Guyana

What can Britain learn from the world's fastest growing economy?

Please, don’t panic, the Monday Memo is back. You can finally find out what is happening in the Guyanese election.

Guyana is a tiny nation. A population of less than a million, with one of the smallest population densities in the world.

A former British colony, Guyana was once the second poorest nation on the globe: now it is the fastest growing economy. 11 billion barrels of crude oil were discovered off its coast in 2015, the largest discovery of oil since the 1970s.

Now, the country is rolling in cash. Last year, President Irfaan Ali authorised a £300 payment to every voting citizen.

On September 1st, as Guyanese take to the polls, it’s likely that the 44-year-old will be re-elected. His pledge is to ensure all people see the benefits of the economic boon: he’s already made university education free, and built new schools and new hospitals. He wants to raise public sector wages, reduce taxes and continue improving infrastructure and social services.

Politicians are often victors or victims on the basis of, not what they do, but where the winds take them. Joe Biden was an electoral victim of global inflation, Irfaan Ali will likely be a winner thanks to the riches of oil.

But while that will undoubtedly be a big part of his victory, Ali has presided over a country that has accomplished economic growth without environmental destruction. Unlike South American neighbours that have demolished their rainforests, then been paid to restore them, Ali has protected the Guyanese rainforest and ensured its long-term survival is economically productive: by negotiating deals with global bodies to preserve Guyana’s rainforests: positioning them as a global asset.

Guyana is also the only country on earth that produces enough food to feed itself: with no reliance on imports.

But while things are good today, President Ali will be looking to one of his neighbours for a warning. Venezuela struck oil almost exactly 100 years before Guyana did. Today, they are a pariah state: led by a dictator, with more than a third of the population having fled.

Guyana’s extraordinary growth will not last forever. Oil prices will fluctuate or production might stall. Ali’s success will not be measured today: but on whether he is able to invest the cash today to ensure equitable wealth in the long-term. History tells us it's difficult: but he seems to be making the right moves.

And what can the rest of the world learn from Guyana? My view is that the UK is sitting on an oil landslide of its own: renewable energy. We are geographically perfectly placed to take advantage of winds and tides to generate energy, and we have the scientific capability to build nuclear reactors. Unlike Guyana, which has won the lottery and must now invest its winning, we must invest today to win the lottery tomorrow. We’re not managing abundance, we need to create it.

The Labour government must, just like Ali’s government, focus on making the country better for people. Better roads seem trivial, but potholes and never-ending roadworks are signs of a country that is deteriorating.

Guyana is also grappling with the issue of elections that are fought along lines of ethnicity. It’s the same story in South Africa. We must not let a situation arise in the UK where voters align with a party based on their ethnicity, not their principles. When a system maps against identity rather than ideology, tensions arise. We’ve seen that in this country with pro-Gaza independents, and we’ll see it again with Reform UK. It is not a sign of a developed nation, and something we should look all around the world at how to avoid.