Guatemala - Infrastructure, power, and communications



An underdeveloped infrastructure is one of the main obstacles to investment and economic development in Guatemala. Public and private investment is disproportionately concentrated around Guatemala City because of the lack of infrastructure connecting the capital to other regions of the country. Not only is much of Guatemala's 12,795 kilometer (3,519 mile) highway network in poor condition, its electricity and telephone density is low, and all of its television stations and newspapers are concentrated in Guatemala City. Additionally, 3 ports (Champerico, Puerto Barrios, and San Jose) handle the bulk of Guatemalan exports, and La Aurora Airport is the only national airport with full capacity for both freight and passengers. These facilities are approaching their breaking points and will need to be expanded soon in order to keep up with growing trade and travel. Overall, major renovation of the country's infrastructure is necessary if trade is to continue uninterrupted.

Telephones are not as available in Guatemala as would be desirable for the purposes of business and general efficient communication. There were 430,000 main telephone lines installed in Guatemala in 1997, but this number still left Guatemala trailing several Central American countries in proportionate terms. Use of cell phones is growing at a remarkable rate, having increased by 2,047 percent between 1993 and 1997, while the number of regular phone lines in the nation increased by only 86.1 percent during the same span of time. In 1998, the government decided to privatize the state telephone company along with several other enterprises. So far, the privatization has not brought about as much progress in infrastructure as outside investors had hoped; the U.S. Department of State's FY 2000 Country Commercial Guide: Guatemala states, "It is not clear that the new owners of the recently privatized telephone company will undertake the investment needed to extend basic telephony to those areas currently underserved."

Electricity has also undergone significant changes due to recent privatizations. Both the major state electricity distribution company and selected assets of the state-owned electricity production company were auctioned off to private bidders in 1998, provoking anticipation of higher electricity prices but also feeding hopes of improved service, mainly among businesses and professionals.

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