Guatemala Report 2010

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IMAGE: Cristian Monterroso

Guatemala Golden investment gateway

Blending a wealth of natural and human resources with the region’s best-performing economy, an enviable strategic location at the heart of the Americas, and a business-friendly government, Guatemala is a stable and safe investment destination.

for its determination to improve transparency levels through a crackdown on corruption.

In a clear sign of the progress that has been made since President Colom came into office, Guatemala has jumped several places in the Corruption Perceptions Index compiled by global anti-corruption organization Transparency InÁlvaro Colom ternational.

President of “There have been dramatic changes in imporGuatemala tant areas such as education and health and my government is committed to fighting poverty – the root of corruption – through long-term socioeconomic development programs,” says President Colom. “We are focused on fiscal reforms and security, and want to develop an economic corridor and achieve rural development. Science, technology and innovation play a crucial role in addressing some of the key challenges facing Central America today – such as climate change, water management and food crisis.”

The U.S. and Guatemala have enjoyed strong political and commercial bilateral relations for many years. Trade and investment between the pair is now worth billions of dollars a year, with Guatemala a leading supplier of coffee to Starbucks and the U.S. the main source of foreign travelers for Guatemala’s fast-growing tourism sector.

American companies and organizations are also helping develop renewable energies in Guatemala – known as the “Land of Eternal Spring” due to its year-round temperate climate – as part of a drive towards sustainable energy programs in the solar, wind, hydroelectric and geothermal energy sectors.

As the cradle of the ancient Mayan civilization, the ambitious Central American republic of 13.5 million people is flourishing,with billions of dollars of foreign direct investment (FDI) pouring into its vast agriculture, industrial, manufacturing, services and tourism sectors.

With more than 350 microclimates and excellent transport links to the U.S., Europe and Asia that facilitate regional and global free trade agreements, Guatemala’s exports of key commodities, such as coffee, cardamom and sugar are growing steadily.

Since taking office in January 2008, President Álvaro Colom has spearheaded a series of ambitious reforms, measures and incentives that have caught the eye of international businesses and fueled impressive socioeconomic development.

“Guatemala is a magical country with a very stable economy that has significant potential to accelerate economic growth and alleviate poverty through trade, regional integration and tourism,” says President Colom. “In the midst of the recent global economic crisis, Guatemala was one of the few Latin American nations to record positive GDP growth [up 0.6% A diversified economy year-on-year to U.S.$38.1 billion]. Public debt remains one of According to forecasts from the Central Bank of Guatemala, the lowest in the region and the investment climate remains more than U.S.$1.5 billion of fresh FDI is expected to flow into the country’s diversified economy over the next three years, extremely healthy.”

In addition to positive feedback and reviews from leading the majority of which is expected to originate from the U.S. global financial institution like the World Bank and Interna- This would be in line with previous economic trends, as North tional Monetary Fund (IMF), Guatemala has received praise American investment in the republic jumped by nearly a quar-

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Congress President, José Roberto Alejos (center), at a ceremony.

President Colom in discusion with Vice President Rafael Espada.

ter in the 2006 to 2009 period as political and economic stability enticed a flood of FDI. Major areas of interest for foreign investors include the agricultural, manufacturing and tourism sectors, as well as the business processes outsourcing (BPO) market which has grown rapidly in recent years because of the republic’s bilingual and computer-literate young population.

Since being launched in 2004, the government’s official investment agency, Invest in Guatemala promote business openings and provides support to foreign investors searching for commercial opportunities throughout the country.

President Colom cites his nation’s key competitive advantages as a strategic location with outstanding sea and air links to every corner of the world, advanced Information and Communications Technology (ICT) networks, excellent infrastructure and lucrative trade deals with major foreign powers.

“Thanks to political and economic stability, Guatemala is a country that offers small, medium and large investors the option to participate in many productive sectors that guarantee high returns in the short, medium and long term,” President Colom says.

Located just a few hours’ flight time from most major U.S. cities, Guatemala offers foreign investors many financial incentives and competitive advantages, including full repatriation of capital and dividends, tax breaks, low labor costs and good transparency.

the Guatemalan community in the U.S. has made great contributions to our nation. These deep connections between our people reinforce our close partnership and I look forward to continuing the partnership between our countries as we work to build a better world for our children.”

Secretary Clinton, who visited Guatemala in March following a visit by President Colom to Washington D.C. a month earlier, added: “During my trip, President Colom and I affirmed our commitment to work together on expanding economic growth, improving transparency and accountability, and increasing access to health care and education.

“Through our Pathways to Prosperity initiative and the Central American Regional Security Initiative, we are working together to widen the circle of opportunity for our citizens and promote stability throughout our hemisphere. The U.S. supports fiscal reform based on a broad consensus to increase transparency in public spending and to strengthen enforcement of tax laws."

The U.S. Secretary of State added: “We want to work with partners like Guatemala to pursue these reforms for the benefit of all citizens. We strongly support the tax reform efforts being discussed. Guatemala deserves better investment in public institutions like education, health, and housing. Transparency and enforcement of tax laws are essential for the future prosperity and progress of the Guatemalan people.”

Vice President at the heart of health programs At the forefront of the Guatemalan’s government determined My dream is to see hunger and poverty efforts to further increase transparency is Vice President Rafael Espada, a respected heart surgeon who is regarded as a eradicated ... and universal access to national hero by many Guatemalans due to his outstanding medical care, education and housing. humanitarian work.

Rafael Espada, Vice President of Guatemala One of the world’s leading cardiovascular experts, with a successful medical career in the U.S. that stretches back 30 years, Dr. Espada returned to his home country in 2007 to play These impressive political and economic relations were fur- a prominent role in the raising of health, education and social ther reinforced earlier this year through a series of visits by se- standards. “My dream is to see hunger and poverty completely nior government officials during which trade and investment eradicated one day and for everyone to have access to medical care, education and decent housing,” he says. issues were discussed in depth.

A keen athlete, the Vice President traveled to New York Speaking ahead of celebrations to mark the republic’s 189th anniversary of independence in September, U.S. Secretary of City and Washington D.C. in June of this year to meet and hold State, Hillary Clinton, said: “I have enjoyed the warmth and talks with leaders of migrant associations about a series of isgenerosity of the Guatemalan people on each of my visits, and sues related to the hundreds of thousands of Guatemalans who

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First Lady Sandra Torres de Colom meets delighted children during one of her regular visits to Guatemalan schools and communities.

live and work throughout the U.S. Appointed to the position of Vice President in early 2008, the 66 year-old is currently helping to coordinate programs that will mark Guatemala’s activities for the United Nations’ International Anti-Corruption Day on December 9.

Fittingly for a doctor who has saved a lot of young lives through his humanitarian efforts, many of these events will involve children and teenagers as the nation looks to secure a future free from the threat of corruption. As well as raising funds for a state-of-the-art heart unit and medical center in Guatemala City during the 1990s, the Vice President and his office also plays a pivotal role in Guatemala’s social development. This includes efforts to increase access to safe drinking water and measures to protect the country’s precious environment, as well as combat the climate change that threatens its fragile ecosystems.

In October 2010, the former student of San Carlos University in Guatemala City gave a speech to the United Nations Population Fund (UNPFA) in the capital that touched on the social, cultural and environmental challenges facing the republic.

During his address to the international development agency, which is working with government departments to promote the basic human rights of health and equal opportunity, Vice President Espada said: “Guatemala has many natural and human advantages, such as its multicultural society, its people and its productive land.”

He also told delegates, who included leaders of the republic’s National Population Commission that: “We must work together to maintain the vision of international development agencies like the UNPFA, putting in practice the meaning of the following three words that will lead us to success: respect, tolerance and dignity.”

Building a true democracy While President Colom and Vice President Espada have played important roles in the excellent socioeconomic success Guatemala has enjoyed over the past couple of years, the Congress of the Republic of Guatemala has strengthened the democratic rule of law.

Headed by President José Roberto Alejos, the Congress of Guatemala has approved a series of legislative reforms and provided a strong political base that has generated stability and enhanced the country’s reputation in the eyes of investors.

A successful businessman who studied law and business administration in the U.S. before embarking on his long career in the private and public sectors, Alejos has participated in many political conferences and forums during the last two decades. As a director of several companies, he has a wealth of business and commercial experience that he is now using to benefit his country.

People are mobilized to defend and secure the values of coexistence, democracy, justice and peace.

José Roberto Alejos, President of Congress

Earlier this year, Alejos revealed some of the reasons behind Guatemala’s rise to international prominence during an authoritative address at an international conference organized by the U.N. “One of our biggest successes in Guatemala has been to eliminate the spector of electoral fraud,” he told delegates. “During this current term, agreements on crucial aspects of Guatemalan democracy have been realized…which shows people are mobilized to defend and secure the values of coexistence, democracy, justice and peace.”

Such qualities are at the heart of Guatemala’s political and social arena with President Colom building on his reputation as a proactive and popular politician who regularly visits villages and towns across Guatemala to meet and talk to ordinary people.

The father of three is a successful businessman and a former executive director of the National Fund for Peace (Fonapaz), an organization established following the end of a long period of civil conflict in 1996. As well as overseeing the rehoming of thousands of refugees, Fonapaz has helped eradicate poverty through the setting up of more than 70 new businesses that, in turn, created more than 23,000 jobs directly and at least 100,000 other jobs indirectly.

Social Cohesion Council With the valuable help of First Lady Sandra Torres de Colom and government entities such as the Social Cohesion Council (Consejo de Cohesión Social), President Colom continues

SPECIAL ADVERTISING SECTION living conditions. “We have a lot of work to do but the changes have started,” the First Lady says. “Our country’s many social programs do not have political interests, they only see the people and their needs.”

Like her husband, the First Lady built a successful career in the private sector but now spends a lot of her time visiting people who benefit from the many social development programs she is actively involved in. Frequently pictured in schools surrounded by smiling children or in hospitals and medical centers talking to patients, the First Lady is leading from the front in the fight against hunger, malnutrition and poverty.

“Babies and young people represent the hope and future of Guatemala,” she says. “This is why we are committed to taking action to improve the lives of our people through the greater access to higher standards of health care.”

President Colom delivers a speech to the United Nations in NYC.

to focus on projects that reduce poverty, fight disease, combat hunger, protect the environment and improve education standards.

The Social Cohesion Council has played a major role in the achievement of this aim through the construction of new housing, schools and hospitals across the country. This infrastructure drive has been greatly supported by health, education and social programs and initiatives that have dramatically improved citizens’ living conditions and employment prospects.

“We have received many ratings from independent organizations and all the indicators related to education and health have increased," President Colom says. “We are in the process of setting up a system that will give people free access to health services around the clock, which is helping to reduce neonatal mortality rates.”

We should congratulate ourselves on the positive progress made in 29 of the 49 Millennium Development Goals. Álvaro Colom, President of Guatemala

Guatemala receives help and support from many international organizations and during his speech to world leaders at the U.N. headquarters in New York on September 20, President Colom highlighted the progress made in key social areas.

“Our education system has advanced greatly in the past year an historical achievement that means up to 40% more children now receive education. Thanks to the projects and programs managed by organizations such as the Social Cohesion Council, thousands more children and young people across Guatemala are exercising their rights to education.”

Focusing on the country’s Millennium Development Goals, President Colom added: “We should congratulate ourselves on the positive progress made in 29 of the 49 indicators, while redoubling our efforts on the other 20 indicators in order to achieve similar success.”

While President Colom was attending the U.N. summit, the First Lady was meeting thousands of rural families who qualify for food packages as part of a successful social program.

Through the provision of free food, families are able to invest the money they would have spent on nutritional items on their children’s education and homes in order to improve general

Education for all In addition to countless health-oriented projects, the current administration has funded a series of construction programs that have resulted in the building of more than 20,000 homes as well as more than 5,000 schools and associated facilities.

“Guatemala’s education system is improving and expanding and our children now receive a better education,” President Colom says. “My government has created 5,100 new centers of education for children and young people, and I am especially proud and pleased to report that we have opened more than 800 new schools that cater for very young children.”

Speaking at an official ceremony on September 18 during which around 2,600 grateful families – many of whom were badly affected by previous tropical storms – were handed the keys and full ownership rights to their new homes, President Colom said: “We offered to give the less fortunate housing as soon we could. I know some have had to wait more than 15 years for the legalization of their land, but their dream is now reality.”

While President Colom has received praise for his work in driving Guatemala’s strong socioeconomic development, he acknowledges that this success would not have been possible without the support of his large team of staff.

As President Colom’s Private Secretary, Gustavo Alejos is a highly respected senior civil servant who plays a prominent role in ensuring the president’s daily meetings, visits and talks run smoothly.

A successful businessman and entrepreneur, Alejos has been a friend of President Colom since 2003 and acted as his right-hand man since the Presidential elections in January 2008. In addition to managing President Colom’s hectic daily agenda, Alejos is responsible for filtering and prioritizing official invitations, briefing the president about policy matters, parliamentary business, and various other political and legislative issues.

A leading tourist destination thanks to its fascinating heritage, famous Mayan culture, lust tropical rainforests – that cover more than a third of its territory – and excellent climate, Guatemala is on course to attract a record two million foreign visitors this year – around a third of whom will be from the U.S. Highlighting the reasons for the sector’s strong performance, President Colom states: “Guatemala is a beautiful, friendly and welcoming country that offers visitors an unforgettable experience thanks to its wealth of natural, historical and cultural treasures and attractions.”

by Business Focus www.businessfocus.org.uk