Guatemala Politica General de Gobierno 2024-2028

Guatemala’s International Economic Landscape

Guatemala’s International Economic Landscape

International economic context associated with Guatemala: Migratory dynamics as a source of opportunities and challenges.

On March 26, 2024, Guatemala’s Secretary of Planning and Programming of the Presidency (SEGEPLAN) announced the release of the General Political Report of the Government of Guatemala 2024-2028 on its “X” platform.

This document, according to SEGEPLAN, establishes 10 strategic axes aimed at building a country for everyone. SEGEPLAN referred to the publication as the current administration’s guide for Guatemala.

 

 

The following text is an excerpt of the guide’s analysis of Guatemala’s international context:

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Guatemala cannot ignore the growing international concerns over phenomena that affect the globe, such as climate change, environmental degradation, or conflicts such as the Russia-Ukraine conflict, which impact regional stability and have economic, political, and social implications in the region…

Guatemala’s international dynamics are characterized by several factors that grant it an active role in the region. Its strategic geographical location allows it to connect with North and South America, facilitating commercial relationships.

However, according to 2023 World Bank data, the country has a developing economy with a marked dependence on agricultural exports and remittances from Guatemalan migrants. This model of strong international economic dependence must be reconsidered in light of the challenges posed by the effects of climate change.

Guatemala counts the United States as its main bilateral trading partner, both in exports and imports, followed by El Salvador, Honduras, and Nicaragua, which together represented the second-largest trading partner with 29.5% of Guatemalan exports in 2022.

Additionally, Costa Rica contributes 4% of total exports. Consequently, Central America constitutes the main destination for Guatemala’s exports, accounting for 33.5% of the total in 2022. The second most important block is comprised of countries in the Eurozone, representing 9% of exports.

The main source of external income for Guatemala is remittances received from the United States of America, reaching $19 billion in 2023, with an estimated $20 billion for 2024. According to the International Organization for Migration (IOM), these resources are generated by around 2.3 million Guatemalan migrants.

The socio-economic and educational profile of the migrant population is characterized by its specificity in particular labor niches in the United States. According to the International Labor Organization (ILO), six out of ten immigrants never completed secondary education, while the rest did not finish basic secondary education, and 76% barely attained primary education. In terms of employment, they mainly stand out in sectors such as construction (17%) and domestic service (7%).

It is important to consider that restrictive immigration policies implemented by the United States have resulted in the deportation of over 55,000 Guatemalans in 2023, which could limit the flow of remittances to Guatemala.

In the last two decades, international cooperation has focused on promoting actions in economic, social, environmental, and institutional political sectors. These significant supports to the public sector, within the framework of international cooperation effectiveness instruments (Paris, Busan, Accra, and others), aim to decisively complement national development efforts.

Main Internacional Commitments

Based on the commitments that the State of Guatemala has undertaken, including the Sustainable Development Goals (SDGs), which currently guide the architecture of development cooperation, the country has been implementing actions to overcome challenges and achieve commitments in this regard.

Guatemala needs to implement public policies that address the challenges of poverty, inequality, violence, and climate change. Additionally, it is crucial to strengthen public institutions to make them efficient and transparent, as well as to promote civil society participation in the agenda. It is important to highlight that Guatemala’s commitment to the international agenda and the Sustainable Development Goals are a continuous process that requires sustained effort from the government, civil society, and the private sector.

Guatemala ratified the Paris Agreement on Climate Change in 2017, highlighting the importance of promoting actions related to adaptation and mitigation of climate change. Additionally, the country is party to fundamental conventions on decent work, freedom of association, and the elimination of child labor. From a rights perspective, fulfilling these commitments involves state guarantees and close coordination with donors and other related actors.

The overall strategic framework of international cooperation in Guatemala should be directed towards key interventions that can enhance the effectiveness of national resources, improve the relevance of technical assistance, and complement strategic public investment for development, in order to effectively address the country’s challenges.

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To learn more, read:

POLÍTICA GENERAL DE GOBIERNO 2024-2028

 


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