Travel Reference
In-Depth Information
StatesisGuatemala'sbiggesttradingpartner,accountingformorethanhalfofthecountry's
exports and a third of its imports. Other important trading partners include the neighboring
Central American countries, Mexico, South Korea, China, and Japan.
In terms of employment, agriculture is the largest employer, with half of the population
employed by this sector. Services, bolstered by tourism, employ 35 percent of the popula-
tionandindustryemploystheremaining15percent.Unemploymentin2005was3percent.
After the signing of the 1996 peace accords, Guatemala appeared poised for rapid eco-
nomic growth, but a financial crisis in 1998 disrupted the expected pace. Despite gains in
industry, the country's economy still showed much of its historical susceptibility to world
commodity prices, specifically coffee. A collapse in coffee prices severely affected rural
incomes and brought the industry into a serious recession, though exports of this commod-
ity have bounced back since then.
Foreign investment has remained weak, with Guatemala unable to capitalize on foreign
investment to the same degree as its neighbors. A notable exception is the privatization
of utilities. Potential investors cite corruption, crime and security issues, and a climate of
confrontation between the government and private sector as the principal barriers to new
business.
Guatemala's economy is dominated by the private sector, which generates about 85 per-
centoftheGDP.Thegovernment'sinvolvementissmall,withitsbusinessactivitieslimited
topublic utilities, manyofwhichhavebeenprivatized underaneoliberal economic model,
andtheoperationofports,airports,andseveraldevelopment-orientedfinancialinstitutions.
The Berger administration passed legislation allowing for more private sector concessions
of services in 2006.
