Globe, Human Rights, In Focus, Latin America, Politiks

Guatemala: the paradox of inequality, the cruelty of poverty

As a sick body in urgent need of medical help and specific medicines Guatemala continues to appear in the eyes of the world as one of its most unequal societies and consequently has high indices of social exclusion.

 

Guatemala Photo from commons.wikimedia.org Isabel Soto Mayedo

 

The equation is a simple one: more than half of Guatemala’s population just about manage to survive in poverty; another quite large group only just escapes this reality but not enough so as to be able to sleep soundly at night; whilst a tiny fraction enjoy unimaginable luxury without the need to worry about tomorrow.

A large number of very revealing official figures attesting to this reality exist though it is also extremely well known that the statistical measures used by nations far from reflect the real size of the inequity and hide rather significant levels of under recording in various forms.

On the other hand, there is the reality which is bigger and better known and that concerns the ability of the very wealthy to camouflage their incomAkismetes from the State and evade taxes.

This is especially the case in Guatemala where the Constitution defines in article 24 that “it is an offence to disclose to physical individuals or legal entities the amount of taxes paid, profits/ losses or costs incurred or any other information relating to audited accounts with the exception of overall balances whose publication are required by law.”

However, the more critical enquirer might quote the results of a study of the Union Bank of Switzerland (UBS) and the consultancy firm Wealth-X (whose headquarters are in Singapore) according to whom 260 Guatemalans possess accumulated wealth of 30 billion US dollars or 231 billion quetzals.

guatemala mujeres pixabayThis equates to 56% of the annual economy of Guatemala – the most stable country in economic terms in Central America – and is exactly the amount the State brings in on average every four years.

In other words, 0.001% of the almost 16 million Guatemalans have more capital than the rest of a society in which shoe shiners and children selling all manner of wares crowd street corners as fire eaters and novice mime artists mass around traffic lights.

A society wherein 70.2% of children under 10 live in poverty and 6,054 between 0 and 5 years of age died in 2015 for medical reasons almost always associated with malnutrition (in the fifth worst affected country in the world as regards this scourge) according to the United Nations International Children’s Emergency Fund (UNICEF). The lack of comprehensive budgets and strategies in the areas of health and education means that more than 59.2% of the population are denied these basic services placing the future of this Central American nation at risk.

Paradoxes

Guatemala scores 57 in terms of the Gini coefficient – one of the most used indicators for measuring inequality, across a range where 0 represents complete equality and 100 total inequality – and is in the top ten of the world’s most unequal countries and number 1 in Central America.

In fact, it is one of the few countries in the region which experienced an increase in poverty in recent years.

However the World Bank acknowledged that Guatemala maintains one of the best economic performances in Latin America, achieving rates of growth above 3% since 2012 and around 4% in 2015, thanks to prudent macroeconomic management.

guatemala niÑos 3 pixabayThe increased access to foreign markets, through various commercial agreements, is one of the factors which led to the current stabilisation after 36 years of bloody war and a process aimed at consolidating democracy which was unsuccessful in the opinion of experts.

Economists are in agreement that this stability has in large part been brought about by revenues generated by family members – the direct result of constant emigration of Guatemalans forced to do so for economic reasons and because of the rife violence in one of the continent’s most impacted countries in terms of crime.

The Bank of Guatemala (Banguat) made it known that transfers of money from abroad were in excess of 6.28 billion US dollars at the close of 2015 representing an increase of 13.4 percentage points over 2014 (5.54 billion US dollars).

As a result of this and other factors, Guatemala continues to be the largest economy in Central America notwithstanding having one of the highest levels of inequality of all countries between the Río Grande and Patagonia.

In line with the World Bank’s report “Evaluation of Poverty in Guatemala” the country was able to reduce poverty from 56% to 51% between 2000 and 2006, but for 2014 this indicator rose to 59.3%.

The situation is particularly difficult in almost half of rural towns where 8 in every 10 people are poor – and this corresponds with the Maps of Rural Poverty.

The World Bank insists that higher economic growth might encourage plans to reduce poverty though it admits that policies in favour of the poor would only produce marginal improvements due to the sizeable and accumulated effects of a lack of social progress.

guatemala niÑos 2 pixabayHowever, the document does point out that if Guatemala grows at 5% annually over the next years and this growth does not come at the expense of the poor the impact on poverty and equality will be significant.

And it adds that with this, levels of poverty will be reduced by one additional percentage point at the end of 2016 which will allow more than 160 million people to leave this precarious existence behind.

However, public investment is essential to achieve these developmental objectives, within a bigger picture marked by a lack of resources and an even more insufficient rise in government revenues to provide for these.

The issue is trickier if one considers that the public coffers of the Government of Guatemala receive the least via taxes and levies (given the size of its economy) compared with other states and despite the insistence of many both abroad and domestically it appears decided upon maintaining this policy for a while longer.

In turn, crime – the greatest evil of them all for some people in the country – is thwarting these attempts at progress.

Whilst the media splash bloody and morbid headlines across their front pages, with their references to shootings, deaths and the capture of criminals the economic cost of the violence and the instability that this creates remain all but forgotten.

Likewise, it confirmed that natives, settled mainly in the eastern highlands, remain the most vulnerable sector: 79.2% of this social group are subject to poverty, that is to say 1.9% more than in 2006.

Natives continue to be subject to poverty and slavery in Guatemala as a result of forms of subjugation associated with economic exploitation, the Inter-American Commission on Human Rights (IACHR) reported.

Ecuador pobreza 6According to this office of the Organisation for American States (OAS) forced labour and servile exploitation continue to weigh heavily on a large number of natives in more than 5,043 farming units spread throughout the country.

The figures gathered in the report “The situation concerning human rights in Guatemala: Diversity, inequality and exclusion” presented in the National Palace of Culture by the head of the IACHR  James Cavallaro are based on the results of the 2008 National Farming Survey.

This opinion poll revealed that in those identified as “productive farming units” there are many “colonies of labourers” or contractually disenfranchised young workers which are none other than families and communities that have been dedicated for several generations to serving their masters for paltry wages.

Faced with the seriousness of these statistics and indicators two poles of opinion emerged: one which welcomed the confirmation that the prevailing economic and social model of development only partially worked or did not work at all; and one which sought to minimise the results or even refute them. (PL)  –  (Photos: Pixabay)

(Translated by Nigel Conibear – DipTrans IoLET ACIL – nigelconibear@gmail.com)  

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