Alvaro Arzú and the problems to be resolved: More than three wishes to grant

When taking office, president Arzú recognized that it will not be until the end of his term, four years from now, that Guatemalans will be able to judge the results of his administration. "On that day we will close the books of our mandate and it will be possible to measure with the truth if we obtained the results we promised." Paying attention to even the most urgent needs is not an easy task in Guatemala, a country where problems are on the every-day agenda.

"What is the main issue the president should solve for each sector?" is the question Gerencia asked representatives of the local industrial, agricultural, trade and service sectors. All believe that there is more than one issue that cannot wait to be solved, but the desire for safety is unanimous. To return personal safety to the citizens and to create a proper climate for investment continue to be the main demands of productive sectors, which for decades have been accumulating demands without obtaining any answer.

The productive sector supports foreign trade as "the most effective way to generate new jobs and create wealth for the country, since it has great opportunities in the international market," according to Fanny de Estrada, Executive Director of the Non-Traditional Exporters Guild ( GEXPRONT).
In addition to strengthening macroeconomic measures, exporters consider it most important to promote a foreign trade policy that supports exports.

Max Quirin, president of the National Coffee Association (ANACAFE) considers it important to promote investment, and to establish a real state of rights where private property must be respected. According to Jorge Briz Abularach, president of the Guatemalan Chamber of Commerce it is most important that the Government eliminate privileges in the economy, although he also admits that it is up to all sectors to work together with the new authorities."

Eliminating privileges, discrimination and misery are three promises the president made during his first speech to the nation, although he didn't discard the possibility of protecting the most needy groups.

Businessman Carlos Paiz Andrade thinks it is important to liberate imports and eliminate all non-tariff barriers. "There are still some products which require import licenses and which pay high customs taxes, for example, apples and chicken meat, among others. Although national producers don't need these import licences, local traders do," he says. According to the businessman the ideal situation would be a stable exchange rate and a realistic interest rate. "Facing an inflation rate of 8% it is not right to have an interest rate higher than 20%."

The need for lower interest rates has been mentioned by all sectors, especially banking representatives. The president of the Finance Chamber Enrique Neutze says there are three priorities to be considered by the new president: one, that the National Bank ends its policy of capturing short amounts of money at high interest rates, in order not to compete with private bankers; two, that the monetary policy favors lower interest rates, although the consecuence will be a higher inflation rate; three, to end impunity of organized crime towards those who alter checks and documents."

The president of the Grupo Financiero del País, a private financial organization, says it is most important to complete the Financial Modernization Program started during previous administrations and to consider seven issues which are still pending:

1. To eliminate foreign currency concentration.
2. To allow banking operation in foreign currencies.
3. To strengthen the Central Bank's autonomy.
4. To change the structure of the Central Bank.
5. To achieve a transition from a specialized banking system to a multiple banking system.
6. To establish an agreement for regional financial integration.
7. To create banking branches outside the national frontiers.

   At present, taxes tend to favor consumption more than they promote investment, according to Fritz Thomas, General Manager at the Bolsa de Valores Nacional, (National Stock Exchange). "Guatemalans pay 10% sales tax, while income tax is as high as 30%," says Thomas, for whom it is also of great importance that the telecommunications systems monopoly be dismanteled. Edin Solares, General Manager of AT&T Guatemala, shares the same vision.

   Justice is an issue that preocupies all sectors. José Ruben Zamora, president of Siglo Veintiuno newspaper, believes it is most important to attack impunity and to remind the government that it must respect freedom of speech. To Diego Pulido, General Manager of Banco Industrial, a private bank, peace is most important to promote investment, tourism and development in Guatemala.

   According to a private poll released before the elections, the main issues that preocupy the population are: high prices (45%), low wages and salaries (27%), delinquency (15%) and poverty (13%).

   The Centro de Investigaciones Económicas Nacionales (CIEN) says that in order to eliminate privileges, poverty and discrimination, it is necessary to establish a principle of equality before the law, and equal opportunities for all.

   No wish of development will come true if no investment is made putting people, the human resources, first by providing preventive health care and education for all Guatemalans.

   Alvaro Arzú and his cabinet dont have the lamp of Aladdin. But proposals made by the economic sectors, while they are not magic, are a good start at establishing the rules of a game in which the whole population wants to participate.

   ---

   Send your comments to agg@guate.net
   February, 1996