Development Performance and Economic Policy in Guyana, 1990-2021

This chapter evaluates Guyana's economic performance since 1990, using the UNDP's Human Development Index. The confident expectations for Guyana's resource-rich economy in the 1970s were defeated by a failed experiment in state control which caused a major regression in economic development in the 1980s. By 1990 Guyana had fallen behind the rest of the Caribbean - Haiti excepted - in the HDI rankings. By that date, however, the last of the controls that had strangled production were being dismantled. In the three decades to 2019, the year when a new era as a petroleum exporter began, Guyana's development performance was among the best in the Caribbean, thanks mainly to investment in gold production in response to rising international gold prices. Investor confidence was restored by fiscal prudence on the part of the Guyanese Government, which maintained savings on the current account for all but a few years around the turn of the 20th century. With the restoration of fiscal credibility, capital flight subsided and the exchange rate stabilised even though the Bank of Guyana no longer actively intervened in the foreign currency market. The transformation to the oil economy since 2019 poses immense challenges for economic management to secure development commensurate with the country's new-found economic potential.