Jun 27, 2013

Difficult issues in Guatemala

Farmers are trapped in a land rush in Guatemala, which has one of the most unequal land distribution structures in the world.
There is more here. That is not unique of Guatemala, but it seems that the situation is extreme here. The problem is that if Guatemalans do not talk about it, sooner or later there might be a huge social problem, added to the existing ones. Besides redistribution of land which is the obvious but probably not the right thing to do because of the conflict it might bring, what are the alternatives? To be sure, the history is very messy, to say the least. If there is corruption in the Government, more taxation at the national level does not seem to be the answer. 

I have notice improvements in some local government. So, may be more decentralization and more taxation at the local level (and less at the national level) might work. But the problem is deeper and it might require more involvement from the private sector that needs to find the way to pay more to their workers. I do not refer to some kind of efficiency wages, because of the unemployment effects. Note that more taxation might bring about less external competitiveness, but probably more internal harmony. 

Obviously the reduction of corruption is key, but also a private sector that is aware of the social realities and could manage to provide more opportunities is also important. There should be ways to do that. Otherwise the issue of inequality might come back in the future in very surprising and painful ways, for everybody. 

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