Research Intern, Jindal Centre for the Global South,
O.P. Jindal Global University, India.
Guatemala is home to an 18 million population with a GDP of USD 77.6 billion in 2020. It’s a Central American country south of Mexico, and is home to volcanoes, rainforests, and ancient Mayan sites. Guatemala is considered to be the largest, fastest growing, and leading economy in Central America. Measured by its GDP per capita (USD 4,603 in 2020), Guatemala is an upper middle-income country. Even after the Covid-19 pandemic, the government of Guatemala was able to tackle the economic difficulties effectively.
However, the economic stability of the government has not been effective in curbing major problems like poverty and inequality. Due to low central government revenues (11 per cent of GDP on average in recent years and 10.8 per cent of GDP in 2021), public investment saw a downfall. This also limits the quality and coverage of basic public services such as health, education, access to water, and lack of developmental progress.
Why poverty persists in Guatemala?
Before going into the depths of the reasons for poverty, let’s check the growth percentage of poverty. It is unfortunate that the country with the highest economy in Central America has the second highest poverty rate in the region. Behind this misfortune lies the history of Guatemala.
In 1954, a rebellion overthrew Jacobo Arbenz, the President of Guatemala. Interestingly, he was a democratically elected president. However, he was also a Communist, and this made the governments of the West very suspicious. This was especially true of the United States, which had lots of money invested in the country. It is believed the United States funded the coup in order to get rid of Arbenz and his Communist party. With the aid of Western dollars, the coup was successful; Arbenz was ousted, and a new President came to power.
Unfortunately, this new Guatemalan president, Colonel Carlos Castillo Armas, did not want social welfare for his people. It’s asserted that he robbed poor Guatemalans of their rights to vote and of their land. In 1960, the poor had had enough and many fighters rose up in a rebellion. With this, Colonel Armas was assassinated, and a new General took over the rule of Guatemala in November 1960. Thus began the civil war of 36 years, which ended on December 29, 1996. During this time, huge infrastructure projects in Guatemala were demolished. The civil war took 200,000 lives, and the people of Guatemala, particularly the country’s indigenous Maya Indians, who constitute the majority, fell into extreme poverty. The consequences were such that even today, the Maya Indians and other Guatemalans have not recovered from this tragedy and are trapped in a poverty trap.
Since 2006, poverty has been increasing at a tremendous rate in the country. Around 2 million people wound up below the poverty line (measured by an income of less than USD 5 per day) from 2006-2014. At the same time about, half a million people went into extreme poverty (USD 1.90 or less per day) (Black, The Borgen Project, 2020).
Causes for poverty
Exorbitant socioeconomic and geographic inequality are at the heart of poverty in Guatemala. Eight out of ten citizens residing in rural municipalities live in poverty. A study from a sample of six different Latin American countries reveals that Guatemala has the poorest distribution of health and educational resources (Black, The Borgen Project, 2020). A quality education and access to health care are vital in helping individuals to come out of poverty. The lack of an efficient way of distributing resources in rural areas further deteriorates the quality of life, leading to lower life expectancy and limited opportunities for education.
Due to chronic malnutrition, there is an increased suffering of the underprivileged Guatemalan communities, and has led to Guatemala having the fourth highest rate of chronic malnutrition in Latin America region. The child malnutrition level was 47 per cent in 2019, which is the highest of all the Latin American countries, and the highest globally. This perpetuates the cycle of poverty, which is challenging to break out from.
The experts have anticipated that the poorer sections of Guatemala have suffered due to strict lockdowns. A lot of people ended up losing their jobs due to the pandemic, and overseas remittances were drastically reduced (a 2 per cent decrease). These remittances alone constitute 12 per cent of the GDP of Guatemala. They form the core of survival for many families.
In addition to this, the stay-at-home orders have disrupted the informal economy, which employs 70 per cent of the Guatemalan labour force. The informal sector, unregulated by the government, does not have safeguards in the event of a massive disruption like the ongoing pandemic. Due to no protection, the people employed in the informal sector have a higher tendency to fall into trap of poverty.
The tax system of Guatemala has been weak for many years as the government has failed to invest in infrastructure development and welfare programs.
The majority of the population is employed in the agricultural sector; many depend on farming as a source of income. Around 65 per cent of the land is controlled by just 2.5 per cent of the farmers. Land is passed down through generations, and most people perceive farming as their only option, limiting their opportunities to work in other job profiles. Farm workers make USD 3-4 a day, and work is mostly seasonal, which leaves many people in deep financial crisis during the off season. Due to this, many Guatemalan people in this sector remain trapped in poverty.
Effects of poverty on the Guatemala population
Due to poverty, children are unable to attend school, and parents prefer that their child works in order to earn money for the family. Thus, the stagnancy in the education level of children is an alarming concern. If this goes on, it will become more and more difficult to break free of the vicious circle of poverty. The low education and skills of the future generation will consequently lead to lower expected income and poor health.
Inexpensive diets of rice and tortillas resulting from poverty in Guatemala make diabetes a prevalent issue. Type-2 diabetes is the most prominent health issue in Guatemala (WHO, 2016). The corn tortilla is the cheapest staple diet used by people. Considering the whole population, 47.7 per cent is overweight, 16.4 per cent is obese, and 12.4 per cent is physically inactive. Therefore, the potential growth rate of diabetes is a major risk in the country.
Tooth decay has become one of the most prominent issues seen by dentists in Guatemala. Many patients go to the dentist for tooth extractions instead of regular check-ups. Regular check-ups require charges, and people in extreme poverty can’t afford these charges, so they neglect such necessary steps. The water management systems are abysmal in many parts of the country, making drinking water a luxury beyond the reach of a lot of people. The rich areas have flushing toilets and showers, but poverty-stricken areas only have latrine facilities. Many underprivileged people in the rural areas use river water for their toilet purposes, which pollutes the marine ecosystem.
Way forward to curb the poverty
For years, Guatemala’s impoverished people have been provided with food aid by USAID (The United States Agency for International Development) along with Peace Corps to reduce malnutrition cases. But the USAID and Peace Corps together came to the conclusion that supplying food aid is just a temporary solution and the impoverished people simply rely on the aid and do not try to come out of the poverty itself. To implement long-term solution of the problem, USAID and Peace Corps together started an initiative called “Feed the Future.”
The primary goal of “Feed the Future” is to train rural communities to become self-sufficient. This initiative will help eradicate poverty by training and educating adults and by strengthening the local markets. It disfavours a top-down system of reliance on international aid and promotes a bottom-up approach.
The Peace Corps is addressing the problem through the Feed the Future Peace Corps Response programme. This programme works in direct affiliation with the Ministry of Agriculture of Guatemala to train government officials. Furthermore, these officials will empower the citizens via education, since the poorest of the Guatemalan people are uneducated and have restricted access to the outside world. Lectures regarding poultry management and agriculture, as well as guidance with respect to personal health and preventive health measures, are taught to small rural communities. Instead of depending on foreign aid to eradicate malnutrition, this initiative certifies the poor to help themselves.
In Guatemala, coffee farmers have faced a tremendous downfall in production since the outbreak of coffee rust in 2012-2013. “Feed the Future” provides new rust-resistant coffee seedlings for farmers and provides training on pesticide application and additional knowledge of crop management. This not only helped in increasing the quality and quantity of coffee, but also helped in creating 12400 jobs in the coffee industry in 2019.
Poverty slightly increased in 2020, from 45.6 per cent to 47 per cent. It is foreseen that without social protection programmes like financial aid to farmers during the pandemic by the government, poverty would have risen three to four times more in Guatemala. Poverty is expected to decrease from 47% to 45.9% by 2021 (Bank, 2021). Agencies such as USAID, Peace Corps and initiatives like Feed the future together are working hard to improve the critical situation of the Guatemala. The health and educational sectors are the biggest contributors to poverty in Guatemala. And currently, the goal of international organisations is to increase investment in the health and education sectors. Once these sectors start to improve, Guatemala’s poverty rates will come down gradually, and such methods will act as an eye-opener for other poverty-stricken countries.
Black, A. (2020, July 14). Poverty in Guatemala. Borgen Project. Retrieved February 22, 2022, from https://borgenproject.org/tag/poverty-in-guatemala/
New strategy for fighting poverty in Guatemala. (2014–06-02). Borgen Magazine. Retrieved February 23, 2022, from https://www.borgenmagazine.com/new-strategy-fighting-poverty-guatemala/
Overview. World Bank. (2021, November 6). Retrieved February 22, 2022, from https://www.worldbank.org/en/country/guatemala/overview#2
Rust and drought resistant coffee seedlings. (n.d.). Feed The Future. Retrieved February 23, 2022, from https://www.feedthefuture.gov/country/guatemala/#:~:text=Guatemala’s%20coffee%20farmers%20have%20faced,rust%20in%202012%20and%202013.&text=Feed%20the%20Future%20not%20only,the%20coffee%20industry%20in%202019.
The opinions expressed in this article are those of the author (s). They do not purport to reflect the opinions or views of the Jindal Centre for the Global South or its members.