . This rhetoric aligns with an independent stance. Yet it remains to be seen whether, in the next election cycle, political forces will lean on the Bank of Ghana once again. Real institutional independence often requires years of demonstrated restraint – something Ghana’s central bank lost when it monetized nearly 40% of the government’s 2022 deficit.

On the fiscal side, Ghana does have a Petroleum Revenue Management framework that set up the Ghana Stabilisation Fund and Heritage Fund. In theory, this framework limits how much oil revenue can be spent in the budget and saves the rest. In practice, however, Ghana has consistently spent the maximum allowed (and then some, by using oil as collateral for loans or drawing down the stabilization fund in bad times). The authors’ point that a sovereign wealth fund is “insufficient” by itself is vividly illustrated by Ghana: despite having those funds, Ghana still fell into an inflation and debt crisis . The missing component was adherence to rules – something the IMF program is now trying to enforce. Ghana’s experience underscores the authors’ argument that political commitment is key. When political will existed (in the early 2000s under debt relief programs), Ghana exercised restraint and inflation dropped; when oil wealth arrived and politics heated up, rules were bent. Going forward, Ghana’s framework will need not just laws but enforcement. This could include empowering Parliament or an independent fiscal council to monitor central bank financing and compliance with deficit rules. Without such oversight, the risk is that once the IMF program ends, old habits return. In short, Ghana’s current policies are in line with the paper’s recommendations (no monetization, tighter fiscal belts), but these have essentially been externally imposed. The true test will be sustaining them domestically – a challenge Ghana’s own history and the authors’ political economy analysis suggest is difficult without deeper reform.

Guyana’s Current Framework

Guyana, as an oil newcomer with surging revenues, has an opportunity to implement lessons from Ghana and others before a crisis hits. To its credit, Guyana’s Natural Resource Fund and fiscal planning are steps in the right direction. The NRF withdrawal rules act as a de facto fiscal rule on how much of the oil money can be used annually. Moreover, Guyana’s public debt is relatively low (around 24% of GDP in 2023, excluding the new oil wealth) and the government so far has avoided reckless external borrowing. However, when we focus on the non-oil fiscal deficit – which is what the authors emphasize – Guyana is currently violating the spirit of what Constantine & Khemraj recommend. The non-oil deficit has widened to nearly 20–30% of non-oil GDP in recent years , far above what sustainable non-inflationary financing would allow. Essentially, Guyana is spending in advance of its future oil earnings, just as Ghana did. The government defends this by pointing to huge developmental needs and the fact that oil production is scaling up dramatically (Guyana’s oil output is set to triple in the next few years, which will bring in even more revenue) . The risk, however, is that if oil prices dip or planned projects face delays, a large fiscal overhang would emerge – and the temptation would be to cover it by central bank financing or rapid drawdown of the NRF (jeopardizing sustainability).

Crucially, Guyana has not yet enacted a formal fiscal rule tying the non-oil deficit to the NRF or foreign financing. Experts have suggested such a rule; for instance, the IMF staff has recommended Guyana target a non-oil primary deficit path that converges to the level of sustainable oil transfers by 2030 . Others have explicitly echoed the paper’s point: Guyana should legally limit its non-oil deficit to what can be financed by the NRF and other non-inflationary sources . As of now (2025), this is not in place. The government does produce a Medium-Term Fiscal Framework in the annual budget, which shows projections of declining non-oil deficits in the future, but those are not binding. Politically, Guyana’s situation – a highly centralized executive government with a comfortable parliamentary majority – means there are few checks on fiscal decisions. The central bank (Bank of Guyana) is not independent by global standards; its governor traditionally changes with administrations and the bank has routinely accommodated government financing requests (e.g., the overdraft). If anything, the current abundance of FX from oil might reduce overt central bank financing (since oil revenue converted to local currency provides liquidity), but the effect is similar: the Bank of Guyana could end up printing local dollars against expected oil dollars that haven’t yet arrived in the NRF. The authors’ findings already noted that Guyana’s monetary base shot up once oil was discovered .

On a positive note, Guyana’s inflation has been contained so far, and the government has taken some prudent steps like not removing all fuel taxes when oil prices spiked (to avoid price shocks) and planning to reintroduce a medium-term fiscal savings rule. There is also discussion of strengthening the central bank law. If Guyana enacts a new central bank act that explicitly prohibits monetary financing of deficits (except perhaps in narrowly defined emergencies) and grants the Bank of Guyana greater independence, it would align well with Constantine & Khemraj’s prescriptions. As it stands, however, Guyana’s framework falls short of the paper’s recommendations: the political leadership is very much in control of fiscal purse strings and, by extension, the central bank’s balance sheet. The notion of “political moderation” may be hard to realize when an enormous oil boom is under way and elections loom (Guyana’s next general election is due by 2025, and historically public spending ramps up before votes). The authors’ call for even constitutional reforms resonates here – Guyana’s political system, a winner-take-all model with ethnic party competition, tends to reward maximizing short-term gains. That environment is a risk to long-term stability, unless anchored by strong institutions.

In summary, Ghana’s current policy framework is temporarily aligned with the recommended discipline (under IMF auspices), whereas Guyana’s framework is nascent and permissive, relying on the government’s self-restraint which may prove tenuous. Both countries would benefit from formalizing rules that commit to the principles of no monetization and saving for the future. The paper’s policy message is essentially that without such commitments, oil wealth can destabilize economies – a warning both governments would do well to heed.

Linking to Broader Literature: Dutch Disease, Resource Curse, and Monetary Economics

Constantine and Khemraj’s contribution can be viewed in light of two strands of economic literature: the Dutch Disease/resource curse literature and the monetary economics literature on fiscal dominance and inflation. Their paper builds on these and departs from them in important ways:

Dutch Disease and the Resource Curse: Classic Dutch Disease models (e.g., Corden and Neary 1982) focus on real exchange rate appreciation and deindustrialization when a country gets an influx of foreign exchange from natural resources. The assumption is often that resource revenue is spent into the economy, raising demand for non-tradable goods and thus their prices, leading to a stronger real exchange rate that hurts tradable sectors. This framework largely abstracts from how the spending is financed – it assumes the revenue exists. The resource curse literature (e.g., Sachs and Warner, 1995; Ross, 1999) adds that institutional weaknesses and political incentives often cause resource booms to be mismanaged, leading to worse outcomes like corruption, conflict, or overspending. The paper at hand provides a nuanced twist: it shows that if governments anticipate resource revenues and finance spending by creating money (ahead of or in excess of actual resource inflows), the straightforward Dutch Disease outcome can change. Specifically, they find Ghana had a real depreciation because monetary expansion led to such a sharp nominal depreciation of the currency that it outpaced domestic inflation . This is a departure from the orthodox view and highlights an omitted variable in many empirical studies of Dutch Disease – the behavior of the central bank. The authors suggest future studies on resource booms should control for central bank financing and money supply effects . In essence, they are inserting monetary economics into a traditionally real-sector discussion.

The paper also resonates with what might be called the “presource curse” – a term used by some economists to describe how mere discoveries (before revenues flow) can distort policymaking. Ghana in 2007–2010 and Guyana in 2015–2019 exemplify this presource curse: unsustainable promises and fiscal expansion before oil money arrived. There are studies (Cust et al. 2017, for example) documenting how countries that discover oil often increase borrowing and spending in anticipation. Constantine & Khemraj cite evidence that oil discoveries “increase unsound political promises and commitments”, leading to pressure for quick financing of government spending – namely via central banks . This aligns with the political economy literature that emphasizes expectations and institutions (e.g., Mehlum, Moene and Torvik 2006, who argue the resource curse strikes worse under weak institutions). The authors specifically reference Persson and Tabellini’s work (2000) regarding political incentives – in Guyana’s case, they note how incumbents tried to cling to power in 2020, consistent with resource-fueled patronage incentives . By calling for constitutional reforms, they echo the broader literature that lasting resource management improvements often require changing the “rules of the game” (Karl 1997’s thesis, for example, that oil states need stronger governance frameworks).

Monetary Economics and Fiscal Dominance: From a monetary perspective, the paper builds upon classic analyses, such as Sargent and Wallace’s “Unpleasant Monetarist Arithmetic” (1981), which demonstrated that if fiscal policy is not disciplined, monetary policy will eventually be compelled to finance deficits, ultimately leading to inflation. What Constantine & Khemraj observe in Ghana and Guyana is a textbook case of fiscal dominance – fiscal needs dictating monetary expansion. Their innovation is contextualizing this in an oil economy. They highlight, consistent with IMF research on aid inflows, that if foreign exchange from resource income is not fully “absorbed” (i.e., converted to imports), and the central bank instead accumulates reserves while financing government spending in local currency, the result is an “excess supply of money” that causes either inflation or a distorted exchange rate . They cite studies of aid surges in Africa (Hussain 2007; Aiyar 2007) that found similar outcomes: central banks monetized aid by accumulating the foreign funds and printing the local counterpart, leading to inflation and real exchange rate effects that sterilization efforts could not fully contain . In fact, the epigraph of their paper quotes Isard et al. (2006) to illustrate how spending unbacked by foreign exchange leads to inflation with no competitive gains . Their theoretical model and diagrams (Figures 1 and 2 in the paper) integrate these monetary insights with the Dutch Disease framework. Essentially, they extend the standard aggregate demand–supply model to include a money market alongside the goods market in a small open economy with a booming resource sector. This helps explain why Ghana’s outcome diverged (because money supply was allowed to explode, shifting the AD curve dramatically and depreciating the currency) and why Guyana’s fixed rate created a different constraint (excess money showed up as balance of payments pressure instead).

In engaging the academic literature, the authors both confirm and challenge prior findings. They confirm the importance of absorption versus spending of windfalls, a theme from IMF studies (e.g., the spend-and-save or spend-and-absorb framework). They also reinforce the idea that central bank independence matters for price stability in resource-rich settings – a notion supported by empirical research (e.g., countries with independent central banks generally have lower inflation, all else equal). However, they challenge the notion that having a sovereign wealth fund or an inflation-targeting regime alone is sufficient. Ghana had both an SWF and inflation targeting, yet still succumbed to high inflation once those policies were overridden by political pressures . This underscores research arguing that institutional commitments must be credible – a point noted by scholars like North and Weingast (1989) in other contexts. Here, credible commitment means not just passing a law, but also aligning incentives so that it is followed.

Ultimately, the authors’ work contributes to the broader debate on managing resource booms. There is a spectrum of views on how much to save vs. spend resource revenues. One view, based on the permanent income hypothesis, suggests saving a significant portion to avoid overheating the economy. Another view argues for spending on development now, given pressing needs (the Friedmanian “to hell with the future, let’s get rich now” critique of excess saving). Ghana initially opted to spend a significant portion of its oil revenue on infrastructure and social programs, as Guyana has. The paper by Constantine & Khemraj doesn’t deny the need for development spending, but it implicitly warns that how you finance that spending is crucial. Financing it by non-inflationary means (using actual revenue or genuine savings) is fundamentally different from financing by printing money in advance of revenue. In that sense, their argument is a caution to policymakers: don’t count your barrels before they’re pumped. This aligns with historical anecdotes – many countries, from Venezuela in the 1970s to Mexico in 1982, over-borrowed or overprinted on the back of high oil prospects only to crash when reality undercut optimism.

“Central Bank Financing of Petro Promises” enriches the literature by bridging the gap between Dutch Disease theory and real-world monetary policy practice. It shows that sustaining low inflation and a stable currency in a resource boom is not automatic – it requires deliberate institutional safeguards. Ghana’s and Guyana’s stories, as analyzed in the paper, confirm that without such safeguards, resource riches can indeed become a curse of instability. The comparative evidence from Nigeria and Trinidad & Tobago further demonstrates that countries that enforce rules (or have the discipline to save) tend to avoid the worst outcomes, whereas those that monetize freely suffer inflation or currency crises. For a well-informed policy audience in Guyana and similar countries, the takeaway is clear: guarding against Dutch Disease is not just about managing the exchange rate or setting up an oil fund – it is also about empowering your central bank to say “no” to the Treasury when necessary. Economic history and the academic literature both support this, and Constantine and Khemraj drive the point home with the case studies of Ghana and Guyana. The hope is that policymakers heed these lessons to ensure oil wealth translates into sustained prosperity, not just petro promises financed by the printing press.

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Sources:

Constantine, C., & Khemraj, T. (2024). “Political Pressure and Central Bank Monetization: ‘Dutch Disease’ and Monetary Developments in Ghana & Guyana.” (Preprint) .
World Bank (2017). “Oil Discovery and Macroeconomic Management: Ghana’s Recent Experience.” Policy Research Working Paper 8209 .
Bank of Guyana Annual Reports and IMF Article IV Reports (various years) .
IMF (2025). Press Release: IMF Staff Completes 2025 Article IV Mission to Nigeria. .
IMF (2024). Article IV Consultation – Trinidad and Tobago. .
Reuters (2025). “Ghana inflation ‘uncomfortably high’, new central bank governor says.” .
OilNOW Guyana (2024). “Guyana withdrew US$1 billion from oil fund for 2023.” .
Economic Commission for LAC (2021). “Trinidad & Tobago Economic Survey.” .
Global Anticorruption Blog (2023). “Protecting Guyana from the Natural Resource Curse.” .
Aiyar, M. (2007). “Managing Economic Volatility in Aid-Dependent Countries.” (IMF) .

April 20, 2025 0 comments

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Turning Guyana’s Boom into Lasting Prosperity: People, Innovation and the Diaspora

by guyanabusinessjournal April 19, 2025

written by guyanabusinessjournal

Turning Guyana’s Boom into Lasting Prosperity: People, Innovation and the Diaspora

Terrence Richard Blackman, Ph.D. April 7, 2025

📢 Support the Guyana Business Journal and Magazine.

Introduction

Guyana stands at the precipice of an unprecedented economic boom fueled by recent oil discoveries. Once considered a relatively quiet economy, it has rapidly transformed into the world’s fastest-growing economy over the last two years. In 2022, Guyana’s GDP surged by an astonishing 62–63%, followed by a further 38% growth in 2023. This meteoric rise is a testament to the nation’s newfound oil wealth. Still, it also raises a critical question: How do we turn this short-term boom into lasting prosperity that benefits all Guyanese? The answer lies not only in barrels of oil but in our people, our capacity for innovation, and the power of the diaspora to bridge Guyana’s present with a sustainable future.

Guyana’s Economic Boom and Its Discontents

The oil windfall has unquestionably reshaped Guyana’s economic landscape. Since the discovery of the massive offshore Liza-1 well in 2015 and the commencement of oil production in 2019, national output has surged significantly. Major international partners have recognized the Stabroek Block’s potential, thereby elevating Guyana’s profile on the world stage. Projections suggest that by 2028, Guyana’s GDP could grow by an additional 115%, outpacing that of every other country.

Yet, amid the celebration of double-digit GDP growth, there is a sober recognition that economic growth does not automatically equal widespread prosperity. President Dr. Mohamed Irfaan Ali himself has warned of the need to avoid the pitfalls of the so-called “Dutch disease” – the pattern where a commodity boom stifles other sectors and fails to improve everyday life. Indeed, despite swelling national revenues, many ordinary Guyanese still face high costs of living, limited job opportunities, and inequality in the distribution of wealth. This paradox is evident in the nation’s continued reliance on remittances from citizens abroad, even as oil dollars flow onshore. In short, the oil boom’s benefits must be deliberately steered toward inclusive development, or else the moment may pass without fundamentally improving the lives of the Guyanese people.

The Diaspora Dividend: Remittances and Beyond

If Guyana’s oil is powering its economic rise, then the Guyanese diaspora has long been the lifeline sustaining its people. The contributions of overseas Guyanese – in finances, skills, and support – are both extraordinary and indispensable. In 2019, remittances from the diaspora amounted to about US $380 million; by 2023, this had swelled to US $549–550 million, a 44% increase in just four years (Village Voice, 2024). To put this figure in perspective, remittances in 2023 were roughly on par with Guyana’s entire education budget and exceeded many other sources of foreign exchange. These funds have been a critical lifeline for families – easing poverty, funding education, supporting small businesses, and generally keeping the economy afloat at the grassroots level. As

one op-ed starkly observed, the rising tide of remittances in the oil era reflects “not prosperity but desperation,” highlighting how many Guyanese households still lean on overseas relatives to make ends meet.

President Ali has openly acknowledged this reality, expressing profound gratitude for the diaspora’s role in “breaking the barriers of extreme poverty” during tough times (Kaieteur News, 2021). He noted that without the steady flow of funds and goodwill from abroad, countless Guyanese would have struggled to overcome economic hardships. In essence, the diaspora has been a silent partner in Guyana’s development, long before the first barrel of oil was ever lifted. Any vision of lasting prosperity, therefore, must treat the diaspora not as bystanders, but as central stakeholders in the nation’s future.

Beyond sending money, the Guyanese diaspora represents an untapped reservoir of human capital and innovation. It is estimated that nearly 40% of all Guyanese citizens reside outside the country, including a disproportionately large proportion of its skilled talent (Kaieteur News, 2023b). In fact, according to the Migration Policy Institute, approximately 90% of Guyanese with tertiary (university-level) education, and about 40% of those with secondary education, emigrated from Guyana between 1965 and 2000 (Kaieteur News, 2023b). This staggering statistic is often cited as evidence of “brain drain,” the loss of skilled workers to foreign shores. However, it also illuminates a tremendous opportunity: these expatriate professionals form a global network of expertise and experience in fields ranging from engineering and healthcare to finance, education, and technology. They are professors and scientists, entrepreneurs and executives, artists and public servants, all carrying a piece of Guyana with them. As one commentator put it, this diaspora is a “wellspring of talent and resources” – a living extension of the nation whose potential contributions far exceed the value of the remittances they send (Kaieteur News, 2023b). The challenge and the promise for Guyana is to harness this diaspora dividend in a structured, strategic way, converting brain drain into “brain gain” or even “brain circulation” (Gaillard & Gaillard, 1997). In other words, by engaging our overseas compatriots to contribute their skills (whether by returning home or collaborating from afar), we can leverage knowledge transfer, investment, and networks to accelerate development at home (Kaieteur News, 2023b). Countries like China, India, and Ireland have demonstrated how diaspora engagement can drive technology transfer, industry growth, and even national branding – lessons that Guyana can apply to its own unique context.

President Ali’s Call: One Guyana, Here and Abroad

Recognizing the power of the diaspora, the Guyanese government, under President Irfaan Ali, has made diaspora engagement a key pillar of its development agenda. “Diaspora support is key in building a new Guyana,” President Ali declared in 2021, underscoring that his government is “vigorously pursuing policies and plans to ensure [overseas Guyanese] are integrally involved in the process” (Kaieteur News, 2021). From his first days in office, Dr. Ali’s message to Guyanese abroad has been one of partnership and unity. He often praises the diaspora’s contributions to upholding democracy, for example, the vocal advocacy by overseas Guyanese during the tumultuous 2020 elections, and acknowledges their steady contributions to social progress through remittances and philanthropy. In Ali’s vision, the diaspora’s “influence, finances and expertise” must join hands with domestic efforts to create what he calls “One Guyana”, a nation unified in purpose and opportunity regardless of geographical location. This “One Guyana” platform is not mere rhetoric; it translates into concrete action.

A Diaspora Affairs Unit has been re-established within the Ministry of Foreign Affairs to serve as a formal bridge between the government and the diaspora (Ministry of Foreign Affairs and International Cooperation, 2021). This unit’s mandate reads like a blueprint for brain circulation: strengthening communication channels, mapping the skills and locations of the Guyanese diaspora, and creating one-stop facilitation for those who wish to return or invest in the homeland. Through this framework, the government has launched initiatives, including virtual diaspora conferences and outreach tours. For instance, in September 2023, President Ali held town-hall-style meetings in New York with the Guyanese-American community, directly addressing questions about Guyana’s development and inviting feedback from the diaspora (Kaieteur News, 2023a). These engagements have yielded tangible results – from streamlined passport and documentation services for expatriates, to tailored incentives for those

willing to return and contribute. The Administration’s approach recognizes that inclusion must extend beyond borders: if every Guyanese abroad feels they have a stake in the nation’s prosperity, they are more likely to invest their time, skills, and capital in national development. “We want the hands of the diaspora to be a key element in the new Guyana… The unification of the Guyanese people is paramount to the prosperity we will achieve,” Ali affirmed, emphasizing mutual trust and consistent engagement (Kaieteur News, 2021). Under this ethos, the diaspora is no longer seen as lost talent but as an integral part of Team Guyana’s journey to lasting prosperity.

Diaspora-Driven Innovation in Technology and Education

Nowhere is the impact of the diaspora more evident than in the realms of technology and education. Guyanese innovators abroad are increasingly turning their success into opportunities for the next generation at home, planting the seeds of a high-tech, knowledge-driven economy. A shining example is Dr. Jason Mars, a Guyanese-born computer science professor and tech entrepreneur who has gained renown in the United States for his breakthroughs in artificial intelligence. Dr. Mars co-founded Clinc, a leading AI company that created one of the world’s most sophisticated conversational AI platforms. But even as he reached the pinnacle of tech innovation abroad, Jason Mars kept his eyes on Guyana. In 2018, he launched a graduate scholarship program enabling top Computer Science graduates from the University of Guyana to pursue PhDs at the University of Michigan, his academic base (Stabroek News, 2018). He also forged partnerships with local tech firms and arranged for Guyanese software engineers to train on cutting-edge projects (such as automotive AI with Ford Motor Company), thereby transferring skills and opening international career pathways. Mars’s commitment reflects a powerful idea: by investing in human capital development in Guyana, diaspora professionals can multiply their impact, creating many more innovators beyond themselves.

In 2022, Dr. Mars further developed this vision by collaborating with Guyana’s Ministry of Education to launch an Artificial Intelligence and Leadership Training Programme for secondary school students nationwide (Department of Public Information, 2022). Over eight weeks, 136 students from various regions were mentored directly by Dr. Mars and colleagues in an immersive crash course on AI coding and entrepreneurship (Department of Public Information, 2022). The goal was not just to teach programming, but to ignite creative leadership – to show young Guyanese how to build real AI products that could compete globally and generate value for Guyana (Department of Public Information, 2022). “These creations themselves can turn into real products sold to the world… funneling economic outcomes from the global market into Guyana,” Mars explained, highlighting how local youth, armed with the right skills and mindset, can attract international revenue and opportunities back home (Department of Public Information, 2022). This initiative exemplifies “brain circulation” in action: instead of a one-way drain of talent out of Guyana, we see knowledge and mentorship flowing into Guyana from the diaspora, setting the stage for homegrown innovation. The broader impact is profound – today’s teenagers in Georgetown or Berbice can envision themselves as tomorrow’s tech CEOs and inventors, thanks in part to the inspiration and concrete support from diaspora champions like Jason Mars.

Another transformative diaspora-led venture is STEMGuyana, co-founded by Ms. Karen Abrams, a Guyanese-American tech advocate. Abrams left a successful career in the U.S. to return to Guyana in 2016 with a mission to bridge the digital divide for Guyanese youth, especially girls and marginalized groups. In just a few years, STEMGuyana has established robotics clubs, coding workshops, and technology summer camps across all ten regions of Guyana. By 2021, more than 20,000 Guyanese students had directly benefited from STEMGuyana’s programs – an incredible outreach that has elevated national awareness of STEM (Science, Technology, Engineering, and Math) (FIRST Global, 2021). The initiative garnered international attention when Guyana’s youth robotics team, nurtured by STEMGuyana, competed admirably at the First Global Challenge, showcasing the country’s budding talent on the world stage. A key aspect of STEMGuyana’s success is its strong diaspora linkages. Abrams actively partnered with other diaspora professionals and organizations to source equipment, expertise, and funding. In November 2020, for example, STEMGuyana partnered with Guyanese diaspora groups and the government’s Department of Youth to launch the STEMGuyana International Academy, a virtual program connecting students of Guyanese heritage worldwide (Stabroek News, 2020). Seventy-plus students from Guyana, the United States, and the Caribbean participated in a shared curriculum that blended Guyanese school syllabi with hands-on tech projects. Notably, 15 students from under-resourced Guyanese communities received scholarships funded by a New York-based diaspora association (Stabroek News, 2020). This model, where diaspora philanthropy and local initiatives intersect, is elevating a new generation of innovators. Abrams often emphasizes finding the “hidden Einsteins” in every village – the tinkerers and dreamers who, if given the tools, could become inventors and problem-solvers for Guyana. Thanks to diaspora-supported STEM education, many such young minds are now being kindled. The ripple effects for inclusive growth are apparent: as more youths gain high-tech skills and confidence, Guyana can cultivate a diversified economy less dependent on oil, and more driven by local ingenuity.

Diaspora Investment in Entrepreneurship and Agriculture

Innovation isn’t limited to laptops and code; it also involves applying knowledge and capital to diversify the economy, particularly in areas such as agriculture and agro-processing, which help build resilience and ensure food security. Here too, diaspora members are at the forefront, marrying global expertise with local opportunity. Consider the case of Omkaar Sharma, a Guyanese entrepreneur who spent nearly twenty years in Canada before deciding to return home. Seeing the booming economy and recognizing gaps in the local market, Sharma invested approximately

$150 million (GYD) – about US $750,000 – to establish the Amaya Milk Company, an expansive dairy farm and processing operation in Berbice (Guyana Chronicle, 2024). From its inception, this venture has been about more than just business; it’s a proof-of-concept that Guyana can reduce its heavy reliance on imported dairy and bolster food self-sufficiency. Sharma’s farm now produces some 600 gallons of fresh milk daily, which is pasteurized and sold in local supermarkets. This single investment is helping to shrink Guyana’s annual US$ 25–30 million dairy import bill, keeping wealth circulating within the country and providing jobs to local farmers and technicians. It exemplifies how diaspora returnees can bring not only capital but also international quality standards and new products, such as fine cheeses or yogurts, to the domestic market.

Sharma has been vocal about the role of the diaspora in Guyana’s next chapter. “If you’re looking to come back and invest, there’s no better time to do it–do it!” he urges fellow overseas Guyanese, noting the government’s active encouragement of agricultural investments and the overall pro-business climate (Guyana Chronicle, 2024). Of course, entrepreneurship in any frontier market comes with challenges – from bureaucratic hurdles to infrastructural bottlenecks – and Sharma faced his share of them. But he emphasizes that patience and perseverance can overcome these obstacles, just as they would in developed markets. Others increasingly echo his story: we see diaspora investors in eco-tourism, in renewable energy projects, in housing development, and more. Each returnee or diaspora-backed startup not only fills a market need but also infuses new skills and international connections into the local economy, whether it involves cutting-edge farming techniques, global supply chain links, or export expertise. Over time, these contributions help build a more diversified economic base. This is crucial for inclusive prosperity, because a diversified economy means opportunities spread across regions and skill levels – from high-tech urban jobs to skilled trades and farming in rural communities. In leveraging diaspora entrepreneurship, Guyana is effectively importing global best practices and adapting them to local realities, accelerating the country’s learning curve in various industries.

Toward Brain Gain and Inclusive Growth: Lessons and Strategies

The emerging pattern in Guyana’s development narrative is clear: diaspora engagement coupled with innovation is a catalyst for broad-based progress. We are moving from the old paradigm of “brain drain” to a new paradigm of “brain gain” and “brain circulation,” where knowledge flows bi-directionally between homeland and diaspora (Gaillard & Gaillard, 1997). This approach aligns with international best practices. Around the world, countries that have successfully turned brain drain into opportunity have done so by embracing what scholars call the “diaspora option” (Gaillard & Gaillard, 1997). Instead of focusing solely on reversing emigration, they focus on building networks with their expatriates, encouraging temporary returns, virtual contributions, and diaspora- driven initiatives that benefit the home country. Guyana is now actively pursuing this option. The government’s One Guyana strategy, diaspora conferences, and the Diaspora Affairs Unit are policy-level efforts to institutionalize these links. Meanwhile, the on-the-ground examples of diaspora-led projects – in tech, education, agriculture, and beyond – are demonstrating proof of concept that engaging the diaspora yields tangible dividends in human development.

To further solidify these gains, Guyana can draw lessons from international case studies. For instance, small countries like Ireland have successfully issued diaspora bonds and created formal networks for overseas alumni, which have helped channel billions of dollars in investment during Ireland’s economic revival. India and China leveraged their vast diaspora communities in Silicon Valley to spark domestic tech industries through mentorship programs, venture capital flows, and even returnee entrepreneurship zones, such as Bangalore’s IT boom, which was fueled partly by Indian-American returnees. Closer to home, Jamaica and Barbados have established “diaspora desks” within their governments and hold regular diaspora summits, which have led to initiatives in tourism, healthcare, and education. These examples reinforce a key point: diaspora engagement is not merely charity or nostalgia; it is a strategic development approach. The diaspora often has what the home country needs – be it specialized expertise, investment capital, or access to international markets – and is typically eager to contribute if given viable pathways to do so. Guyana’s task is to continue converting that goodwill into structured programs. Some strategies could include:

“Return of Talent” initiatives include offering short-term fellowships for diaspora professionals to work in Guyana’s public sector or universities, sharing skills in critical areas such as healthcare (e.g., training specialist doctors to work with local medical staff) or public administration. This builds local capacity without requiring permanent relocation.
Diaspora venture capital and innovation hubs: creating funds or incubators where diaspora investors partner with local entrepreneurs, particularly in sectors outside of oil, to foster start-ups and small businesses. This can be incentivized through tax breaks or public co-investment.
Education and exchange programs: scaling up scholarship schemes (like the one by Dr. Mars) and twinning Guyanese institutions with overseas counterparts. A “Global Guyana” online mentorship network could connect students and young professionals in Guyana with diaspora mentors in their fields, sustaining the knowledge exchange year-round.
Recognition and reintegration support: simplifying bureaucratic procedures for returnees (streamlining work permits, property purchase, business registration) and celebrating diaspora achievers as heroes of national development, to nurture a culture of pride and collaboration.

At the same time, focusing on inclusive development at home will ensure that diaspora contributions benefit all citizens, not just elites or urban areas. This means continuing to make heavy investments in education, healthcare, and infrastructure using oil revenues – essentially converting oil wealth into human and social capital. President Ali’s administration has initiated this process with initiatives such as expanded public scholarships (the GOAL program), new hospitals and schools, and infrastructure projects that connect remote regions. When diaspora investors like Omkaar Sharma see these improvements – better roads, a more educated workforce, transparent governance – they gain confidence that their contributions will have an impact. Moreover, inclusive growth reduces the push factors for future brain drain; as opportunities grow at home, fewer young Guyanese will feel compelled to leave solely due to economic necessity. In this virtuous cycle, diaspora engagement and domestic development mutually reinforce one another.

Prosperity for the Next Generation

In concluding this keynote vision, let us remember that the accurate measure of prosperity is not the height of our GDP graph, but the breadth of opportunities available to every Guyanese. We stand today on the cusp of history. The petroleum boom has given Guyana a once-in-a-lifetime financial windfall and the attention of the world. But it is our people – both at home and abroad – who will determine whether this windfall becomes a foundation for lasting prosperity or a footnote in economic reports. By empowering our youth with education and technology, welcoming the knowledge of our diaspora, and fostering an environment where innovation and entrepreneurship can thrive, we are planting the seeds of a Guyana that can compete globally while uplifting its local communities. This is the essence of turning a boom into a sustainable bloom of development.

President Ali encapsulated this hope by assuring the diaspora and citizens alike that his government is “building a country where every Guyanese can prosper” (Kaieteur News, 2023a). Achieving that vision requires all hands on deck – the entrepreneur in Georgetown, the teacher in Lethem, the scientist in New York, the farmer in Berbice, the student in Linden, and the policymaker in Parliament. It calls for unity of purpose, the very spirit of One Guyana, where geographical distance diminishes in the face of shared national pride and ambition. If we continue on this path – investing in people, embracing innovation, and partnering with our global Guyanese family – then the current boom will be remembered not as a fleeting blaze, but as the spark that lit the way to decades of equitable growth and national renewal. The story of Guyana will not be just about oil. It will be about how a small nation with big dreams rallied its diaspora, its innovators, and its everyday heroes to build a diversified, knowledge-based, and inclusive economy – a prosperity that endures for generations.

References

Department of Public Information. (2022). Over 100 students complete AI training programme. Department of Public Information, Guyana. https://dpi.gov.gy/over-100-students-complete-ai-training-programme/

FIRST Global. (2021). Team Guyana at FIRST Global Challenge. FIRST Global Challenge Report. https://first. global/archive/fgc-2021/teams/guy/

Gaillard, J., & Gaillard, A. M. (1997). The international mobility of brains: Exodus or circulation? Science, Tech- nology and Society, 2(2), 195–228.

Guyana Chronicle. (2024). Diaspora investor brings dairy production back to Berbice. Guyana Chronicle. https:

//guyanachronicle.com/2024/01/14/diaspora-investor-brings-dairy-production-back-to-berbice/ Kaieteur News. (2021). Diaspora support key in building a new Guyana – President Ali. Kaieteur News. https:

/ / www. kaieteurnewsonline . com / 2021 / 05 / 23 / diaspora – support – key – in – building – a – new – guyana – president-ali/

Kaieteur News. (2023a). President Ali meets with Guyanese diaspora in New York. Kaieteur News. https://www. kaieteurnewsonline.com/2023/09/26/president-ali-meets-with-guyanese-diaspora-in-new-york/

Kaieteur News. (2023b). Turning brain drain into brain gain: Guyana’s diaspora potential. Kaieteur News. https:

//www.kaieteurnewsonline.com/2023/06/11/turning-brain-drain-into-brain-gain/

Ministry of Foreign Affairs and International Cooperation. (2021). Diaspora affairs unit established. Government of Guyana Official Portal. https://www.minfor.gov.gy/diaspora-affairs-unit/

Stabroek News. (2018). Michigan professor introduces scholarship programme for UG computer science gradu- ates. Stabroek News. https://www.stabroeknews.com/2018/11/23/news/guyana/michigan- professor- introduces-scholarship-programme-for-ug-computer-science-graduates/

Stabroek News. (2020). STEMGuyana launches international academy. Stabroek News. https://www.stabroeknews. com/2020/11/15/news/guyana/stemguyana-launches-international-academy/

Village Voice. (2024). Remittances to Guyana rise to US$550 million in 2023. Village Voice News. https : / / villagevoicenews.com/2023/12/31/remittances-to-guyana-rise-to-us550-million-in-2023/

April 19, 2025 0 comments

Commentary Diaspora Engagement Education Environment Foreign Investment Geopolitics Governance and Transparency Infrastructure Media Advisory Oil Sector Policy Private Sector and Business Opportunities Webinars Workforce Development and Training

Bringing the Power Home: Guyana’s Decisive Moment to Forge the Future of AI and Clean Energy

by guyanabusinessjournal April 19, 2025

written by guyanabusinessjournal

Bringing the Power Home: Guyana’s Decisive Moment to Forge the Future of AI and Clean Energy

By

Hon. Kwasi Fraser, Former Mayor of Purcellville, Virginia

📢 Support the Guyana Business Journal and Magazine.

A Fork in the Road:

Frog Nation or Future State?

Walter Rodney reminded us that underdevelopment is not a natural state — it is imposed. In How Europe Underdeveloped Africa, he laid bare the systems that mined the wealth of the periphery to enrich the core. Today, Guyana stands at a similar crossroads. With vast natural gas reserves and strategic geographic positioning, we must choose: follow the well-worn path of extractive dependency, or forge a bold new future rooted in digital sovereignty and climate-smart industrial transformation.

The age of Artificial Intelligence (AI) is upon us. But AI’s foundation is not just data — it’s energy, infrastructure, and the courage to lead. Guyana can transform from a resource-exporting nation to a sovereign provider of computing power for the world’s most advanced technologies. The question is not if this can be done. The question is: will we do it, and will we do it on our own terms?

The Power Beneath Our Feet, the Future in Our Hands

The global energy crisis, intensified by the growing demands of AI workloads, is already straining electrical grids in developed nations. In the U.S., 34 new nuclear plants may be needed over the next five years to maintain current capacity. Primary data center markets are at maximum capacity. Delays and denials are the norm.

Meanwhile, Guyana sits atop 17 trillion cubic feet of recoverable natural gas — an untapped resource of generational significance. Rather than exporting raw gas, we can channel it toward energy-resilient, low-emission, domestically powered AI and high-performance computing (HPC) data centers.

With such an approach, Guyana could:

Build a sovereign data infrastructure
Attract billions in investment
Create sustainable public revenue for education, healthcare, and transport
Position itself as a bridge to a future powered by clean hydrogen and renewables

This is not merely an economic plan. It is a decolonial strategy for technological self-determination.

A Sovereign Digital Vision for the Wales Industrial Zone

At the Wales Industrial Site, an unprecedented opportunity awaits. Over 1,300 acres have been designated for energy and industrial development, adjacent to power infrastructure, gas pipelines, and deep-sea cable landing points. This site is perfectly positioned to become the beating heart of Guyana’s digital economy.

Picture a 1-gigawatt AI data center campus using immersion cooling, modular buildouts, and natural gas microgrids. This isn’t science fiction — it’s entirely feasible, environmentally advanced, and economically sound.

Key performance benefits include:

50–130 MMcf of natural gas from domestic fields
84% reduction in energy consumption vs. legacy data centers
95% reduction in cooling costs and 98% less water use
PUE (Power Usage Effectiveness) of 1.03 — among the best in the world

The Wales site could become a launchpad for the Caribbean’s AI future.

Diaspora as Vanguard: Calling Guyanese Home to Build the Digital Nation

We must also recognize a powerful and underleveraged asset: the Guyanese diaspora. Across the globe, our brothers and sisters work as engineers, IT professionals, architects, data scientists, and planners. They hold the knowledge and experience to help make this vision a reality.

So we issue this call:

To the Guyanese diaspora in data center planning, energy systems, and AI infrastructure — come home. Help build the future. Help reclaim our right to define our economy on our terms.

This is not sentiment. It is strategy. The Caribbean cannot afford to outsource the foundation of its digital future. We must own the value chain — from hardware to software, from design to governance.

To this end, Guyana should establish:

A Diaspora Technology Corps, modeled on national service but aimed at digital infrastructure
Investment incentives and fast-track repatriation for returning professionals
Joint ventures with diaspora-led firms and academic institutions to build capacity and transfer knowledge
National fellowships to pair diaspora experts with young Guyanese talent in engineering, cloud infrastructure, cybersecurity, and STEM fields

Walter Rodney was a global scholar, but always a servant of his people. Let us harness the brilliance of Guyanese minds everywhere to build a digitally sovereign nation.

Not Just Data — Destiny

This is more than a conversation about bandwidth. It is a battle for the bandwidth of destiny. Data centers are not inert machines; they are the economic, geopolitical, and technological infrastructure of the next era.

The economic case is clear:

A single hyperscale data center can inject over $3 billion in CAPEX over a decade
Job creation carries a 7.4x multiplier per direct hire
Property tax revenue from data centers outpaces the most productive agricultural land by 100x

The moral case is even stronger:

Transition from a site of extraction to a site of innovation
Empower youth, deepen STEM education, and connect Guyana to global research networks
Define clean energy on our terms — beginning with natural gas microgrids and evolving toward green hydrogen and renewables

A Digital Path to Decolonization

For generations, Guyana has exported its riches — sugar, bauxite, gold, and now oil — while capturing only a fraction of their value. That model must end.

By building sovereign, sustainable, AI-ready infrastructure, rooted in our own energy, land, and people, we do more than enter the digital economy — we reshape it.

We call on:

Policymakers and educators
Energy stakeholders and civil society
Diaspora professionals and private investors

To unite under this vision:

✅ Embrace data centers as engines of national transformation

✅ Create public-private frameworks that uplift our people

✅ Embed equity, sustainability, and education into every project

✅ Declare science and technology central pillars of development

✅ Empower Guyanese everywhere to lead

This is Guyana’s moment. The choice is ours:

Leap boldly into the future — or be left behind.

Let us rise.

Let us compute.

Let us lead.

Kwasi Fraser

President, Guyana Infrastructure Consortium

Former Mayor, Purcellville, Virginia

April 19, 2025 0 comments

Talking Dollars & Making Sense: Building a Stronger Guyana, One Opportunity at a Time

by guyanabusinessjournal April 19, 2025

written by guyanabusinessjournal

Talking Dollars & Making Sense: Building a Stronger Guyana, One Opportunity at a Time

By

Rennie Parris, MBA

📢 Support the Guyana Business Journal and Magazine.

Welcome back to Talking Dollars & Making Sense. In this week’s article, I want to talk about something important to every Guyanese: how do we create more opportunities for our people—especially good-paying jobs—and prepare our local companies to compete and succeed, both at home and abroad?

The answer lies in two big ideas: how we borrow and how we build. Let’s dive in.

Borrowing Big but Missing Out on Skills

Guyana has borrowed billions of U.S. dollars in recent years to build roads, hospitals, schools, and other major national projects. These are the kinds of investments we need to improve everyday life for citizens across the country.

But here’s the catch: many of these loans come with conditions. In some cases, the countries lending us money are allowed to bring in their own companies and workers to do the job. So even though we’re the ones taking the loan and paying it back, our people don’t always get to do the work or gain the experience.

This means that Guyanese companies and workers often miss out on learning new skills, adopting new technologies, and managing large, complex projects. Over time, this keeps our people locked out of future opportunities—both here in Guyana and across the region.

Time to Negotiate Smarter Deals

We don’t have to accept these kinds of deals. The Government of Guyana can—and should—negotiate smarter.

Multilateral banks such as the IDB already work with local-content clauses, as long as deadlines remain clear. And if we provide capital from the Natural Resource Fund, we’re showing lenders that we have skin in the game.

Instead of signing off on contracts that limit local involvement, we should take a page out of our Local Content Law in the oil and gas sector and require that foreign companies partner with local businesses through joint ventures. That means both sides work together, share responsibilities, and—most importantly—share knowledge.

These partnerships should include clear training and development plans. If a foreign company is building a hospital, then Guyanese engineers, electricians, welders, and project managers should be working alongside and shadowing them. That way, when the next big project comes, we’re ready to take the lead.

This approach shouldn’t be limited to roads or bridges. Whether it’s in manufacturing, logistics, or technology, our people and businesses deserve a seat at the table and a chance to grow.

Let’s Talk About Oil—and the Opportunities We’re Missing

Guyana is now one of the fastest-growing oil-producing countries in the world. But most of the oil we produce is sold as unrefined crude on the international market. That means other countries are making more money by refining our oil into diesel, jet fuel, and gasoline—and then selling it back to us or others.

But what if we kept a portion of that oil right here in Guyana and refined it ourselves—or even contracted another country to refine it on our behalf? That move could open the door to new markets and new opportunities for local businesses.

For example, Guyana could refine its oil and sell it to our CARICOM sister countries at a discounted rate or on deferred payment terms. In return, those countries could agree to hire Guyanese businesses to build bridges, modernize government offices, or develop digital systems.

This would allow our companies to expand into the region, build their experience, and earn foreign income. Over time, these businesses could become strong enough to compete in even bigger international markets.

It’s Not Just About Oil—It’s About Everything We Produce

The same thinking applies to our agriculture and other industries. If we’re building strong trade relationships through refined oil and infrastructure projects, we can also open new export markets for rice, plantains, pineapples, pepper sauce, and other locally produced goods.

Guyana has world-class agricultural products, but our exporters often struggle with access to markets, logistics, and consistent demand. Smart trade deals can help change that. We can negotiate not just for fuel sales, but for supermarket shelf space, distribution partnerships, and long-term buyers for our food, beverages, and natural products.

Creating a Workforce Ready for Opportunity

Of course, all of this only works if our people have the skills to take advantage of it.

That’s why the government can do more to connect education with opportunity. High school and university students should be able to clearly see what kinds of jobs are in demand—and how to prepare for them. If they know that studying welding, project management, agriculture, or computer science leads to a good job, they’ll be more motivated to pursue those paths.

The government can help by publishing regular reports that show which industries are hiring, what qualifications are needed, and where training programs are available. That way, everyone—from students to business owners—can make smart, informed decisions about their future.

A Guyana Where Everyone Has a Chance

The goal here isn’t just to build infrastructure; it’s to build a stronger, fairer economy. One where every Guyanese—no matter their background or where they live—has the opportunity to benefit. That means better-paying jobs, stronger local businesses, and a country that’s not just growing, but growing together.

So the next time we build a bridge or strike a trade deal, let’s ask:

“How does this create new markets for our people?”
“How does this train our workers and grow our businesses?”

If we start asking those questions, we won’t just build roads—we’ll build a better future for all of Guyana.

As always, I’d love to hear your thoughts. Email me at talkingdollarsgy@gmail.com.

Until next time, let’s keep Talking Dollars & Making Sense.

Rennie Parris, MBA, is a Guyanese economist and business strategist with expertise in trade policy, economic development, and regional competitiveness. He holds an MBA in Finance from the Wharton School of Business and has served in private and public sector advisory roles. Parris regularly contributes to the Guyana Business Journal, where he writes on trade, investment, and economic policy issues impacting Guyana and the wider Caribbean.

April 19, 2025 0 comments

One Guyana FPSO Arrives, Signaling Major Boost in Oil Production

by guyanabusinessjournal April 15, 2025

written by guyanabusinessjournal

One Guyana FPSO Arrives, Signaling Major Boost in Oil Production

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Guyana has reached a significant milestone in its burgeoning oil industry with the arrival of the One Guyana Floating Production, Storage, and Offloading (FPSO) vessel. Constructed by SBM Offshore, this state-of-the-art facility is poised to substantially enhance the nation’s oil production capacity.

The One Guyana FPSO is set to operate within the Yellowtail development in the prolific Stabroek Block. With an initial production capacity of 250,000 barrels per day and storage for approximately two million barrels, the vessel will elevate Guyana’s total daily oil production capacity to around 900,000 barrels once operations commence later this year. Read more at News Room Guyana.

This development marks the fourth FPSO to be deployed in Guyanese waters, joining the ranks of the Liza Destiny, Liza Unity, and Prosperity vessels. The ExxonMobil-led consortium, which includes Hess and CNOOC, continues to spearhead these advancements, reinforcing Guyana’s position as a rising energy powerhouse in the region.

To celebrate this achievement, a street festival is scheduled for May 3. The festival will highlight the benefits of the Yellowtail project to Guyana, including the growth of local content and increased national revenues.

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April 15, 2025 0 comments

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Business Opportunities in Guyana

by guyanabusinessjournal April 14, 2025

written by guyanabusinessjournal

Business Opportunities in Guyana

📅 Date: Wednesday, April 16, 2025

🕐 Time: 1:00 PM EDT | 📍 Location: Virtual | 💵 Cost: $50

🟢 Register Now

Join the U.S. Commercial Service for the first event in the Southern Caribbean Energy Corridor Webinar Series, a timely and strategic conversation on how U.S. companies can tap into Guyana’s booming economy—the fastest-growing in the world.

Why Guyana?

Opportunities Abound

Guyana is the only English-speaking country in South America, and it offers a unique gateway for exports and investment into the Caribbean and northern Brazil.
The country maintains strong cultural and political ties to the Caribbean and is home to the CARICOM Secretariat in Georgetown.
Best known for its transformational oil discoveries—with 46 finds to date—Guyana also boasts fertile agricultural land, valuable minerals (like bauxite and gold), and over 80% forest cover, making it a net-zero carbon sink.
In 2024, Guyana’s real GDP growth reached 43.6%, with oil production projected to increase to 1.2 million barrels per day by 2030.
Beyond oil, the Guyanese government is actively diversifying into infrastructure, agriculture, health, and renewables, including solar and small-scale hydroelectric development in rural and hinterland regions.
Significant investments are also being made in modernizing the country’s aged power infrastructure—creating critical opportunities across the energy value chain.

Who Should Attend?

This webinar is ideal for U.S.-based:

Upstream and downstream energy companies
EPC contractors and infrastructure developers
Logistics and engineering service providers
Firms interested in natural gas monetization and renewables
Business development professionals seeking direct market access and insights

Featured Speakers:

Adam Shanks, Director, U.S. Commercial Service – Rockford, IL (Moderator)
Ambassador Nicole D. Theriot, U.S. Ambassador to the Co-operative Republic of Guyana

“The United States: Guyana’s Preferred Partner”
Daniel Gaines, Senior Commercial Officer – U.S. Embassy Georgetown

“How to Do Business in Guyana and Be Part of the Booming Economy”
John A. Colling, VP & CFO – ExxonMobil Guyana

“Guyana’s Energy Boom: Exxon’s Role in the Country’s Historic Transformation”
Doug Hemstreet, VP – K&B Industries

“A U.S.–Guyana Success Story”

📌

Don’t Miss This Opportunity

With its remarkable economic trajectory, pro-business government, and strategic positioning in the region, Guyana is fast becoming a centerpiece of hemispheric growth and investment.

📅 Date: April 16, 2025

🕐 Time: 1:00 PM EDT

💻 Format: Virtual

💵 Cost: $50

🟢 Register Now

April 14, 2025 0 comments

Building a Scientific Nation: Why Science Must Drive Development in Guyana and the Caribbean

by guyanabusinessjournal April 9, 2025

written by guyanabusinessjournal

Building a Scientific Nation: Why Science Must Drive Development in Guyana and the Caribbean

Terrence Richard Blackman, Ph.D.

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In Guyana and across the Caribbean, we stand at a historic juncture. The decisions we make now—about education, innovation, and investment—will shape our collective future for generations. At the center of this effort must be a force too often sidelined: science.

Scientific innovation, when aligned with national priorities and backed by strategic investment, can be transformative. It equips us to respond to our region’s most urgent challenges—climate change, food security, educational inequality—and to lead globally in areas where we have unique natural and human assets. Yet, for too long, scientific development in the Caribbean has been underfunded, undervalued, and underestimated.

This argument was powerfully advanced in the recent Transforming Guyana webinar, Science, Education, and National Development, hosted by the Guyana Business Journal and the Caribbean Policy Consortium. In that wide-ranging conversation, three of the region’s leading voices—Dr. Ulric Trotz, Professor Paloma Mohamed Martin, and Professor Cardinal Warde—called for a bold new vision of science-centered development in Guyana and the wider Caribbean.

A Legacy of Vision: Dr. Ulric Trotz and the Foundations of Scientific Development

In his recently published book, A Ray of Hope: Reflections on Development, Science, and Technology in Guyana and the Caribbean, Dr. Ulric Trotz chronicles the early efforts to build a scientific nation in post-independence Guyana. As one of the architects of the country’s scientific infrastructure, Dr. Trotz helped found the Department of Chemistry at the University of Guyana, the National Science Research Council, the Institute of Applied Science and Technology (IAST), and the National Agricultural Research Institute (NARI).

These institutions were not bureaucratic relics—they were engines of national development. They reflected a profound belief that science was not a luxury, but a practical and necessary tool for national self-determination, industrial development, and environmental sustainability.

The STEM Imperative: Education as Infrastructure

Central to this vision is the creation of a robust, inclusive STEM education ecosystem—one that identifies talent, nurtures creativity, and builds the human infrastructure necessary for innovation.

Across the Caribbean, initiatives like the Student Program for Innovation in Science and Engineering (SPICE), launched by the Caribbean Science Foundation, are equipping students with the skills to thrive in a knowledge-based economy. SPICE engages young minds in applied science and engineering through problem-solving and mentorship, planting the seeds for a new generation of scientific leaders.

Closer to home, the University of Guyana’s Regional STEM Accelerator program and the establishment of nine new research institutes reflect a national commitment to transforming education into an engine of development. These programs prepare students not simply to succeed academically, but to contribute meaningfully to national priorities—from climate resilience to food security and clean energy.

Equally inspiring is the grassroots innovation of STEM Guyana, a youth-driven initiative co-founded by Karen Abrams and her son, who returned from the diaspora to give back to their country. As reported in Stabroek News, STEM Guyana has proven to be a game-changer in a challenging environment, democratizing access to robotics, coding, and digital literacy in underserved communities across the country. Through after-school clubs, national robotics competitions, and mobile learning labs, the organization has created real opportunities for thousands of young Guyanese to see themselves as innovators and problem-solvers.

Together, these programs represent a multi-level strategy for STEM education—from university labs and elite accelerators to schoolyards and village computer hubs. They remind us that building scientific capacity must happen across the full educational spectrum and that transformative change often begins with visionary community leadership.

Turning Resources into Research

Guyana is uniquely positioned to turn its natural endowments into platforms for scientific advancement. From its rich biodiversity to high-purity silica and the underexplored utility of rice husk ash, the country has what it takes to become a global research leader in materials science, renewable energy, and environmental technologies.

But realizing this potential requires more than resources. It demands an innovation ecosystem—one that connects research institutions, government policy, entrepreneurship, and international collaboration. Professor Cardinal Warde’s white paper, Creating a STEM-Based Economic Pillar for the Caribbean, provides a detailed blueprint for this transformation. He advocates for regional centers of excellence, including fabrication labs and advanced research hubs, to catalyze technological development and economic diversification.

A Moment of Opportunity—and Responsibility

The challenges are real. Caribbean research has historically struggled with inconsistent funding, limited infrastructure, and weak policy alignment. But Guyana’s economic transformation—driven by oil revenues—presents a once-in-a-generation opportunity to fund science, technology, and education at scale. Now is the time to think strategically, build boldly, and align national development with global scientific standards.

Diaspora as Catalyst

As emphasized during the Transforming Guyana webinar, diaspora scientists must be embraced as collaborators, not spectators. Structured engagement through fellowships, joint research projects, and regional conferences can convert the brain drain into brain circulation. These professionals bring global experience, cutting-edge expertise, and a deep desire to contribute to national progress.

A Generational Project of Vision and Hope

The message emerging from Dr. Trotz’s reflections, the Transforming Guyana conversation, and Professor Warde’s strategic blueprint is both clear and urgent: science must be the foundation of national development.

We must educate for it, fund it, and build resilient institutions to sustain it. This is not the task of one government or one generation. It is a national—and regional—project of hope, discipline, and shared vision.

Let us commit ourselves to building a scientific nation—not as rhetoric, but as a serious, strategic endeavor to ensure Guyana and the Caribbean lead in shaping a more sustainable, equitable, and innovative future.

Dr. Terrence Richard Blackman is Associate Professor and Chair of the Department of Mathematics at Medgar Evers College, CUNY. He is Chair of the Executive Council of the National Alliance for Doctoral Studies in the Mathematical Sciences and a Region B Representative on the Board of Directors of the National Association of Mathematicians.

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April 9, 2025 0 comments

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Talking Dollars & Making Sense: The Trade Policy Showdown – U.S. Tariffs vs. China’s Dumping in Guyana

by guyanabusinessjournal April 5, 2025

written by guyanabusinessjournal

Talking Dollars & Making Sense

The Trade Policy Showdown – U.S. Tariffs vs. China’s Dumping in Guyana

Rennie Parris, MBA

📢 Support the Guyana Business Journal and Magazine.

Welcome back to Talking Dollars & Making Sense. Today, we’re diving into the complicated world of international trade—specifically, how recent U.S. tariff policies and China’s dumping practices are impacting Guyana. Let’s unpack what these policies mean for our local businesses and the broader economy.

To understand why China’s trade approach is creating such disruption, we need to examine its internal challenges. China is currently grappling with a trio of economic issues: a consumption slump, a real estate collapse, and massive overproduction. The 2020 collapse of the Chinese real estate market wiped out significant household wealth, and since then, Chinese consumers have become far more cautious, favoring saving over spending.

Even five years later, domestic consumption remains well below pre-pandemic levels. With demand down at home, China has found itself with vast surpluses of goods—from inexpensive everyday items to luxury products.

To counteract this slowdown, China has turned to exports. Today, exports make up roughly 20% of China’s $19 trillion GDP, contributing to a trade surplus exceeding $1 trillion. The strategy is straightforward: move excess inventory by flooding foreign markets with goods at prices far lower than local competitors can match. But it doesn’t stop there. China also lends money to countries like Guyana for development projects, often stipulating that Chinese workers be hired—exporting both goods and labor. State subsidies keep prices artificially low, and governments from Indonesia and Brazil to Canada and India have accused China of dumping—selling products below market value to gain unfair advantages.

In Guyana, the impact is real and painful. Local businesses are struggling to compete with these deeply underpriced imports. For consumers, it may feel like a temporary win—cheaper goods on the shelves—but the long-term consequences are stark. When local companies shut down or scale back, jobs are lost, industries shrink, and national economic resilience weakens.

Many Guyanese entrepreneurs have already been forced to close or significantly reduce operations. They are calling on the government to intervene, citing global precedents in anti-dumping measures. Yet to date, no action has been taken to shield our domestic industries.

Other countries offer clear models. Indonesia banned the Chinese e-commerce giant TEMU. Brazil and Argentina, among others, imposed steep tariffs on Chinese steel, textiles, electronics, and more. The European Union and the United States have adopted similar tactics. These protective policies aim not to block competition, but to ensure that it is fair—and that local industries have room to thrive.

Guyana would do well to follow suit. Even as initiatives like the gas-to-shore project promise cheaper energy and enhanced manufacturing potential, our local producers will not survive unless we act to level the playing field against heavily subsidized imports.

At the same time, U.S. tariff policy also deserves scrutiny. Under the Trump administration, the U.S. imposed sweeping global tariffs aimed at correcting trade imbalances. Though not targeted specifically at Guyana, the consequences have been felt. In 2024, Guyana exported about $5.5 billion—mostly oil—to the United States, while importing only $1.3 billion. This left Guyana with a $4.2 billion trade surplus. On this basis, the U.S. applied a 38% tariff rate to Guyanese exports—though oil, which makes up nearly 90% of our exports, was exempted.

This exemption, however, highlights an odd irony: our trade surplus, driven by oil, triggered tariffs that impact non-oil exports. Firms like DDL, Banks DIH, and food manufacturers could face new costs—not because of their own market performance, but due to broad-based U.S. trade metrics.

Thankfully, many of these businesses are not heavily reliant on the U.S. market, minimizing the short-term damage. But the long-term uncertainty caused by these tariffs complicates operations and raises costs.

Beyond our borders, the broader risk is a global economic slowdown. History provides cautionary tales—most notably the 1930 Smoot-Hawley Tariff Act, which worsened the Great Depression. If global trade tensions escalate, oil prices could drop dramatically. We’ve already seen Brent crude dip to $65 per barrel, a troubling sign for Guyana, whose fiscal health remains tightly tethered to petroleum revenue. A global recession would severely hamper non-oil sectors and further destabilize the economy.

Both Chinese dumping and U.S. tariffs pose significant challenges. China’s actions threaten the foundations of our domestic economy by undercutting local producers. U.S. tariffs, meanwhile, strain our export capacity and create macroeconomic uncertainty. The risks are different, but equally serious.

In response, the Guyanese government must act with urgency and focus. Implementing anti-dumping duties on Chinese imports would send a clear message: our local businesses matter. We should draw on the experiences of countries like Canada, India, and Brazil to design a strategy that protects our interests without isolating us from global trade.

As for the United States, retaliation through reciprocal tariffs would likely do more harm than good. A smarter approach would be diplomatic engagement. Emphasizing Guyana’s role in supporting U.S. energy goals—especially through ExxonMobil and Hess—could help make the case for revised trade terms. Guyana’s surplus with the U.S. is primarily due to oil, and that oil flows back into the U.S. economy. Clarifying this interdependence is essential.

Additionally, Guyana must take real steps toward economic diversification. Relying solely on oil is unsustainable. Supporting local manufacturing, encouraging entrepreneurship, and building strategic trade alliances will be key to weathering future disruptions.

At the end of the day, understanding trade policy isn’t just for economists—it affects all of us. Guyana stands at a crossroads. The decisions made now will determine whether our economy thrives in the face of global change or falters under its weight.

Let’s stay engaged, stay informed, and continue to demand policies that reflect the best interests of all Guyanese. Until next time, keep thinking critically—and keep talking dollars and making sense.

April 5, 2025 0 comments

Foreign Policy Is Not a Single Party Prerogative: Lessons from South Africa for the Guyana-Venezuela Controversy

by guyanabusinessjournal March 29, 2025

written by guyanabusinessjournal

Foreign Policy Is Not a Single Party Prerogative: Lessons from South Africa for the Guyana-Venezuela Controversy

Guyana Business Journal Notes

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The recent diplomatic tensions within South Africa’s coalition government over appointing a U.S. ambassador underscore a fundamental principle of governance: foreign policy is not the prerogative of a single party. This lesson is particularly relevant as Guyana navigates its diplomatic challenges, especially in its long-standing border controversy with Venezuela.

South Africa’s ruling African National Congress (ANC) asserts that it holds the exclusive right to appoint ambassadors, dismissing concerns from coalition partners. However, this approach has deepened fractures within its unity government, highlighting how foreign policy, when monopolized by one party, can alienate key stakeholders and weaken national influence. The appointment of ambassadors is not merely an administrative decision; it shapes a country’s global standing and relationships.

Similarly, Guyana’s foreign policy toward Venezuela—especially regarding the Essequibo controversy—requires broad national consensus rather than partisan maneuvering. The implications of diplomatic strategy in this matter extend far beyond one government’s tenure. Guyana’s sovereignty, economic future, and regional stability hinge on consistent, inclusive diplomacy.

The Venezuela-Guyana border controversy, exacerbated by oil discoveries, demands a unified national front. It is not merely an issue for the current administration but a matter of national interest that should transcend party lines. If foreign policy becomes a tool of political exclusivity, Guyana risks eroding bipartisan support, weakening its negotiating position, and undermining international confidence in its diplomatic stability.

South Africa’s internal struggles serve as a cautionary tale. Just as differing coalition perspectives in Pretoria have led to diplomatic discord, a lack of unified foreign policy in Georgetown could weaken Guyana’s ability to secure firm international backing against Venezuela’s territorial claims. Guyana must ensure that its foreign policy—especially on high-stakes issues—is built on broad consensus, engaging opposition parties, civil society, and international allies.

Diplomatic strategy should not be the domain of a single party. Instead, it must be shaped by a cohesive national vision that ensures Guyana’s interests are protected beyond political cycles. The South African case illustrates that foreign policy missteps can have lasting repercussions. Guyana must learn from this and prioritize unity in its engagement with Venezuela and the international community.

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📢 Stay informed. Engage in the conversation. Support independent reporting.

📩 terrence.blackman@guyanabusinessjournal.com

March 29, 2025 0 comments

Register for : “A ray of Hope,” with Dr. Ulric Trotz

by guyanabusinessjournal March 29, 2025

written by guyanabusinessjournal

🚀 Transforming Guyana Webinar: Science, Education & National Development 🇬🇾

Join us on Wednesday, April 9, 2025, from 10:30 AM – 12:00 PM EST for a compelling discussion on how science, technology, and education can shape Guyana’s future.

This special Transforming Guyana webinar, held in support of Dr. Ulric Trotz’s new book, A Ray of Hope, brings together leading experts:

🎙️ Dr. Ulric Trotz – Renowned scientist & author

🎙️ Dr. Paloma Mohamed – Vice Chancellor, University of Guyana

🎙️ Dr. Cardinal Warde – Founder, Caribbean Science Foundation & MIT Professor

Together, they’ll explore the evolution of STEM education, scientific research, and workforce development in Guyana, with a focus on innovation, policy strategies, and sustainable growth.

💡 Why Attend?

✅ Gain insights from top STEM leaders

✅ Explore strategies for Guyana’s scientific advancement

✅ Engage in a live Q&A with experts & policymakers

📢 Register now and be part of the conversation! 🎟️

🔗 Register here: https://streamyard.com/watch/nBGwJJemgzTT

#TransformingGuyana #STEM #Education #Science #GuyanaDevelopment

March 29, 2025 0 comments

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