Economy of Guatemala

Economy of Guatemala

According to businesscarriers, Guatemala is an agro-industrial country that specializes in the production of tropical crops (coffee, cane sugar, bananas, etc.). GDP in 2001 – 20 billion dollars, per capita 1786 dollars. The difference in income is very large: 60% of the population – below the poverty line. The economy is developing unevenly, the average annual GDP growth (%): 1997 – 4.4; 1998 – 5.8; 1999 – 3.6; 2000 – 3.4; 2001 – 2.4; 2002 – 1.9. Inflation 6.6% (2002). In the structure of GDP in terms of value and employment, the share of services associated with the growth of tourism is growing most rapidly. GDP structure by value (2001,%): agriculture – 23, industry – 20, services – 57. Employment structure (%): agriculture – 50, industry – 15, services – 35. Unemployment – 8%.

The main branch of the economy is agriculture, crop production predominates. Large landownership predominates: the share of landlords-latifundists and foreign companies (0.2% of all farms) accounts for 3/4 of all cultivated land, the owners of small plots (about 9/10 farms) own only 15% of the land. The main export crop – coffee is grown mainly on the plantations of the Pacific Piedmont, less – in the central and northern parts of the highlands. The harvest of coffee in the 1999-2000 season amounted to 322 thousand tons, of which 294 thousand tons were exported in the amount of 597 million dollars. Plantations of sugar cane (15.4 million tons in 2000) and bananas (793 thousand tons) are located in the Pacific Lowland. in 2000), as well as livestock farms. Other export crops: fruits, vegetables, cardamom, cotton, manila hemp, sisal, kenaf, tobacco, sesame and ethereal plants. The main consumer grain crop – corn, is cultivated in the highlands; beans, vegetables, wheat, potatoes, rice cultivated on rainfed land are grown. Animal husbandry is extensive. Cattle are raised mainly in the eastern highlands and the Pacific lowlands. Sheep are bred in the alpine meadows of the highlands. Shrimps are fished in the sea.

Industry is underdeveloped. In the cost structure of GDP and in terms of employment, it occupies only 3rd place. The main energy carrier in the fuel and energy industry (FEC) is imported and domestic oil. Electricity production 5.9 billion kWh (2000), consumption – 4.8 billion kWh (2000). The share of TPPs on fuel oil is 50%, hydroelectric power plants – 45% and 5% – on other energy sources. Export of electricity – 0.9 billion kWh, import – 1 billion kWh.

The industrial structure is dominated by light industry. The leading industries are food and flavor (including sugar and tobacco), textile and clothing production, oil and oil refining. The food industry mainly uses local raw materials and serves the domestic market (part of the sugar is exported), the leather and footwear, textile and clothing industries also serve the domestic market, there are many handicraft and semi-handicraft workshops. Free trade zones established at the port of Santo Tomás de Castillo and ca. Guatemala, export most of their products (clothes and textiles) to the United States.

In the mining industry, oil production in the south of Petén stands out. Proven reserves are estimated at 75 million tons (2001), production – 1.1 million tons (2001). Development is controlled by Basic Oil (Canada). Guatemala exports some of its oil, but imports even more from Mexico, Venezuela and Curaçao. Near the port of Puerto Barrios and in the city of Escuintla, there are 2 oil refineries with a total capacity for direct distillation of 1 million tons of oil (2001). Ores of nickel, zinc, lead, manganese, silver, chromium and antimony, as well as non-metallic minerals (marble, sulfur, asbestos, etc.) are mined in small quantities. Heavy industry is represented by enterprises controlled mainly by US capital. There are tire and steel factories (production of galvanized steel), a factory for household appliances, enterprises for assembling TV sets,

Forestry is underdeveloped. The volume of logging for export is insignificant. The harvesting of chicle (hardened resin of sapodilla) for export for the production of chewing gum, which flourished in the past, has declined sharply.

Transport is also underdeveloped. Road transportation predominates. The length of highways is 13.9 thousand km, incl. with a hard surface 4.4 thousand km and without a hard surface 9.5 thousand km. The Pan American Highway passes through the highlands and the city of Guatemala. The length of the only narrow-gauge railway and its branches is 884 km. In 1997, this railroad was given a 50-year concession to a US company. The main seaports are San Jose and Champerico on the Pacific coast and Puerto Barrios and Santo Tomas de Castillo on the Caribbean coast. Guatemala does not have a merchant marine. Air transport is not developed. Aurora International Airport is located in the capital. Almost all other airfields do not have paved runways.

Retail and wholesale trade is underdeveloped due to the small capacity of the domestic market in most areas of the highlands and Peten, where the population is engaged in subsistence and semi-subsistence farming. The governments of Guatemala attach great importance to the development of foreign tourism. New hotels are being actively built. In 1997, the number of foreign tourists in Guatemala grew to 500,000 people, and revenues to $325 million (in 1998, to $394 million and continued to grow, becoming the 2nd item of income after coffee exports).

The most important direction of economic policy was the implementation of neoliberal reforms. In order to modernize the economy, a program was launched to privatize the largest public sector enterprises. The Spanish company Iberdrola Energia was sold 80% of the shares of the leading electric power company EEGSA for $520 million, telephone communications, television, most of the transport infrastructure, and the second largest electric power company INDE were also privatized.

The leading place in the monetary system is occupied by the Central Bank of Guatemala, which issues money, regulates money circulation and provides most of the loans. State budget (2000, billion dollars): revenues 2.1, expenditures 2.5. External debt of $4.5 billion. Poor tax collection in Guatemala led to conflict with the IMF and a number of credit institutions. The foreign trade balance of Guatemala is chronically passive: in 2001 – exports of 2.9 billion dollars, imports – 4.9 billion dollars. The deficit is covered by transfers to Guatemala of Guatemalans working in the United States (1.6 billion dollars, 167% more than in 2001), growing income from foreign tourism and significant funds received from the privatization of the economy in 1997-99. Agriculture accounts for 75% of export value in recent years. Main articles: coffee ($200 million in 2001–02 season), raw sugar, bananas, oil, fruits and vegetables, cardamom, meat, clothing, electricity and textiles. A temporary decline in demand and prices for coffee on the world market in 2001–02 led to a reduction in export earnings. The main import items are: machinery and equipment (including transport equipment), fuel, industrial products, grain, fertilizers and electricity. Main trading partners (2000): in exports (%) – USA (57.0), El Salvador (8.7), Costa Rica (3.7), Nicaragua (2.8), Germany (2.6); in imports (%) – USA (35.2), Mexico (12.6), South Korea (7.9), El Salvador (6.4), Venezuela (3.9). fertilizers and electricity. Main trading partners (2000): in exports (%) – USA (57.0), El Salvador (8.7), Costa Rica (3.7), Nicaragua (2.8), Germany (2.6); in imports (%) – USA (35.2), Mexico (12.6), South Korea (7.9), El Salvador (6.4), Venezuela (3.9). fertilizers and electricity. Main trading partners (2000): in exports (%) – USA (57.0), El Salvador (8.7), Costa Rica (3.7), Nicaragua (2.8), Germany (2.6); in imports (%) – USA (35.2), Mexico (12.6), South Korea (7.9), El Salvador (6.4), Venezuela (3.9).

Science and culture of Guatemala

The National Council for Science and Technology, the Ministry of Culture and Sports and the Ministry of Education coordinate the activities of public and private training and research centers. In Guatemala, there are the National Geographic Institute, the National Institute of Statistics and the Rural University of Guatemala, the University of San Carlos (state), the University del Valle, the Rafael Landivar University (Catholic), the Francisco Marroquin University (private). There are 200 libraries in the country, the National Museum of Natural History, the Museum of Modern Art, the National Archaeological Museum, the Museum of Folk Arts and Crafts, and the Museum of Fabrics. Dozens of newspapers are published.

Literature has developed in Spanish, and in recent years there have been works in the languages of the indigenous population. M. Angel Asturias (1899-1974) – an outstanding prose writer and playwright, laid the foundation for the “magic realism” movement, was awarded the Nobel Prize in Literature in 1967. Rigoberta Menchu (born 1959) – a well-known figure in the Indian movement, author of a book on the crimes of the military regime, in 1992 won the Nobel Peace Prize. In 2002, the national prize for literature was awarded to the poetess A.Maria Rhodes. Various schools are represented in the visual arts – from primitivists (Andres Carruci, Manuel Sisay) to abstract and postmodern artists. Painters and sculptors Goletti Torres, Guillermo Graheda, Dagoberto Vazquez are known outside of Guatemala. Instrumental ensembles and folk songs are popular in musical culture.

Economy of Guatemala