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Country profile - Guatemala


The Central American republic of Guatemala is dotted with lakes and covered by tropical jungles, volcanic beaches and forested plains. But against this picturesque backdrop, Guatemala has suffered a bloody past resulting in a food insecure country with a weak domestic economy, a situation compounded by ongoing political instability and social inequality. Whilst Guatemala has achieved macroeconomic stability in the ten years since the last conflict ended, unemployment remains high and income distribution inequitable. Almost 80 per cent of the population lives in poverty, 60 per cent of those in extreme poverty. Much of the inequality is the result of discriminatory land distribution; three per cent of landlords own 70 per cent of the land, and dominate cultivation of the fertile coastal regions.

A land of inequity

Since the Spanish conquest during the 16th century, the indigenous Mayan people have had to move to avoid repression, abuse and exploitation. During the thirty years of recent conflict, Mayans were accused and punished for supporting guerrilla warfare and thousands were killed or disappeared. Inequality between the Maya population and those of European descent - the Ladino - is still deeply ingrained. Mayans constitute more than half of Guatemala's population but the Ladino earn more than twice the monthly income of their indigenous counterparts. In recent years, over 900 thousand children have been employed as labourers, mostly in agriculture, hunting and fishing. Only 45 per cent of children who work manage to attend school and illiteracy, infant mortality and malnutrition are among the highest in the region.

Farmland, set amongst Guatemala's forested hills
Farmland, set amongst Guatemala's forested hills

Agriculture provides the backbone of Guatemala's economy, contributing 25 per cent of GDP, employing over half the labour force and providing two thirds of exports, mostly coffee, sugar, bananas and beef. Guatemala's three main staple foods are maize, beans and rice. However, national production covers only 60 per cent of demand, and many poor families face seasonal food shortages. Maize, beans and squash are grown traditionally by the Mayans. Maize - believed to have originated from wild grass in Guatemala and Mexico - provides over 70 per cent of total daily energy intake among rural households although beans are also an important part of the traditional diet, particularly valued by the poor. Like neighbouring countries, more rice is consumed in the country than is grown locally, with imports from the US supplying the deficit.

Traditional and non-traditional exports

Guatemala is now the third largest sugar producer in Latin America, and three quarters of production is exported. Mills are largely controlled by elite landowning families, who together account for 77 per cent of the country's sugar milling. In contrast, coffee is mostly grown by Mayan smallholders. However, in recent years the market price has often been less than the cost of production. Since the 1990s, tens of thousands of seasonal harvest jobs have been lost, and small-scale coffee production has become virtually unsustainable.

Farmland in Guatemala
Farmland in Guatemala

As an alternative source of employment and income, a growing number of farmers are turning to non-traditional crops including snowpeas, broccoli, cauliflower and melon. But whilst returns may prove fruitful, expensive inputs are required to grow these crops to the standards required for export. Snowpeas have become one of Guatemala's most important non-traditional crops, generating more than $50 million annually in exports to the US. The crop costs six times more to produce than traditional crops like maize, but returns may be up to fifteen times higher. But snowpea prices are highly volatile, creating uncertainty for small-scale farmers.

Environmental degradation

Forests are an important resource for Guatemala, providing chicle (gum) and timber. However, three per cent of forested areas are now being destroyed annually and in fifteen years (1990-2005), Guatemala lost 17 per cent of its total forest cover. Almost a third (27%) of Guatemala's land is protected but illegal logging in national parks is increasing, with a burgeoning population requiring fuel wood and land clearance for agriculture. Environmental groups are working to develop community-based conservation projects that use sustainable harvesting techniques to reduce soil degradation and the impact on the forest ecosystem.

In 2005, Hurricane Stan resulted in mudslides on deforested mountain slopes which killed more than 1,500 people. The hurricane has impacted heavily on agricultural activity, washing away a large proportion of arable land. Atitlán, one of the country's major coffee producing areas, was particularly hard hit and the most vulnerable communities have lost their livelihoods and income. A representative from the World Food Programme (WFP) said: "In the Western Highlands, Stan struck in the worst possible moment, as rural subsistence farmers were preparing to harvest their maize." Six months after the hurricane, WFP reports that almost 300,000 people face a "hunger crisis".

Challenging the future

In 1996, a peace accord was signed to end 36 years of civil war in Guatemala. However, conflict and oppression remain, and the peace process has failed to solve the fundamental problem of land inequality. Guatemala requires redistributive land reform to meet subsistence needs, especially urgent now that malnutrition and extreme poverty are increasing. Challenges in the future also include improving inequality gaps especially for indigenous women who remain significantly marginalised, curtailing drug trafficking, and narrowing the country's trade deficit.

Statistical information
  • Country: Guatemala
  • Capital: Guatemala City
  • Area: 108,890 sq km
  • Population: 12,293,525 (2006 est)
  • Population growth rate: 2.27%
  • Life expectancy: 69.4 years
  • Ethnic groups: Ladino and European 59.4%, Mayan 40.3%, indigenous non-Mayan 0.2%, other 0.1% (2001 census)
  • Languages: Spanish, Amerindian languages (23 officially recognized Amerindian languages)
  • Inflation: 7.2% (2004 est)
  • GDP: purchasing power parity $62.97 billion (2005 est.)
  • GDP per capita: $5,200 (2005 est.)
  • GDP composition by sector: agriculture: 22.8% industry: 19.1% services: 58.1% (2005 est.)
  • Land use: arable land 13.22%, permanent crops 5.6%, other 81.18% (2005)
  • Major industries: sugar, textiles and clothing, furniture, chemicals, petroleum, metals, rubber, tourism
  • Agricultural products: chicken, beef, pork, coffee, wheat, corn, sugar, cotton, cacao, vegetables and fruits
  • Natural resources: petroleum, nickel, rare woods, fish, chicle, hydropower
  • Export commodities: coffee, sugar, petroleum, apparel, bananas, fruits and vegetables, cardamom
  • Export partners: US 53%, El Salvador 11.4%, Honduras 7.1%, Mexico 4.1% (2004)

Date published: May 2006


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