About 34 years ago, the economy of Guatemala was facing a crisis. At that time, the country’s military rulers announced a package to normalize the economy of Guatemala. This package imposed heavy taxes on the business sector. Country’s powerful business lobby started protests. The authorities of Guatemala informed the government about the situation. Finally, the government had to surrender. The democracy returned to Guatemala the following year. The country faced an end to about thirty years old dictatorship. However, the country could not make significant development economically. Now Guatemala’s tax income is very low. Exporters are taking advantage of cheap labor and polluting the waters of Guatemala, but they are in the tax net. The proposal to regulate water usage by industries could not make any progress in congress.
Business monopolists have a strong influence over Guatemala’s authorities. Business groups exercise their power to manipulate the regulatory laws on tax.
In 2013, The Constitutional court suspended the 80 years imprisonment of former dictator General Efrain Rios Montt. Experts opine that this conviction was a result of pressure from Guatemala’s authorities who have close relations with business monopolists. It is also believed that business monopolists of Guatemala provide financial support to the politicians to formulate the favorable laws. This is the reason that despite sincere efforts by some congress members, the tax laws are still awaiting congress approval.
The current economic model is getting failed. About sixty percent population is living under the poverty line. People are trying to migrate to the USA because of deteriorating economic conditions.
The UN International Commission against Impunity in Guatemala (CICIG) visited Guatemala in 2007. The USA paid the major part of its cost. This mission was sent to tackle corruption. According to a report by CICIG, it was declared that the political scenario of Guatemala had been changed. The report claims that business groups support and aid for a politician are decreasing. Now the country’s politics is being managed by state suppliers and criminal groups.
In Guatemala, the state suppliers are called “burguesia emergente.” These groups started interference in Guatemala’s politics in the early 2000s. They meddled in politics intending to get contracts. This created troubles for traditional business groups and their allies in the USA. The business group was supporting the status quo.
The CICIG report was very alarming. Hundreds of politicians were identified and charged on their links with criminal gangs. Besides, these many criminal organizations were discovered. Four years ago the then president and prime minister were charged in formulating a fraud scheme called La Linea.
In 2016, CICIG started paying attention to illegal campaign financing. CICIG disclosed that many of the politics financers are working against the law. However, in 2018, Guatemala’s deep state accused the Colombian head of CICIG. And in early 2019, Guatemala refused to extend the mandate of CICIG.
Investigation of electoral finances was considered as a threat for the business community, politicians, and criminal organizations. After the report, representatives of various business groups held a press conference and apologized to the public. Unfortunately, the matter was closed after this apology, and Guatemala’s authorities did not go for further investigations.
In 2018 a group was formed in Washington by the funding of business groups. The purpose of this group was to create a lobby to cancel the mandate of CICIG.
Now the Colombian head of CICIG is not allowed to visit Guatemala. The mandate of CICIG will expire on September 2019. Despite giving funds to CICIG, now USA is silent on Guatemala’s tactics against CICIG. In a surprising move, US Secretary of State, Mike Pompeo, assured Guatemala full support of the USA to protect the so-called sovereignty of Guatemala. Currently, Guatemala’s politics is moving around CICIG.
Conclusively we can say that a criminal nexus among politicians, criminals, and big business groups is causing economic troubles for the economy of Guatemala. The future of Guatemala appears uncertain. The anti-corruption drive is also diverted towards new issues like rising disparities, poverty, and deterioration of the economy. However, these topics were not part of recent presidential election campaigns in Guatemala. None of the candidates is presenting a mechanism to address the problems of Guatemala. Experts believe that an effective anti-corruption campaign is required to normalize the situation.
