In recent years, Guyana has been making global news on record economic growth (the amount in percentage of how the economy has been growing). Fast paced growth would not have been possible without the investment of Exxon and other energy related companies. Some critics of Exxon, a multi-national giant, have suggested to leave the oil under the seabed and for Exxon to pack up and go. Others have called for government “to teach Exxon a lesson on who is boss” in Guyana. If the preceding were to be affected, Guyana would not have experienced the kind of growth it has boasted on the international scene. Most of Guyana’s growth is energy related and attributed to investment of and revenues from Exxon. Its and other investments have indicated growing confidence in the economy and high expectations of huge return on investments. And so far, Exxon and other foreign energy related as well as mining and lumbering companies have been experiencing mammoth rates of return. It is because of Exxon’s energy investments that other companies have pumped money in Guyana.
Investments, domestic and foreign, are important for economic growth and development of any country. Investment (transfer of money, knowledge, skills, technology, and related factors) from external sources are called foreign direct investment (FDI) and are most critical for development. Exxon and other companies have been investing heavily in Guyana over the last several years resulting in large amounts of revenues to the exchequer that have it possible for government to fund infrastructure work, education, health and other sectors that benefit the nation. Money is also being invested in the hospitality sector (hotels).
In general, FDI takes place when an investor establishes business operations or acquires assets or shares of a company or manages one or more businesses in a foreign country. It also includes joint ventures. Exxon’s investment is an example of FDI in Guyana. Guyana has attracted a lot of FDI ever since Exxon decided to pour money exploring for fossil energy. After Exxon found oil and gas in Guyana’s jurisdiction, FDI grew exponentially. Other companies are also investing in oil and gas and in other industries. But Exxon’s, in particular, is a huge investment in the tens of billions in American dollars.
Exxon and other companies invest in Guyana because of guarantees of return and safety of investment and government’s honor of sanctity of contract. They expect to recover costs and also earn a huge profit for money plowed into their business and by extension in the economy. Their investment has helped the country to develop, creating jobs and growing the economy. Because of investments from Exxon and other companies, the country is growing at record rate, making news globally.
Guyana has been the fastest growing economy ever since Exxon came on the local scene (with production) some five years ago. Exxon’s investment has created confidence and stimulated other foreign and local investments throughout the economy. This has boosted other economic activities such as domestic construction, infrastructure, expansion of the airport, non-fossil energy generation of power, farming, hospitals, among others, resulting in an increase in an increase in local productivity, and sales. The vast expanse of economic activities has resulted in an increase in income across the board. The resulting increase in purchasing power has led to a higher standard of living although it has been offset by (unofficial) high inflation (rising costs of goods and services).
Ever since Exxon came on the scene, that saw an improvement in physical infrastructure and the skyline, there has also been an increase in the development of human capital resources, among other resultant benefits. More and more Guyanese have been getting training in technical skills in oil and gas related areas as well as in other sectors such as health, tourism and hospitality, how to teach (education), and in other fields. The workforce (including civil servants or the bureaucracy, educators, medical staff, the armed and police forces) has been getting better training and more equipped (in addition to better equipment) to do their jobs as well as higher salaries. The foreign direct investment of Exxon and other companies have allowed for resource transfers and exchanges of knowledge, technologies, skills, culture, and other benefits. The facilities, equipment and know-how of foreign investors have increased the workforce’s productivity and income in most if not all areas. More Guyanese are pursuing tertiary education today than ever before. Government has been flushed with money funding thousands of scholarships annually. Overall, human capital has been increasing that will redound to benefits in the economy.
Guyana has been benefiting tremendously from the FDI of Exxon and other energy companies and private investment in general. Those opposed to the development of the oil and gas sector, Exxon and other energy related companies, should re-think their position.