Guyana Gold: A Unique Resource Curse?

Abstract

This article offers explanations for the underwhelming economic performance of Guyana, a country heavily dependent on the revenue generated from gold mining. Here, government intervention has spawned a gold mining sector which today is comprised exclusively of local small and medium-scale operators. But whilst this rather unique model appears to be the ideal blueprint for facilitating local development, the country seems to be experiencing many of the same setbacks that have beset scores of other resource-rich developing world economies. Unless these problems are anticipated, properly diagnosed and appropriately tackled, a resource curse-type outcome is inevitable, irrespective of the context.

Perspectives on diversification prospects for the agrifood industry in Guyana

“…Guyana has not opted to follow a large-scale, export-led extractive blueprint, as has been the case in other resource-rich developing countries, such as Ghana and Peru. While Guyana's goldmining sector consists to a large degree of local small and medium-scale operators, it is still at risk of facing similar issues, if local interests are not prioritized (Hilson and Laing, 2017).…”

“…The service sector and gold production hold a key role in Guyana's economy, contributing 61 percent and 18 percent to its GDP respectively (see Table 1). The development of the gold sector was favoured by an expansion in financial services for gold mining throughout the last decade, which has had a significant impact on financing for local mining activities (Hilson and Laing, 2017). The past few years have seen a strong increase in commercial bank loans, especially in the service sector.…”

Small man goes where the large fears to tread: Mining in Guyana: 1990-2018

“…The sectors relationship with the Low-Carbon Development Strategy has been studied from both a qualitative (Lowe, 2014) and a quantitative (Laing, 2015) perspective. Its importance and impacts on the wider economy have been examined in relation to the resource curse (Hilson & Laing, 2017a) and the rentier profits that have emerged from the sector (Bulkan & Palmer, 2016).…”

“…Understanding the growth of this industry and its impacts, and how formalising this often informal sector may impact the industry, economy and society is vital for understanding how to formulate policy and regulate the sector. A small but evolving literature has emerged looking at this context , including some focusing on Guyana (Hilson & Laing, 2017a;Bulkan & Palmer, 2016;Hook 2019a;Hook 2019b).…”

“…The dominance of small and medium-scale mining has had particular impacts within Guyana, on its economy, society and environment. Economically the policy helped to maintain value within Guyana, but may not have fully insulated the country from the resource curse (Hilson & Laing, 2017a). Although a large value has been created for consumption by Guyanese miners and their families, little of this has been captured by government for investment in long-term infrastructure, and a large share has ended up in the hands of a small rent-seeking elite -with much being offshored.…”