Guatemala's Financial Present and Future

A review of the fiscal outlook in Guatemala, the difficulties encountered and possible solutions for addressing these challenges.

Tuesday, July 22, 2014

From the Introduction of the study by the Foundation for the Development of Guatemala (FUNDESA):

In any country, taxation is critical to ensuring the proper functioning of the state. Guatemala has faced a host of challenges in this area. In Latin America we are a country with one of the lowest rates of total revenue going into the treasury. We are also a country with a very young population pyramid with needs in education, high levels of chronic infantile malnutrition (49%), etc. Guatemala is also facing a number of obstacles that limit the development of the country such as the poor quality of education. According to a study by the Foundation for the Development of Guatemala (FUNDESA), the top five links to Guatemala's growth are chronic malnutrition, governmental opacity, insecurity, impunity and lack of infrastructure.

Overcoming these limitations requires effective state investment which, so far, has been much lower than expected. For example in education, there is now an investment of 2.8% of GDP. UNESCO data from 2011 places Guatemala in position 119 of 122 in per capita investment in education. There are without doubt great opportunities in the quality of spending but it is with a sense of urgency that the country must recognize that solutions need to be implemented in order to address these deficiencies.

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