As an entrepreneur, as a social change agent, but primarily as a citizen of Guatemala, I welcome your Call to Action. As Guatemalans we are keenly interested in addressing the root causes of irregular migration and mitigating the flight of talent from our country. Guatemalans migrate predominantly in search of better economic opportunities.
If 77% of Guatemalans are migrating in search of better jobs, we should focus our attention and our solutions towards creating those job opportunities and making them available locally. I recognize that there are certain systemic constraints that limit our country’s ability to grow and to drive its inclusive development. I respectfully respond to the Call to Action with a concrete set of proposals:
- Dramatically increasing foreign investment. As a country, we welcome foreign investors that will join us in creating good jobs. This is a more robust and sustainable option than aid alone. The “Guatemala Moving Forward” Plan, analyzes the reasons why we have been unable to attract more investors and provides a prioritized roadmap of the most impactful initiatives that would spur job creation.
- Fiscal Revenue as a percent of GDP is the lowest in the region. 3% of taxpayers, namely formal sector businesses, collect and pay over 96.8% of all taxes. Businesses pay 87.2% of income taxes whereas individual taxpayers represent 12.8%. Fiscal Revenue can and should be increased by: (i) Causing informal businesses to contribute according to existing legislation, (ii) fighting contraband and other forms of tax-evasion, and (iii) increasing the revenues collected from personal taxes.
- Implementing a Fiscal Pact along the lines of the one proposed and signed in 1999 but which unfortunately was never put into effect. Our country needs to prioritize basic social services such as health and education. It also needs to invest in sorely needed infrastructure. And it must do so while maintaining macro-economic stability. The Fiscal Pact, in conjunction with higher Fiscal Revenue, would create the framework to drive resources where our country needs it most.
- Improving the effectiveness and quality of government expenditure by reducing the prevalence and the incentives for corruption. I propose at least 3 specific actions: (i) Revising the general Procurement Law to emphasize transparency, agility, efficiency, and open competition, (ii) Promoting the study and approval of Initiative 5431 “Infrastructure Law” to reduce the incentives for corruption in the construction of Infrastructure, and (iii) strengthening the court system to deliver prompt, fair and independent justice.
I believe in Guatemala. We have invested in our country even during the toughest years of the Cold-war and our internal armed conflict. Guatemalans don’t want to leave their country in search of jobs. I welcome your Call to Action as an opportunity to mobilize and rally around a concrete agenda which fuels job growth and inclusive development. Thank you.