Guatemala: development at what cost?

By Anna Luisa Schönwald y Fabio Cresto Aleína

In the past 25 years, the Gross Domestic Product (GDP) of Guatemala has increased largely and it is now at $85.3 billion with an annual growth rate of 2.95%. With that number it is in the top third of international ranking lists and its economy now counts as the largest in Central America. It is not the first time that Entremundos is reporting on the issue of inequality and we still witness that the country is riddled and plagued by an unfair distribution of wealth that was even exacerbated by the recent economic growth. The Gini Index quantifies this sensation, and the value of 48.3% ranks Guatemala among the top 20 of most unequal countries. [1] [2]

The measurement of the GDP, Gini Index and other indicators in general can and should be criticized for being tools invented by the Global North pushed upon the Global South pointing at the so-called “underdevelopment” with every year of reporting. All this, while never really representing the living conditions, nor the inequalities within a country. For the lack of quantitative tools depicting the whole of a country and the difficulties of qualitative comparisons, we will still use these indicators hereinafter. 

According to his theory of 1963, economist Simon Kuznets explained that there is a correlation between income inequality and long-term economic growth. He declared that the inequality increases during the phase of industrialization and decreases once the country has completed this process. The same model was associated with the correlation between the GDP and the local water and air pollution by Gene M. Grossman and Alan B. Krueger in 1991 and named Environmental Kuznets Curve. They concluded that pollution would rise for a certain time and then decrease as economic growth reaches a plateau or declines. From this concept, we derive that we are supposed to just wait for a certain economic development for the ecological damages to decrease automatically. There are a few main arguments proponents use to support this narrative:

• The population will only start caring about environmental issues after reaching a certain living standard.
• The industries in respective countries can only afford cleaner technologies after reaching this turning point.
• The share of the service sector increases at the expense of manufacturing and will automatically lead to a reduction in damage after the turning point.

Even though the authors themselves acknowledged that the theories have deficiencies, these messages were repeated like a mantra for many years and even used to support decisions by policy makers. The iconic diagram supposedly backed up the story with data, but by analysing the situation in Guatemala and in the world we argue that the model of  “grow now, clean up later” simply doesn’t work. It is the people who are demanding environmental protection and not the standstill of economic growth causing it. An increase in revenue will not encourage companies to switch to cleaner solutions, and an increase in the service industry will just export the harm caused by manufacturing to another country. We know now that ecological degradation is not a luxury concern for countries to be left on the side until the population is rich enough to give it attention. [4] [6]

In the name of economic growth, enormous damages have been inflicted to Guatemalan ecosystems, some of them probably irreparable. Since 2001 Guatemala has lost around 1.58 million hectares of its tree-cover, a surface equal to 21% of the total tree cover in 2001. [3] Deforestation is predominantly caused by the conversion of forests into cropland and cattle pastures. Agriculture is a very important aspect of development; however, the increased deforestation is mainly driven by heavy investment in Guatemala’s palm oil and rubber plantations and cattle ranching, activities which are driving subsistence farmers deeper into forested areas. It would be easy to blame the small producers now, as they are exploiting the natural environment in order to sustain their families, where in reality they are among the victims of a vicious cycle. As deforestation and forest degradation increase, communities who depend on the forest’s natural goods and services must seek alternative livelihoods, such as cattle ranching, which even further degrades the landscape. [5] So again, the real reason for these practices is the lack of possibilities and the huge inequalities within the country. 

Another vicious cycle connected to ecosystem destruction and economic growth is the one related to mangrove forests and coral reef degradation. Mangroves and corals constitute key ecosystems for the protection of coastal zones, as they function as barriers against inundation, hurricane surges, coastal erosion and even sea level rise. The lives of millions of people depend on the health and the services of these ecosystems, and nevertheless they are heavily threatened by logging (mangroves), overfishing (corals), and general overexploitation of resources for the sake of economic growth. Water pollution because of unregulamented and uncontrolled spillages of wastewater from industry and agriculture is heavily damaging these ecosystems along both the coasts of Guatemala, with harms that might well be beyond repair.

The protection of Guatemalan ecosystems and biodiversity often lies upon the Guatemalan System of Protected Areas (SIGAP), which, despite its lack of sufficient funds and staff, supports ecosystem conservation in the whole country. Of course, it is not a perfect system, but it is vital to protect these precious resources that no economic indicator such as the GDP takes into account, but have been and will be vitally important for the livelihood and development of millions of people in Guatemala. At the same time, other models of ecosystem conservation and sustainable development appeared in Guatemala during the past years. One of the most successful ones are the forest concessions in Petén. Within this framework of “community forestry“, the local communities living at the margins of the protected area of the Biósfera Maya have been involved in the conservation of the forest itself, leading to an unprecedented success in the fight against illegal logging and wildfires.

This emphasizes that giving up or waiting for the desired outcome is not an option. As described in this article it is necessary to form coalitions to grow resilient within the communities. There are a plethora of local and regional initiatives to empower sustainable and ecological development in Guatemala at different levels. Sometimes with the help of NGOs (like the WWF-led project Smart Coasts), and sometimes starting at the municipal or communal  level, such as the attempts to ban plastic in San Pedro La Laguna (Sololá), or other local activities to reduce water pollution and to protect the ecosystems. 

It is true that for global changes to happen we still have to wait until economies will become regenerative by design, restoring and renewing the local-to-global cycles of life on which humanity depends. [4] But until this point, we need to move away from the historic measurement of development based on indices such as the GDP, and instead look at more holistic indicators. Taking into account nature, ecosystems, and their complex interdependencies with the Guatemalan population is fundamental for real sustainable development. Furthermore, it is essential to move away from the narrative that “poor countries are too poor to be green” [4] and start acting now within the respective range of possibilities and power.

Sources

[1] Countries ranked by GINI index (World Bank estimate) (indexmundi.com)

[2] Gini index (World Bank estimate) – Guatemala | Data

[3] Global Deforestation Rates & Statistics by Country | GFW (globalforestwatch.org)

[4] Doughnut Economics p.173/174, 175, 204, 207

[5] The story of deforestation in Guatemala – Ecosphere+

[6] Sustainable development must not hinge on economic growth alone Balkan Green Energy News