Jobs and poverty in Guatemala

From Luis Duiguid at the Kansas City Star on his impressions following a visit to Guatemala

On our cross-country nearly 10-day journey, Hinshaw described the well-meaning but sometimes counterproductive foreign involvement. Many Christian groups proselytize, and the foreign money causes the Guatemalan government to not devote its taxing structure and policies to the health, education, welfare and other needs of the poor.

Outside groups should work with the Guatemalan government to ensure that foreign aid and efforts only occur with a far greater commitment in taxpayer-funded Guatemalan social services. As we traveled from the lowlands, to the mountains, the tropics and through the Mayan ruins, Hinshaw pointed out that what this country also badly needs is a railroad to efficiently and safely carry commerce and people. 

I don't know. Even without foreign money I'm not sure that the Guatemalan government, we're looking at you congress, was going to substantially increase smart spending on health, education, welfare and other needs of the poor. The spending would not only be in the interests of the poor but in the interests of the entire country. The international community made a big push for Guatemala to collect and spend more tax revenue following the 1996 peace accords to no avail. They almost withdrew financial support in return. If there's one thing that the Guatemalan government has shown, it is that it is rather impervious to outside pressure (US cut off funding during the war, the failure to pass necessary reforms following the war, the Rios Montt genocide trial, Paz y Paz's term, and their willingness to work with CICIG).

From Fitch Ratings

Regionally, low government revenue bases hamper fiscal flexibility. Improving low GDP growth potential will be important for El Salvador and Guatemala in the context of their lagging GDP per capita and development indicators. Sustaining growth momentum while making room for faster fiscal consolidation will be supportive of creditworthiness for the more diverse and dynamic Costa Rica and Panama.

Guatemala needs stronger economic growth and better jobs in order to reduce poverty. As we've seen in El Salvador with weak growth, however, there can be improvement in the lives of the poor without the magic jobs, jobs, jobs, campaign slogan (at least in the short-term).