Guyana’s growing petroleum wealth has removed many of the financial constraints that once limited the country’s development, but economist Joel Bhagwandin is warning that the shift from scarcity to abundance carries a new set of economic and governance risks.
In his analysis, The Legacy Behind the Abundance, Bhagwandin argued that Guyana has entered a fundamentally different period in its economic history, where the challenge is no longer primarily finding the resources to finance development, but ensuring that unprecedented revenues are converted into lasting national gains.
“Abundance brings risks of waste, overheating, concentration and institutional overload, but removes the principal constraint faced by earlier administrations. It raises—not lowers—the standard of accountability,” Bhagwandin stated.
He pointed out that Guyana now has access to petroleum revenues, stronger state capacity and significantly greater international interest than in previous decades.
According to Bhagwandin, the scale of the change can be seen in the country’s financial position. He noted that at the end of 2025, the Bank of Guyana held approximately US$1.356 billion in gross international reserves, while the Natural Resource Fund (NRF) stood at approximately G$716.1 billion, or US$3.44 billion.
Together, he said, those separately held external assets amounted to about US$4.79 billion.
Bhagwandin cautioned, however, that the availability of large financial resources should not itself be interpreted as evidence of economic transformation.
“Nominal expansion is not proof of productive transformation, which depends on real growth, productivity, diversification, exports and institutional depth,” he argued.
The economist said the abundance era therefore demands a different standard for measuring economic management. Rather than focusing heavily on the size of budgets, allocations and announcements, he contended that greater attention must be placed on whether projects are being delivered efficiently and whether spending is building productive capacity.
In this regard, Bhagwandin identified implementation speed, project quality, value for money, diversification, productive capacity, stronger institutions and broad economic opportunity among the key measures that should determine whether Guyana successfully manages its petroleum windfall.
“The historical judgement remains open. It will turn not on budgets or announcements, but on whether unprecedented resources produce unprecedented results,” he stated.
Bhagwandin also warned of the pressures that rapid expenditure and development can place on an economy and the institutions responsible for delivering major projects.
He identified inflationary pressure, institutional overload, procurement challenges, project-execution risks and waste among the dangers that accompany abundance.
According to him, those risks become particularly important when the State is attempting to execute development at a scale significantly greater than in previous periods.
“The present administration must implement at scale. If projects remain delayed, procurement concentrated and productive capacity lags behind demand, allocations and announcements are no answer. The abundance-era test is outcomes,” Bhagwandin argued.
He maintained that while managing abundance is not necessarily easy, the nature of the challenge has changed because the Government does not first have to restore solvency, rebuild financial credibility or create fiscal space before undertaking major investments.
For Bhagwandin, the central economic challenge is therefore whether temporary petroleum revenues can be transformed into competitive industries, deeper productive capacity and stronger institutions capable of surviving beyond the oil boom.
“Abundance brings inflationary pressure, institutional overload, procurement and project-execution risks, waste and the danger of mistaking expenditure for transformation,” he warned.
Bhagwandin said the ultimate measure of the oil era will be whether Guyana enlarges its productive and institutional base rather than simply spending the resources now available.
With the country enjoying advantages unavailable to previous administrations, he argued that the expectations placed on economic management must rise accordingly.
“Because the opportunity is historically unequalled, so is the obligation,” Bhagwandin stated.
