Page 59 - STRATEGY Magazine (G)

Effective December 1, 2015, both goods and people gained the ability to move free- ly between Guatemala and Honduras, under a new initiative that allows for greater commercial traffic between the two countries.
interregional power network known
as SIEPAC, and oil and renewable sources such as hydro, solar, and wind are becoming increasingly prominent. Industry accounts for 29 percent of Guatemala’s GDP and 14 percent of the labor force. The nation’s output en- compasses products such as beverages, furniture, clothing, chemicals, precious metals, non-perishable food items, furniture, and pharmaceuticals.
A LONG PROMISE OF
EMERGENCE
The 1996 Peace Accords represent the most significant outcome of the end
to Guatemala’s Civil War. Econom-
ic reforms were built into the very agreement, the implementation of which paved the way for considerable economic gains from trade freedom
and tax relief. Yet Guatemala has not broken completely free of its past, and many sought-after reforms have not yet been realized. The rule of law is still weakly enforced, and it is estimat- ed that corruption in customs offices results in an annual cost of US $1.5 billion. Although the political climate
is considered stable—despite the recent resignation of the president and his cabinet—crime and violence continue to disrupt the country’s economic po- tential, with an annual cost estimated at 7.7 percent of GDP.
Related to crime and unrest is the issue of poverty. Guatemala’s pover- ty rate decreased from 56 percent to 51 percent from 2000 to 2006, but
it rose again shortly thereafter and currently hovers around 54 percent. A large portion of this demographic is in extreme poverty, surviving on next to nothing per day. Many of these people are among the indigenous populations that represent approximately half of the country’s overall population. The unemployment rate of 2.9 percent is low and is expected to increase slowly to slightly over 3 percent by the year 2020, but much of the workforce labors long hours in low-paying jobs that take place in precarious conditions.
EXCEPTIONAL OPPORTUNITIES
Agriculture represents 41 percent of the nation’s exports and is one area where private and government sectors are working together successfully.
The nation is concentrating more on
organics to meet global demands, and the quality of Guatemala’s verdant soil, its abundant forests, and its potential for aquaculture are assured.
With the planned expansion of the regional power grid SIEPAC,
Guatemala is Central America’s largest economy
US $58.7 billion GDP
US $2,379.99 per capita income
24% public debt in Guatemala
Government consumption comprises 14.1% of domestic output
200 foreign firms investing in Guatemala due to CAFTA-DR
United States is Guatemala’s main trading partner
U.S. exports to Guatemala were $5.5 billion in 2013, 95% higher since entering CAFTA-DR
U.S. imports from Guatemala were $4.2 billion in 2013
U.S. is the main investor in Guatemala
Attractive for investors:
- Availability and cost of skilled labor
- Guatemala wage levels are among the most competitive at a regional level
- Favorable business climate
- Top telecommunications and electrical infrastructure
- Highly developed call center/BPO industry
SPECIAL REPORT
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