"You Can't Survive on Cement and Stones": Gatekeeper state theory and economic inequality in oil-rich Guyana

Image credits: Wikimedia Commons

By Owen M. Eastman

Look at a list of some of the fastest-growing countries in the world (% growth in GDP/capita) and you are bound to find a few surprises. Some seem to be obvious - Libya and South Sudan top the list at first and second, indicating a kind of “rebound growth” in the wake of war conditions. Others have recently been highlighted in Western media for their robust economic policies (Ireland, Kyrgyzstan), or obviously seem to be coming about as a result of a massive population undergoing industrialization (India). Few know about Guyana and its reasons for success, though, ranking at third on the list with a staggering 10.3% growth rate in 2025. Despite American foreign policy’s emphasis on energy access, Guyana has received relatively little coverage for its 2015 discovery of one of the largest oil reserves in the world. 

Not everyone in Guyana has benefited equally from this sudden windfall, of course. An August 2025 article for the Irish Times notes that, while the Guyanese government has invested heavily in infrastructure with its new wealth, ordinary citizens are unhappy about the stagnation in living standards: “You can’t survive on cement and stones,” one points out. The Inter-American Development Bank, furthermore, notes that 58% of Guyana’s population still lives below the poverty line. For some, the pitfalls of Guyana highlight the limitations of GDP per capita as a measure of overall well-being, particularly when economies are driven by industries that lead to a highly unequal distribution of wealth.  Despite this disparity between on-paper results and real-life change, however, Guyanese president Ali Irfaan’s government prevailed in elections hosted in 2025, winning 36 of 65 seats in the general assembly (thereby forming a majority without having to engage in coalition politics) and successfully completing his reelection bid. 

One way to understand how natural resources can doom developing nations is through a model proposed in Fred Cooper’s book Africa since 1940: The Past of the Present. Post-independence-era nations, per Cooper, often suffer from being structured as a “gatekeeper state”. The gatekeeper model, in essence, is one where the paths to economic prosperity (and/or individual success) are managed not by market forces but by government “gatekeeping” of lucrative sectors. Whereas public servants in free-market countries are traditionally seen as underpaid (compared to the vast sums of money entrepreneurs make), the dynamic is flipped in a gatekeeper state: government officials are often the highest earners, both through official salaries and the bribes or kickbacks they earn from controlling the gate. Cooper, furthermore, notes the particular conditions that oil poses for such a setup, noting that “oil can turn a gatekeeper state into a caricature of itself … oil requires little labor, and much of it from foreigners. It also entails relationships between the few global firms capable of extracting it and the state rulers who collect the rents.” Cooper terms this extreme setup a spigot economy: “whoever controls access to the tap, collects the rents”.

Certainly, much of this description fits the Guyanese economic structure, and might ultimately pose problems for creating a better future for all citizens (rather than a wealthy few). Guyana received a 58.2 out of 100 on the Heritage Foundation’s Economic Freedom Index (ranking in the bottom half of all countries), with especially poor scores on the categories of “Property Rights,” “Governmental Effectiveness,” and “Judicial Integrity”, likely indicating an increased presence of the national government in economic affairs (mirroring the gatekeeper state). Upon the discovery of oil, Guyana promptly signed an extraction contract with ExxonMobil, splitting oil profits up 50-50 between the government and contractors. The Institute for Energy Economics and Financial Analysis, however, points out that the contract fails to establish a “ring fence” around the profits that Guyana receives: Guyana agreed to pay for the drilling of any future wells, and Exxon can simply subtract these costs from the payouts of currently-operating wells, significantly dampening the amount of potential money Guyana receives in the short term. Essentially, Guyana has to finance the continued expansion of oil infrastructure, continuously deferring the full scope of profits, leading to a large share of revenues being sent overseas. 

With this in mind, one might worry about the short-term stability of the government - if such a large bounty of oil money is now up for grabs, the incentives for conducting an overthrow would grow substantially. Such an arrangement might partly explain why many African nations have struggled to maintain government stability over the past 70 years. Domestic pressures to control this oil are, furthermore, compounded by recent international events. The most obvious of these has been America’s recent incursion into the region with the express intent to tap into Venezuela’s oil reserves. Even before this development, Venezuela claimed sovereignty over Guyana’s Essequibo region, which makes up two-thirds of Guyana’s total landmass, going so far as to pass a 2024 resolution declaring it a newly incorporated state, citing a complicated set of claims stemming all the way back to ambiguities between the British and Dutch in delineating the territories of their colonies. A previous iteration of this conflict ended with former president Hugo Chavez giving up the border dispute, but the stakes are higher now that oil is on the line. Guyana thus faces a dual threat to stability: internal competition for control of resources fuels domestic instability, and external territorial challenges could escalate into international conflict. 

Fortunately, some institutional guardrails are in place to prevent all-out competition from breaking out, at least at the national level. The most prominent example of this came in 2019, with the formation of Guyana’s Natural Resource Fund. Wisely, the sudden uptick in oil wealth leads to an increasingly volatile public spending environment. Essentially, to sustainably control the money supply, one has to mediate the release of such increased wealth into a national budget, rather than drop it all in one large shock.  The rationale for this is simple: if Guyana began large public services with the intent of financing it with both present and future oil money, and the source of revenue were to somehow dry up mid-construction, then the government would leave such projects unfinished (in the case of infrastructure) or leave previously-dependent constituents stranded (in the case of welfare). 

It is not clear whether Guyana will succumb to its gatekeeper-state structure, or reach an arrangement that brings prosperity to all its citizens, and a few factors are worth monitoring in assessing this. First, if ExxonMobil ceases expansion of its production capabilities, a larger share of revenue will reach the pockets of the Guyanese government, which could then be employed either to benefit a narrow elite or a broader public. Second, Guyana’s heavy dependence on oil revenue means that the country is especially beholden to international markets: pressures from the Iranian war has made oil more profitable, but if the price per barrel suddenly drops as part of a larger economic shock, any remaining goodwill that the Irfaan government has may suddenly vanish. Regardless of the outcome, Guyana remains a curious economic case due to the relative asymmetry of its economy and may ultimately serve as a case study for how developing countries ought to manage sudden windfalls.