07-09-12 by Emmanuel Besserve
Guatemala is the country in Central America that has the biggest population and has a GDP per capital of about one-half of the other Latin America and Caribbean nations.
In Guatemala, the agricultural sector actually accounts for 15% of the GDP and is half of the labor force that is out there. Their key agricultural exports are things like coffee, sugar, and bananas. With peace agreements in 1996, a 36 year old civil war was ended, and because of this it removed many of the obstacles that were out there for foreign investment. Since that time, Guatemala has worked on important reforms and worked on macroeconomic stabilization. With the Dominican Republic-Central American Free Trade Agreement, which was started in July of 2006, this helped to increase foreign investments and helped to diversify the exports. Some of the exports that increased were ethanol and other non-agricultural exports.
With CAFTA-DR, there has been a significant improvement to the investment climate, but there are still concerns over security, the lack of workers that are qualified and skilled, and a poor infrastructure that limits the foreign direct investment that countries will make. The distribution of wealth is very clear also, the richest 10 percent of the population account for more than 40 percent of the overall consumption. Because of this, more than half of the population is below the poverty line and 15 percent of the population lives in extreme poverty. Poverty is even worse among the indigenous groups, which is going to make up 38 percent of the population. In this population, 76% live below poverty and 28% live below extreme poverty. 43% of the children under the age of five are malnourished and this is one of the highest rates in the world.
President Colom entered into his presidency promising that he would increase education, help with healthcare, and aide in rural development. In April of 2008, he put a program in place that was a conditional cash transfer program and was modeled after the other programs started in Brazil and Mexico. These programs provide incentives to poor families so that they can keep their kids in school and make sure that they are also getting regular checkups.
Guatemala actually has a large population of expatriates from the United States and for this reason there is a lot of foreign income that comes into this country. Economic growth actually fell in 2009 because export demand fell from the countries that they did business with. In 2010, the economy started to slowly recover and it is thought that by 2012, it will return to a normal growth rate. President Colom in his last year in office will have some opposition that he will have to deal with because of the tax reform that he really needed to complete already.
In January of 2012, Guatemala started its first term as a non-permanent member of the UN Security Council. They are expected to get the presidency in October of 2012. The diplomatic interests that they have a regional security, development that is sustainable, and integration of the economy. Guatemala is also members in several regional groups, mainly ones that are related to trade and the environment. One of the panels that they participate in is the Council of Central American Minsters of Trade, this meets regularly to work on trade issues and regional approaches to solving them. The council signed what was known as TIFA or the Trade and Investment Framework Agreement with the US in 1998. This was part of negotiations that led to creating CAFTA-DR. Guatemala also joined Honduras and El Salvador in a free trade agreement with Mexico in 2009.
Guatemala originated the idea and is a seat for the Central American parliament. They also are a part of the CONCAUSA, which is an agreement that was created at the Summit of the Americas in December of 1994. CONCAUSA is a cooperative plan of action that was created to help promote efficient energy that is clean and to work on biodiversity. They have worked hard to help promote other countries and to work themselves to get just what they need. Look into what Guatemala has to offer and what they can give you.
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