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Guatemala 2014 Blog: Sergio de la Torre and Investment Panel

Economy Minister Sergio de la Torre. (Image: José Pablo Martínez.)

Thursday, August 14, 2014

Speakers:

  • Sergio de la Torre,  Minister of Economy, Guatemala
  • Enrique Godoy, Journalist, Canal Antigua (moderator)
  • Orlando López, Senior Manager, FedEx Guatemala
  • Jorge Mario Mendoza Castro, Minister of Foreign Relations, Guatemala
  • Bernardo Chacin, Country Officer, Citi Guatemala

Economy Minister Sergio de la Torre outlined Guatemala's macroeconomic profile, pointing out the country grew 3.7 percent in 2013. The minister noted Guatemala grew more than the global average and Latin American average last year, surpassing analysts' forecasts. De la Torre said the country could reach 4 percent economic growth in 2014. He described infrastructure developments and public-private partnerships (PPPs) to expand the country's industrial and manufacturing sectors, as well as legislative reforms that can boost social inclusion in the country. "There is no sustainable economic development without social development. But we are convinced that social development is not possible without economic growth," he explained. 

De la Torre explained the government chose 25 sectors with high potential for development and stressed that infrastructure is one of the most important, since it affects growth and regional integration. "We depend on it to compete internationally and complete integration with Central America and Mexico," he said. The minister added that PPPs are especially important for smaller countries which might not have the economic resources for large-scale infrastructure projects. He outlined plans to expand ports and construct a gas pipeline to Mexico, which would "open the doors to NAFTA" and lower energy costs by 75 percent.

Watch the video with the minister's presentation:

To speed up productivity in the manufactoring sector, the minister said that expanding border infrastructure allows Guatemala to take advantage of its "strategic geographic position," close to the largest consumer market in the world. He also noted legislative reforms under consideration in Congress, and an education reform to help develop the country's human capital, as more than 70 percent of the population of 15 million is under 40 years of age. (Download the minister's presentation)

During the investment panel, representatives of the private sector discussed their main strategies in the country as well as the country's potential given increasing urbanization and a demographic transition. Enel Green Power's Orlando López spoke about the importance of exploring the energy potential in rural areas of the country and how companies can be "agents of development" in areas with a low government presence if they work with a strategy of "shared value" with local communities. Citi's Bernardo Chacin said that proposed financial regulations can expand the participation of the financial sector in the country's GDP, which today stands at only 5 percent. He also mentioned new opportunities that can arise with technology development in the country and greater internet access; today, internet penetration reaches only 20 percent.

Fedex's Jorge Mario Mendonza said that his sector's most important recommendation is to expand investments in to address security. He stressed the opportunity for regional integration and the benefits of taxation system similar to the European Union, and "for us to bring products from Guatemala to Costa Rica, for example, and transit with more freedom across the borders."

Watch the video: