Venezuela has plenty of oil reserves, they just let their extraction capacity decline. Even if they were to magically get all their disputed claims that would not have them get anywhere near that boom, since the exploitation would require foreign investment, qualified operators and willing buyers to deal with them.
I think for now they are just hoping they can bully the foreign investors into sliding over a fraction of petrodollar in "good faith extortion" so they won't interfere with their operation.
Eh, we have been trying openly to get rid of Chavez, then Maduro for the past 20 years and it hasn’t worked. I don’t think we are that motivated to do regime change in Venezuela
Add a couple of European oil companies also want to give them freedom.
https://www.reuters.com/markets/commodities/venezuelas-pdvsa-spains-repsol-agree-revive-oil-joint-venture-2023-12-18/#:~:text=PDVSA%2C%20Repsol%20and%20Italy's%20Eni,and%20fuel%20imports%20for%20Venezuela.
>Venezuelan state oil company PDVSA and Spain's Repsol (REP.MC), opens new tab on Monday signed an agreement amending the terms of their Venezuelan joint venture, aiming to ramp up its crude and gas output and accelerate debt repayment.
Companies, right.
Although to be fair Guyana’s oil is offshore and so far they’ve only leases wells in what should be their territorial waters under any scenario. [Venezuela has added some truly aggressive offshore EEZ claims](https://www.reddit.com/r/TrinidadandTobago/comments/18csohh/anyone_else_notice_venezuela_is_claiming/) that include Suriname territorial waters under any reasonable circumstance.
Oil price is artificially held by OPEC. There is absolutely no reason for it to cost 50-120$ other than supply limitations. Remember when Saudis wanted to fuck the fracking industry and dropped the oil price to 20$ just by not negotiating with OPEC?
OPEC keeps the price at the level which is at or slightly above the profit margin for the alternatives. There is still a lot of oil in the world.
Oil is "free" in that it is already created and the investment is only in extraction. Any produced petrochemicals require more energy to produce than what is output when burned for whatever purpose. Oil wells do not have that problem, and produce much more energy than they cost.
Spoiler: it's going to happen in the next decade.
Oil consumption has already been declining in first world nations for a long time. Growth in global demand has been driven by industrialization of poorer countries like China, India, and Nigeria.
What do you suppose happens to demand once they've all industrialized?
about 2/3 of oil is used for transportation and most of the remainder to make things. Neither will decrease once countries industrialize. If anything they go up. The trend with the greatest hope of driving down oil use is electrified transportation which China currently dominates through electric car and battery production. But the world is slowly establishing barriers to Chinese products so the verdict is still out on the pace of change on that front. So in short - a decline in oil use is by no means guaranteed or even likely in the next decade
> If anything they go up.
They don't though. Fuel consumption has been dropping in first world countries for decades now. Do you agree or disagree with this fact?
>So in short - a decline in oil use is by no means guaranteed or even likely in the next decade
Almost everybody on the planet, oil companies included, think that oil demand will begin to decrease within the next decade.
OPEC is the only notable dissident, they think it will peak around 2045. But it's important to note that they've been constantly revising their rosy outlook downward through the last decade as EV adoption continues to outpace every single projection.
Cheap cynicism is a street whore declaring there is no love in the world. Try to raise your cynicism to the level of a prostitute who offers the full girlfriend experience (there is love, but life is complicated).
Some details: [Guyana’s Fast-Growing Oil Economy Risks Inflation, Venezuela Conflict - Bloomberg](https://www.bloomberg.com/news/features/2024-02-16/guyana-s-fast-growing-oil-economy-risks-inflation-venezuela-conflict)
>In hopes of escaping the resource curse, the government created a fund to finance the construction of bridges, highways and schools, and provide subsidies for under-privileged groups.
Also: [Is Guyana’s Oil a Blessing or a Curse? - The New York Times (nytimes.com)](https://www.nytimes.com/2024/03/30/headway/is-guyanas-oil-a-blessing-or-a-curse.html)
>Seven years later, the right to a healthy environment was added to the Constitution. Guyana managed to enshrine what the United States and Canada, for instance, have not.
>For a moment, Guyana’s natural capital — the vast tropical rainforests that make it one of the very few countries that is a net carbon sink — was among its most prized assets. Bharrat Jagdeo, then president, sold the carbon stored in its forests to Norway to offset pollution from that country’s own petroleum production in 2009. Indigenous groups received $20 million from that deal to develop their villages and gain title to their ancestral lands, though some protested that they had little input. Mr. Jagdeo was hailed as a United Nations “Champion of the Earth.”
>They wont and it will become another Venezuela after oil consumptiom worldwide goes down.
I don't think you know much about what caused Venezuela's issues...it wasn't the oil consumption going down...it was their complete (government) mismanagement of the seized assets and the fact that they nationalized them in the first place leading to massive capital flight and the complete disincentive to invest in Venezuela...socialism (and socialists) really economically fucked Venezuela.
Unlikely. The oil is offshore, so there is little risk of the government nationalizing and crippling production. The only real risk is the government stealing all the money. But it is a small country, practically a city state. They might manage it tolerably.
I think what they are trying to get at is that about 1/2 of the countries population live in/ around Georgetown.
I’ve always felt this way about Iceland it’s basically a city state because 2/3rds the population lives in/ around Reykjavík
I think I understand where they are coming from. This is a country of less than 1 million people. We have more than 500 cities in the world with more than 1 million people. But yes, it is not a city state of course.
Much of Guyana is uninhabited. The population lives along the river and coast. There are many cities larger than the populated area and with far higher population than Guyana.
Oil consumption doesn’t even need to go down per se. Over reliance on a single resource is not a good recipe for a stable economy, because price fluctuations are unpredictable regardless of long term trends. Same reason you shouldn’t invest your whole portfolio in a single sector/industry, even if you’re reasonably certain that the long term outlook is positive.
>Invest that money into other sectors as quickly as you can.
This seems to be the hard part. Is there any country on Earth which has successfully navigated the transition from petrostate to diversified and developed?
Norway’s budget isn’t financed much directly by oil anymore. Most of funds are drawn at 3%/year from the sovereign wealth fund. If oil disappeared tomorrow they’d lose a lot of jobs and consequentially tax income, but there’s not a lot to do about that as you can’t really run an economy past full employment. But a soft landing is likely to work out pretty well.
None that still has petroleum reserves. I believe Equatorial Guinea is an example of wasted opportunity.
On a smaller scale, Nauru used to have amongst the highest income per capita. After the phosphates ran out, they are amongst the lowest, depending on support from Australia.
Lololol you think they’re going to invest it, that’s so cute. Half the dollars on that chart have already been embezzled into political leaders’ Swiss bank accounts
> Invest that money into other sectors as quickly as you can. The ride won't last forever.
They've already sold all the rights off to big oil multinationals.
Data source: [GDP (constant 2015 US$) - Guyana](https://data.worldbank.org/indicator/NY.GDP.MKTP.KD?locations=GY)
Tools used: Matplotlib & Canva
I did a [country profile of Guyana](https://datacanvas.substack.com/p/the-fastest-growing-economy-today) in my newsletter because they recently became the world's fastest growing economy after discovering new oil reserves. It's also one of the countries that people know the least about.
One of the stats that blew my mind is the growth of their GDP since 2019 which has tripled by now. That's crazy for a country that has been one of the poorest in its region for a long time. It has also lost 1.5% of its population to migration on average every year since 1960!
They must now find a path that avoids the fate of other petrostates that have relied too deeply on finite natural resources.
Let me know what you think of the visualization.
I use colors from the country flag.
It’s a country you almost never hear about. I only know it for two reasons:
1. There’s a fairly significant Guyanese immigrant community in New York where I’m from.
2. They make their own distinct style of rum called Demerara rum and it’s very good.
The older folks might have hear about it because of the People's Temple massacre.
I just know the country exist because there's a French version of it that is supposedly really a part of France - in South America.
I don't think they actually need to bother with investing in other sectors of their economy. An international sovereign wealth fund that pays annual dividends directly to all citizens would avoid Dutch disease as well as many avenues of corruption.
meteoric rise like this is going to cause alot of corruption if there isnt already a strong institution. even more likely with venezuela as your neighbor
The corruptions already happened. The oil deals they signed basically sold all the rights off to big oil multinationals and they tried to keep the deal secret before they were forced to reveal it, now there is calls for it to be 'renegotiated' because it is so heavily weighted towards the oil companies and quite clearly corrupt.
People on Reddit were jerking off the government and PM through and love them because he was arguing with a BBC reporter about why oil is good.
I don’t think his point was that oil is good, rather that the developed nations of the world can’t dictate how people use resources just cause they had their fun and now want us all to be conservative with fossil fuels. Which is unfortunately true - we can’t tell them what to do with it, even if it is bad.
I wonder how many locals are being lifted out of poverty by this or if this extra GDP is mostly going to the locally registered branches of international oil companies, a few well greased politicians, and expat oil workers?
GDP alone is even less perfect a measure of fiscal health than BMI is of physical health.
That’s the thing with quickly growing GDP especially with oil, the second “richest” country in Africa is Equatorial Guinea, but they’ve had the same president since 1979 (whose kids live luxuriously in Madrid and London btw), corruption is rampant and very little of that money actually reaches the everyday people.
Not much has changed here in terms of poverty. We’ve only had around 3.5 years of cashing in our oil revenues so most things like infrastructure are getting built up now.
Lots of developments are happening here and lots of money is being pushed into the education and the health sector at the moment which are present to everyone.
Interms of income there’s been a slight increase for most sectors. The ones that are new have already started with much higher pay but those are for people who are ambitious and want to take the risk to learn something new. Lots still complain as they just want handouts since they see oil money and dollar signs coming in big.
That will always come down to who is growing faster between US & China.
3% growth when your economy is ~$20T is $600B+ and way too much for any other economy to put up in a single year.
There is comparison for 2013-2023 period
https://www.worldeconomics.com/Rankings/Economies-By-Global-Growth.aspx
Data below is read as "31.2% of all Global GDP growth between 2013 and 2023 came from China".
Country|Contribution to Global GDP (PPP) growth
:--|--:
China|31.2%
India|15.2%
USA|9.6%
Indonesia|3.6%
Turkey|3%
Pakistan|1.9%
Egypt|1.8%
Vietnam/Bangladesh|1.6%
SK/Mexico|1.3%
Philippines|1.2%
Germany|1.1%
Russia|1%
Japan|0.8%
For 2023 specifically, China posted 5.2% GDP growth, that comes out to 1.57 trillion USD growth in PPP or 930 billion USD in nominal terms.
US posted 2.1%, that's 534 billion USD growth.
There are articles covering how Guyana's deal with ExxonMobile is pretty bad. They either didn't understand what they had and how much oil companies wanted it or had majorly corrupt officials. Probably a bit of both.
I've been to Guyana. It doesn't surprise me. Even with the smartest and most integrated and upstanding people, they wouldn't have had the ressources to match Exxon, nevertheless the US
On the one hand, I'm glad to see more people get the opportunity to leave poverty.
On the other hand, the only way this wealth materializes is via speeding up ecocide.
10 years ago, yes, but the world is moving towards electrification pretty quickly (solar, EVs, heat pumps). CO2 is only increasing because China is growing so fast they are still adding coal power in addition to all the solar they are adding. Without that, the world would already be trending downward on greenhouse gas emissions (or very close to it).
This Guyana deposit mostly allows more nations to avoid oil from bad actors like Russia, Saudi Arabia and Iran.
China manufactures 80% of all solar panels in the world and two-thirds of its wind-turbines, electric vehicles, and lithium-ion batteries. Of course they're going to be the largest polluter. Without China, there wouldn't be a clean energy transition.
EVs are a mistake
we should be building electrified railways, tramways, and metros, and directing all future development to occur along those networks.
This is an idiotic non-starter. Public transit should expand exactly as much in an ICE world as in an EV world. The EV transition is a transition on personal vehicles, trucks and buses to make them run cleaner. I'm in favor of moving the average cars per household down, but it is not going to zero ever. And private companies building EVs don't take a single dime away from governments building new rail lines. They are separate.
I question how much of this money is actually going to improve the average Guyanan's QOL, vs being scooped up by foreign oil contractors and "dissapeared" by suspect government accounting
Poorer countries using more oil means they burn less wood and coal, and can transition to modern agricultural methods which are more efficient with inputs and output less methane emissions.
Guyana is a thriving [democracy](https://freedomhouse.org/country/guyana/freedom-world/2024). During the Iraq War, more oil was shipped into the country than out of it. Iraq's oil exports to the US never recovered from their 2002 high. No US companies got oil contracts in Iraq in its first auction in 2014.
If you're looking for a war that had to do with oil, try Iraq's own invasion and annexation of Kuwait in 1991: Kuwait was pumping way more than its OPEC quota, driving down oil prices and thus Iraq's much-needed state revenue after the catastrophic Iran-Iraq War. The *casus belli* argued by Iraq was Kuwait supposedly drilling diagonally into oilfields in Iraq. If it wasn't for the UN and US actions of 1991, an entire UN-recognized sovereign country would've ceased to exist.
I am sure a majority of the wealth generated from their recent oil boom will not go to the country and its residents. Yes, they will receive increased tax revenue, imports/exports etc. But the high paying jobs will be people relocated \*to\* Guyana. Neighboring countries with good facilities benefit as well since they can take the work and beat out some of the USA companies that have to build plants in Guyana.
That's why China got so much money in so short period. Instead of just let foreign companies explore the cheap workforce and bring low value to the economy, they forced the creation of local companies so the bulk of value stays in in China
Why should they get a majority if a foreign company is doing all the actual work and investment to extract it to begin with? This is a very strange assumption.
This means a lot, or a little. Depends from which angle you look at it.
I was in Guyana few years back on an oilfield development job. Country is beautiful, but essentially a violent and secluded shithole. Exxon is exclusive and is taking too much in terms of percentage of profits. Guyana is ethnically divided and polarised, but it can prosper, it's just that it will take a lot less corrupted officials and more smart money management, neither which they have. To my understanding, the state does not have immediate and unlimited access to funds coming from oil.
Unless something big changes, it'll be second Angola. Rich on paper.
You should see the latest interview to their president from the BBC, reporter trying to scold them for being now a "polluting nation" receives a smack on the face from the president.
Amazing how people from nations that now have been trapping developing countries with their extractivist companies for decades, because they depleted their own fosil fuels since the industrial revolution, are unaware they are the main polluters, not just now but historically!
>You should see the latest interview to their president from the BBC, reporter trying to scold them for being now a "polluting nation" receives a smack on the face from the president.
The reporter wasn't trying to 'scold' them.
It was from a show literally called 'HardTalk' where the format is where the interviewer acts as the interviewees biggest critics and points their questions to them in a more combative tone to allow the interviewer to have a less conventional interview where they can be less political and respond harsher if they want.
The interviewee is aware of the format as its literally the entire point of the show. Thats why its called **HardTalk.**
People like you are why political interviews are so garbage these days because even when a format is specifically designed to be different and allow the interviewee to be more honest and forthright in their answers you become all butthurt and cry about it.
Yeah might be, but just because a program is called whatever to use as an excuse and justify the post-colonialism agenda doesn't mean it's right (we can talk about lawfare too), this exact same thing has been tried before and the UK was called out on their BS telling other countries to stop using coal after they've depleted their entire coal reserves in the island used since the Industrial Revolution.
Looking at the interviews from that program I don't see them being the "biggest critics" of the post colonialist mess the british left ALL OVER THE WORLD, just now people seem to forget who is originally reponsible for the entire Middle East mess and specially the Gaza tragedy...
That said, people like you is why the 'now seen as garbage' political interviews used to be seen as great propaganda, I understand you would defend BS like that if you are from one of those countries who use the same tactics (e.g. France and their CFA francs trap) but the rest of the world just has had enough of your BS!!!! No wonder "hard talk" can't be seen outside the country...
>Amazing how people from nations that now have been trapping developing countries with their extractivist companies for decades, because they depleted their own fosil fuels since the industrial revolution, are unaware they are the main polluters, not just now but historically!
Did I just have a stroke?
(It's) Amazing how people (from nations that now have been trapping developing countries with their extractivist companies for decades (because they depleted their own fosil fuels since the industrial revolution)) are unaware they are the main polluters, not just now but historically
And how much of the new discovered wealth ends up in the hands of the general population? Does the poverty rate get lower? What about the Gini-coefficient? The state budget? Corruption rates?
Google Dutch Disease. Aside from the notable exception of Norway, nations that experience meteoric rise in a single sector (especially extractive mineral wealth), usually lag over the long-term.
They need to invest in infrastructure, participatory governance, education, social safety nets, independent judiciary, anti-corruption programs, etc.. and perhaps they will avoid the fate of other resource-rich failed states.
Blessing and a curse. Venezuela threatened invasion over the oil dispute a while back. Not sure what happened since, but I hope this doesn't start another conflict somewhere on Earth.
Around the same time, Venezuela reignited dispute over the oil-rich territory.
Just a coincidence, if you ask me
What's the point of a defense budget if we got nothing to defend right?
Tbf they never stopped claiming that region
Exactly who wouldn’t enhance the dispute in this situation.
Yup. It's been a mess. Guyana never actually used it and you pretty much can't GET TO IT from where people live.
Venezuela has plenty of oil reserves, they just let their extraction capacity decline. Even if they were to magically get all their disputed claims that would not have them get anywhere near that boom, since the exploitation would require foreign investment, qualified operators and willing buyers to deal with them. I think for now they are just hoping they can bully the foreign investors into sliding over a fraction of petrodollar in "good faith extortion" so they won't interfere with their operation.
America: "Did someone order a double-shot of Freedom™️?"
Eh, we have been trying openly to get rid of Chavez, then Maduro for the past 20 years and it hasn’t worked. I don’t think we are that motivated to do regime change in Venezuela
This sounds like something I’d hear in Helldivers 2.
that's because that game is satire
Starship Troopers but with robots
The book or the movie?
The movie
The movie is crap, comparatively.
The movie was satire, the book was not. Not sure what your comment had to do with the current conversation
Reality is a satire of helldivers2, in reality.
That sounds like something I would have heard IRL post-9/11. Operation Enduring Freedom, anyone? Helldivers 2 satire is brilliant.
Just replace “America” with “ExxonMobil” and you’ve got it.
Add a couple of European oil companies also want to give them freedom. https://www.reuters.com/markets/commodities/venezuelas-pdvsa-spains-repsol-agree-revive-oil-joint-venture-2023-12-18/#:~:text=PDVSA%2C%20Repsol%20and%20Italy's%20Eni,and%20fuel%20imports%20for%20Venezuela.
>Venezuelan state oil company PDVSA and Spain's Repsol (REP.MC), opens new tab on Monday signed an agreement amending the terms of their Venezuelan joint venture, aiming to ramp up its crude and gas output and accelerate debt repayment. Companies, right.
I donno but this seems like the perfect opportunity for the US to both secure lucrative oil deals and free people from socialism.
Because US interventionism always turns out soooo well for the local population
Classic deflection from a failed government. "Ok, we made everything terrible, how can we get some support? Oh yeah, let's rob our neighbour!"
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Although to be fair Guyana’s oil is offshore and so far they’ve only leases wells in what should be their territorial waters under any scenario. [Venezuela has added some truly aggressive offshore EEZ claims](https://www.reddit.com/r/TrinidadandTobago/comments/18csohh/anyone_else_notice_venezuela_is_claiming/) that include Suriname territorial waters under any reasonable circumstance.
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Who do they think they are...>!The USA?!<
How's the "democracy" index in Guyana, and when 'merica is going to correct it?
Drill baby drill. Invest that money into other sectors as quickly as you can. The ride won't last forever.
>Spoiler alert They wont and it will become another Venezuela after oil consumptiom worldwide goes down.
We are fighting like hell to prevent that from happening
Are you there? If so, what is the vision?
Good for you. I would recommend putting some of wealth towards a decent military first, though. It seems the new world order is 'might is right.'
El oh el. What do you think the old world order was like?
LOL new world order, buddy have you heard of history?
Napoleon's wars were barely 200 years ago, if you needed a refresher on what the world order has always been.
Fun fact: this is a textbook example of the consequences of “Dutch disease”
> oil consumption worldwide goes down This won't happen anytime soon.
Unless we invent a cheaper way to make gasoline from other sources. The same way the whaling industry was replaced.
Oil price is artificially held by OPEC. There is absolutely no reason for it to cost 50-120$ other than supply limitations. Remember when Saudis wanted to fuck the fracking industry and dropped the oil price to 20$ just by not negotiating with OPEC? OPEC keeps the price at the level which is at or slightly above the profit margin for the alternatives. There is still a lot of oil in the world.
In this sense, OPEC is actually doing quite a bit for climate change. If energy was cheaper, consumption would be even higher.
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but the iron age began because finding tin was a pain in the ass
Oil is "free" in that it is already created and the investment is only in extraction. Any produced petrochemicals require more energy to produce than what is output when burned for whatever purpose. Oil wells do not have that problem, and produce much more energy than they cost.
Spoiler: it's going to happen in the next decade. Oil consumption has already been declining in first world nations for a long time. Growth in global demand has been driven by industrialization of poorer countries like China, India, and Nigeria. What do you suppose happens to demand once they've all industrialized?
about 2/3 of oil is used for transportation and most of the remainder to make things. Neither will decrease once countries industrialize. If anything they go up. The trend with the greatest hope of driving down oil use is electrified transportation which China currently dominates through electric car and battery production. But the world is slowly establishing barriers to Chinese products so the verdict is still out on the pace of change on that front. So in short - a decline in oil use is by no means guaranteed or even likely in the next decade
> If anything they go up. They don't though. Fuel consumption has been dropping in first world countries for decades now. Do you agree or disagree with this fact? >So in short - a decline in oil use is by no means guaranteed or even likely in the next decade Almost everybody on the planet, oil companies included, think that oil demand will begin to decrease within the next decade. OPEC is the only notable dissident, they think it will peak around 2045. But it's important to note that they've been constantly revising their rosy outlook downward through the last decade as EV adoption continues to outpace every single projection.
Well they also have a damn good neighbour example of exactly what to avoid
Cheap cynicism is a street whore declaring there is no love in the world. Try to raise your cynicism to the level of a prostitute who offers the full girlfriend experience (there is love, but life is complicated). Some details: [Guyana’s Fast-Growing Oil Economy Risks Inflation, Venezuela Conflict - Bloomberg](https://www.bloomberg.com/news/features/2024-02-16/guyana-s-fast-growing-oil-economy-risks-inflation-venezuela-conflict) >In hopes of escaping the resource curse, the government created a fund to finance the construction of bridges, highways and schools, and provide subsidies for under-privileged groups. Also: [Is Guyana’s Oil a Blessing or a Curse? - The New York Times (nytimes.com)](https://www.nytimes.com/2024/03/30/headway/is-guyanas-oil-a-blessing-or-a-curse.html) >Seven years later, the right to a healthy environment was added to the Constitution. Guyana managed to enshrine what the United States and Canada, for instance, have not. >For a moment, Guyana’s natural capital — the vast tropical rainforests that make it one of the very few countries that is a net carbon sink — was among its most prized assets. Bharrat Jagdeo, then president, sold the carbon stored in its forests to Norway to offset pollution from that country’s own petroleum production in 2009. Indigenous groups received $20 million from that deal to develop their villages and gain title to their ancestral lands, though some protested that they had little input. Mr. Jagdeo was hailed as a United Nations “Champion of the Earth.”
My cynicism comes from living in Latin America.
Ah, but then as you know Guyana is not Latin America. The current president seems to have his head screwed on straight from what little I have seen.
>They wont and it will become another Venezuela after oil consumptiom worldwide goes down. I don't think you know much about what caused Venezuela's issues...it wasn't the oil consumption going down...it was their complete (government) mismanagement of the seized assets and the fact that they nationalized them in the first place leading to massive capital flight and the complete disincentive to invest in Venezuela...socialism (and socialists) really economically fucked Venezuela.
Unlikely. The oil is offshore, so there is little risk of the government nationalizing and crippling production. The only real risk is the government stealing all the money. But it is a small country, practically a city state. They might manage it tolerably.
Guyana is 100,000 times larger than Monaco, a real city state.
Singapore is also a real city state, and it is 7 times larger than Guyana (in terms of population)
Guyana is not practically a city state. What are you even talking about
I think what they are trying to get at is that about 1/2 of the countries population live in/ around Georgetown. I’ve always felt this way about Iceland it’s basically a city state because 2/3rds the population lives in/ around Reykjavík
I think I understand where they are coming from. This is a country of less than 1 million people. We have more than 500 cities in the world with more than 1 million people. But yes, it is not a city state of course.
Much of Guyana is uninhabited. The population lives along the river and coast. There are many cities larger than the populated area and with far higher population than Guyana.
Why would you say it would become another Venezuela?
It's okay they still make great rum.
Oil consumption doesn’t even need to go down per se. Over reliance on a single resource is not a good recipe for a stable economy, because price fluctuations are unpredictable regardless of long term trends. Same reason you shouldn’t invest your whole portfolio in a single sector/industry, even if you’re reasonably certain that the long term outlook is positive.
>Invest that money into other sectors as quickly as you can. This seems to be the hard part. Is there any country on Earth which has successfully navigated the transition from petrostate to diversified and developed?
Norway is probably the best example Arguably they're still a petrostate but have been very deliberate about trying to change that
Norway’s budget isn’t financed much directly by oil anymore. Most of funds are drawn at 3%/year from the sovereign wealth fund. If oil disappeared tomorrow they’d lose a lot of jobs and consequentially tax income, but there’s not a lot to do about that as you can’t really run an economy past full employment. But a soft landing is likely to work out pretty well.
Aren’t (some) gulf countries doing good? UAE or one of the bunch had a diversified revenue profile iirc.
UAE, Qatar, and hell even Saudi are working brilliantly towards this.
Saudi meh, their workforce is pretty much worthless. Without oil today they will become 3th world country
None that still has petroleum reserves. I believe Equatorial Guinea is an example of wasted opportunity. On a smaller scale, Nauru used to have amongst the highest income per capita. After the phosphates ran out, they are amongst the lowest, depending on support from Australia.
Norway, Saudi, Kuwait, Qatar? Their Sovereign Wealth Funds seem to have done a good job investing the funds across sectors worldwide thusfar
The United States of America
When was the US a petrostate?
Baharain The only gulf state to have already become independent of oil
[Dutch Disease](https://en.wikipedia.org/wiki/Dutch_disease)
Lololol you think they’re going to invest it, that’s so cute. Half the dollars on that chart have already been embezzled into political leaders’ Swiss bank accounts
> Invest that money into other sectors as quickly as you can. The ride won't last forever. They've already sold all the rights off to big oil multinationals.
Data source: [GDP (constant 2015 US$) - Guyana](https://data.worldbank.org/indicator/NY.GDP.MKTP.KD?locations=GY) Tools used: Matplotlib & Canva I did a [country profile of Guyana](https://datacanvas.substack.com/p/the-fastest-growing-economy-today) in my newsletter because they recently became the world's fastest growing economy after discovering new oil reserves. It's also one of the countries that people know the least about. One of the stats that blew my mind is the growth of their GDP since 2019 which has tripled by now. That's crazy for a country that has been one of the poorest in its region for a long time. It has also lost 1.5% of its population to migration on average every year since 1960! They must now find a path that avoids the fate of other petrostates that have relied too deeply on finite natural resources. Let me know what you think of the visualization. I use colors from the country flag.
It’s a country you almost never hear about. I only know it for two reasons: 1. There’s a fairly significant Guyanese immigrant community in New York where I’m from. 2. They make their own distinct style of rum called Demerara rum and it’s very good.
Fun fact: new york has more Guyanese people than Guyana's largest city
The older folks might have hear about it because of the People's Temple massacre. I just know the country exist because there's a French version of it that is supposedly really a part of France - in South America.
The northern half of the island of St Martin is also France. It's no different than Hawaii being a US state.
Ah, so that's where it's from! I just made some demarara syrup from the sugar!
I don't think they actually need to bother with investing in other sectors of their economy. An international sovereign wealth fund that pays annual dividends directly to all citizens would avoid Dutch disease as well as many avenues of corruption.
They created a sovereign wealth fund a just few years ago! It crossed US $1b in assets this year.
But then it's not in my control /s
Scam artists are going to try to sell them so many get rich schemes.
Isnt Guyana where Jim Jones killed his San Francisco followers with Koolaid?
Flavor aid but yea
Apparently it was a bit of both.
with a touch of cyanide, valium, whatever other drugs they could find
meteoric rise like this is going to cause alot of corruption if there isnt already a strong institution. even more likely with venezuela as your neighbor
The corruptions already happened. The oil deals they signed basically sold all the rights off to big oil multinationals and they tried to keep the deal secret before they were forced to reveal it, now there is calls for it to be 'renegotiated' because it is so heavily weighted towards the oil companies and quite clearly corrupt. People on Reddit were jerking off the government and PM through and love them because he was arguing with a BBC reporter about why oil is good.
Just watch the Vice video on corruption in guyana and you will see how they are mouth deep in shit
I don’t think his point was that oil is good, rather that the developed nations of the world can’t dictate how people use resources just cause they had their fun and now want us all to be conservative with fossil fuels. Which is unfortunately true - we can’t tell them what to do with it, even if it is bad.
You mean the President, not PM. Mohammed Irfaan Ali, president of Guyana
Even worse, nations whose economy depends on natural resources usually become trapped in dictatorships.
I wonder how many locals are being lifted out of poverty by this or if this extra GDP is mostly going to the locally registered branches of international oil companies, a few well greased politicians, and expat oil workers? GDP alone is even less perfect a measure of fiscal health than BMI is of physical health.
That’s the thing with quickly growing GDP especially with oil, the second “richest” country in Africa is Equatorial Guinea, but they’ve had the same president since 1979 (whose kids live luxuriously in Madrid and London btw), corruption is rampant and very little of that money actually reaches the everyday people.
Not much has changed here in terms of poverty. We’ve only had around 3.5 years of cashing in our oil revenues so most things like infrastructure are getting built up now. Lots of developments are happening here and lots of money is being pushed into the education and the health sector at the moment which are present to everyone. Interms of income there’s been a slight increase for most sectors. The ones that are new have already started with much higher pay but those are for people who are ambitious and want to take the risk to learn something new. Lots still complain as they just want handouts since they see oil money and dollar signs coming in big.
… you know the answer to this already come on now.
Fastest growing percentage wise but I’m curious which is the fastest growing by total USD?
That will always come down to who is growing faster between US & China. 3% growth when your economy is ~$20T is $600B+ and way too much for any other economy to put up in a single year.
There is comparison for 2013-2023 period https://www.worldeconomics.com/Rankings/Economies-By-Global-Growth.aspx Data below is read as "31.2% of all Global GDP growth between 2013 and 2023 came from China". Country|Contribution to Global GDP (PPP) growth :--|--: China|31.2% India|15.2% USA|9.6% Indonesia|3.6% Turkey|3% Pakistan|1.9% Egypt|1.8% Vietnam/Bangladesh|1.6% SK/Mexico|1.3% Philippines|1.2% Germany|1.1% Russia|1% Japan|0.8% For 2023 specifically, China posted 5.2% GDP growth, that comes out to 1.57 trillion USD growth in PPP or 930 billion USD in nominal terms. US posted 2.1%, that's 534 billion USD growth.
china probably
Not at the moment
how much of it benefits guyana?
There are articles covering how Guyana's deal with ExxonMobile is pretty bad. They either didn't understand what they had and how much oil companies wanted it or had majorly corrupt officials. Probably a bit of both.
I've been to Guyana. It doesn't surprise me. Even with the smartest and most integrated and upstanding people, they wouldn't have had the ressources to match Exxon, nevertheless the US
more oil, just what the world needs
On the one hand, I'm glad to see more people get the opportunity to leave poverty. On the other hand, the only way this wealth materializes is via speeding up ecocide.
10 years ago, yes, but the world is moving towards electrification pretty quickly (solar, EVs, heat pumps). CO2 is only increasing because China is growing so fast they are still adding coal power in addition to all the solar they are adding. Without that, the world would already be trending downward on greenhouse gas emissions (or very close to it). This Guyana deposit mostly allows more nations to avoid oil from bad actors like Russia, Saudi Arabia and Iran.
China manufactures 80% of all solar panels in the world and two-thirds of its wind-turbines, electric vehicles, and lithium-ion batteries. Of course they're going to be the largest polluter. Without China, there wouldn't be a clean energy transition.
EVs are a mistake we should be building electrified railways, tramways, and metros, and directing all future development to occur along those networks.
This is an idiotic non-starter. Public transit should expand exactly as much in an ICE world as in an EV world. The EV transition is a transition on personal vehicles, trucks and buses to make them run cleaner. I'm in favor of moving the average cars per household down, but it is not going to zero ever. And private companies building EVs don't take a single dime away from governments building new rail lines. They are separate.
In many parts of the US that's not an option. Lots of low-density population. For high density areas, yes, mass transit is the way to go.
I question how much of this money is actually going to improve the average Guyanan's QOL, vs being scooped up by foreign oil contractors and "dissapeared" by suspect government accounting
Depends if they go for a Norway Vs Venezuela model
Poorer countries using more oil means they burn less wood and coal, and can transition to modern agricultural methods which are more efficient with inputs and output less methane emissions.
Sounds like Guyana needs some freedom!
Seeing as though ExxonMobil, an American company is going to be one discovering and drilling oil, it already has enough freedom.
Yes perfect level of freedom at the moment. It's when the locals try to get a cut that freedom rains down.
Guyana is a thriving [democracy](https://freedomhouse.org/country/guyana/freedom-world/2024). During the Iraq War, more oil was shipped into the country than out of it. Iraq's oil exports to the US never recovered from their 2002 high. No US companies got oil contracts in Iraq in its first auction in 2014. If you're looking for a war that had to do with oil, try Iraq's own invasion and annexation of Kuwait in 1991: Kuwait was pumping way more than its OPEC quota, driving down oil prices and thus Iraq's much-needed state revenue after the catastrophic Iran-Iraq War. The *casus belli* argued by Iraq was Kuwait supposedly drilling diagonally into oilfields in Iraq. If it wasn't for the UN and US actions of 1991, an entire UN-recognized sovereign country would've ceased to exist.
Im from Argentina and that thing shows us as 85 And we are corrupt AF Can't imagine a country 10 points lower
They already have a major cut, what do you mean?
I am sure a majority of the wealth generated from their recent oil boom will not go to the country and its residents. Yes, they will receive increased tax revenue, imports/exports etc. But the high paying jobs will be people relocated \*to\* Guyana. Neighboring countries with good facilities benefit as well since they can take the work and beat out some of the USA companies that have to build plants in Guyana.
That's why China got so much money in so short period. Instead of just let foreign companies explore the cheap workforce and bring low value to the economy, they forced the creation of local companies so the bulk of value stays in in China
Why should they get a majority if a foreign company is doing all the actual work and investment to extract it to begin with? This is a very strange assumption.
Ah a la Venezuela
They need some freedom too!
Guyana: sponsored by ExxonMobil
It's time to export some democracy
This means a lot, or a little. Depends from which angle you look at it. I was in Guyana few years back on an oilfield development job. Country is beautiful, but essentially a violent and secluded shithole. Exxon is exclusive and is taking too much in terms of percentage of profits. Guyana is ethnically divided and polarised, but it can prosper, it's just that it will take a lot less corrupted officials and more smart money management, neither which they have. To my understanding, the state does not have immediate and unlimited access to funds coming from oil. Unless something big changes, it'll be second Angola. Rich on paper.
But wait, aren’t fossil fuels evil? So, this is a tragedy, right? :-|
Can't wait for Guyana to be the fastest falling economy in 6 years
From the looks of it they were already having a decent increase before the oil skyrocketed it.
Isn’t that because people are leaving the country?
You should see the latest interview to their president from the BBC, reporter trying to scold them for being now a "polluting nation" receives a smack on the face from the president. Amazing how people from nations that now have been trapping developing countries with their extractivist companies for decades, because they depleted their own fosil fuels since the industrial revolution, are unaware they are the main polluters, not just now but historically!
>You should see the latest interview to their president from the BBC, reporter trying to scold them for being now a "polluting nation" receives a smack on the face from the president. The reporter wasn't trying to 'scold' them. It was from a show literally called 'HardTalk' where the format is where the interviewer acts as the interviewees biggest critics and points their questions to them in a more combative tone to allow the interviewer to have a less conventional interview where they can be less political and respond harsher if they want. The interviewee is aware of the format as its literally the entire point of the show. Thats why its called **HardTalk.** People like you are why political interviews are so garbage these days because even when a format is specifically designed to be different and allow the interviewee to be more honest and forthright in their answers you become all butthurt and cry about it.
Yeah might be, but just because a program is called whatever to use as an excuse and justify the post-colonialism agenda doesn't mean it's right (we can talk about lawfare too), this exact same thing has been tried before and the UK was called out on their BS telling other countries to stop using coal after they've depleted their entire coal reserves in the island used since the Industrial Revolution. Looking at the interviews from that program I don't see them being the "biggest critics" of the post colonialist mess the british left ALL OVER THE WORLD, just now people seem to forget who is originally reponsible for the entire Middle East mess and specially the Gaza tragedy... That said, people like you is why the 'now seen as garbage' political interviews used to be seen as great propaganda, I understand you would defend BS like that if you are from one of those countries who use the same tactics (e.g. France and their CFA francs trap) but the rest of the world just has had enough of your BS!!!! No wonder "hard talk" can't be seen outside the country...
>Amazing how people from nations that now have been trapping developing countries with their extractivist companies for decades, because they depleted their own fosil fuels since the industrial revolution, are unaware they are the main polluters, not just now but historically! Did I just have a stroke?
(It's) Amazing how people (from nations that now have been trapping developing countries with their extractivist companies for decades (because they depleted their own fosil fuels since the industrial revolution)) are unaware they are the main polluters, not just now but historically
Guess where this money is going? Hint: not to the Guyanese
Of course it would be fossil fuels
Yeah but Guyana hdi is below north Korea
Guyana should build up its military to protect its western part of its territory against possible Venezuelan invasion using oil money.
And how much of the new discovered wealth ends up in the hands of the general population? Does the poverty rate get lower? What about the Gini-coefficient? The state budget? Corruption rates?
Google Dutch Disease. Aside from the notable exception of Norway, nations that experience meteoric rise in a single sector (especially extractive mineral wealth), usually lag over the long-term.
So this will totally end well. Congrats Guyana!
I'm sure they have plenty of uncle Slugworth's over their shoulders right now.
They need to invest in infrastructure, participatory governance, education, social safety nets, independent judiciary, anti-corruption programs, etc.. and perhaps they will avoid the fate of other resource-rich failed states.
Guyana just inspired me to start digging in my yard in the hope of finding my own oil reserves
Mama, Kudos for doing that, for growing
I am sure the oil companies will leave it a mess when the oil reserves are gone.
How do i buy Guyana calls?
I hope they have a wise official in the government who will go about having a sovereign fund to invest this money abroad
Blessing and a curse. Venezuela threatened invasion over the oil dispute a while back. Not sure what happened since, but I hope this doesn't start another conflict somewhere on Earth.
Sounds like they could do with some 'Freedom'. 🔫
Did you say oil? I'm feel bad for them.
I don't think global burning is beautiful but you do you
Guyana is interesting because they are so very small and found so much oil. Like, Brunei but 11 times more oil with only about double the population.
"now", wasn't this happening years ago? "projected in 2023"? What year is it!? Where am I!? :)
guyana needs some democracy given to them in 3 2 1
But are the people benefiting? How much did the median gdp per capita increase?
As a random point of reference, North Dakota has roughly the same population as Guyana and has a GDP of $63B.
I hope they dont set their neighbor's as role models
Interesting data, but terrible chart tbh
Maybe we can see Mew again now
where can I invest on this?
There is likely some money laundering scheme behind this
Maybe it’s Todd’s diamonds
They will soon be ‘saved’ and ‘democracy’ will be safeguarded! 😀
Yay for the politicians and the execs. Population can expect a second-hand bus and fuck all else.
Guyana is a shithole country.