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Guyana, a tiny country in South America with a population roughly the size of Bahawalpur, has the highest expected GDP growth rate in the world. Recording a GDP rate of 62.3 per cent in 2022, it is expected to grow by over a 100pc by 2028, mostly because of oil.
Unlike its neighbour Venezuela, which has the world’s largest oil reserves, Guyana’s GDP skyrocketed because of massive foreign direct investment (FDI), mostly by the US through ExxonMobil and its partners.
The importance of US FDI in transforming a country’s economic fortunes cannot be overstated. In Guyana’s case, American investment has catalysed an economic boom, driving infrastructure development, creating jobs, and increasing national revenues. This showcases how strategic FDI can propel a nation towards unprecedented economic growth.
The IMF’s World Economic Outlook April report predicts that Pakistan’s GDP growth rate will recover to 5pc by 2029. The US has not traditionally been a major investor in Pakistan. However, an article last week by The Express Tribune said that the US has shown interest in providing debt funding for Reko Diq, possibly the first major investment in Pakistan in decades. Perhaps American FDI could help propel Pakistan out of the boom bust cycle it is trapped in.
Published in Dawn, The Business and Finance Weekly, June 3rd, 2024
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