Page 49 - STRATEGY Magazine (G)

The 2015 Heritage Economic Freedom Index rated Guatemala 60.4, exactly equal to the world average, reflecting improved labor freedom, better management of govern- ment spending, and reduced corruption.
America under the
Constitution of 1824. Unfortunately, the Central American union dissolved in 1841, launching a period of instability and civil strife that continued through the end of the nineteenth century.
Beginning in the early 20th century, Guatemala fell under the rule of a series of dictators backed by the United Fruit Company and the United States government. These leaders dispossessed many indigenous people of their communal lands, imposed harsh labor regulations, and instituted a police state.
SEARCH FOR INDEPENDENCE
By the mid-20th century, Guatemalans had had enough of foreign-controlled dictators, and in 1944, authoritarian leader Jorge Ubico was overthrown by a pro-democracy military coup. This initiated the 10-year Guatemalan Revolution, also known as the Ten Years of Spring, which were the only years of representative democracy in Guatemala between 1930 and 1996. The nation embraced a program of sweeping social, eco- nomic, and agrarian reform that proved enormously influen- tial both in Guatemala and across Latin America.
These transformations included an ambitious land-reform program, known as Decree 900, which redistributed uncul- tivated portions of large land holdings to poverty-stricken agricultural laborers. Approximately 500,000 people benefited from the decree, including many indigenous people whose forebears lost their land after the Spanish invasion.
However gratifying they may have been in Guatemala, these policies ran afoul of the powerful United Fruit Company. The U.S. responded by engineering a coup and installing a military junta, thus provoking the Guatemalan Civil War. This bloody conflict, fought between the new government and rebel, gue- rilla forces, lasted nearly four decades, from 1960 to 1996, and left 200,000 citizens dead.
PEACE AT LAST
The Guatemalan Civil War ended in 1996 with a peace accord negotiated by the United Nations between rebel forces and the government. Both sides made concessions; the guerrilla fighters disarmed and were given land to work.
Since the end of the war, Guatemala has enjoyed economic growth and democratic elections, most recently in October 2015, when Jimmy Morales of the National Convergence Front was elected president in a run-off election. A newcomer and former comedy actor, Morales assumed office January 14, 2016, to serve a four-year term.
Morales’ predecessor, Otto Pérez Molina, resigned the presi- dency after having been charged with corruption and stripped of his immunity by Congress. He was arrested the day after leaving office. In the wake of this scandal, Guatemalans are likely to demand anti-corruption and governance reforms. Though President Morales ran on an anti-corruption platform, he faces a divided Congress, which could slow policy imple- mentation and sustain fiscal concerns.
Antigua, Guatemala - August 27, 2015: Locals protest against govern- ment corruption & demand resignation of President Otto Pérez Molina.
FOREIGN INVESTMENT POURS IN
A tangible benefit of the ’96 peace accords was the reopening of Guatemala to foreign tourism and investment. Tourism has since become one of the main drivers of Guatemala’s economy, with the nation receiving around 2 million visitors annually. In recent years, the nation has become an attractive destination for cruise ships, and this has brought even more visitors into the country, driving tourism revenue to US $2 billion in 2014.
The country’s largest single source of foreign income is remittances from Guatemalans living in United States. These repatriations account for two-thirds of exports and one-tenth of GDP. Guatemala is also the recipient of foreign direct investment, which flows into energy, the extractive industries, agriculture, and, to a lesser extent, manufacturing. GDP is expected to grow by an average of 3.4 percent per year over the next five years.
MATURING LEGAL STRUCTURES
Guatemala’s capital and largest city is Nueva Guatemala de la Asunción, also known as Guatemala City. The representative democratic government comprises three branches—executive, legislative, and judicial—and each branch has its own leader- ship pantheon.
The executive branch is headed by a president and vice-pres- ident, who are elected by vote of the people to a term of four years. The judicial branch encompasses a pyramid of local
and federal courts, of which the final arbiter is the Supreme Court of Justice. The highest body in the legislative branch
SPECIAL REPORT
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