Guatemala News Wrap

Though you might not have known it, the big news last month was the Guatemalan presidential election. Former General Otto Perez Molina defeated Congressman and business magnate Miguel Baldizon by a margin of 7 points.

The good news is that the election was generally considered to be free and fair with voter turnout higher than in previous presidential run-offs. The bad news is that with Baldizon’s defeat, he won’t be able to fulfill his lofty campaign guarantee of a berth in the 2014 World Cup for Guatemala’s soccer team.

Come inauguration in January the biggest problem facing the new government will be security. It is a pressing problem as the country has one of the highest crimes rates in the Americas- don’t flee just yet; most of those bad stats have Guatemala City to blame and in any case our neighbors aren’t any better off: statistically El Salvador, Honduras and Mexico are even more dangerous.

Perez has promised concrete results in reducing crime within 6 months. But how that will be possible without increased resources remains unexplained- and that’s a big question as the country has lowest effective tax rate in Latin America (see chart below) and no consensus on how to increase revenue (counterintuitively Perez has proposed reducing the tax rate).

In past presidential news, the saga of former leader Alfonso Portillo continues. After a controversial acquittal in Guatemalan court, Portillo took a step closer to justice when President Colom approved his extradition to the United States on money laundering charges. Colom’s decision had been highly anticipated because of speculation that he might decline to approve the request as part of political horse trading connected to the elections. But the story isn’t complete yet as Portillo’s lawyers continue to pull out every stop to avoid a trip to the United States for the former ruler.

On the soccer front, while a World Cup entry is no longer guaranteed, Guatemala made some progress with their recent defeats of Granada (which is apparently a country). As such, Guatemala has advanced to the next round of World Cup qualifying matches, which will include duels against Jamaica and the United States.

Finally, in law enforcement news, the police discovered nearly a ton of cocaine hidden inside a shipping container in Puerto Quetzal. The container, supposedly filled with candy, was addressed to a non-existent company in Escuintla and had come from (surprise!) Cali, Colombia.

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