Guyana and Venezuela Defuse Long-Standing Land Dispute

On December 15th, Guyana and Venezuela agreed to resolve their centuries-old border conflict over the Essequibo region peacefully, easing fears of potential military escalation.

The Origins of the Dispute

Essequibo is a sparsely populated, forested area constituting over half of Guyana’s land. But Venezuela has claimed it since the 1800s when both were European colonies.

Tensions reignited in 2013 when Guyana permitted ExxonMobil to explore offshore oil and gas reserves near Essequibo. The subsequent discovery of over 17 trillion cubic feet of gas and 11 billion oil-barrel equivalents sparked Venezuela’s aspirations.

Economic Implications for Guyana

Before the massive fossil fuel finds, Guyana’s small $4 billion economy depended on agriculture and mining.

But oil and gas now comprise nearly 50% of GDP. Guyana became the world’s fastest growing economy in 2020 at a stunning 62.3% clip. This momentum is projected to continue with 2023 growth over 38%.

Experts predict the oil wealth could make Guyana one of the globe’s highest per capita producers and income countries by 2030.

Geopolitical Factors

However, analysts argue Venezuelan President Nicolas Maduro is using the dispute to shore up domestic politics rather than eyeing unreliable economic gains. He held an allegedly rigged referendum on annexing Essequibo despite poor turnout.

With Maduro’s term ending next year, some believe he manufactured the crisis to look strong. But the risk of open conflict previously seemed real to Guyana.

Lessons from the Dispute

The tensions spotlight how newly discovered natural resources can instantly elevate a region’s economic and political significance.

While Guyana has an unprecedented chance to convert oil into prosperity, unresolved threats from powerful neighbors and global uncertainty could constrain that promise.

Month: Current Affairs - December, 2023

Category: International / World Current Affairs • Places in News Current Affairs