perhaps no world leader spends more of their time at launch events than the president of Guyana DrAran Ali that's because the small South American country is speedrunning National development for example just weeks ago the president was at the opening of the Aiden a new luxury hotel in the capital operated as a franchise of the Best Western this is only the country's thirdd aligned with an international brand and it's badly needed the country's top Hotel the Marriott is consistently selling for over $600 a night as a recent influx of foreigners has outpaced the country's ability to build hotel rooms meaning it's consistently more expensive than the Marriot in New York's Time Square but this new hotel in guyana's capital of Georgetown is the first of a relative Deluge backed by the country's government including a four points by Sheron Hyatt Place AC by Marriott Courtyard by Marriott and RIS and blue already announced an in development also notable enough to Warrant the president's attend was the opening of guana's first Starbucks prices are steep higher in fact than in the US a medium latte goes for 1400 guanes dollars or about $6. 75 USD considering just 5 years ago Guana was one of the poorest countries in South America with a human development index lower than that of Palestine it's remarkable that there are now enough people with enough disposable income in Georgetown to sustain such an expensive coffee shop something similar can be said for the country's new F Changs whose opening was also of course attended by President Drfanali there an order of crab wons goes for the equivalent of $22 us a major reason why these International brands are setting up in the country is because there are now more people from abroad coming into the country so in addition of course Drair fanale was also on hand to receive a delegation from United Airlines when the carrier undertook its inaugural flight from Houston to Georgetown he fulfilled similar duties when British Airways started flights the country via St Lucia reconnecting Guana with its former Colonial capital of London as recently as 2019 guana's only flights beyond the Caribbean region or to Miami and New York since then in addition to the Houston and London flights American and JetBlue added their own flights to New York Caribbean Airlines to Toronto and aanka to Bogota there's just suddenly so much more in demand to get to the nation and therefore so many more Airlines willing to take Travelers dollars this turbocharge development also manifests in far less flashy ways as well the President also presided over the launch event of dynamik q a new Guana based Enterprise it provider it may not be exciting but as more and more Tech dependent companies enter the country they need a company to sell Hardware integrate cyber security systems and provide ongoing support something similar can be said for this highway opening as Georgetown grows larger and rents rise this section of land across the demara river is suburbanizing and therefore this higher throughput Road through the area will help alleviate commuter traffic behind this all the reason why Guana is developing so much so fast is oil and a whole lot of it now in retrospect it's not some massive surprise that Guana has oil in fact it sits directly next to Venezuela the country with the single largest proven oil reserves in the entire world geologists have long speculated that the same formations extended across the border into Gana yet Decades of half-hearted exploration last century only yielded uneventful discoveries that were either too small or too difficult to exploit commercially Exxon held exploration rights since the late '90s but it was only around 2013 as these rights Drw close to expiring that the company started to form a coalition of smaller oil companies willing to do what they weren't in paying $225 million for the exploratory drilling process in exchange these companies would get a portion of the overall oil rights and therefore Revenue if oil was found at all but on May 5th 2015 the Deepwater Champion oil rake broke through to liquid the ologists were right Gana had oil it would take some time for the true scale of this discovery to become clear as Exxon and its Partners kept exploring over the years that followed their understanding of the extent of this oil deposit grew and grew and grew today 11 billion barrels worth of oil have been found that by itself is a lot it's a good bit more than that of Norway or Ecuador for example but while Guana only sits around 18th in the world for proven oil reserves there's a big difference between it and every other country higher on the list with a population of just 830,000 Guana is far far smaller than every country with more oil meaning its oil per capita is amongst the highest in the world beaten only by that of Kuwait but there is yet still a difference between Kuwait and Guana Kuwait is an Emirate a form of monarchy meaning much of the spoils of its oil wealth is confined to the ruling family however is a democracy meaning at least in theory oil Revenue should be used for the benefit of the nation and its people it would therefore be reasonable to conclude given the style of governance and the ratio of oil to people that the scale of change that guyana's oil Discovery will bring about will be amongst the greatest any country has ever seen in just 5 years since the start of production in 2019 tremendous change has already unfolded but that's truly only the start the nation reached output of 645,000 barrels per day in 2024 representing a doubling of 2023 production but based on the expected output of new projects already in development G is projected to double that count to 1. 3 million barrels a day by 2027 and then beyond the sheer scale the oil's influence is magnified yet further by its cost it's cheap whereas globally a barrel tends to cost between $50 and $60 to pull out of the ground in Guana the comparatively simple geology puts it at just $36 near middle eastern prices oil sells in a global Marketplace so that leaves tremendous profit margins against today's 70 or so dollar per barrel oil prices with 50% of profits going to the government and profitability expected to only grow as project setup costs are paid off Guana is in for Far Far More change than the tremendous amount that is already occurred in five short years but this change is far from a guarantee win it would be intuitive on the surface to expect that a massive influx of cash into one of the world's poorest countries would lead to it becoming a far wealthier one and it will this is already happening of course its economic growth rates are quite literally the fastest in the world but the mere fact that a country's Topline indicators move up and to the right is not necessarily a good thing look no further than guana's Western neighbor Venezuela as the country with the world's most oil it developed almost single-handedly off of the revenues the resource provided and this did pull it up to the status as the wealthiest country in South America for a period the standard of living in Caracas was high democracy was stable the economy was strong but of course the Venezuela of today is far from that in fact on the list of the 10 countries with the largest proven oil reserves the economic profiles of the Nations vary widely there are some of the world's wealthiest and most developed economies like the US Canada and UAE but then there are places like Venezuela and Iraq and Iran while these nations still trend wealthier on a GDP per capita basis than most of their Regional neighbors they certainly are not as wealthy as some of their neighbors on this chart plotting these nations out by GDP per capita proves it objectively there is very little correlation between oil reserves and National wealth economists know this and have studied the phenomenon since the birth of the P State and they have at least some straightforward explanations for example currency exchange rates at their simplest level ENT all the manners in which countries manipulate the relationship fluctuate based on the traditional influences of supply and demand in a Marketplace that's to say if more people want Guan dollars likely to buy things from Guyana they'll have to offer more US dollars per guanes dollar in order to compensate for the increased demand as only so many ganes are ever willing to take US dollars in exchange for their own of course when a nation starts producing oil plenty more people want to buy from it so plenty more people want its currency so without inter vention a currency's value will rise relative to others you'll get fewer guanes dollars in exchange for each us one this does have benefits a Guan person could now buy a product from abroad say an iPhone for Less given the increased value of their money imported goods in general get cheaper but it also presents challenges a guani sugar exporter for example gets their money from abroad their income is tied to foreign currencies and therefore their income in local currency is now effectively lower they might earn the same number of US dollars but those dollars translate to fewer goods and services locally so that's all to say absent intervention the success of oil often can lead to the failure of other older Industries in a nation the ones that actually employ local workers since oil tends to hire from abroad so oil Revenue by itself does very little for a nation and can actually actively damage the economy so what matters is what a government does with the revenue and the data pretty clearly shows what they should while oil reserves exhibit almost no correlation with GDP per capita another indicator does oil rents as a percent of GDP that's to say the more Reliant an oil Rich nation is on its resource the less its economy tends to have developed or flipping that the other way this appears to indicate that the more a resourcer nation diversifies away from its resource the greater its economy will grow of course these days this is obvious every oil Rich Nation talks constantly about diversification the number that actually achieve it though is low in that top 10 Group Canada Russia and the US were large and developed enough economies pre- oil that diversification was never a worry the industries in Venezuela and Iran are held back by sanctions and other geopolitical factors meaning oil rent as a percent of GDP likely would be higher in an unrestricted Market Saudi Arabia Iraq Kuwait and Libya are some of the world's most oil Reliant and have not had tremendous success historically at diversification even if Saudi Arabia and to a lesser extent Kuwait have started to make more meaningful progress fairly recently the UAE really stands as a rare example of a previously lowincome country experiencing a relatively recent oil boom and translating it into a high inome stable Diversified economy so guana's task is to add itself to that exclusive list and it's going to be anything but easy not only is Gana tiny it's disconnected and divided take the nation's 2012 census it's most recent since the country is yet to publish its 2022 Edition nationally 74% of people live in rural areas putting it near Afghanistan and Tajikistan in the metric and that doesn't consider that 90% of the population lives in six regions that comprise the coastlands while the other 10% are spread across the other 2third of the nation's land mass in What's called the Hinterlands in the Hinterlands the closest comparable US state in terms of population density is Alaska while for the nation in whole the most comparable state would be the US's third least dense Montana gyana then is not only small in size it's small in population and population centers with pockets of people and Villages spread across a relatively rough and heavily forested landscape this makes managing a country let alone a functioning democracy all the more difficult as conveniences like Broadband or cell service or even paved roadways have yet to make it to many communities then zooming out another physical disconnect more than half of all ganes live outside of Ghana there are 300,000 in the United States nearly 100,000 in Canada and 30,000 in the United Kingdom if the guanes population of Brooklyn was a city in Ghana for instance it'd be the country's second largest city effectively the country is split between those who have and haven't left with massive immigration beginning in the country in the 1970s largely on account of a lack of work prospects and moments of real instability fueled by another divide this one ethnic a result of colonial era indentured servitude and the transatlantic slave trade Gana is split between two major ethnic groups with nearly 40% of the population indogan and another 30% afro ganes while the country has been governed by a multi-party democracy since before independence in 1966 the nation's Stark ethnic divides have informed political leanings and fueled bouts of political violence with the afro ganes passionately backing The People's National Congress while indog ganes push the people's Progressive Party even in the country's heavily publicized and closely monitored elections of 1992 deem the nation's first fair and free riots and an attack on the elections commission Building made the New York Times the trend continued in the following elections of 1997 and 2001 as violence marred both occasions nevertheless Ghana has remained a democracy albeit a the concerningly frail one as it ranks 67th on The Economist democracy index where it's categorized as a flawed democracy and it's these types of indicators that have onlookers worried that Newfound wealth May well tip the country over but Ghana for its part has so far backed its commitment to democracy in its burgeoning oil boom for one they've taken a play out of the number one ranked democracy on this list Norway in creating a sovereign wealth Fund in 2019 essentially a national scale Investment Portfolio to hold and grow the oil wealth because this fund or the natural resource fund is public ghis can keep an eye on it cutting down on corruption and because this fund is designed for the betterment of the country's future prospects it's directed to invest in the all important diversification of guyana's economy Beyond oil in some ways this move was a continuation of guyana's 2017 entrance into the extractive industries transparency initiative run by a Norwegian organization which showed a governmental willingness to open up on how oil money is being used and in 2021 the messaging of 2017 and 2019 was doubled down on with further amendments to the natural resource fund that ensured any transfer out of the fund would have to be approved by Parliament rather than just a federal bureau with unelected Representatives at the helm and while young the program is beginning to pay some dividends in early 2024 president aan Ali presented a national budget of 5.
5 billion USD a number that blew past the previous year's High Watermark of 3 . 75 billion making possible a budget some six times larger than that of 10 years prior was the fact that 29% of it was covered by four scheduled and executed transfers of natural resource funds money held in the New York Federal Reserve Bank back to the nation your marked within this big oil-backed budget was nearly $500 million for developing agriculture infrastructure nearly $1 billion for Rose and bridges and another $20 million towards the University of Ghana to help reduce tuition payments all efforts a to close physical and educational divides within the country but perhaps the most exciting and ambitious aspect of the year's budget was the continued funding of a 300 megawatt natural gas power plant with another $400 million going to the project the plant could have a truly revolutionary impact on the nation as currently guana's total energy sector capacity sits at around 300 megaw and relies on inconsistent and often private self-generated Diesel power in taking on a 1. 7 billion dooll project to pipe unused natural gas from the oil field to a plant roughly here Guana is using its oil windfall to potentially Electrify a country where houses are still Colonial remnants roads are still dirt and cooking in some Villages is done by wood and charcoal the life altering transformative potential can't be overstated but the project has hit some snags on the Exxon Mobile side the side responsible for constructing the 125 M or 200 km pipeline things are on Target and on time for an end of 2024 delivery however on the plant construction side the side contracted out by the federal government to the us-based partnership of CH4 and linsa disputes over timing and cost for the project have pushed the plant's projected opening into late 2025 in the grand scheme of things though it's unlikely a delay and an increased price tag will prove too much of an issue or perhaps it's an example of a crack in the facade it wouldn't be the first well these first few years of Ghana's oil era have gone on balance smoothly hiccups have occurred for one in the 2020 snap election incumbent David Granger was nearly sworn in as president before the high court stepped in and blocked the move to make time for a recount which ultimately proved the initial vote counting fraudulent leading to aan Al's Inauguration in 2024 Ghana's Representatives found themselves in the crosshairs of the UN rights committee over complaints of corruption and non-competitive bidding processes linked to government officials and in every announcement of a new government program or large spending plan there's the questioning from near and far academics and overlooked rural gianis alike over exactly which gian's people are meant to benefit from such projects and then there's the Venezuela problem this region is called the esao it's a bit smaller than Florida it's home to over 100,000 it's heavily forested it holds a trove of gold and diamonds and when looking at a map it traditionally appears within the borders of Ghana but not the one that vene introduced in late 2023 now the region has been disputed for more than a century and while a 1966 agreement to find a solution then efforts by Gana to settle the dispute through the UN as recently as 2020 have pushed for a resolution Venezuela has refused to play ball and now the troubled country is only intensifying its rhetoric around the region as the reimagined map of Venezuela has been paired with nationalist messaging on the part of President Maduro that the rise of Gana and the encroachment of Exxon Mobile in the region an extension of American Empire in his view is a direct threat in a December referendum it appeared that a majority of Venezuelans agreed with the head of state as an incredible 99% of Voters agreed that Venezuela has the right to the region turnout however was so low and the results so obviously altered by the government that Guyana and the rest of the International Community wary of Venezuela's intensifying tone took a sigh of relief but Maduro has so far proved undeterred in the face of an unenthused Venezuelan voter base his government has spent much of 2024 showcasing new missile boats on social media authorizing and publicizing military aircraft exercises over the Atlantic and expanding the anoko island military base and air strip directly on the border of gyana maduro's exact purpose and what the unpredictable regime does next remains to be seen but on top of its efforts to ensure it doesn't make the same mistakes as Venezuela gyana is also dealing with the existential threat of a large swath of the nation becoming Venezuela but overall the story of gyana is not a new one plenty of previously poor countries have navigated this complex web of opportunity and Peril what makes Gana situation unique is the combination of the fact that it's happening now it's happening in a democracy and it's happening in the US's backyard that really just means more people are paying attention there's a long history of countries getting trapped in the resource curse and ending up no better than they were pre- oil but many of those failures happened in an era where there was less historical precedent and therefore less recognition of the pitfalls worth avoiding there's also a long history of weak democracies devolving into authoritarian regimes with the pressures oil applies it's happened in Venezuela it's happened in Iran it's happening in Angola each time the direct causes are different but oil seemingly serves as fuel to the flame in flawed democracies when there's a lot to gain from corruption and weak institutions that could get in the way one seemingly just gets more corruption backed up by authoritarianism but there's not as much of a long history of countries as geographically close to the US experiencing the situation Venezuela is the main case and considering where it's ended up it'd be reasonable to assume that the US will play a much more active role in Guyana than it has in many of the West African economies that have gone through oil Booms for example guyana's off to a strong start right now in these early early years they're directing money in a lot of smart ways and the country's Democratic institutions appear to be intact but the bulk of the challenge is still to come guyana's only gone through one election since the scale of its impending oil wealth became clear and that was the election that nearly Ended as a coup the Gan oil boom is likely to be one of the world's last with peak oil Demand on the horizon the industry is growing less and less interested in investing the enormous amounts necessary to set up production in new areas already unlikely new discoveries will increasingly go unex exploit it so Gana presents one last opportunity to get it right the steps a nation in its position need to take are as clear as they've ever been it's the ensuring that it actually does so that's tricky but if it does it appears that gyana is set for an incredible transformation that will reshape the entire region of course understanding what's next for Ghana also requires an understanding of Venezuela's next move and understanding what Venezuela's up to has required a careful consideration of the biases within my own research on the topic given how politically charged anything to do with the country or its politics or its economy or its leader has become when looking for sources and news stories to inform this video I turn to ground news the sponsor of this video take for instance the issue of rising tensions between Venezuela and its neighbors an important component of this video given that maduro's regime is often associated with a perceived ills of socialism and given that so much news is often sensationalized to pull clicks and generate ad Revenue I wanted to make sure that it was fair to characterize Venezuela's tone as increasingly hostile towards its neighbors without repeating the biases of slanted news sources ground news allowed me to do that by compiling articles on the growing Rift between Brazil and Venezuela and characterizing the sources for such stories as Center left or right it also generated a list of key points made in right leaning articles and left leaning articles in this case given so many sources were considered Center and given that the right leaning and left leaning talking points were fairly similar I was able to continue drafting the script with confidence that I'm not simply echoing my own or anyone else's political biases and our only as ground news of massive Aid in spotting biases and slant in the stories you care about it also has a feature called blind spot that identifies and introduces stories that are not getting equal coverage from the right and left which is so helpful to any and all news consumers because it allows each and every one of us to move beyond our own biased media diets to consider what we're missing on top of blind spot ground news also has a local feed so you can plug in your city and quickly identify the slant and the stories that are getting covered in your hometown on top of this there's also my news bias which tracks reading habits over time with this I can see my most read Outlets the bias of the stories I read and even the topics and people I read about most is basically a diet tracker for news and one final aspect I'd like to shout out is the ownership feature that ground news has developed they've analyzed well over 2,000 separate news sources to distill the ownership structure of each Source into one of seven categories ranging from wealthy private owners to two government owned and operated news sources which again helps me understand why a story is framed the way it is the fact of the matter is all media to a certain extent carries bias and all media consumers including myself carry some personal biases so if you want to counter such factors cut through all the rhetoric political positioning and organizational slant go to ground.
