Comparing Guatemala's Economy to the World - Part I

A large part of what we do, and any successful NGO must do, is identify and evaluate the needs of the people that we serve. This requires two things: field visits and research. Recently, we have been attempting to gain a better understanding of where Guatemala’s economy is relevant to other similar and competing economies from around the world. By putting together a few different levels of statistics and graphs, we were able to come to a few conclusions that will assist further research and actions that we take.

First it’s important to understand Guatemala’s economy. Guatemala’s economy is largely based on agriculture and its exports of coffee, sugar, bananas, corn, vegetables, flowers and plants, and timber. Exports in 2009 totaled $7.2 billion – with 40.7% going to the United States. It is not surprising then that 50% of the labor force is working in agriculture, supplying the man power to produce large amounts of coffee and sugar. Comparing GDP and GDP per capita (GRAPH BELOW), you start to get a sense of how small Guatemala’s economy is compared to the rest of the world.

But comparing GDP is only one way to analyze Guatemala’s economy and it isn’t always very effective when comparing it to larger countries. It is important to look at how these country’s economies function. We decided to look at two main statistical describers of economies – composition of GDP by sector and labor force by occupation.

A few things stick out when examining these graphs. First is that of the six countries, the two with the lowest GDP (Guatemala and Haiti) are the two with the strongest economic ties to agriculture. These two are also have the highest rates of poverty. It is an unfair assessment to make that there is a direct correlation between agriculturally based economies and poverty but one can say that, to the naked eye, there is at least a slight basis for this assumption.

It also might be surprising that Haiti has a GDP that is comprised of a higher percentage of agriculture (25%) than Guatemala does (13.3%). This could be explained by the fact that Guatemala has a stronger, more developed economy, with a greater ability to create jobs, manufacturing, and services, whereas Haiti’s infrastructure does not allow for large amounts storefronts or businesses for that matter.

However, Guatemala’s labor force is high reliant on agriculture. Of the countries examined, Guatemala has the largest percentage (50%) of workers working in agriculture.

But who employs these workers? Large farms or small farms? This will be discussed in Part 2 of our discussion looking at Guatemala’s economy, to be posted in the coming week.

~Doug Franz

*All stats are from: CIA WORLD FACTBOOK - https://www.cia.gov/library/publications/the-world-factbook/index.html