From January 2020, Guatemala will have a new president. Alejandro Giammattei, a former director of the Guatemalan prison system and four times presidential candidate, will take office after having won elections in August 2019 in a second round with 58% of votes. He defeated Sandra Torres, ex-wife of former president Alvaro Colom who ended up in prison few weeks later, accused of having received illicit funding during her 2015 presidential campaign.
Everyone agrees that these were very unusual elections. On the one hand, the electoral legislation was changed and a public funding system aimed at avoiding other cases of illicit funding was introduced. On the other, the real protagonists of these elections were the courts that disqualified five presidential candidates during the campaign. The most controversial exclusion regarded two big names in the Guatemalan political landscape: Zury Ríos, daughter of the controversial general and president of Guatemala Efraín Ríos Mont, and Thelma Aldana, former Attorney General, both accounting for almost 25% of voting intentions. Especially, it was the disqualification of Thelma Aldana, charged with embezzlement, lying and tax fraud, that changed the electoral landscape, explaining why in the first round Sandra Torres obtained 25% of the votes and Giammattei 14% with blank and null votes accounting for more than 15%, a sign of apathy and anger against the system. A situation reflected also in the composition of the newly elected parliament: for the first time in history, there will be 19 parties represented in congress.
From 2015 to 2019: a crusade against corruption, will it survive?
It is not possible to understand the electoral climate of 2019 without understanding what happened in 2015. At that time, the International Commission Against Impunity in Guatemala (CICIG) – established with the support of the United Nations in 2006 to strengthen national judicial institutions and to allow them to continue to confront illegal groups and organized crime – scaled up its activity in collaboration with the attorney general Thelma Aldana. Its activity became a kind of Guatemalan mani pulite; an anticorruption campaign with no precedent in the history of the country.
The outcome was more than 1,000 people indicted for various serious crimes. The list of the accused includes two former presidents (Alvaro Colom, 2008-2012, and Otto Pérez, 2012-2015), the former vice president Roxana Baldetti (2012-2015), several former ministers of state, dozens of former congressmen, former judges of the Supreme Court of Justice and other senior officials. Indeed, it was the process against former president Otto Perez that forced him to resign in 2015 after peaceful mass protests.
The activity of the CICIG was highly approved of (70% of Guatemalans in April 2019, according to several polls) so that in 2016 the new president, Jimmy Morales, extended the agreement with the UN until October 2019. However, as the list of the indicted grew, so did the list of powerful enemies including President Morales himself, accused in 2017 of illegal financing. A situation that created increasing tensions and unprecedentedly severe constitutional strains. Soon after the accusations were made against him, Morales tried to declare the head of the CICIG, Iván Velásquez, persona non grata. The decision was provisionally blocked by the Constitutional Court but became effective in August 2018 when Velazquez was banned from entering the country and when it was announced that the mandate of the CICIG ending in October 2019 would not be renewed.
The challenges for the new president
The new president will have to recover the country from political tension and division. The first task is undoubtedly the fight against corruption. The question everyone asks is whether the fight against corruption will survive without the CICIG. President Giammattei made it clear during his campaign that he opposes extending the CICIG mandate. Instead, he wants to establish a national anti-corruption commission that should deal with the root causes of corruption, removing public sector officials’ scope to act without proper oversight and making government business more transparent.
In the meantime, the situation is grim and the current interim period is favoring murky maneuvers as in the case of the election of new magistrates of the Courts of Appeals and of the Supreme Court that sparked an institutional crisis due to infighting between influential groups trying to appoint judges who will be loyal to them.
Apart from that, other compelling issues will be among top priorities on Giammattei’s agenda. First, he, as his predecessor before him, will have to fight against the country’s high rate of crime and violence. Violence and street gangs are a real plague. The country has one of the highest murder rates in the world, but less than 4% of murders end in conviction. The high murder rate has been blamed on "a highly powerful criminal cartel", made up of politically connected retired military officers and linked with drug traffickers and other criminals.
In economic terms, Guatemala is experiencing a period of prolonged macroeconomic stability. Thanks to the conservative approach of the central bank, over the last five years inflation has fluctuated between 3.5% and 5.2% on a year-on-year basis, the exchange rate remained durably linked with dollar fluctuations and GDP growth remained between 3% and 4%. The export sector represents more than 14% of GDP with the United States as the main destination for its products (35% of total exports), mostly concentrated in the traditional sectors: clothing (13%), followed by bananas (7%), coffee (6%) and sugar (6%). Intra-regional trade accounts for 31% of total exports, while Guatemalan exports to the European Union have almost doubled in the last five years and account for 9% of the country’s total exports.
Measured by nominal GDP, Guatemala is the tenth economy of Latin American, but measured by GDP per capita, it occupies the 26th position of the 32 economies of the region. The main concern for a country with a per capita income of US $ 4,534.8 is that growth is too slow to lift millions of people out of poverty considering that around 51% live below the poverty line and 15% live in extreme poverty according to data from ECLAC.
Very unequal income and wealth distribution coupled with the aforementioned violence, corruption and a weak rule of law are the main reasons for an increasing number of Guatemalans fleeing the country. According to the Guatemalan Ministry of Foreign Affairs Sandra Jovel there are 3.2 million Guatemalans living in the US and an additional 1.5 million is believed to be also living in the US without authorization. These people’s remittances constitute one of the main sources of Guatemala’s foreign income: in 2018, they reached US $ 9.2 billion, equivalent to 12% of GDP.
The issue of illegal immigrants in the US has become a cause of increasing tension with the United States, which pressured the outgoing president Jimmy Morales to sign a “safe third country” agreement to send back to Guatemala Central American migrants trying to seek asylum in the US. To seal the agreement with Guatemala, US president Donald Trump threatened the country with taxing its exports and remittances. Another big challenge on the shoulders of the newly elected president, whose administration will have a hard job passing laws: with only 17 seats out of 160 in congress, for the executive achieving a majority will be extremely difficult if not impossible.