On a March afternoon, with the sun tinting the jacarandas purple and the palo blanco trees golden, Guatemala looks like paradise. The song of blackbirds and the flutter of hummingbirds remind us that we live in a privileged land. But the danger of paradise is complacency. We’ve clung to stability, to the “we’re fine as we are,” to the fear of change. Like the frog that boils without noticing, we’ve stayed in the water—comfortable—unaware that we are slowly fading away.
Less than a century ago, Guatemala ranked among the 24 richest economies in the world in terms of GDP per capita. During Jorge Ubico’s presidency, even while relying on coffee exports, strict fiscal management allowed the country to reduce external debt to zero, invest in infrastructure, and expand education. In 1942, our GDP per capita was nearly on par with Italy, France, and the Japanese Empire. We were on the same level as world powers.
Surprisingly, our GDP per capita was higher than that of Hungary, Venezuela, and Spain. Guatemala’s economy per person was 70% larger than Costa Rica’s, more than double that of South Korea and Turkey, and more than triple that of Honduras and Brazil. Today, most of the countries we once outpaced have surpassed us. Brazil, Mexico, and Costa Rica now double us; Turkey and Hungary triple us; South Korea multiplies us fivefold, and Singapore doesn’t even see us in the rearview mirror—it leads us tenfold. While they innovated, we preferred the comfort of staying the same.
Falling from 24th to 108th in GDP per capita is more than a statistic—it reflects a country that lost its place in the world. Competitiveness depends on many factors, but without an agile business environment and an innovative economy, growth is impossible. According to the 2020 Doing Business index, Guatemala ranks 96th in ease of doing business. While Singapore (2), South Korea (5), Spain (31), and Turkey (34) have made progress, Guatemala lags behind. Even emerging economies like Georgia (7), Malaysia (12), and Rwanda (38) outperform us with more investment-friendly regulations. Our region doesn’t help either: Chile (59), Mexico (60), Colombia (67), and Costa Rica (74) offer more attractive environments. If you were an investor and saw an 89-country gap between Guatemala and Georgia, where would you put your money?
The problem isn’t just bureaucracy. Guatemala’s corporate income tax is 25%, compared to 15% in Georgia and 12.5% in Ireland. Overall, 103 countries have lower taxes and 95 offer more favorable regulations. While the world competes to attract capital, we keep tripping over our own feet.
It’s easy to blame the government: bureaucracy, regulatory hurdles, and widespread corruption. But Guatemala’s lag is also the private sector’s responsibility. A clear example is access to credit. In Guatemala, credit to the private sector amounts to just 35.9% of GDP, while in Panama it reaches 106% and in Chile, 125%. In those countries, entrepreneurs and business owners easily access financing, fueling growth and innovation. Chile lends 25% more money than it generates in its economy. In Guatemala, credit is a bottleneck—not a growth engine. Without access to financing, macroeconomic stability isn’t enough: we need a system that drives growth, not limits it.
If we keep settling for less, in ten years we’ll be paying the price with stagnant growth and more missed opportunities. Guatemala has the talent to conquer the world—but it won’t happen with fear or complacency.
The Peace Accords aimed for 6% annual growth; today, we settle for 3.5%. And the problem isn’t just the government: many companies still fear risk, innovation, and adopting technology. The world is advancing with automation and artificial intelligence, where productivity no longer depends on minimum wage, but on the capacity to innovate. Guatemala invests only $41 per person in ICT Capital—an indicator of investment in tech-related assets—while Costa Rica invests $418, Estonia $1,744, and Singapore $5,797. To put that into perspective: Singapore invests 141 times more per person than Guatemala in technology.
The gap is brutal. While the world becomes more efficient and competitive, many successful entrepreneurs in Guatemala continue to rely on outdated methods that have worked until now. If you’re a business owner and your team still manages critical processes in Excel, there’s your first sign that your company—and your country—are falling behind in the global race. For small businesses, it’s even harder: with tight margins, they can’t afford bold innovations or competitive advantages abroad.
The consequences are obvious: between 2022 and 2024, exports of high-value-added products in sectors like processed foods, chemicals, textiles, and metalworking fell from USD 7.1 billion to USD 5.9 billion. Likewise, ICT exports declined from USD 744 million in 2019 to USD 604 million in 2023.
There’s no doubt: the productivity train left the station decades ago—and Guatemala stayed on the platform. In 1974, our Multifactor Productivity (MFP) was 0.93 relative to the U.S., just 7% below the world’s largest economy. Today, it has dropped to 0.66—below Namibia, Sudan, and Iraq. While Costa Rica (0.77) and Panama (0.79) pull ahead, others once behind us—like Armenia (0.83) and Turkey (0.89)—have now overtaken us. Some, like Mauritius (1.27) and Macau (1.25), have even surpassed the United States. MFP measures the impact of innovation, competitiveness, and efficiency on economic growth. The world moves forward with more efficient, tech-driven economies, while Guatemala remains trapped in a mindset of low growth and small gains.
Next week we’ll dive deeper into the topic of productivity. But for now, one thing is clear: the current model is condemning us to stagnation. The lack of investment in technology, resistance to automation, and fear of change are not just government issues—they’re signs of a country that has lost the ambition to compete.
If we keep settling for less, in ten years we’ll be paying the price with stagnant growth and more missed opportunities. Guatemala has the talent to conquer the world—but it won’t happen with fear or complacency. First, we must imagine it. Then, we must dare to build it. The time to act is not tomorrow. It’s now.
