Caribbean & Central America - January 2012 (ISSN 1741-4458)

A declared priority of Guatemala’s right-wing president-elect, Otto Pérez Molina, who takes office on 14 January, is the approval of a desperately needed fiscal reform which, he claims, would boost tax take to 14% of GDP [RC-11-12], up from the 11.2% registered in 2011. The inability of the outgoing president, Alvaro Colom, to achieve any progress in this area due to the obstruction of his efforts by Pérez Molina (for whom the measure is now key to the success of his new Partido Patriota (PP) government) and the private sector lobby Cacif, was arguably the biggest failing of his four-year mandate. The renewed influence of the business elite in Pérez Molina’s incoming cabinet, invoking comparisons with the previous administration of Oscar Berger (2004-2008), whose former vice-president, Eduardo Stein headed up the recent transition process, suggest the new president stands a greater chance than his predecessor at the negotiating table.

Members of the incoming cabinet closely identified with the business elite include Pérez Molina’s choice of Sergio de la Torre Gimeno, a textiles businessman, as his economy minister. A former president of the chamber of commerce and of Cacif (2006-2007) and the private sector representative before the central bank’s monetary board at the time of his appointment, De la Torres is the managing director of Textiles Accessorios, known as Actex Labels, and heads various companies such as Reto and Promocionarte which promote exports. He has cited as priorities the need to create jobs through boosting Guatemala’s competitiveness and attracting foreign direct investment (FDI). FDI reached US$742m in 2011 on preliminary figures from the UN Economic Commission for Latin America and the Caribbean (Eclac) – just 8% of the total received by Central America and the Dominican Republic.

Also likely to ease Pérez Molina’s task ahead is the appointment of a PP heavyweight and defeated Guatemala City mayoral candidate, Alejandro Sinibaldi, to head up the communications portfolio. Sinibaldi’s family, Castillo Sinibaldi – an important financier of the party – is a branch of the Castillo Córdova family, which is behind the Corporación Castillo Hermanos, one of Guatemala’s most influential economic groups. The choice of Harold Caballeros, the defeated first-round presidential candidate for Visión con Valores as foreign minister will also be well received by Cacif; a former evangelical pastor who founded the El Shaddai church, which has more than 12,000 members in Guatemala, Caballeros was reportedly Cacif’s first choice of presidential candidate. According to the local media, prominent business leaders close to the former pastor, whose new post is no doubt a reward for his decision to back the PP in the second round given his dearth of diplomatic experience, include Diego Pulido, the general manager and corporate director of Corporación Banco Industrial, the country’s biggest bank, and Jaime Arimany, an industrialist and former president of Cacif.  

• New finance minister

Unlike other cabinet appointments, the new finance minister, Pavel Centeno, is less closely aligned with the traditional elite. A conservative technocrat now, he was previously identified with the regional research organisation Flacso; his father, the economist Carlos Centeno, was murdered by the military during the 1960-1996 civil war.