Corruption and Violence Haunt Guatemala Ahead of Election

Image by Surizar

Image by Surizar

One might say Guatemala is best known for its coffee, bananas and rampant violence. In September, Guatemala will face not only local and legislative, but also presidential elections offering, yet again, a glimmer of hope. Scheduled for September 13th, they will determine the new President and Vice President, members of Congress, the Central American Parliament, and mayors and councils for all Municipalities in the country. All positions will be elected for a four-year period. Current President Otto Pérez Molina is no longer eligible to run due to constitutional term limits.

Presently leading the race is Manuel Baldizón of the Libertad Democrática Renovada (LIDER), returning to the electoral ring in hopes of avenging his defeat by Pérez Molina four years ago. During his first campaign, Baldizón famously proposed the introduction of a month’s extra pay every year for each worker, as well as the return of the death penalty. In a country notorious for its frequent and brutal murders, it would come as no surprise if he were to advocate the latter once again.

The ruling party Partido Patriota (PP) has thrown its support behind former Minister of Communications, Infrastructure, and Housing Alejandro Sinibaldi. Sandra Torres of the Unidad Nacional de la Esperanza (UNE), who boldly divorced former President Álvaro Colom to be constitutionally eligible to run for office, also has noteworthy name recognition and prospects.

Voting disruptions are to be expected as both regional security and electoral violence during the campaign period will remain a chief concern. This upcoming election brings optimism to a country fatigued by a daunting trinity of corruption, poverty and crime.

Corruption

Corruption has gained a significant position in Guatemala’s public debates. Last year, Guatemala ranked 115 out of 175 countries in Transparency International’s 2014 Corruption Index, confirming the evident nepotism that plagues the country. In a recent State of Nation address, President Otto Pérez Molina recognized the need to strengthen institutions, lamenting corruption’s pervasive presence, paired with the presence of organized crime and drug trafficking. Back in 2007, the United Nation’s International Commission against Impunity (CICIG) was specifically established in Guatemala to bolster investigation of criminal networks. However, progress remains anemic as illicit cartels and high level of malfeasance persist. With a mandate set to expire in September and a slim chance of renewal, it is rumoured that CICIG’s days are numbered.

Poverty

Along with this setback, there is the matter of poverty. The most populous country in Central America, Guatemala has an infamously unequal distribution of income. It has the second highest inequality rate in Latin America, with the richest 20% of the population accounting for more than 51% of Guatemala’s overall consumption. Over half of the population lives below the national poverty line and 13% of the population lives in extreme poverty. Poverty among indigenous groups, which comprise more than 40% of the population, averages 73%, with 22% of the indigenous population living in extreme poverty. Home to 15 million inhabitants, Guatemala has one of the highest malnutrition rates in the world with nearly one-half of Guatemala’s children under age five chronically malnourished.

Guatemala’s GDP per capita is approximately one-half that of the average for Latin America and the Caribbean. Agriculture is one of the main sectors in Guatemala, producing cash crops like coffee, sugar and bananas. This sector accounts for 30% of the labor force. The United States is the country’s largest trading partner, providing 37% of Guatemala’s imports and receiving 38.5% of its exports.  Aware of the dominating role the agricultural sector plays in its export and domestic economies, Guatemala is seeking to expand its manufacturing activities and diversify its economy so as to reduce economic dependence on agriculture.  Studies have confirmed that Guatemala is rich in minerals. In fact, its deposits of gold, copper, lead and nickel are among the richest in Latin America. Furthermore, the jade deposits located in Guatemala are one of a kind. For these reasons, the mining sector is expected to become increasingly attractive for both national and foreign investors.

Crime

Guatemala, averaging 101 murders per week in 2013, remains one of the most violent countries in the world. Brutal crime is a serious concern due to widespread poverty and an opulence of weapons. The violent crime rate is considered “Critical” by the U.S. Department of State. Weak law enforcement and judicial systems seem to cultivate a norm of violence. Narco-trafficking, gangs and transnational organized crime groups pose a tangible threat to local, regional, and international interests.

Much work remains to be done for whoever wins the elections. In order to fully exploit Guatemala’s economic potential, the victor must institute structural reforms capable of radically changing its iffy reputation. Only a strong commitment to these changes can increase both foreign and national investment to Guatemala and consequently strengthen its economy.

Image courtesy of Surizar

 

Itziar Aguirre

About Itziar Aguirre

Itziar currently works as a Property Sector Analyst at HFF, a commercial real estate capital intermediary. She holds an MBA in Accounting and Finance from the University of St. Thomas and an MSc in Comparative Politics from the London School of Economics.

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