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Good news for Guatemala

Thursday, January 19, 2012

For many years Guatemala has been seen as the sleeping giant of Central America in business terms, overshadowed first by Costa Rica and then, more recently, Panama.

More recently, however, a raft of good news for the region's largest country - in terms of both population and area - heralds the January 14 inauguration of Otto Pérez as president.

Exports in 2011 are expected to reach $10.4 billion, a record. Another record figure involves Guatemalan emigrants - most of them based in the United States - sending $4.3 billion in remittances to their families.

Consumption too is sending important growth signals. In the telecom sector alone, Guatemalans last year spent $2.4 billion, almost 70 percent of it on cellular telephony.

Perhaps the most encouraging news is that homicides in Guatemala fell in 2011 for the second straight year. The 5,600 figure represents a decline of almost 6 per cent over 2010, a relief to everyone, not least to those who do business, and a boost for Pérez, a retired general who made the fight against crime the main plank of his electoral platform.

Guatemalans may not be in a hurry to uncork the champagne.

Export earnings have been boosted not so much by greater volumes but rather by high coffee and sugar prices, which could fall once again as a result of economic problems in consuming countries.

Likewise, the increase in remittances could be short-lived, if the United States slips back into recession.

Still, after a lot of bad press, a spate of good news may mean that Guatemala is turning a corner.