Travel Reference
In-Depth Information
The ratification of DR-CAFTA was met with protests in Guatemala City. Its detractors
fearedthelossofjobs,increaseddependenceonfoodimports,andabroadeningofthedeep
gap between Guatemala's rich and poor. Peasant organizations and at least one NGO cal-
culated the loss of up to 100,000 jobs in the agricultural sector. The government offered to
counteract perceived imbalances through a series of credits supporting small and medium-
size businesses, which employ more than 70 percent of the population and are the engine
of the rural economy. Nontraditional export sectors were quick to point out the treaty will
create an estimated 50,000 new jobs in nontraditional agriculture in the first two years of
its implementation. Whatever the result, the implementation of DR-CAFTA will certainly
involve major adjustments requiring the strengthening of agro-industry, and small farms in
particular, via expansion to new markets and the application of new technologies, among
other things.
AnothermajorcontributortoGuatemala'seconomyisthemoneysenthomeby1.5milli-
on expatriate Guatemalans living and working in the United States. In 2008, this amounted
to $4.3 billion, which Guatemalans on the receiving end used to supplement their incomes,
start businesses, and put into savings. This phenomenon has helped to widely ameliorate
the country's endemic poverty and accounts for almost 12 percent of the GDP. Although
income sent from abroad showed continued growth in 2008, Guatemalans feared that an
increase in deportations of Guatemalan nationals from the United States would negatively
impact the local economy.
It remains to be seen whether DR-CAFTA will aggravate or alleviate Guatemala's skewed
wealth- and land-distribution patterns, which are already some of the most unequal in the
world. The wealthiest 10 percent of the population receives almost half of all income, and
the top 20 percent receives two-thirds. About 80 percent of the population lives in poverty,
with two-thirds of that number living in extreme poverty and surviving on less than $2 a
day. Belying these patterns of wealth and income distribution are Guatemala's social-de-
velopment indicators, such as infant mortality and illiteracy, which are among the worst in
the hemisphere. Chronic malnutrition among the rural poor worsened with the onset of the
late-1990s coffee crisis and devastation wrought by Hurricane Stan in 2005.
On a much more positive note, tourism has greatly impacted the economy in recent years,
particularlysincetheendofthecivilwarin1996.In2004,Guatemalareceivedonemillion
visitors for the first time and increased visitor numbers have continued in the years since.
In2007,Guatemalaregistered1.6millionforeignarrivalswithatourismexpendituretotal-
