Guyana Economic Analysis 2020
04 Mar 2020
The South American country of Guyana has experienced subdued economic growth since its independence from the UK in 1966, mainly relying on mineral and agricultural exports. However, the discovery and subsequent production of oil is likely to radically change Guyana in the decade to 2030.
Geography & Climate
Guyana is home to some of the most remote landscapes of Latin America, situated along the northern shoulder of South America and bordered by Venezuela to the west, Brazil to the south-west and Suriname to the east. Around 80% of the country’s total land mass is covered by tropical rainforest, and in the south-west the Rupununi grasslands stretch to the border with Brazil, dissected by the Kanuku Mountains. Some 90% of the Guyanese population lives in the narrow fertile strip between the rainforest and the Caribbean coast, which was once one of the most productive plantation economies of the colonial era. Today, however, much of it is below sea level and protected by a sea wall that stretches from the eastern banks of the Demerara River, around the capital Georgetown, and a further 451 km to the east.
Guyana gets its name from an indigenous Arawak word that translates to “land of many waters”. The country is intersected by a number of rivers, with its three largest – the Essequibo River, the Demerara River and the Berbice River – all running from south to north. Only the Demerara River is bridged, with a 1.8-km retractable toll bridge which, when it was constructed in the 1970s, was the world’s longest floating bridge. Paved roads connect Georgetown to Guyana’s second-largest city, Linden, 90 km to the south, and to the town of Skeldon in the east.
Guyana is located in the tropics and close to the equator. Accordingly, its climate sees high average temperatures and considerable annual rainfall. Georgetown’s temperatures, which are typical for the country, average between around 24°C and 31°C.
At the time of Christopher Columbus’ first voyages to the region, the Caribbean coast of South America was inhabited by the Arawak and Carib tribes. Although the Spanish and the British led expeditions into the interior of the Guianas in search of the fabled city of El Dorado, the Dutch were the first Europeans to successfully settle in the region, creating trading posts on the Essequibo River in 1616 and the Berbice River in 1627. They went on to establish a successful plantation economy for tobacco and sugar, importing thousands of slaves from Africa. By the late 18th century, however, British settlers outnumbered the Dutch, and the territories were ceded to the British in 1814. Following the end of the slave trade in 1838, Afro-Guyanese slave labour on the sugar plantations was replaced first by Portuguese and Chinese labour, and eventually by indentured labour from India.
The current shape of the country’s political party system emerged in the aftermath of the Second World War, during which time exports from Guyana – namely bauxite – boomed. Cheddi Jagan, founder of the left-wing People’s Progressive Party (PPP), became president in 1953, but was eventually deposed by British military action ordered by Winston Churchill. Following the drafting of a new constitution, the PPP remained in power until 1964, when it lost to the People’s National Congress (PNC), led by Linden Forbes Burnham.
Burnham and Jagan were the leading political figures in Guyana during the 20th century, with Burnham overseeing independence from Britain in 1966. During his time in power, he overcame a separatist movement in the Rupununi savannah and dealt with ramifications stemming from the 1978 Jonestown Massacre. He also tackled increases in political violence and a deepening economic crisis, before dying in office in 1985.
In 2017 Guyana’s population was estimated at around 773,000. With 56% of its inhabitants under the age of 29, its population is relatively young. Successive waves of immigration to the country have resulted a wide range of ethnic groups, religions and cultures. According to the most recent census, which took place in 2012, approximately 39.8% of citizens are Indo-Guyanese, 29.3% are Afro-Guyanese, 19.9 % are of mixed race and 10.5% are Amerindian. In recent years, however, immigration has been minimal, with newcomers largely coming from neighbouring countries like Suriname and, to a lesser extent, Brazil. As such, there were relatively few foreign-born residents living in the country as of early 2020.
Emigration, however, has been heavily influential on Guyana’s demographics since its independence. It experienced a “brain drain” through the latter half of the 20th century, with educated Guyanese relocating to the UK, the US, Canada and some neighbouring Caribbean islands such as Trinidad and Tobago. In addition, many low-skilled Guyanese have emigrated to Suriname in search of work.
Founded in 1781 and named after King George III, Georgetown is both Guyana’s capital and its largest city. With approximately 70,690 residents, it holds roughly 10% of the country’s population. The city is located at the mouth of the Demerara River on the Atlantic Ocean, perfectly situating it as the country’s leading manufacturing and commercial centre. As such, it has a number of sugar refineries and exports much of the agricultural
and mining produce from the interior.
Language & Religion
Guyana’s official language is English; however, its wide array of South Asian communities still speak a number of Creole and Hindu languages. According to the 2012 census, approximately 24.8% of the population identified as Indian, 22.8% Pentecostal, 7.1% Roman Catholic and 6.8% Muslim. The remaining 24.8% of respondents were classified as “other”, including a number of indigenous religions practiced by much of the country’s Amerindian population.
In 1992 Jagan returned to the presidency at the head of the PPP, which had been out of power for 28 years. The PPP went on to cement its political dominance, winning the next four general elections and opening the country up for foreign and local private investment.
In 2015 David Granger, former commander of the Guyanese army, won the presidency at the head of a coalition between the PNC and a number of smaller political parties. Shortly after his inauguration, US oil company ExxonMobil announced substantial oil discoveries which have the potential to change the country’s economic fortunes. However, the coalition held a narrow majority – with just 33 of the National Assembly’s 65 seats – and after one of its parliamentarians defected in December 2018, there was a vote of no confidence in Granger’s government.
Under normal circumstances, the loss of such a vote would have led to general elections within 90 days, but a protracted legal debate resulted in elections being set for March 2020. The proceedings are expected to be hotly contested, with both of the main parties and a number of smaller new ones vying to be the first to manage and channel the country’s new spending power on much-needed social and physical infrastructure projects.
Guyana’s current constitution, which dates from 1980, laid out the responsibilities of the three branches of government. The legislature is unicameral and formed exclusively by the National Assembly, with 65 representatives elected on five-year terms and 40 elected on a party basis under proportional representation.
An additional 25 representatives are chosen by the country’s administrative regions. The president heads the executive branch and the Cabinet, and is overseen the National Assembly. The judiciary’s highest institution is the Supreme Court, which is made up of the Court of Appeal and the High Court. The law in Guyana is largely based on a tradition of British common law, while the Roman-Dutch code is applied for land tenure. Since 2009 the Caribbean Court of Justice has been Guyana’s court of appeal.
Following its independence in 1966, Guyana joined the UN. It is also one of the 35 members of the Organisation of American States. More regionally, as a result of both its language and past as a British colony, Guyana has maintained stronger ties with its Caribbean peers than its South American neighbours. In 1965 it joined the Caribbean Free Trade Association, which became Caribbean Community, better known as CARICOM, in 1974. The organisation is headquartered in Georgetown.
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