Page 60 - STRATEGY Magazine (G)

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STRATEGY
SPECIAL REPORT
US Vice-President Joseph Biden gives presents to students during a visit to Villa Nueva municipality, 20 km south of Guatemala City on March 3, 2015. Leaders from Guatemala, El Salvador and Honduras were meeting with US Vice President Joe Biden for two days of talks on the crisis of child immigrants entering the United States.
Guatemala’s energy sector also has significant investment potential. It is anticipated that the SIEPAC grid will be expanded and enhanced in neighboring countries, which will strengthen the demand for electricity in Guatemala. In addi- tion to electricity, oil has great potential for investment.
The nation has a large number of oil wells but does not have a single refinery plant to transform the crude into a more usable finished product. With the addition of a refinery, Guatemala’s oil production capacity may at last meet its potential.
Business process outsourcing (BPO) also holds great prom- ise as a developing industry with a tremendously high ceiling. This industry is underpinned in large part by the nation’s youth—some 70 percent of its 15 million residents are under the age of 40. As Guatemala focuses more on educating this very young population, BPO is becoming a very attractive career choice for that demographic. While this is a newer market for Guatemala, the nation can now claim a 10-year
history with BPO call centers, the last five of which have been characterized by substantial government involvement as it promotes this industry in the academic and private sectors.
This has resulted in an increasing percentage of educated Guatemalans who are bilingual, and new trends in education will only increase this percentage in the future.
CHALLENGES REMAIN
More than 200 foreign firms are currently investing in Guatemala due to the U.S. Dominican Republic–Central America Free Trade Agreement (CAFTA-DR). Foreign direct investment (FDI) increased by 18 percent from 2013 to 2014, and 400 percent since 2003, reaching US $12.1 billion. These foreign investments are predominately in oil production, energy, and agriculture.
These foreign investors face serious challenges, however, that have been present for many years. The Guatemalan government has complex laws and regulations, as well as