Since the start of oil production in 2019, Guyana’s economy has not merely grown, but has taken off. This can be substantiated by the fact that in 2024 the real Gross Domestic Product (GDP) increased by an impressive 43.6 per cent. In 2022, oil exports accounted for approximately 88 per cent of total domestic exports, while sugar, gold, bauxite, shrimp, fish and fish byproducts, timber and rice contributed approximately 90 per cent of the non-oil exports.
The country stands as one of the world’s fastest-growing economies. More importantly, although the revenue gained provides an opportunity for the country to strategically attain global prominence through policy strategies and development agenda, overreliance on the sector can heighten the risk of “Dutch disease”, a phenomenon that may undermine the performance of non-oil sectors.
Moreover, as a Small Island State (SIDs), Guyana faces challenges such as price volatility, limited market size, possibilities of rent-seeking and commodity dependence. As the country navigates the new economic transformation driven by the discovery of its new oil wealth, it is essential to understand the potential role that trade in services can play in Guyana’s diversification and sustainable growth.
The potential of services in Guyana
According to a joint report published by the World Trade Organisation (WTO) and the World Bank in 2023, the services sector accounts for half of global employment and two-thirds of global GDP, exceeding the combined contributions of the agricultural and other productive industries. In Guyana, both goods and services trade have maintained a positive relationship with GDP during the period 2005 to 2022. That is, increased international trade in goods and services increased Guyana’s earnings.
Services such as engineering and logistics, driven mainly by the oil and gas industry, increased nearly fourteen times over the period 2005–2021. However, service exports have remained stagnant. Therefore, the paradox that remains is that Guyana currently has a consistent services trade deficit. This imbalance has created a high level of services trade deficit of over US$4.4 billion in 2023, and as such, dependence on imported high-value services for important oil-related activities has increased. As a result of reliance on oil-related services, there is a risk of Dutch disease, a phenomenon that can undermine the performance of non-oil sectors.
Similarly, foreign direct investment (FDI) has largely focused on capital-intensive oil and gas projects, posing a threat of competition for labour and resources within the oil and gas industry, crowding out domestic investment in other sectors. The negative relationship between aggregate FDI and non-oil GDP growth is an indication that oil-based investments may be overshadowing non-oil investments or creating little domestic value. Therefore, Guyana should focus on attracting high-value-added FDI that strengthens local companies.
The development of the dynamic high-productivity domestic services sector is key to achieving meaningful diversification. Despite the increase in employment in the services sector, growth has been concentrated in the oil and gas industry, and in construction and support services for oil and gas, such as administrative services.
The relatively underdeveloped and perhaps overlooked subsectors, including Information and Communication Technology (ICT) and professional, scientific, and technical services, are high-value subsectors that can provide employment opportunities. Although there have been remarkable initiatives by the government, such as free education from nursery to university and the development of scholarship programmes, which have proven to be demonstrative of progress, the transition to high-productivity service jobs does not match the pace of growth in the oil economy.
MSMEs and SMEs: Engines for growth
Micro, Small and Medium Enterprises (MSMEs) and Small and Medium Enterprises (SMEs) are critical players in addressing the identified lacuna. As drivers of innovation, sustainable economic growth and adaptive capacity, they have the power to open growth pathways in tourism, digital services and green finance. A robust and comprehensive policy framework must be applied to encourage the MSMEs and SMEs. Such a framework must include the creation of high-productivity service areas, such as ICT and high-value professional services, green finance, and the development of foreign direct investment (FDI) policies that encourage value-added service-related activities and promote domestic connections. It should focus on improving and providing finance in the form of grants, low-interest credit facilities, and the creation of a special Services Export Development Fund. Thus, encouraging innovation and inclusion of even the vulnerable groups.
At the same time, there will be a great need to strengthen institutional integrity by maximising transparency and effective anti-corruption reforms so that the resource wealth accrued can be distributed fairly. Moreover, the importance of adopting digital transparency portals cannot be overemphasised, as they would facilitate the regulation procedures.
Tapping into the international services sector
Guyana has acceded to multiple regional agreements, such as the Economic Partnership Agreement with the European Union (EU) and Caribbean-Canada Trade Agreement (CARIBCAN). It is a signatory to several bilateral trade agreements (e.g., the Guyana-Brazil Partial Scope Agreement, the Guyana-China Trade Agreement, Guyana-Argentina Trade and Economic Cooperation Agreement, and the Guyana-Venezuela Partial Scope Agreement).
These agreements seek to enhance trade in traditional and non-traditional markets. It is important to capitalise on bilateral and regional agreements like CARIFORUM-EU (EPA), as their provisions not only cover goods, but services, investments and other trade-related issues such as innovation and intellectual property rights.
Additionally, greater integration in the region through the Caribbean Community (CARICOM) would provide greater access to the regional market and simplify professional mobility across the constituent member states. This includes faster adoption of the CARICOM Single Market and Economy (CSME) which would allow free movement of professionals (Mode 4) and the mutual recognition of credentials.
Notably, Belize, St Vincent and the Grenadines, Barbados and Dominica acceded to the protocol of free movement as of October 1, 2025, which allows their nationals to access each other’s service markets. Guyana has requested a five-to-seven-year stay (grace period) before full implementation, as reported by Stabroek News. It is hoped that the government will assess its readiness for free movement and implement the required measures to join these members and advance its services trade.
Prospects for tourism services
While initiatives such as the soon-to-be-implemented ferry service to transport merchandise and people between Guyana, Barbados, and Trinidad and Tobago are laudable, a similar initiative can be considered for services in CARICOM. The leveraging of a CARICOM Services Export Initiative could incorporate a package of tourism, educational, and healthcare services (a “Caribbean Tourism Initiative”) to increase the regional competitiveness of members.
Moreover, it is necessary to adopt an innovative approach to the country’s tourism strategy that highlights niche areas such as heritage and eco-tourism while encouraging growth in the local bioeconomy. For example, portions of the decommissioned Demerara Harbour Bridge (DHB) can be transformed into a heritage tourism attraction, modelling the Jet d’eau in Geneva. The DBH could include a tall fountain, with the structural components of the previous bridge strategically placed along the West Bank of Demerara on the Demerara River, powered by green technologies such as solar or hydroelectricity. This attraction could remind us of the historical significance of the Demerara Harbour Bridge, while simultaneously helping Guyana take heritage tourism to a new level.
There is no doubt that the booming oil and gas industry places Guyana in a position of great opportunities. Guyana has the potential to transform its resource abundance into the base of inclusive, diversified and sustainable prosperity through strategic investment in the domestic services sector, the development of entrepreneurial dynamism and the strengthening of institutional governance. This type of transformation would thus protect its long-term socioeconomic path from over-reliance on the oil sector to the detriment of other sectors.
Chryssanti Braithwaite is an MITP Alumna of the Shridath Ramphal Centre for International Trade, Law, Policy and Services, The University of the West Indies, Cave Hill Campus. Learn more about the SRC at www.shridathramphalcentre.com.
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