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GUATEMALA
Society

Cities in GUATEMALA

Guatemala city

Society

State structure

Guatemala is a Republic. The constitution of Guatemala is based on the 1986 Constitution, which was subsequently amended in 1994. The Constitution separates the executive, legislative and judicial branches of government. The President is both the Head of State and of Government. He is elected by universal suffrage for a term of four years. Re-election or extension of the term is punishable. Legislative power is vested in the Parliament, which has 113 members. These are also elected for four years. The parliament's decisions are taken by absolute majority. In certain cases, a two-thirds majority is required. The Human Rights Ombudsman, an institution created by the Peace Accords and provided for in the Constitution, is elected by and reports to the parliament. The Supreme Court consists of at least seven judges. They are elected by the parliament for a period of five years. The Constitutional Court has jurisdiction over constitutional matters. Constitutional amendments are debated in Parliament and require approval by referendum.

Politics

Guatemalan society has traditionally been characterised by great economic and social inequality and by the influential position of the armed forces. The Indian population, which accounts for more than half of the total population, is still disadvantaged and subject to discrimination. The human rights situation remains complex. There have been positive developments in some areas, but the situation remains worrying. Government resources are inadequate because of a tax rate that is too low and is being slowly increased. In addition, the rule of law can be called weak, with government protection against violence often lacking. The government seems to fail in its effective investigation, prosecution and sanctioning policy. Impunity seems to be the standard. For the current political situation, see chapter history.

Economy

Guatemala's economy is heavily dependent on exports of coffee, sugar and bananas. Agriculture accounts for 13.3% of GDP and 31% of the economically active population is employed in this sector. Recently, policies aimed at economic stabilisation and recovery have continued. The national currency, the Quetzal, has been strengthened and international reserves have increased. Inflation is 4.4% (2017). The development of the US economy, especially affecting revenues from free trade zones (maquilas), the price level for coffee, the price of oil (imports) and a possibly higher sugar price will largely determine the economic picture. At the current level of expenditure, the targeted budget deficit of 1.5% of GNP may be exceeded by a wide margin. Nevertheless, as of 1 August 2001, the VAT rate was increased from 10% to 12% and laws against tax evasion were passed. Partly because paying taxes is a very controversial subject in Guatemala, this met with broad social resistance.

The restoration of confidence among the business community and consumers is still pending. The lack of concrete measures to increase the standard of living and curb crime and corruption may play a role in this. A positive development is that the new government has also declared itself willing to enter into a broad dialogue with civil society groups. A new law has made it possible to open bank accounts in foreign currency, as a first step towards dollarisation. However, this measure has attracted less money than expected. The banking system will have to be further strengthened, partly in the light of recent scandals, before further steps towards dollarisation can be taken. Money laundering is a serious problem.


Sources

Elmar Landeninformatie

CIA - World Factbook

BBC - Country Profiles

Last updated January 2024
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