Like other developing countries endowed with non-renewable natural resources but underdeveloped political economic institutions, Guyana, a new addition, will face similar challenges.
Guyana is considering establishing a sovereign wealth fund (SWF) after Exxon-Mobil reported that a recent oil discovery off the coast of Guyana may hold up to 1.4m barrels of crude oil—worth between US$40-US$70bn. Guyana currently imports all of its gas and oil. The discovery of offshore deep-water oil reserves has the potential to bring a massive financial windfall to the country. Effective capture of these revenues is important for Guyana. This will require a national commitment to institutionalize the process and establish a clear mandate for the governance and management of these national assets. The risks of complacency include becoming a self-inflicted victim of “Dutch disease.”