Guatemala: the other side of the investment coin

Wednesday, July 8, 2015 - 13:29

All eyes are on Guatemala in recent weeks as a new awakening of peoples’ protest has broken onto the streets calling for an end to state sponsored corruption. One of the main reasons for the protest is a report written by an international prosecutors’ panel (backed by the UN), which details cuts to customs duties in exchange for bribes. Calls for an end to corrupt deals between the government and the corporate sector could have a major impact on the elections coming up this September. But the protesters calls need to go wider to expose some difficult truths about that corporate government dynamic and the impact of investment on people in Guatemala.

Across the country, investment in the large-scale extraction of minerals, hydro-electrical energy and endless acres of mono-crops, predominantly palm and sugar, has catalysed a new kind of gold rush. Only this time the gold is land. And water. Those speaking out – the communities, civil society organisations and movements campaigning for rights - have been threatened by anonymous messages, defamation in the media, legal processes and even physical attacks. There have been 57 reported attacks on journalists so far this year. ‘Political prisoners’ is a phrase that has come back into the vocabulary of Guatemalans with a 33 year sentence recently imposed on one activist for his role in opposing a land grab for hydroelectrical power.

This is the other side of the investment coin.

Land grabbing is taking place across Guatemala for petrol (north), for palm (across the central belt) and for sugar (on the southern coast). Beyond this, hydroelectrical plants and mining concerns are dotted across the land. ActionAid Guatemala and its partners, universities and foundations have just issued an urgent appeal to stop an environmental disaster at La Pasion River linked to a palm oil plant in Sayaxche. A pesticide called ‘Malathion’ has contaminated 60 miles of river affecting hundreds of fishing families who are facing loss of income and having to buy their food elsewhere as detailed in ActionAid USA's recent blog: The dirty side of the agribusiness industry.

This ecological disaster is part and parcel of the current political crisis in Guatemala and citizens calls for an end to corruption and impunity: ‘the state has failed in its role to regulate and to guarantee human rights and to trigger national and international legislation with respect to palm oil companies.’

There are some grounds for hope. For example, Guatemala’s policy on rural development has improved in recent years. Civil society organisations have fought for it to reflect the rights of people. But still, the devil is in the implementation detail. The budget is low and it is not going to where it is needed. Overall Guatemala still has the lowest rate of state investment in public services in the world. The government invests 2% of the budget in agriculture, whilst it increased military spending by 25% in the last year. Much of the spending on rural development goes to chemical fertilisers and to baskets of food for farming communities, the latter which are often tied to expected votes for the party in power at the local authorities. Both this and the chemical fertilisers risk developing harmful dependencies of different varieties. Beyond this, the policy is not challenging or changing the structural causes of rural poverty.

So what is ActionAid Guatemala doing on all of this? They are engaging on rural development policy. And helping to change practice. Over the last ten years they have been helping farmers develop alternative ways of farming that respects the land and the environment, helps them to become resilient to climate change. Organisations like the National Network on the Defence of Food Sovereignty in Guatemala (REDSAG) are now themselves giving that training.

They have also joined up with partner CONGCOOP to cut off land grabbing at the source, looking at the potential for engagement with the Roundtable on Sustainable Palm Oil. The RSPO are developing a certification process that requires investors to meet social and environmental criteria. If investors are not playing fair, failing to meet standards on labour, land rights, on environmental protection, they should, in theory be stopped. Still many criticise certification schemes, arguing that the devil is in the detail. They are expensive, difficult to track and verify over huge land masses and just too easy for investors to hide the truth. The RSPO still needs to demonstrate how this can really work for poor communities in Guatemala and beyond.

Meanwhile back at the ranch, the pre-elections campaigning is in full flow. It remains to be seen how long the public mobilisation can be sustained to generate real change in Guatemala. One thing is for sure, Guatemala will only change once it has tackled the other side of the investment coin, once there is a real debate on the costs and benefits of Foreign Direct Investment for its people.