Guatemala is the most populated country in Central America with one of the highest demographic growth rates. It is classified as a lower/middle-income country. It has the largest proportion of indigenous population in Central America (over 40%) and 52% of the total population is younger than 20 years of age. Guatemala is affected by alarming rates of insecurity and violence and an increasing penetration of drug-trafficking cartels as the country is a major transhipment point for US and EU-bound cocaine. Public finance management still remains a major issue, being Guatemala the country in Latin America having the lowest tax revenue to GDP ratio (12%).
EU cooperation 2014-2020
The EU contribution of €186 million for Guatemala for the 2014-2020 period revolves around food security, conflict resolution, peace and security and competitiveness as the three main sectors of intervention. The EU remains committed to supporting Guatemala in addressing its main long-term challenges, such as ensuring democratic human security, enhancing the rule of law and reducing impunity, reducing structural economic and social inequality and discrimination, guaranteeing the respect of human rights, in particular for the indigenous people, women and children, and combating widespread poverty and malnutrition, in particular in rural areas.
Guatemala is signatory of the EU-Central America Association Agreement, a comprehensive free trade agreement with a strong focus on development cooperation. As in the past, Guatemala will continue benefiting during 2014-2020 from the EU sub-regional programme for Central America (€120 million). It must be noted that the focal sectors of cooperation for the sub-regional have evolved for this period. In the past, cooperation was mainly focused on social cohesion and economic growth, while the new programming exercise responds to the emerging needs of the region, namely security and impunity, climate change and private sector development as a vehicle for generating employment opportunities.
EU cooperation 2007-2013
For the 2007-2013 period (€135 million) the main focal sectors were social cohesion and human security as well as economic growth and trade. The EU has played a crucial role in supporting the fight against impunity by strengthening capacity on criminal investigation and special investigation methods, witness protection, fight against organised crime and money laundering. The budget support programme on food security and nutrition has contributed to successfully implement the national objective of reducing by 10% the chronic malnutrition rate in under 5-year old children.
Furthermore, Guatemala has a substantial portfolio of EU thematic projects which amounted to a over €30 million for the 2007-2013 period. This portfolio includes 52 projects in the following sectors such as democracy, human rights, civil society organisations, food security, environment and health.