Is Guatemala stuck in poverty?

      No Comments on Is Guatemala stuck in poverty?

Guatemalans’ inability to break out of poverty is a direct relationship to the late 20th century global food and fuel price shocks that targeted the cost of imports that developing countries couldn’t keep up with (Clapp, 64). After the inflation of interest rates and import taxes on fuels in the 1970’s, the IMF and World Bank sought a remedy to the developing nations debts to the USA and EU. Loans were provided to developing countries that fell into debt to the developed nations, but the loans granted came at a higher price of production that effectively devalued the currency in developing countries by imposing more flexible exchange rates. The loans came with different rules and regulations around exporting, importing and production, which sought to change the structure of the food system to increase economic growth in countries whose agricultural sectors were a majority of their GDP. The structural adjustment programs (SAPs) were really the only way out of debt for a lot of developing countries in Latin and South America, and in theory, the programs could help countries in the short term by alleviating debt crisis. But in the long term, the devaluing of the currency in these nations as well as the dropping cost of staple crops worldwide didn’t allow for much profit in the developing nations (Sen). So little profit, in fact, many people in these countries spend more on production of food than they gain back. When I look at the photos of the Mendoza family and their living conditions, it is clear that in the last 30 years of agricultural production, Guatemala and its people have seen little rise in their standards of living or status in the world economy. Without readjustment to regain their currency value, developing countries may always be many steps behind the thriving economies already developed nations enjoy. 

Leave a Reply