In Guatemala, the Chambers of Industry, Construction, Commerce and Agriculture agree that the reforms to the State Contracting Law constitute a step backwards in terms of transparency and open the door to greater opacity in public spending.
In April 2021, the deputies approved the amendments to Decree 57-92, which among other things allow for an increase in the amounts of direct and low value purchases.
Although more than 140 agricultural products have access to the U.S. market, only 70 are currently shipped by local producers, which is partly explained by low production capacity and lack of quality.
According to studies conducted by Central American Business Intelligence (Cabi), Nebraska, District of Columbia, Maryland, Hawaii, Tennessee, Illinois, Mississippi, Maine, Kansas and North Dakota are the states with the greatest potential to take advantage of market opportunities.
In Guatemala, approximately 75% of agricultural enterprises have reported liquidity problems in the context of the crisis generated by covid-19.
A study conducted by the Chamber of Agriculture (Camagro) states that during May, agricultural companies recorded income losses, a situation that can be explained by the quarantine decreed and the social isolation measures.
In order for Guatemalan producers to compete under the same conditions as neighboring countries, the government is preparing a bill that seeks to exempt agricultural inputs from VAT.
The initiative, known as the "Fiscal Equity Law", is being prepared by the Ministry of Agriculture, Livestock and Food (Maga), because, according to the institution's top official, other Central American countries do not charge value-added tax (VAT) on agricultural inputs.
For agricultural producers, the use of precision biotechnology in Guatemala requires a specialized committee so that the authorities' decisions are based on technical and scientific evidence, and not under the influence of political or ideological interests.
Guatemala already has regulations in this area, since on October 1, 2019, the regulatory framework signed by the Ministry of Economy with its counterparts in El Salvador and Honduras came into effect.
With the beginning of the new government in Guatemala, businessmen in the agricultural sector are optimistic and believe that the priorities of the new authorities should be to guarantee property rights and improve road infrastructure.
According to a survey conducted to measure the perceptions of the members of the Chamber of Agriculture (Camagro), economic revitalization is another issue that should prioritize the work agenda of the government of Alejandro Giammattei.
To the denouncements made in recent months by businessmen from Guatemala and Nicaragua, is added that of a Honduran union, which denounces the invasion of 3,400 manzanas of productive land.
Because the area of stolen land in Guatemala has grown from about 10,000 hectares in the 1990s to 164,000 in 2018, losses in agricultural production caused by this phenomenon reached nearly $650 million last year.
The Chamber of Agriculture (Camagro) estimates that only in 2018, invasions of private property, mainly agricultural production farms, generated a negative impact equivalent to 0.6% of Gross Domestic Product.
Guatemalan authorities, the only country in the region that is negotiating the FTA with Korea unilaterally, announced that they will speed up efforts to sign the agreement before the end of the year.
The announcement was made by President Jimmy Morales in the company of the Minister of Economy, Acisclo Valladares Urruela, before the members of the board of directors of the National Coffee Association (Anacafé), which is one of the sectors that is demanding the adhesion of the country to the Free Trade Agreement (FTA) between Central America and South Korea.
While declining international prices and smuggling are threatening factors for agricultural production in Guatemala, planned investments in infrastructure would help reduce the costs of the sector.
Estimates by the Bank of Guatemala (Banguat) detail that the agricultural Gross Domestic Product increased 2.6% in 2018, and by 2019 a 2.8% increase is expected. Although the variations registered and projected are positive, the growth of the sector's production is still below the average of the national economy.
The determination of how much and how the minimum wage should be regulated, something that occasionally seems to be done in an arbitrary manner and for political purposes, continues to be one of the factors that most confront Central American businessmen and governments.
In Costa Rica, a 3% increase in the minimum wage was approved for 2019; in El Salvador, an increase is expected to be discussed, and in Guatemala, the commission in charge of the issue reported that no increases will be made this year.
To reduce production costs, the Guatemalan coffee association will implement a climate information system to provide access to more specific forecasts in coffee-growing areas.
According to the National Coffee Association (Anacafé) with the implementation of more weather stations in small coffee areas of the country, the costs of grain production could be reduced between 10% and 15%.
While agricultural companies in Guatemala insist on signing the agreement so as not to lose out to their competitors in the region, industrialists propose to renegote the agreement from scratch.
Each sector's position is very clear.The industrialists say that if the agreement is signed under the current conditions, some subsectors will be affected, and for that reason they want, if there is openness on the part of the Korean government, to go back to the negotiating table.
The Morales administration has announced that in February they will resume talks with the Peruvian government to complete the ratification process of the agreement signed in 2011.
The main factor that has delayed the entry into force of the Free Trade Agreement between Guatemala and Peru has to do with the conflict that arose in 2013 due to the tariffs imposed by the Andean nation on the import of sugar from Guatemala, which resulted in the Guatemalan government filing a complaintwith the WTO.
The way in which the Guatemalan Congress approved reforms to the Penal Code, "suggests that its objective could be to ensure impunity in the country and through this take a backwards step in the fight for a true and effective Rule of Law."
Although President Morales said he was ready to analyze the reforms approved and veto them if they proved to be "harmful to the people of Guatemala," the very fact that Congress has approved them with such speed and simplicity reflects the delicate political crisis that the country is in.
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