Guatemala Economic Conditions

In Guatemala, a country with diverse culture and nature, there is a struggle for resources. A battle that the indigenous people lose to a small elite. The poor population is also gearing up for a relatively new threat: climate change that is already hitting hard.

Guatemala is a small Central American country with an area of ​​108,890 square kilometers. There are few reliable sources on the country’s population. According to the latest official census, around 14 million live in Guatemala, while other sources estimate a population of around 17 million. The capital is Ciudad de Guatemala (Guatemala City) and is the most populous and urban city in Central America. Nevertheless, the largest proportion of the population are indigenous peoples and small farmers, living in close proximity and in line with nature. In 2015, Guatemala was ranked as one of the world’s ten most vulnerable countries for climate change by the Global Climate Risk Index. The country is also marked by a 36-year-long civil war that ended in 1996.

At the 2019 presidential election, the conservative, former prison director, Alejandro Giammettei, won with the party Vamos. Giammettei took over the presidency in January 2020 from Jimmy Morales, and is among other opponents of gay marriage, abortion and the death penalty. Through the election campaign, he promised to fight corruption, while during his time as prison director he was indicted and jailed for multiple killings, but the verdict was eventually upheld. It is also alleged that Giammettei is backed by the same powerful elite who helped outgoing President Morales shut down the UN-appointed International Commission on Impunity (CICIG), and he has confirmed he will not renew their mandate. CICIG is a product of the peace agreement signed in 1996 and the abolition of CICIG is a major setback to the fight for justice and against impunity.


The period 1944-1954 is known as the Revolution in Guatemala’s history. Former professor, Juan José Arévalo, was elected president in 1944 in the wake of a popular uprising and coup against US-backed dictator Jorge Ubico. The Arévalo government introduced a number of social reforms that included raising minimum wages and literacy programs, as well as a working environment law in 1947. In 1951, Jacobo Árbenz took power and continued social reforms, opening up more to the organization of workers and a more open public debate. Nevertheless, it was agricultural reform – capable of redistributing unused, large plots of land to small farmers and compensating landowners – that led a CIA-led coup by Árbenz.

In other words, land reform went against landowners and foreign financial interests. Particularly threatened was the United Fruits Company (UFC), which in practice did not pay taxes and owned practically Puerto Barrio, Guatemala’s only port to the Atlantic. The coup is therefore seen as a reaction to the UFC’s lobbying efforts by the Truman and Eisenhower governments, where they convinced the government that Guatemala had intentions to ally with the Soviet Union. The politics led by Arévalo and Árbenz, on the other hand, railed against a social democratic policy, although the latter and the land reform had some influence from the Communist Party. In the wake of the coup, Guatemala was once again a country ruled by authoritarian dictatorships that eventually led to a civil war in 1960.

The war was between guerrilla groups in different regions, representing small farmers and indigenous peoples, and the state. The military tactics of the military (the state) were particularly brutal, including the use of sexual violence where the female body was a territory for the exercise of power. Split and ruler methods were also often used in communities to scare people from supporting guerrilla groups.

After 36 years of civil war, the peace agreement was signed between guerrilla representatives from the Union Revolucionaria Nacional Guatemalteca (URNG) and the Guatemalan state in 1996. During the civil war, about 200,000 people were killed and 40,000 disappeared. 400 villages were leveled (about 80 percent of the villages in the Ixil region were wiped out), at least 100,000 people fled to Mexico and around a million people became refugees in their own country. Only in recent years has the country begun to prosecute some of the civil war offenses. In 1999, the United Nations-appointed Truth Commission for Guatemala concluded that the Guatemalan state was responsible for genocide in four regions of the country in the period 1981-84, and that most massacres and violations of human rights committed were carried out by the state. Efraín Ríos Montt ruled Guatemala for 17 months between 1982 and 1983 when the worst actions were carried out. As late as 2013, Ríos Montt was convicted of genocide and crimes against humanity.

After the war, the state still uses violent repression as an instrument of social control. Despite the peace agreement, the disarmament of the military is small as the war’s military force has insisted on retaining its positions of power. They continue to justify that their warfare was worthy and necessary in the fight against communism.

Socio-economic factors

Guatemala is a middle-income country, but the distribution of income is among the most skewed in the world. Agriculture still constitutes a large part of the economy where small farmers often live off basic commodities such as corn and beans. Capitalist large estates are another common form of agriculture, where goods such as coffee, banana, sugar and palm oil are produced. Otherwise, the economy mainly consists of the service industry and money that migrants in the United States send to their families (10% of GDP).

According to, Guatemala has a gini coefficient of 53, indicating extreme inequality. Women and indigenous peoples are hardest hit and their involvement in economic development is limited, as well as territorial and ethnic discrimination. It is precisely these sections of the population that are now facing an expansion of natural resource extraction such as mining, hydropower, oil extraction, sugar and palm oil plantations.

Exclusion and racism have produced structural, legal, and institutionalized forms of violence and discrimination that particularly appeal to indigenous peoples, especially those living in rural areas. The country is ruled by a small elite that sits on both money and power. It is a vastly segregated society still characterized by colonial divides where the white population rules over the majority – mestizos and peoples.

Inequality – some indicators (Sources: UNDP and World Bank 2018 and 2019)

  • 49 percent of the population lives in rural areas.
  • 3 percent of the population lives in poverty in 2019 (this has increased from 51 percent in 2006).
  • 75 percent of indigenous people live in poverty. The poorest counties are the counties with the highest number of indigenous peoples (Totonicapan, Sololá, Quiché, Alta Verapaz, Chimaltenango, Baja Verapaz, Huehuetenango and San Marcos). Here, 8 out of 10 children are chronically malnourished.
  • 260 people own 56% of the country’s economy. This means that 0.001 percent of the population controls more than half of the nation’s wealth.
  • 62 percent of all financial income is controlled by 20 percent of the population.
  • 5% of Guatemala’s major farms occupy more than 65% of arable land.
  • Only 2 percent of the municipalities are governed by a female mayor.
  • 6 percent of women complete high school.
  • The average age of women at first child is 21 years.
  • The average number of school years is 7.2 years for men and 6.7 years for women.
  • 17 percent of all workers have access to welfare schemes.
  • 73 percent of the population work in the informal sector.


Capital: Guatemala City
Population: 15.19 million (2016)
Life expectancy: 72.3 (2016)
Infant mortality: 22 per 1000 (2016)
GDP per capita (PPP): US $ 7,900 (2016)
Religion: Catholicism, Protestantism, Indigenous Religions (Maya)
Official Languages: Spanish
Currency Unit: Quetzal
Export Articles: Coffee, sugar, oil, clothing, bananas, fruits and vegetables, cardamom, precious stones and metals, electricity.
Regional relations: Member of CELAC, CAFTA-DR, OAS, Pacific Alliance, PetroCaribe, (observer), Union Latina