Next June 16, Guatemalans will have to elect the new government that will assume in January 2020, which will have the challenge of implementing the policies needed to respond immediately to the most urgent demand of the population: the employment generation.
The country's electoral process has been surrounded by uncertainty, since four of the presidential candidates were decided in the courts.
So far in the Morales administration, the Guatemalan government has raised $2.4 billion through the issuance of Eurobonds, but the quality with which the funds collected are being executed is questioned.
The last issuance of Eurobonds was on May 23, when the government issued $700 million over 30 years at a 6.12% rate, and $500 million over 10 years at a 4.9% rate.
The reforms to the State Contracting Law under discussion in Guatemala establish five criteria for the Government to terminate the contract with a company in advance.
The proposal is currently under discussion in the Public Finance and Currency Commission of the Congress of the Republic, and among its main objectives is to solve the problems arising from litigation between contractors and state entities, because of issues related to unfinished works.
On March 18, the political campaign for the General Elections in Guatemala officially began, but the legal inconveniences faced by some candidates cause doubts for the future.
Zury Ríos, Thelma Aldana and Sandra Torres are the three presidential candidates leading the voting intentions for the 2019 General Elections, but both Ríos and Aldana have had legal problems in their registration process, and Torres, already a registered candidate, was accused of illegal electoral financing. These cases have caught the public's attention and prevented them from knowing the concrete economic proposals.
The IMF projected a 3.2% growth in GDP for Guatemala in April, but in its latest review the institution reduced the figure to 2.8%.
As the International Monetary Fund (IMF), the Bank of Guatemala also reduced the projected growth of the Gross Domestic Product from 3.8% to between 2.8% and 3.2%.
Hugo Maul, a consultant with the National Economic Research Center, said to Elperiodico.com.gt that "...
Due to social conflicts and various legal processes, 16 hydroelectric projects have been halted in Guatemala, which together amount to an investment of close to $1.5 billion.
The Association of Generators of Renewable Energy (Ager) reported that power generation projects have been suspended because of conflicts with communities in the zones, consultation processes with indigenous peoples, and orders issued by the Constitutional Court, many of which which have been in response to claims raised by environmental organizations.These projects, for which no light can yet be seen at the end of the tunnel, represent an installed capacity of 460 MW.
In the last ten years the use of renewable energy has doubled in the country, and currently sources of generation of this type represent between 65% and 70% of national consumption.
According to the authorities at the National Electricity Commission (CNEE), the stability that has been achieved in electricity rates and the lower dependence on oil derivatives, is due to the fact that the country is consuming more energy generated through renewable sources.
Standardizing procedures and applying administrative silence in favor of the taxpayer, are some of the proposals that Congress has received for reforming the current regulations.
Due to the widespread delay in the tax refunds which is still harming the majority of the companies in the country, the Central American Institute of Fiscal Studies (Icefi), the Center for National Economic Research (Cien) and the Association of Exporters (Agexport), delivered to the Economic Commission at the Guatemalan Congress, a proposal to modify the regulations that are currently applied.
The government is to propose the creation of a new tax to finance part of the budget of the Ministry of Interior, which "would be directed towards the upper and upper middle class" .
This tax would not be for the entire population, since according to the Interior Minister, "... it will be directed towards the upper and upper middle class, because they have the ability to pay.
The National Development Plan of K'atun projects that in 2032 79% of the population will live in urban areas, and identifies the areas with the greatest potential for investment.
Currently 58% of Guatemala's population reside in urban areas, the National Institute of Statistics expects that in 2032 that percentage will rise to 79%, which allows a future map of national wealth to be charted.
Warnings are being issued of a possible rise in the cost of credit if the government finances its spending with bonds issued in the local market.
Elperiodico.com.gt reports: "If Congress authorizes for the next fiscal period the issuance of $1.282 billion in bonds to finance public spending, as the executive branch plans, credit to the private sector could be affected ... ".
For every $100 that migrants send to their families between $30 and $35 are in some way related to banking services.
Prensalibre.com reports: "If you take into account that from January to September this year family remittances, according to the Bank of Guatemala, totaled $3.801 billion, the amount that passed through banks was between $1.1403 billion and $1.3303 billion" .
It has been pointed out that the Guatemalan state is slow, bureaucratic, unplanned, and that there are no rules or processes for controlling public spending.
The National Economic Research Center (CIEN), believes that there is an urgent need to modernize the State, since these conditions ensure the perpetuation of high levels of poverty.
They point to a need to reform the State Procurement Law, the Civil Service Law, the Organic Budget Law and the Law of the Comptroller General.
"Weak public institutions in Guatemala and a polarized political environment continue to limit its credit quality" - Standard & Poor's
An article in elperiodico.com.gt reports that "The three most important credit rating agencies internationally: Moody's, Standard & Poors and Fitch Ratings, have pointed to deficient management in Guatemala's social indicators."
In the first 5 months of 2012 the export of raw tobacco from Guatemala reached only 6% of the $50 million made from in exports during 2011.
According to Carlos Martinez, an analyst at the Institute of National Problems at the University of San Carlos (Ipnusac), this is partly due to a contraction of demand resulting from the global crisis.
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