Caribbean & Central America - May 2014 (ISSN 1741-4458)

FDI up: According to figures released last month by Guatemala’s central bank (Banguat), foreign direct investment (FDI) into Guatemala reached US$1.3bn in 2013, up 5.1% on the US$1.2bn reported in 2012. According to Banguat, the agriculture & mining sector accounted for the biggest (37.3%) chunk of FDI, followed by trade (17%); and energy (14%). The main sources of FDI were Canada (heavily involved in the mining sector), which accounted for 21% of FDI inflows, followed by the US (16%), Russia (14%) and Colombia (13%).

Gas pipeline to Mexico: On 30 April Guatemala’s President Otto Pérez Molina and his Mexican counterpart, Enrique Peña Nieto, signed an agreement to construct a US$800m gas pipeline which will stretch some 600kms and supply gas to Southern Mexico and Guatemala. The agreement was inked on the side-lines of the VI Summit of the Association of Caribbean States (ACS), which took place in Mexico on 29-30 April. A press release by the Guatemalan presidency cited Guatemala’s energy & mining minister, Érick Archila, as stating that Guatemala would stump up some US$200m for the first phase of the project, which will begin in Tecún Umán in the Guatemalan department of San Marcos and continue to Escuintla, on the Mexican border. According to the same statement some of the funding for the project, which could be completed “by 2018 or 2019”, could come from a loan from the Inter-American Development Bank. In January Guatemala’s economy minister, Sergio de la Torre, said that the pipeline could cut energy costs by up to 75% and would provide local manufacturers with access to cheaper energy. The announcement of the plan follows a 13 January visit to Mexico by Guatemala’s foreign minister, Fernando Carrera, where he met his Mexican peer, José Antonio Meade Kuribreña, and the two agreed to promote bilateral trade and investment.

• Fuel imports

According to figures from Guatemala’s energy & mining ministry cited in the local press on 5 May, Guatemala spent US$904.2m on fuel imports in the first three months of 2014, up 12.7% on the comparable period last year. Reducing energy costs is a major priority for the government led by President Otto Pérez Molina.