Guatemala’s President Says ‘Corrupt Coalition’ Plans a Comeback

(Bloomberg) -- Guatemala’s President Bernardo Arevalo says the same politicians and officials who nearly thwarted his inauguration this year are now trying to sabotage his plans to fight corruption and boost infrastructure and social spending.

Arevalo, who took office in January with the support of the US, said in an interview that most of his proposals have not made any progress in congress, where his party holds just 23 of 160 seats. His long-term goal is to integrate subsistence farmers in the national economy, creating the social development that’s needed to retain Guatemalans seeking to emigrate north, he said.  

But Arevalo’s plans face an uphill battle in the hostile congress, while local courts have already received 13 impeachment requests against him. He said that gives ammunition to the politicians and court members who keep trying to destabilize his government. Known as “coalition of the corrupt” in Guatemala, many of them were sanctioned by the US last year for “undermining democracy and the rule of law.”

“They’re going to try to come back. That’s why they need us to fail,” Arevalo said in New York. “They will try to throw every possible obstacle in our way — legal, political.”

Prosecutors who tried to stop his inauguration have alleged that Arevalo’s party didn’t follow proper procedures when registering, that he and his vice-president were present on a university campus during a violent takeover by protesters, and more recently, that his government ordered illegal payments to state contractors through the Ministry of Housing and Infrastructure. He describes the cases as spurious. 

Low Debt 

Arevalo, 65, said the nation’s low debt levels give it space to comfortably increase spending to boost economic growth.

The government’s 2025 budget proposal showed the deficit widening to 3.1% of gross domestic product which, excluding the pandemic, would be the most in a decade and a half. This year, the government forecasts a deficit of 2.6% of GDP. 

Guatemala, Central America’s biggest economy, has debt levels that are among the lowest in the world at less than 30% of GDP. 

The government is seeking public-private partnerships for big projects such as a metro in the capital, upgrading ports and improving the country’s main airport. Arevalo’s administration is also seeking foreign development loans to expand electricity coverage and build new hospitals. 

US Vice President Kamala Harris launched a program in 2021 to drive private investment to Guatemala to create jobs and thereby cut migration to the US. In May, Walmart Inc. said it would invest $700 million in the country over the next five years. Mediacom Communications Corp. has also been expanding its cable coverage in the country, Arevalo said. 

More than 220,000 Guatemalans were detained at the southern US border last year, down slightly from the previous year. 

Arevalo, a former diplomat who studied in Jerusalem and the Netherlands, said that strengthening the rule of law is key to enticing more companies to invest. 

In October, the country is preparing to elect new judges for the country’s criminal and appellate courts. Arevalo said many of the candidates complicit in corruption have been left out of the process, which means the courts should be cleaner.   

Even so, malign actors remain “entrenched in the judicial system,” he said. 

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