Geopolitical swing states are critical to the world economy and balance of power, but they don’t have the capacity by themselves to drive the global agenda, at least for now, according to a recent article by Jared Cohen, President of Global Affairs and co-head of the Office of Applied Innovation at Goldman Sachs.
Cohen asserts however, that as long as the tensions between the U.S. and China continue to get worse, they will have outsized abilities to navigate geopolitical competition and take advantage of and influence it.
“They know this and are consciously using that newfound power to shape the world order to more effectively serve their national objectives,” Cohen writes in the article.
These countries, he said, fall into four often overlapping categories. These include countries with a competitive advantage in a critical aspect of global supply chains, those with a unique ability to make themselves attractive, countries with a disproportionate amount of capital and willingness to deploy it around the world, and those with developed economies and leaders who have global visions that they pursue within certain constraints.
It is the first category which Guyana, the newest oil and gas hotspot on the South American continent, is attracting attention. ExxonMobil back in 2015 made a world class discovery of some 800 to 1.4 billion barrels of crude at a massive block called Stabroek. Oil production is underway at two fields with a third set to come online later this year and two more projects under development.
“No [sitting] American president has ever been to Guyana. But the small South American nation recently found commercially recoverable petroleum reserves of up to 11 billion barrels, positioning it as a global player in energy markets, raising the standard of living of the Guyanese people, and offering it future potential to one day become the next geopolitical swing state at a critical time,” Cohen said.
He pointed out that last fall, the Biden administration reluctantly turned to Venezuela for new sources of energy “but with the right long-term policies, it could be Guyana that shifts the politics of energy in Latin America and offers the U.S. a new, and preferred, alternative.”
Cohen said Guyana could attract the investment required to make it a player in global energy markets, if it can transparently implement a sound policy framework for how the revenues will be spent.
Already, the small nation of just around 800,000 people is attracting massive oil and gas investments. So far, Exxon has budgeted $42.7 billion for five approved projects in Guyana. Together, they are expected to produce more than 1 million barrels of oil and gas per day by late 2026.
These mega oil projects have also pushed the country to third place for highest value foreign investment in 2022 according to a United Nations Economic Commission for Latin America and the Caribbean (ELAC) report.