GUATEMALA



Guatemala 1105
Photo by: Mariusz Prusaczyk

Republic of Guatemala

República de Guatemala

COUNTRY OVERVIEW

LOCATION AND SIZE.

Located in Central America at the southern tip of Mexico between the Caribbean Sea and the Pacific Ocean, Guatemala has a total area of 108,890 square kilometers (42,042 square miles), slightly smaller than that of the state of Tennessee. Belize, Honduras, El Salvador, and Mexico all share land boundaries with Guatemala that total 1,687 kilometers (1,048 miles) in length, while Guatemala's coastline along the Pacific Ocean and the Caribbean Sea totals 400 kilometers (249 miles). Guatemala City, the national capital and home to 2 million Guatemalans, is located in south-central Guatemala, less than 100 kilometers (62 miles) from the Pacific Ocean.

POPULATION.

As of July 2000, Guatemala's population was estimated at 12,639,939. There are approximately 484 persons to every square kilometer of the country (1,253 persons per square mile), making Guatemala the second most densely populated nation in Central and South America. (El Salvador is the only nation in the region with a higher population density.) Guatemala also has an extremely high rate of population growth; if the population were to continue at its current growth rate of 2.9 percent per year, the total number of people living in the nation would double in 24 years. Population projections estimate that Guatemala's population will reach 16,295,000 by 2010. The fertility rate in Guatemala is the highest in Latin America, with an average of 5 children born to each Guatemalan woman during her lifetime. Although the Guatemalan government has officially recognized that the national birth rate is high, it has done little to encourage family planning or birth control among its populace. The reluctance of the Guatemalan government to institute population control policies can be partly attributed to its strong ties with the Catholic Church, while resistance to family planning among the general populace can be partially imputed to the civil unrest of the 1980s, which provoked a distrust of foreign-initiated programs (including family planning programs).

In stark contrast to most Latin American countries, Guatemala has a populace that is concentrated mainly in rural areas. Only 39 percent of its population is urban (though urbanization is accelerating). The sizeable rural population is linked to the large indigenous (Amerindian) presence in Guatemala; persons descended from the Mayan Indians account for 56 percent of the nation's total population, making Guatemala the Latin American nation with the largest indigenous population relative to total population. The other 44 percent of the national population is mestizo (of mixed Amerindian-Spanish descent, also called ladino in local Spanish). Despite the concentration of the population in rural areas, close to 80 percent of physicians are located in the metropolitan area, making health care difficult to access for rural inhabitants. Additionally, water supply and sanitation services reach 92 percent and 72 percent of the urban population respectively, while in rural areas they reach marginally more than 50 percent of the population. These facts betray a broader phenomenon of rural disadvantage that

extends to the economic, political, and social realms of Guatemalan life.

AGRICULTURE

Although Guatemala is trying to expand its manufacturing activities to reduce economic dependence on agriculture, the agricultural sector is a crucial component of Guatemala's export and domestic economies, accounting for 23 percent of GDP (US$11 billion) in 1999 and employing 50 percent of the labor force (1.7 million workers).

COFFEE.

One of Guatemala's original commercial developments in the 19th century, coffee production is still of vital importance to the national economy. In 1998, coffee exports brought in US$586.3 million, almost double the amount of sugar, the next most profitable agricultural export. Guatemala's production of coffee is equally important in the global economy, as Guatemala is the world's third largest exporter of coffee. Because large-scale operations are needed to produce vast quantities of coffee for export, most Guatemalan coffee is harvested at large plantations along the southern border of the highlands.

SUGAR.

After coffee, sugar is Guatemala's most profitable crop, earning US$315.3 million on the world market in 1998. Sugar has also shown promise as an expanding industry in Guatemala, particularly because it can be produced in raw form or processed within the country prior to export, augmenting its value.

BANANAS.

Bananas remain one of Guatemala's top agricultural exports, grabbing US$190.4 million in revenue in 1998. Like other developing countries that export bananas, Guatemala has recently encountered problems on the international market, including declining prices and a European Union policy that places new restrictions on its imports of bananas. Additionally, conflicts between Guatemalan banana workers and the companies that contract them have led international fruit companies to move their headquarters from Guatemala to Ecuador, where labor is unorganized and therefore cheaper. All of these factors have contributed to the recent decline of the banana industry in Guatemala.

INDUSTRY

Industry in Guatemala, which includes food processing, publishing, mining, and the manufacture of textiles, clothing, cement, tires, and pharmaceuticals, comprises 20 percent of the GDP (US$9.6 billion) and employs about 15 percent of the total workforce (500,000 workers). After growing steadily during the 1960s and 1970s, manufacturing slowed during the debt crisis of the 1980s but picked up again during the 1990s.

TEXTILES AND APPAREL.

More than 80,000 Guatemalans are currently employed by the apparel industry, most of whom are young women. The apparel industry has experienced growth over the past decade, but international attention directed to the poor working conditions within apparel-for-export factories or maquilas has resulted in the closing of some major plants, including the Phillips-Van Heusen factory that used to be located in Guatemala. So long as labor remains cheap and accessible in Guatemala, the apparel industry is likely to continue expanding. The United States provides a sizeable market for Guatemala's apparel exports, importing more than US$1 billion worth of apparel in 1998 alone.

MINING AND OIL.

Combined with production of energy (mainly from petroleum), mining contributes roughly 3 percent of Guatemala's GDP. Antimony, copper, nickel, iron, and tungsten are all mined in Guatemala, though not in great quantities. Surveys of Guatemala's subsurface have revealed that the nation has a wealth of mineral resources, indicating that, given the right investment interest, mining could become a more prominent part of Guatemala's economy in the future. Guatemala, the only oil-producing country in Central America, has been extracting oil from its Petén Basin since the early 1980s, though it does not extract nearly enough to be a net exporter of petroleum.

SERVICES

TOURISM.

The service industry contributes the largest segment of Guatemala's GDP (57 percent, or US$27.3 billion) and employs about 35 percent of the nation's total workforce (1.2 million workers). While the service sector encompasses several different industries like retail , financial services, transportation, and computer services, the most profitable component is tourism. Because of its agreeable climate and diverse landscape, as well as its Mayan ruins, Guatemala is becoming a popular travel destination in the post-conflict period. In light of the high profit margins associated with tourism receipts, the government is making solid efforts to expand tourism and attract more foreign visitors to Guatemala.

DEPENDENCIES

Guatemala has no territories or colonies.

BIBLIOGRAPHY

Banco de Guatemala. "Guatemala: Algunas variables macroeconomicas, años 1950-1999." <http://www.banguat.gob.gt/ver.asp?id'/indicadores/hist03> . Accessed March 2001.

BASICS/USAID. "Guatemala: Country Achievement Summary." <http://www.basics.org/summaries/Guatemala.htm> . Accessed January 2001.

Canadian Foundation for the Americas. "Guatemala Under the FRG: Peace at a Crossroads." <http://www.focal.ca/images/pdf/guatemala.pdf> . Accessed March 2001.

Country Watch. "Guatemala: Economy." <http://www.countrywatch.com/files/069/cw_topic.asp?vCOUNTRY=069 &TP=ECO> . Accessed March 2001.

Pan American Health Organization. "Guatemala: Basic CountryHealth profiles, Summaries 1999." <http://www.paho.org/English/SHA/prflgut.htm> . Accessed February 2001.

Population Reference Bureau. "2000 World Population DataSheet: Central America." <http://www.prb.org/pubs/wpds2000/wpds2000_CentralAmerica.html> . Accessed March 2001.

USAID Bureau for Latin America and the Caribbean. Latin America and the Caribbean: Selected Economic and Social Data. Washington, D.C.: USAID, 1999.

U.S. Central Intelligence Agency. "The World Factbook: Guatemala." <http://www.cia.gov/cia/publications/factbook/geos/gt.html> . Accessed February 2001.

U.S. Department of State. "Background Notes: Guatemala." <http://www.state.gov/www/background_notes/guatemala_0500_bgn.html> . Accessed March 2001.

—Heidi Jugenitz

CAPITAL:

Guatemala City.

MONETARY UNIT:

Quetzal (Q). One quetzal is equal to 100 centavos. There are coins of 1, 5, 10, and 25 centavos, as well as paper bills in the amounts of 50 centavos and 1, 5, 10, 20, 50, and 100 quetzals.

CHIEF EXPORTS:

Coffee, sugar, bananas, fruits and vegetables, meat, apparel, petroleum, electricity.

CHIEF IMPORTS:

Fuels, machinery and transport equipment, construction materials, grain, fertilizers, electricity.

GROSS DOMESTIC PRODUCT:

US$47.9 billion (purchasing power parity, 1999 est.).

BALANCE OF TRADE:

Exports: US$2.4 billion (f.o.b., 1999). Imports: US$4.5 billion (c.i.f., 1999).



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