GOVERNMENT & ECONOMY

Capitol Building in Guatemala City

More than any other country in Central America, the political and economic situation in Guatemala has become metaphoric of the interlocking contractions found within much of Latin America. With approximately 11 million people, Guatemala is the most populous of the Central American republic, the richest in potential export resources, and it attracts the most investment collars from the US and large multinational European countries. Yet, it's Maya majority have the lowest per capita income in the region (a 1991 study by the National Institute of Statistics revealed that 90 of the highland residents live in conditions of extreme poverty).

Guatemala's political legacy is one of authoritarian governments often owned by, and dominated by the oligarchy that makes up about 2% of the country, yet controls 65% of the land (Victor Perera, Unfinished Conquest: The Guatemalan Tragedy, 1993). Throughout most of Guatemala's post-colonial history, external political opposition was simply not possible and as a result small covert revolutionary movements grew within the political infrastructure. Armed guerilla movements have been a political presence since the 1960's. In 1982 many small Guerrilla factions joined to form the Unidad Revolucionaria Nacional Guatemalteca (URNG).

The constitution came into effect in January of 1986. It created a representative system of government where power is exercised equally by the legislative, executive and judicial branches of government. Suffrage is universal over the age of 18, and voting is compulsory for all that can read or write. Much like the US government, executive power is held by the president and vice president who are directly elected for a four-year term. The executive branch appoints a cabinet to assist them.

Legislative power lies in the 80 member unicameral National Congress, also elected every four years. 64 of the seats are elected in departmental congressional districts and 16 in a nationwide ballot. Absolute majority of the congress is required to approve laws. The exception to this is if the proposed law amends the constitution, involves an international treaty or effects the sovereignty of the state. In these cases congress must reach a two/ thirds majority to ratify the law. Congress is responsible for electoral matters, for approving the budget and establishing taxes. Congress meets on June 15 of each year and an ordinary legislative session lasts four months. In 1994 a 13 member supreme court was appointed.

As the end of the cold war brought changes to the world's political structure, Guatemala was finally able to reach political stability. For one thing, Guatemala's Marxist revolutionaries were forced to come to terms with the collapse of the Soviet empire and their loss of soviet patronage. Additionally as the threat of communism declined, the US retracted funding to Guatemala's military thus weakening the oppressive Government. Peace accords were escalated in the early 90's and in 1995 a UN human rights establishment was set up following political agreements between the government and the guerrilla's. The UN commission was to protect and enforce the rights of indigenous Guatemalans, many of whom were tortured and murdered during the war. Of the 140,000 people thought to have died during the war, a majority was indigenous.

Alvaro Arzu

On December 30, 1996, the conservative government led by Alvaro Arzu signed a treaty with the URNG guerrillas to end the previous thirty-six years of civil war. Initial assessments estimated that the costs of implementing the peace plan were approximately 2.3 billion dollars (US). A month after the peace treaty was signed 1.9 billion dollars had been secured in foreign loans from governments and multinational banks. The Inter-American Development Bank pledged US $800 million, while US $400 million came from the world bank. European countries granted Guatemala around 250 million dollars.

The traditional export commodities of Guatemala are in the agricultural sector but there has been shifting emphasis on non-traditional exports and export diversification. While coffee and sugar remain important (at 24 and 13% of the total export earnings of 119 respectively), products like assembled clothing, winter fruits and furniture are becoming increasingly more important. Tourism is another area that is rapidly growing. In 1997 tourism contributed a revenues of US 295 million dollars, up 15 from 1996.

Although Guatemala was previously one of the least indebted countries in Central America, because of the government's refusal to increase tax percentages on the upper class, this may not remain the case in coming years. The end of the civil war has brought Guatemala exposure to the disparity in the standard of living between its rich and its poor. Yet is has also been a first step in economic repair and integration with the world economy.