With 15 billion liters of oil lying off its coast, Guyana wants to play a bigger geopolitical role. Major powers with specific interests are now competing for influence in this once-overlooked corner of South America.
U.S. Secretary of State Antony Blinken (left) listens attentively as Guyana’s President Irfaan Ali speaks.
Andrew Caballero-Reynolds / Reuters
Guyana, a country in South America’s northern region, is about twice the size of Germany but has a population smaller than Luxembourg’s. Its parliament is made up of part-time members, and the nation’s highest court convenes in a modest wooden building. Georgetown, the capital, is home to just 200,000 people.
Irfaan Ali is the country’s president. Until recently, hardly anyone would have recognized him in a group photo of Latin American presidents. But that has changed: Last year, U.S. Secretary of State Antony Blinken visited him, and China’s powerful President Xi Jinping invited President Ali to China, calling for a partnership «on an equal footing.»
Guyana’s rise from obscurity to significance
What has sparked this newfound interest in Guyana? The answer lies beneath the waters off its coast, where an estimated 15 billion barrels of oil await extraction. For five years, American-owned ExxonMobil has been tapping into these reserves, now producing 650,000 barrels per day, which is comparable to Britain’s output. Within three years, Guyana is projected to rival Qatar’s production levels, making it the third-largest oil producer in Latin America, behind Brazil and Mexico. Guyana is on its way to becoming an oil powerhouse.
The discovery of oil has triggered a scramble for influence, as neighboring countries, regional powers and global players all vie for a stake in Guyana’s future. The small nation, however, has ambitions of its own, aiming to secure a seat at the table of global geopolitics.
Different countries are eyeing Guyana for different reasons, each pursuing its own strategic interests.
Venezuela: A border dispute as a distraction
A year ago, Nicolás Maduro, the president of neighboring Venezuela, used a regional conflict from colonial times to divert attention from his government’s failures. Since independence, Venezuela has laid claims to two-thirds of Guyana’s land. Maduro has recently declared the province of Essequibo a Venezuelan federal state.
The dictator is likely to play the «Guyana card» again when it seems politically opportune. The border conflict could escalate into a broader geopolitical issue, especially given Russia’s heavy support for the Caracas regime, which includes military aid and security consultation. Iran-backed Hezbollah is also believed to maintain a significant foothold in Venezuela.
The U.S.: A reliable partner in a strategic location
The U.S. is particularly sensitive to Maduro’s saber-rattling in its backyard. After his recent threats, a U.S. fighter jet conducted maneuvers over Georgetown, and the U.S. Navy made its presence felt. Guyana’s military, however, is ill-equipped to fend off any Venezuelan aggression. The government in Georgetown now wants to invest more in defense spending, and joint maneuvers with the U.S. armed forces are planned.
Guyana has drawn the interest of the United States as a partner. Fast becoming a politically stable, Western-aligned oil producer, it is a potential alternative to Venezuela, which holds the world’s largest oil reserves but has seen its output crippled by U.S. sanctions since 2017, following Maduro’s election fraud. Rampant corruption and mismanagement have left Venezuela producing just a fraction of its former output.
Georgetown could also serve as an ideal location for a U.S. military base in the Caribbean. This would allow the Americans to keep a closer eye on the actions of left-wing dictatorships in countries such as Cuba, Venezuela and Nicaragua. It would also enhance efforts to track drug trafficking and refugee movements from Latin America northward.
However, the U.S. has already made it clear that its strategic partnership with Guyana will not shield the country from scrutiny. Recently, the U.S. imposed tough sanctions on some of Guyana’s wealthiest entrepreneurs, including the Mohamed family, which has profited immensely as a key supplier and local partner of ExxonMobil. The U.S. accuses the family of corruption, gold smuggling and money laundering. Mike Singh, a Transparency International representative in Georgetown, suggests their alleged financial ties to Hamas may also have influenced the sanctions.
Brazil: Increased trade with a neighbor
Guyana’s road links to the rest of South America are sparse. But a collaborative project with Brazil could change that. The two countries are planning and financing a road through the rainforest to the Caribbean, offering Brazil its only land route to the north. The new road would provide Brazil with access to a deep-sea port in the Caribbean, enabling the export of agricultural products, meat and electronics from Manaus, a free-trade zone in the Amazon, to Guyana’s markets and beyond.
The Guyanese government hopes that this will lead to better supplies and lower food prices. It has also launched joint agricultural ventures with Brazil, tapping into its neighbor’s experience in this sector. Brazil is well advanced in this area. In addition, Guyana seeks to develop its sparsely populated interior, as most of the population lives on the coast.
China: Expanding influence through infrastructure
As in much of Latin America, China is rapidly expanding its economic and political influence in Guyana – efficiently and largely unnoticed. The state-owned China National Offshore Oil corporation holds a 25% stake in the oil consortium controlled by ExxonMobil. In contrast to Exxon, however, the Chinese company rarely faces public criticism for environmental risks or possible corruption.
Guyana’s retail sector is undergoing a large structural shift of ownership, with many local businesses being sold to Chinese buyers. China is also a significant player in construction. In Georgetown, Chinese investors recently completed a large shopping complex in Georgetown, complete with a hotel and casino, catering primarily to Chinese clientele.
Reliable immigration data is scarce due to weak border controls. However, the oil boom is expected to attract, in addition to the Chinese, immigrants from Brazil, Venezuela and Cuba.
India: Leveraging ethnic ties for influence
India is also hoping to expand its political and economic influence in Guyana – an outlier for New Delhi in Latin America. The connection dates back to the colonial era. When Great Britain took over the colony from the Netherlands by treaty in 1814, it brought indentured laborers from India to what was then British Guiana. Previously, the population consisted mainly of enslaved Africans who worked on the sugar plantations.
The British exploited tensions between Afro-Guyanese and Indo-Guyanese, a divide that continues to shape politics today. President Ali, who is of Indian origin, represents the People’s Progressive Party, which draws its support largely from Indo-Guyanese voters. The opposition, the People’s National Congress, is backed primarily by Afro-Guyanese. With Ali in office, Indian businesses and politicians are increasingly looking to Guyana as an opportunity to strengthen ties.
Qatar: A model to follow?
Ethnic ties may also explain President Ali’s decision to roll out the red carpet for the Emirate of Qatar. Though of Indian origin, Ali is a Muslim in a party largely composed of Hindus.
Ali envisions developing Guyana along the lines of Qatar. The two countries share several similarities: Both have populations roughly the same size, and Guyana’s oil revenues are expected to soon rival Qatar’s. Like Qatar, Guyana will need to pursue an active immigration policy to address labor shortages and diversify its economy beyond oil.
For Qatar, establishing close ties with an emerging oil power on another continent could bolster its global standing and expand its geopolitical reach.
Europe: The value of environmental protection
Europe is eager to find a South American ally that shares its values. Guyana is a strong candidate for two reasons: President Ali is ambitious on the global stage – and he is a democrat. He aims to position Guyana as a democratic leader in rainforest conservation, with plans to protect 30% of its land from deforestation by 2030 and a commitment to achieving net-zero emissions. (In Guyana’s accounting, emissions from extracted oil are attributed to the consumer countries.)
In view of the crisis in many democracies around the world and the wavering commitments to climate protection, Europe sees value in having a partner country that stands firm on these goals. Europe’s influence in Guyana stems less from investment or military leverage and more from the recognition Guyana receives in Europe.
However, maintaining good relations with Europe is not a given. High levels of corruption and the potential drift toward authoritarianism could push Guyana into the orbit of new friends such as China or Qatar.
Guyana will change the world’s view of South America
Guyana is becoming a gateway for new geopolitical players that have, until recently, had little connection to South America. Whether these emerging powers or the region’s historically dominant forces ultimately prevail will reshape both local politics and the global perception of South America. Europe has long enjoyed close cultural, political and economic ties to the continent. But as new players gain influence there, these traditional transatlantic connections will weaken.
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Publish date : 2024-09-16 01:29:00
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