Guatemala recently hosted one of the largest investment conferences of its region. The Guatemala Investment Summit was held May 30-31 in Guatemala City as a means to connect banks, financial institutions, service providers, investors, entrepreneurs, government agencies and businessmen. This summit, the most important and biggest of its kind, provided opportunities to create strategic business alliances and learn first-hand about specific investment projects and meet senior government officials as well as primary business leaders from the private sector.
With a dynamic and growing economy, Guatemala enjoys a competitive advantage, given its strategic geographic location between North and South America, with open access to all markets thanks to its Pacific and Atlantic ports. Guatemala has traditionally promoted private investment and its government is committed to providing investors with solid legal certainty, transparency, clear rules and regulations and giving numerous incentives to promote local and foreign direct investment (FDI).
Guatemala has the largest economy of all Central America, holding 38 percent of that region’s GDP and boasting a leading local market of almost 15 million consumers, 70 percent of whom are under 30 years of age. Recently rated as the fifth most open economy in Latin America, it has consistently boasted strong macro-economic figures, namely a low inflation rate of 3.5 percent, a public debt ratio of 24 percent, a GDP of close to $50 billion, a per-capita GDP of $3,200 and FDI amounting to $1.5 billion yearly. Although our economy suffered a slight dip during the financial downturn in 2008, it did not go into recession, and it has maintained a positive annual GDP growth of roughly 3.5 percent.
Guatemala’s GDP is made up of several segments and has changed considerably since being predominantly agricultural 20 years ago. Now, agriculture is only 11 percent of the GDP, with industry accounting for 21 percent; private services, 16 percent; commerce, 12 percent; public administration, 11 percent; transportation, 11 percent; real estate, 10 percent; financial services, 5 percent; and construction, 3 percent.
The bilateral commerce between Guatemala and Canada continues to grow, representing slightly more than $500 million in two-way trade. Our main exports into Canada, which amount to more than $400 million are coffee, sugar, beverages, cardamom and various vegetables and fruits. From Canada, we import machinery and mechanical appliances, paper products, cardboard, fertilizers and transport equipment, totalling close to $150 million a year.
Guatemala has signed and ratified numerous free trade agreements (FTAs) in the region and beyond. We have FTAs with almost every country in the Americas and are finishing a comprehensive accord with the European Union. Beyond that, like other partners in our region, we are looking towards the Pacific and hope to access the Pacific Alliance and forums such as APEC.
We have been negotiating an FTA with Canada for many years. We have closed negotiations on more than 90 percent of it and we continue to strive for its successful conclusion. My government recently sent Canadian authorities its latest counter-proposal regarding sensitive products, and we hope to soon receive a response. We are also interested in exploring an air transport agreement with Canada (Open Skies) and will benefit from its logistical advantages.
With Export Development Canada’s practical financing possibilities, there is much room for investment in infrastructure of all types by foreign private investors, or in the form of public-private partnerships, a growing and increasingly popular form of business investment. Also, with close to 4,000 temporary agricultural workers from Guatemala in Canada, there are opportunities for Canadian companies to look after their banking and insurance needs.
The mining and extractive industry is one in which Canadian firms are traditionally present, yet Guatemala has recently granted exploration and exploitation licences to companies from other countries. With strong and proven reserves in gold, silver, nickel and oil, Guatemala continues to attract prospectors and developers. Another growing investment sector is call centres, with one company in particular recently opening an office in Toronto.
Tourism as an industry continues to be one of our largest, growing at roughly 7 percent annually. With its natural wonders and ecological attractions, the tourism industry generates close to $1.5 billion for the economy, benefiting all strata and sectors of society. In addition, Guatemala has also recently become a destination for medical tourism, presenting viable, less expensive and safe remedial options.
Georges de La Roche is Guatemala’s ambassador to Canada. Reach him at embassy1@embaguate-canada.com or 613-233-7237.
