Guatemalan Government Response to Economic Crisis.
The Guatemalan Government presented a 10 step action package to confront the economic crisis caused by high prices of basic food and fuel. This action package was presented yesterday by President Alvaro Colom, Vice President Rafael Espada and the Economic branch at the Presidential Palace.
The majority of these actions depend on reaching agreements between the Government and the economic sector. Other measures depend on the approval by Congress of three legislative initiatives presented by the Executive Branch. The three legislative projects are: The law for public-private participation, the law of competition and an additional entity for consumer protection presented by President Alvaro Colom.
The majority of these actions depend on reaching agreements between the Government and the economic sector. Other measures depend on the approval by Congress of three legislative initiatives presented by the Executive Branch. The three legislative projects are: The law for public-private participation, the law of competition and an additional entity for consumer protection presented by President Alvaro Colom.
The 10 actions to curb the escalating prices are divided into three components:
- Foment stability, investment and competition.
- Solidarity agreements with the economic sector to tackle inflation of some basic commodities.
- Stimulate employment and production in the agricultural and rural sector, through cooperatives and Agexport (Guatemalan Association of Exporters).
No short term results are specified for these three components.
These plans are not entirely new, some of them have already been presented by President Colom and some of the bills are already in the legislature pipeline.
Colom expressed that his government has little space to maneuver: "Today we have taken a further step in the measures announced five weeks ago, there are new measures and follow up of others. The goal of the government is to maintain the macroeconomic stability, work towards the generation of employment, investment and increase production."He assured: "We do not want to take impulsive actions or be guided by political agendas. It would be easy to create very short term impact, but we would have bread today and hunger tomorrow. This crisis is controllable if we have unity in the country and if there is good dialogue.
"Within these actions we have not contemplated any tax cuts for some of the basic food products" said Juan Alberto Fuentes, Minister of Finance.
Colom expressed that for the implementation of these actions $197 millions are required from the national budget.
The implementation of these measures would be targeted at the most vulnerable groups in the country, through credits to cooperatives and small producers associations, to finance the purchase of commodities in bulk
Photos: Market: Galen R Frysinger, President: public domain