In Guatemala, a history of discrimination and inequality of opportunity led to a 36-year conflict that finally subsided with a Peace Agreement in 1996. Improvements since then have prevented a return to conflict and begun to create the conditions for sustained stability. However, the persistence of substantial inequality constitutes a risk factor for future stability and constrains Guatemala’s growth potential.
Land distribution is highly unequal. The largest 2.5% of farms occupy nearly two-thirds of agricultural land while 90% of the farms are on only one-sixth of the agricultural land. Furthermore, tenure is insecure and is one of the key causes of poverty among indigenous Guatemalans, who make up 43% of the population. Multiple unresolved land disputes and ineffective mechanisms to resolve them discourage investment and reduce the potential contribution of agriculture to improvements in rural living standards and overall economic growth.
Guatemala’s extensive and biologically diverse forest systems are experiencing a rapid 1.3% annual rate of deforestation and losing their economic value due to forest fires, agricultural expansion, wildlife-poaching, and large-scale development projects. Increases in ongoing donor assistance to empower communities in resource management of this valuable forest system would help Guatemala achieve a greater, more sustainable yield from its forests and reduce the rate of deforestation.