Guatemala's poor getting poorer

According to a recent report, Guatemala is the only country in the region where the poor have been getting poorer. In 2012, the poorest 40 percent of the country's people lived on $1.50 per day. That is worse than 2003 when the bottom 40 percent lived on $1.60 per day.

Last I read poverty had improved to where only 51 percent of the population had lived in poverty but then increased again following the global economic and food crises as well as insecurity, natural disasters, and other issues more specific to Guatemala. (Poverty in Guatemala, Poverty decreased by twenty percentage points - that's good, right?)

Go take a look at the brief article. No need for me to summarize it all here. However, what was really disappointing was the concluding paragraph.

According to World Bank simulations, if Guatemala's rate of growth were to rise to 5 percent over the next three years, by 2016 the poverty rate could fall by an additional 1 percentage point, thereby allowing 160,000 more Guatemalans to escape poverty.

I haven't read anything that indicates 5 percent over the next three years is possible. The Perez Molina government has been all about encouraging foreign investment and promoting economic growth but the results have been mixed.

Really makes me wonder how neighboring El Salvador has been able to decrease poverty by 10 percentage points over the last several years with horrible growth rates. Social programs help, of course, as due remittances (which Guatemala also enjoys) but there's something fishy going on.

Bananas, seeds and gold courses in Central America

So how is international pressure impacting the Guatemalan banana industry? Fresh Fruit Portal has a pretty balanced (accurate?) overview of the situation in Guatemala.

With pressure from bodies such as the International Labor Organization (ILO), Guatemala’s attorney general has given greater attention to Sitrabi’s cases.

Russell said much of the investigative interest has stemmed from fear of an ILO-led commission of inquiry that could bring greater grievances to light.

On a recent visit to the attorney general’s office, Russell said representatives were quick to highlight their progress on cases emphasized by the ILO.

“For as long as that pressure is there, we think that’s a potential engine for influencing change. Unfortunately it’s still on the table. It will be discussed by the ILO governing body in November. It’s a hanging threat that the government there is aware of,” Russell said.

“They realize if there were a commission of inquiry, a lot of things would be uncovered that they are currently managing to keep hidden. This might have a knock on effect to their free trade relationships with the States and the EU.”

In particular, Guatemala’s union situation has been flagged under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR).

Under pressure from the ILO, the validity of the U.S. free trade agreement with Guatemala was put into doubt in 2008. The labor body has questioned Guatemala’s perceived lack of labor policy enforcement, which could violate certain articles of CAFTA-DR.

In its first labor claim using a free trade agreement, the U.S. challenged Guatemalan practices in 2011 by requesting a panel to improve enforcement.

 There's nothing wrong with creating jobs in Central America, Clay Aiken.

No love for Monsanto here - looking for a solution to El Salvador's seed program's lack of compliance with CAFTA-DR and even national laws.

Perhaps the MAG’s seed distribution program violates the Central American Free Trade Agreement, but that does not make it a bad program. It is just another reason why CAFTA and free trade are bad policies. 

And really, does anyone really think that it is a good idea to spend needed development assistance on luxury condos and golf courses in El Salvador?