Home' Trinidad and Tobago Guardian : August 22nd 2013 Contents BG10 | NEWS
BUSINESS GUARDIAN www.guardian.co.tt AUGUST 2013 • WEEK FOUR
The two largest economies of Central America
and the English-speaking Caribbean,
Guatemala and T&T, must continue investing
in each other to sustain development, said
Luis Fernando Carrera, Guatemala s Foreign
"T&T plays that important role as being as the sub-region
leader in the Caribbean, and you have Guatemala as the largest
economy in Central America," he said. "So it is important that
the role between the two countries is mutually beneficial for
us and for the rest of the region."
Carrera spoke to the Business Guardian on August 13 at the
office of the Association of Caribbean States (ACS), St Clair.
On that day, Carrera also met T&T Foreign Affairs Minister
Winston Dookeran in Port-of-Spain where agreements were
signed between T&T and Guatemala in the spheres of eco-
nomics, politics and culture.
At a media conference, Dookeran said Guatemala is "clearly,
the largest economy of Central America."
Natural gas was one of the main areas discussed between
T&T and Guatemala.
The Minister of Energy of Guatemala, Erick Archila Dehesa,
also visited T&T with Carrera and met T&T s Energy Minister
Carrera said it was a follow-up to meetings they had earlier
"Both countries want to explore the opportunity of investors
from T&T to Guatemala to see what are the opportunities in
the energy sector," Carrera said.
He said it is important Guatemala lowers its energy cost to
"Natural gas is important for Guatemala and to find oppor-
tunities in this area. Guatemala is a market that is expanding
into southern Mexico and we want to lower our energy costs,
which is high at this time. We want to offer the manufacturers
in Guatemala the opportunity to lower their costs," Carrera
He said T&T is experienced in this area and can lend its
"T&T is one of the largest producers of natural gas in this
area and that will help us if we can come to an agreement
that will make it profitable and mutually beneficial for both
of us," Carrera said.
Carrera said, currently, the energy relationship between the
two countries is "not very big."
"We really want natural gas from T&T to produce electricity
in Guatemala. We want to reduce the cost of electricity."
Dookeran said it is important for a T&T delegation to visit
Guatemala to work out ways in which it can supply Guatemala
with its natural gas.
According Guatemalan statistics, Guatemala s energy con-
sumption increased by 2.2 per cent in the first seven months
of 2013 and was 5,166 gigawatts hours, 114.5 gigawatts hours
more than the same period in 2012.
In its attempt to find cheaper sources of energy, Guatemala
is offering tax breaks to companies willing to build geothermal
Guatemala hopes to meet at least 60 per cent of its energy
needs through geothermal and hydroelectric sources by 2022,
the country s National Electric Energy Commission has said.
Carrera said Guatemala, with a population of 15 million, is
Central America s largest manufacturer and there is a lot of
potential for both countries to invest in each other s econ-
"Guatemala is a large manufacturing country of basic goods
related to food, food processors, beverages and other related
items. We are also into light manufacturing. T&T right now
is importing from countries with higher costs for some of
these same goods and importing from Guatemala, T&T will
benefit from cheaper prices," Carrera said.
He said Guatemala sees T&T as an excellent place in which
"I do not think there are any limitations in doing business
here. Over the last ten years, there has been the trend by
Guatemalan business people to expand into the Caribbean
He gave the example of Cabcorp, a large Guatemalan man-
ufacturer and the bottler for Pepsi-Cola in Central America.
It is also the 13th largest company in size in Central America
and the Caribbean.
"CBC is one of the most important producers of beverages
in Guatemala and has a venture with Blue Waters," Carrera
"There are also T&T construction companies that are in
He said Guatemala is situated next to one of Latin America s
giants, Mexico, with a population of more than 100 million
and there should be a stronger relationship among the three
He spoke about a "triangularised" relationship in business
"The relationship between Guatemala and southern Mexico
may provide an opportunity for business, and particularly in
the area of energy, for T&T."
In two weeks, there will be bilateral meeting between Mexico
and Guatemala where these topics will be explored.
"The Foreign Affairs Minister of Mexico will meet us and
we will discuss a stronger alliance among the three countries.
This will give T&T access to Central American markets and
to Southern Mexico," Carrera said.
He spoke about having deeper discussions to enhance ways
"We had investors from T&T in May, which was the
Guatemalan Investment Summit. It was aimed at not only
investors from T&T, but many other countries as well. We
would like a specific approach with T&T investors," he said.
Carrera spoke about other countries in the region Guatemala
has invested large sums of money in and there is the possibility
the same can happen in T&T.
"Over the last five years, Guatemala has invested over
US$600 million in the Dominican Republic. We have invested
a similar amounts of money in Nicaragua over the last few
years. Our investors are really investing, but it all depends on
the size of the country s economy we are investing in."
Partial scope agreement
Carrera said the partial scope agreement that T&T and
Guatemala have been negotiating will be ready in two months.
"We are making progress. In this visit, we are making efforts
in dealing with the legal challenges the two countries are
facing. These will have to go to T&T s Parliament for approval.
By November, we would be ready to sign the agreement and
our Minister of Economy is ready to do it."
He said this will result in lower costs and prices for T&T
"By opening the markets, you are allowing consumers to
access goods that maybe they did not have before and now
at lower prices. This will encourage more trade routes," he
This agreement will see T&T benefitting from more
favourable/preferential access with a reduction or removal of
tariffs/custom duties into the Guatemala market for a range
of products including canned chicken sausage, peanut butter,
groundnuts, pepper sauce, lubricating grease, clay tiles, building
bricks, co-axial cable, automatic circuit breakers and steelband
Most of the energy and energy products already receive
duty-free status. Guatemala will have access to T&T s market
for products including certain flowers, fresh fruits, decorative
candles, tableware and textiles.
Crime and security
Carrera does not believe that T&T s high crime rate is a
deterrent to foreign investment.
He said for investors outside of Latin America and the
Caribbean, they may consider crime a factor when investing,
but for Latin and Caribbean countries who have experience
with the problem, they do not usually consider it.
"In Latin America and the Caribbean, we know crime is a
risk and how to manage it," he said.
"The solution is not a bilateral one. The problem of drugs
and crime is not only a problem of T&T and Guatemala, but
also a regional one. It is common to Venezuela, Mexico, Colom-
bia, Jamaica and the rest of the region."
T&T's natural gas
Profile of Guatemala
Guatemalan economy grew by 3.3 per cent in 2012
and has Central America's largest population with a size
of 15 million people. Guatemala's economy is dominated
by the private sector, which generates about 85 per cent
of gross domestic product (GDP). Most manufacturing is
light assembly and food processing, geared to the do-
mestic, Central American and United States markets.
In 2012, its exports comprised mainly coffee, sugar,
apparel, bananas, fruits and vegetables, cardamom.
The Economic Commission for Latin America and the
Caribbean (ECLAC) expects the Guatemalan economy to
grow by 3.5 per cent in 2013.
The World Bank's latest Report said: "Guatemala has
huge potential for accelerating economic growth
through trade, regional integration and tourism. The eco-
nomic recovery after the 2008/2009 crisis has been
moderate, with GDP growth reaching an estimated 2.8
per cent in 2010, 3.9 per cent in 2011 and 3.3 per cent in
The report also said Guatemala's President Otto Perez
Molina took office in 2012, pledging a tough stance on
crime and a commitment to strengthen the govern-
ment's social programmes. In order to increase revenues,
a proposal for fiscal reform presented by President
Perez was approved by Congress.
LUIS FERNANDO CARRERA
Guatemala's Foreign Affairs Minister
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