Accelerating Guatemala Growth

Abstract

Guatemala is the largest economy in Central America, with a GDP of US$46.9 billion (2011). A moderate long-term rate of economic growth of 3.3 percent between 2001 and 2011 translated into a per capita GDP of $3,300 in 2011. However, Guatemala experienced 36 years of civil unrest, which left few resources for social programs, including education. The country is one of the most unequal in Latin America, with an estimated Gini coefficient of 0.54. With 51 percent of its population living in poverty, Guatemala urgently needs to accelerate growth and move toward a more equitable society through rapid and inclusive growth. The team identified four areas where Guatemala needs to think long-term and think big: 1) the development of key sectors with potential to move up the value chain; 2) a much needed investment push in infrastructure and human capital; 3) the role of state in delivering essential services; and 4) cooperation between the government and business to foster economic growth. Specific recommendations are further elaborated in the various sections of the report.