How does Guatemala make money?
In this blog, we will discuss the topic “how does Guatemala make money” Alongside the different sectors of Guatemala and how they contribute to revenue generation.
how does Guatemala make money
The main three industries of Guatemala that generate money are services, manufacturing, and agriculture. Remittances from Guatemalans living in other countries are a significant source of foreign money for the country. According to the World Bank, Guatemala has the largest economy in Central America.
Resources and power
There was a widespread belief that Guatemala lacked coal, iron, and other metals that were essential for industrialization in the early 1900s. However, since the early 1980s, the Petén region’s petroleum reserves have been fast diminishing, which has helped alleviate some of Guatemala’s power demands while also creating new exports.
Guatemala had documented mineral resources, including nickel, at the start of the twenty-first century, according to historical records. However, the majority of the country’s mining activities were focused on the extraction of antimony, iron ore, lead, and gold.
The country’s western and northeastern regions have seen an increase in the number of open-pit mines for the exploitation of gold and silver deposits. The development of these mines sparked protests and requests for military action from residents and human rights organizations around the world.
Petroleum, hydroelectricity, and solid fuels such as wood are currently the world’s principal energy sources. The majority of the country’s electricity needs are fulfilled through the use of fossil fuels and hydroelectric power. Forested areas in densely populated places provide fuel and charcoal for cooking, heating, firing ceramic ceramics, and making lime.
Manufacturing expanded greatly between 1960 and 1980 but then stalled. As a result of competition from Asian manufacturers, particularly in the apparel industry, Guatemala’s market share has shrunk. Primary industrial operations include food and beverage production, tobacco and sugar processing, publishing, textile and garment manufacturing, cement, tires, construction materials, pharmaceutical manufacturing, and petroleum refining. Like other Central American countries, Guatemala has developed multiple garment factories or firms that specialize in the assembly of clothes for export. The majority of the women who work in these facilities make up the workforce.
The Bank of Guatemala, which is overseen by the government, is in charge of issuing notes and overseeing the banking arrangement. It is also in charge of all overseas accounts. A stock exchange was formed in the City of Guatemala in 1987, along with several other governmental and private banks. The quetzal is Guatemala’s monetary unit. The US dollar, along with the quetzal, became legal tender in 2001.
Guatemala has business relationships with some countries; however, the United States is the country with whom it conducts the most business in the country of Guatemala. Some of the other countries that do commerce with the United States of America are Mexico, China, Honduras, El Salvador, Nicaragua, Canada, and Panama, to name just a few examples.
It was in 1960 that Guatemala became a member of the Central American Common Market, which made it easier for Central American countries to trade with one another. It also had a minor impact on intra-isthmian trade, albeit a minor one.
After a brief pause in the mid-1980s, CACM’s operations were restarted in the 1990s. In 1993, Guatemala established a new Central American Free Trade Zone, which was later joined by Costa Rica. The countries aimed to gradually reduce intra-regional trade obstacles. In 1996, SIEPAC was finally installed.
Guatemala signed a new Central American Free Trade Agreement in 2004. Farmers, labor organizations, and indigenous groups were adamantly opposed to the agreement’s implementation, while businesses and the government were certain that it would boost international venture capital and accelerate Guatemala’s economic development.
Mineral fuels, electrical machinery, transportation equipment, pharmaceutical, and other chemical items, textiles, and food are all imported goods. Chemicals and coffee are the most important exports, followed by sugar, crude petroleum, and cardamom. Vegetable, fresh fruit, cut flowers, and seafood exports are increasing in importance.
The expansion of Guatemala’s service sector accounts for the vast bulk of the country’s gross domestic product (GDP). As a source of income and employment, tourism is becoming increasingly popular among people all over the world. Some of Petén’s most notable ancient sites may be found in Tikal, Zacaleu, on the border with Huehuetenango, and Quiriguá, in the lower Motagua Valley, among other places. Tikal National Park was classified as a UNESCO World Heritage Site in 1979, and Flores, an island hamlet in Petén Itzá Lake that serves as the park’s entrance, was the first community to do so. The architecture of the “earthquake baroque” style may be seen throughout the old colonial city of Antigua Guatemala, which was declared as a UNESCO World Heritage Site in 1979 by the United Nations Educational, Scientific, and Cultural Organization.
This once-dormant tourist and cultural attraction have been revitalized, and it now has a prosperous industry of language schools, exhibition hall, bookshops, artisan shops, and visitor amenities to show for it. With their vibrantly clad Indian people, volcanic peaks and mountain valleys make for a fantastic setting for photographs. Chichicastenango’s market is particularly well-known for its fresh produce. Those who enjoy water sports travel to Guatemala’s Caribbean coast, which has gentler surf than the country’s Pacific coast. Playa de Escobar, near the port of Puerto Barrios, is a favorite destination for water enthusiasts.
Employment and taxation
Agriculture employs more than two-fifths of Guatemala’s total workforce, followed by the service sector, which employs about as many people, and manufacturing and construction, which each employs approximately one-fifth. The 1990s saw an increase in the number of women entering the work field, particularly those from low-income households. The quick speed of urbanization was one element that led to the population increase. Between 1900 and 1920, female labor force participation increased fivefold, yet women accounted for less than a quarter of the formal workforce at the time, according to the Census Bureau.
Transportation and telecommunications
The country’s southern highway system serves as the primary mode of transportation. There was a time when Guatemala’s central rail line transported more bananas than people, but today it is mainly used for truck and bus transport. Petén and Guatemala City are the only commercial domestic flights in Guatemala.
Guatemala is connected by two major east-west highways. The Pan-American Highway, which is connected to the Inter-American Highway, travels north of the southern chain of volcanoes. To the south, there is a beachfront road. Numerous routes connect the chain’s numerous points. Numerous paved roadways service the Pacific coastal plain, branching off from the primary coast highway in the south. Guatemala City serves as the primary north-south route between the Pacific shore at San José and the Atlantic coast at Puerto Barrios.
Health and wellness
A lack of medical and health services in Guatemala’s rural areas is a contributing factor to the high frequency of intestinal infections and newborn mortality in the country. Inadequate sanitation and malnutrition are at the root of the problem. There are a few public hospitals and several private facilities administered by the Ministry of Public Health and Social Assistance, depending on the size of the community in question. Throughout the 1980s, a large number of rural health centers with preventive medicine specialists were established to assist rural residents in improving their health. Although the quality of care provided by these facilities has progressively improved, most rural communities continue to lack access to healthcare services, with more than half of the population eating diets that are nutritionally insufficient.
Employees of both the government and private sector in Guatemala are covered by the Guatemalan Social Security Institute since 1946. Pregnancy and childbirth are included in the plan’s coverage. The institute is also in charge of running several hospitals.
The cabeceras (county headquarters) of hundreds of municipios (counties) is bordered by rural settlements (municipalities). The living conditions in the majority of these settlements are opposed to those found in the capital city of Guatemala. The great majority of households do not have access to water or sanitary facilities. Traditional building materials such as adobe or cane, as well as thatch or tiled roofs or corrugated metal roofs, are used in traditional construction. A large number of houses have dirt flooring.
Education is free of charge, secular, and compulsory until the completion of primary school. Secondary school students are prepared for careers in education by being prepared to be teachers, agricultural specialists, industrial technicians, and university students. It has fallen from over two-thirds of those eligible for elementary education to less than one-fifth of those eligible for high school. Adult literacy rates in Central America are among the world’s lowest (just under three-fourths). Despite having attended school, many adults who grew up in primary schools, especially in remote places, are functionally illiterate. Low literacy rates are exacerbated by educational inequity and a lack of educational options.
Everyday life in Guatemalan society is marked by great extremes. Elite families in Guatemala City interact through e-mail, cell phones, and beepers, exactly as they do in developed-country cities. Indigenous people, on the other hand, reside within an hour’s drive of the city, their daily lives mirroring those of previous centuries, and their communities are still linked by market activity. These dramatic distinctions saturate Guatemalan society, whether in language or household, cuisine, fashion, or family concerns.
In this blog, we answered the question, “How does Guatemala produce money?” and discovered that the three primary industries that generate money in Guatemala are services, manufacturing, and agriculture. Remittances from Guatemalans residing abroad are an important source of foreign currency for the country.
Frequently Asked Questions (FAQ): How does Guatemala make money?
Is Guatemala a high-income country?
Guatemala is an upper-middle-income country as measured by GDP per capita (84.50 USD Billion). However, economic stability and upper-middle-income status have not resulted in a considerable decrease in poverty and inequality.
How is the economy in Guatemala?
USAID encourages economic growth in Guatemala by increasing markets for Guatemalan-made goods, boosting access to finance, and assisting with policy reform to improve the business climate.
What are the 3 main exports of Guatemala?
Guatemala’s biggest exports are coffee and clothing, which account for 12 percent of overall exports. Sugar, bananas, and precious metals are among the other exports. The United States is Guatemala’s biggest export partner (40 percent of exports).
Why is Guatemala’s economy bad?
To begin, Guatemala has one of the greatest income inequality rates in the world (ranked 13 on the GINI index), with the wealthiest 10% of the population holding over 50% of the country’s wealth and the poorest 10% having less than 1%.
What is Guatemala’s biggest export?
Chemical goods and coffee are the most important exports, followed by sugar, bananas, crude petroleum, and cardamom, fresh fruit, cut flowers, and seafood exports are becoming increasingly important.
What is the biggest problem in Guatemala?
Poor governance, widespread poverty, food insecurity, severe violence, citizen insecurity, shrinking space for civil society, a lack of respect for human rights, unequal access to economic opportunities and social services, and COVID-19 pandemic are among the many challenges that Guatemala faces.
Britannica, T. Information Architects of Encyclopaedia (2022, January 6). Guatemala. Encyclopedia Britannica. https://www.britannica.com/facts/Guatemala