By Scott B. MacDonald
In June 2021, Guyana hosted Operation Tradewinds, a multinational military exercise involving military forces from the United States, Bahamas, Brazil, Canada, Dominican Republic, France, Jamaica, countries -Bas, Trinidad and Tobago and the United Kingdom. . Although the operation was set “to strengthen the collective capacity of the defense and police forces to combat transnational criminal organizations and to conduct humanitarian aid and disaster relief operations”, it also sent a signal to the Venezuelan regime of Maduro that Guyana has friends, who will show up if the larger country threatens to act on its border claim of about a third of the former British colony.
Beyond the strained relations between Guyana and Venezuela, the southern Caribbean is undergoing changes, driven by the discovery of important offshore commercial oil discoveries in the Guyana Shield, the impact of the COVID-19 pandemic on economies regions and a slide into a new cold war similar situation between the United States and China. In the middle is Guyana, an emerging petro-state of about 782,000 people. Guyana has become a linchpin of the geopolitics of the southern Caribbean. A number of factors explain this.
First and foremost, the discovery of oil off Guyana. Guyana’s oil production is estimated to reach 1.2 million barrels per day by 2030, making it a rival to Venezuela, where production has declined dramatically. This could generate billions of dollars in revenue, catapulting what many saw as an economic backwater to petro-state status. Guyana is changing and with these changes increased political and economic weight in Caribbean affairs has increased.
The second factor is that Guyana’s burgeoning transformation from one of the poorest nations in the Western Hemisphere to a major energy producer has caused the world to knock on the country’s door. The United States has been active in supporting Guyana, but the country has also gained more attention from European and Asian countries, including China and India. With oil companies such as ExxonMobil, Hess, Repsol (Spain) and CNOOC (China) involved, the flag has followed the companies to Guyana.
The third factor is the discovery of important offshore oil discoveries in neighboring Suriname. Although Suriname is grappling with COVID-19, defaults, high inflation and severe economic contraction, the potential for oil wealth has also attracted many foreign players to the country, including Total in France, Apache in United States and Royal Dutch Shell in Europe. China has also been active in Suriname and is one of the country’s biggest creditors.
The fourth factor is Venezuela. Guyana’s neighbor has long claimed around two-thirds of the English-speaking country. Although the case was believed to be closed, President Nicolás Maduro rekindled the claims. It came with a combination of belligerent rhetoric over the military seizure of parts of Guyana, the harassment and detention of Guyanese fishermen, and violations of Guyanese airspace by the Venezuelan air force.
Venezuela’s warmongering is due to two things. The Maduro regime needs something to unify the country. During his tenure, the country suffered from hyperinflation, a massive contraction of the economy over several years, the scarcity of basic necessities and a collapse of public order. led more than five million refugees to flee what was once the richest country in Latin America. Renewing old demands on Guyana seeks to stir up nationalist passions and to relieve the corrupt regime a little.
Lobbying Guyana also allows Maduro to somehow retaliate against the United States, which he sees as the bane of his regime. It has also been a factor in attracting other external actors to the Caribbean; Venezuela’s growing ties to the Islamic Republic of Iran, another former rival of the United States, have exacerbated tensions as the Middle Eastern country previously sent tankers full of gasoline and sent a cargo of gasoline in June. seven high-speed missile boats to its Latin American ally.
The last factor is the slide towards a cold war between the United States and China over influence in the Caribbean. Since the early 2000s, China has become a major economic force in the region, notably by being one of the main supporters of the Maduro regime. China is also a key support (within limits) for Cuba, another country where the United States has problems. The United States has been slow to recognize China’s economic and strategic challenge and the potential for a “pivot to China” by Caribbean governments in need of funding to develop critical infrastructure, such as roads, bridges. , airports and ports.
The “Chinese factor” was evident in Guyana in February 2021, when Beijing rejected Georgetown’s plans to allow Taiwan to open a trade office. Guyana has maintained diplomatic relations with the People’s Republic since 1972, highlighting Guyana’s recognition of one China; recognition of any kind cannot be extended to Taiwan, which is considered a separatist province. Despite the important role played by the United States, China has emerged as an important source of funding and infrastructure construction, including the Arthur Chung Convention Center and a planned Cheddi Jagan International Airport expansion. Establishing a Taiwanese office was balanced with Chinese infrastructure help and found too high a price.
The ability of alternative energy sources to bridge the gap to global demand indicates that even if the world goes green, it will still need oil and natural gas for some time to come. Such a probability makes Guyana, as well as Suriname and Trinidad and Tobago, the key to regional development and foreign markets. At the same time, such trends could reinvigorate refineries in Aruba and Curacao.
In all of this, Guyana is a key pivot: it shares borders with Venezuela; seeks to improve economic relations with Suriname; may be part of an effort with other Caribbean oil and natural gas producers Trinidad and Tobago and Suriname to drive a regional energy security agenda, and with the ear of the United States and China ( despite their rivalry in the region). This places a responsibility on Guyana to maintain its own political stability, to make wise choices among its friends and allies, and to become a more influential player in regional affairs.
If managed prudently, Guyana’s oil wealth can also facilitate the transition to a larger and ultimately greener economy, which deserves more attention. This will only benefit Guyana, but the entire Caribbean.
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