Do you remember Demetrio? The man from the Alka-Seltzer commercials of the 1980s who, after a night of excess, would return home feeling miserable. Well, when Demetrio wanted to buy his Corolla in the year 2000, he needed twenty-seven months of salary to pay for it. That same year, a Demetrio in Guadalajara needed only twelve. The average Mexican could buy nearly twice as many things as the average Guatemalan. Mexico then seemed like the mirror of development we aspired to resemble.
Twenty-four years later, something changed. The son of the Guatemalan Demetrio now needs nineteen months for the same Corolla. The one in Guadalajara still needs eleven. The gap narrowed. One might think Guatemala finally began catching up to Mexico. But the story behind that convergence should worry us more than it should make us celebrate.
It is not that Guatemala transformed itself into a dynamic economy. It is that Mexico stopped growing. And what is even more serious is that we are beginning to copy the exact model that produced that stagnation. Like Demetrio before the discomfort arrived, we continue accumulating excesses without yet feeling the consequences. We still have not asked for the Alka-Seltzer.
World Bank data leave no room for generous interpretations. Between 2000 and 2024, Mexico’s GDP per capita barely grew. Under Fox, it advanced only 0.40% annually. Under Calderón, the average Mexican actually regressed in real terms. Under Peña Nieto, growth slowly returned. And under López Obrador, growth nearly disappeared again. Four presidents. Twenty-four years. After all that time, the average Mexican earns today only 734 real dollars more per year than in 2000. In terms of development and quality of life for most citizens, that changes nothing.
How does a country with a border with the United States, preferential access to the world’s largest market, and one of the largest export platforms in Latin America end up stagnating? The answer lies in the model. Mexico expanded the size of the State without increasing the productivity of its economy. Public spending rose from 19% of GDP in 2000 to nearly 29% in 2022. Debt climbed from 38% to 53%. Meanwhile, private investment became trapped between legal uncertainty, protected monopolies, bureaucratic corruption, and the growing influence of organized crime. The result is a country that spends increasingly more while producing very little additional growth for its citizens. Mexico managed to increase the size of the State without increasing the size of opportunity.
Guatemala looks into that mirror and still believes the story will end differently. Many of our authorities celebrate that we are now approaching Mexican purchasing power. The country grows close to 4% annually, something that seems extraordinary compared to today’s stagnant Europe. But that growth hides a trap: it is growth in total GDP, not in real prosperity per person. With a population growing near 2% annually, the real progress of the average Guatemalan was only 1.53%. And most worrying of all, that growth rests upon a foundation that looks far too similar to what eventually slowed Mexico down.
Guatemala no longer grows mainly by producing. It grows by consuming. Ninety-two percent of GDP depends on household consumption. In Mexico, that number is 66%. But there is an even more important difference: much of Guatemalan consumption is sustained not by internal productivity but by family remittances. In 2025 alone, Guatemala received US$25.53 billion in remittances, nearly 24% of GDP. Meanwhile, exports of goods and services represent barely 16%. Put differently: the Guatemalan economy does not grow because it produces more. It grows because our migrants send more money home.
Mexico, despite its stagnation, still maintains an economic structure based on production and exports. It exports and imports in similar proportions, meaning it finances much of its consumption with what it produces. Guatemala does not. It imports twice as much as it exports and covers the difference with the money sent by those who left. That is not a sustainable model of development. It is migration income disguised as growth. And sooner or later, the disguise breaks.
The deterioration has been building quietly for more than a decade. In 2010, Guatemalan exports represented 26% of GDP. By 2024, they had fallen to 16%. Ten points lost in barely fourteen years without even perceiving it as a national emergency. Productive investment has also failed to take off. Guatemala barely reaches levels close to 18% of GDP, far below the threshold that normally allows countries to accelerate growth, reduce poverty, and build sustainable economic capacity. The country has not reached that level since comparable records exist. Worse still, in recent years real investment has even begun to decline. Guatemala consumes like a rich economy but invests like a retired one.
Meanwhile, Guatemala is beginning to walk the same path that ended up stagnating Mexico. Public spending rose to 16% of GDP in 2025. The fiscal deficit reached 3.9% and, according to the International Monetary Fund, will remain near 4% in coming years. Public debt, which represented 20.6% of GDP in 2000, could reach 34.4% by 2027. These are not crisis figures, at least not yet. But they are clear signs of a familiar trajectory: more State, more deficit, and more debt, without translating into more productive investment or higher exports. One only has to look at the condition of roads, hospitals, ports, or airports. Guatemala is copying Mexico’s vice without first having built its virtue.
Mexico, despite all its mistakes, managed to build a real industrial export base, although limited by monopolies, dependence on the United States, and low internal competition. Guatemala has not even reached that point. Today it increases spending and deficits upon an economy whose true backbone is the money sent by those who had to leave.
But the most painful mirror is not Mexico. It is countries that twenty-four years ago were poorer than us. In the year 2000, Armenia had a GDP per capita far below Guatemala’s. Today it has surpassed us. Georgia as well. Both countries transformed economies that seemed trapped in post-Soviet backwardness while Guatemala became increasingly dependent on consumption and remittances. The contrast becomes even more evident in everyday life: in 2000, the average Georgian needed forty-two months of income to buy the same Corolla that Demetrio could purchase in twenty-seven. Today he needs only ten salaries.
What did Armenia and Georgia do? They changed the model. They reduced taxes, opened space for private investment, aggressively fought state corruption, and eliminated barriers that restrained economic activity. Georgia, after 2004, implemented one of the deepest anti-corruption reforms in the post-Soviet world. The result was not a miracle. It was the logical consequence of creating an environment where producing, investing, and entrepreneurship once again became attractive.
The phenomenon did not occur only in Eastern Europe and the Caucasus. Panama chose to become the logistical and financial hub of the hemisphere — and moved from US$6,856 per capita in 2000 to US$17,123 in 2024. Costa Rica chose precision medical manufacturing and free trade zones, tripling the gap that separated it from Guatemala. The Dominican Republic, which in 2000 was barely 30% richer than Guatemala, is now 110% richer — sustained by investment exceeding 28% of GDP, a threshold Guatemala has never reached. None waited for perfect conditions. All made a model decision before having all the resources to execute it. Remittances may relieve the present. But they do not build a different future.
The problem is not that remittances arrive. The problem is that they have ended up replacing a development strategy. Today they finance much of the consumption that sustains economic growth and, at the same time, generate enough political comfort to avoid deep reforms. It is a cycle that works as long as remittances continue growing. But they depend on factors Guatemala does not control: U.S. immigration policy, the health of the American economy, and the willingness of future generations of migrants to continue sending money home. When one of those variables changes — and sooner or later it will — the fragility of the model will become exposed. And if by then Guatemala has not built stronger exports or more productive investment, growth will begin to lose its real support.
Demetrio still managed to correct course in time. His son reduced the excesses and managed to buy the Corolla in nineteen months instead of twenty-seven. But if Guatemala continues expanding spending, postponing reforms, and celebrating remittance-driven growth as if it were a development strategy, Demetrio’s grandson may discover that the car has once again become unreachable.
Not because the world changed.
But because Guatemala decided to imitate what does not work and call it progress.
And for that discomfort, Alka-Seltzer will no longer be enough.
Ramiro Bolaños, PhD.
President of the Center for Thought and Action: Factoría Libertatis
References
- World Bank. GDP per capita, PPP (constant 2017 international $), Gross fixed capital formation (% of GDP), and Exports of goods and services (% of GDP). World Development Indicators, 2024. https://data.worldbank.org [Accessed May 9, 2026]
- Bank of Guatemala. Family Remittance Inflows 2002–2026. Department of Macroeconomic Statistics, 2026. https://banguat.gob.gt [Accessed May 9, 2026]
- International Monetary Fund. Public Finances in Modern History Database, 2025 version. Guatemala fiscal projections 2025–2027. https://www.imf.org [Accessed May 9, 2026]
- Ministry of Economy of Guatemala. Weekly Economic Report, Edition XIV, Year VII, March 30, 2026. Directorate of Economic Analysis. https://www.mineco.gob.gt [Accessed May 9, 2026]
Article originally published on RamiroBolanos.phd and republished by Factoría Libertatis as part of its institutional library of analysis and thought.
