Do you remember Demetrio? The one from the Alka-Seltzer commercials of the 1980s, who would come home feeling sick after a night of excess. Well, when Demetrio wanted to buy his Corolla in the year 2000, he needed to save twenty-seven months of salary to pay for it. That same year, a Demetrio in Guadalajara needed only twelve. The average Mexican could buy nearly twice as many things as the average Guatemalan. Mexico seemed at the time to be the mirror of development we aspired to resemble.
Twenty-four years later, something changed. The son of the Guatemalan Demetrio now needs nineteen months for the same Corolla. The one in Guadalajara still needs eleven. The gap narrowed. One might think that Guatemala had finally begun catching up with Mexico. But the story behind that convergence should concern us more than it should be celebrated.
It is not that Guatemala has transformed into a dynamic economy. It is that Mexico stopped growing. And what is even more serious is that we are beginning to copy exactly the model that produced that stagnation. Like Demetrio before the stomachache, we keep accumulating excesses without yet feeling the consequences. We have not asked for the Alka-Seltzer yet.
The World Bank data leave no room for generous interpretations. Between 2000 and 2024, Mexico’s GDP per person barely grew. Under Fox, it advanced only 0.40% annually. Under Calderón, the average Mexican actually moved backward in real terms. Under Peña Nieto, it grew slowly again. And under López Obrador, growth nearly disappeared once more. Four presidents. Twenty-four years. After all that time, the average Mexican earns today only 734 real dollars more per year than in 2000. In terms of development and life-changing progress for most citizens, that changes nothing.
How does a country with a border with the United States, preferential access to the largest market on the planet, and one of the largest export platforms in Latin America end up stagnating? The answer lies in the model. Mexico expanded the size of the State without increasing the productivity of its economy. Public spending rose from 19% of GDP in 2000 to nearly 29% in 2022. Debt increased from 38% to 53%. Meanwhile, private investment became trapped between legal insecurity, protected monopolies, bureaucratic corruption, and the advance of organized crime. The result is a country that spends more and more but produces very little additional growth for its citizens. Mexico succeeded in increasing the size of the State without increasing the size of opportunity.
Guatemala looks into that mirror and still believes the story will end differently. Many of our authorities celebrate that we are already approaching Mexico’s purchasing power. The country grows at nearly 4% annually, something that seems extraordinary compared to today’s stagnant Europe. But that growth contains a trap: it is growth in total GDP, not real prosperity per person. With a population growing at nearly 2% annually, the real progress of the average Guatemalan was only 1.53%. And most worrying of all, that growth rests on a foundation that looks far too similar to what ultimately slowed Mexico down.
Guatemala no longer grows mainly by producing. It grows by consuming. Ninety-two percent of GDP depends on household consumption. In Mexico, that number is 66%. But there is an even more important difference: much of Guatemalan consumption is not supported by domestic productivity, but by family remittances. In 2025 alone, Guatemala received US$25.53 billion in remittances, nearly 24% of GDP. Meanwhile, exports of goods and services represent only 16%. Put differently: the Guatemalan economy does not grow because it produces more. It grows because our migrants send more money.
Mexico, despite its stagnation, still maintains an economic structure based on production and exports. It exports and imports in similar proportions, meaning it finances much of its consumption through what it produces. Guatemala does not. It imports twice as much as it exports and covers the difference with the money sent by those who left. That is not a sustainable development model. It is migrant income disguised as growth. And sooner or later, that disguise breaks.
The deterioration has been building quietly for more than a decade. In 2010, Guatemalan exports represented 26% of GDP. By 2024, they had fallen to 16%. Ten percentage points lost in just fourteen years without even being perceived as a national emergency. Productive investment has also failed to take off. Guatemala barely reaches levels close to 18% of GDP, far below the threshold that normally allows countries to accelerate growth, reduce poverty, and build sustainable economic capacity. The country has not reached that level since comparable records exist. Worse still, in recent years, real investment has actually begun to decline. Guatemala consumes like a rich economy but invests like a retired one.
Meanwhile, Guatemala is beginning to follow the same path that ultimately stagnated Mexico. Public spending rose to 16% of GDP in 2025. The fiscal deficit reached 3.9% and, according to the International Monetary Fund, will remain near 4% in the coming years. Public debt, which represented 20.6% of GDP in 2000, could reach 34.4% by 2027. These are not crisis figures, at least not yet. But they are clear signs of a familiar trajectory: more State, more deficits, and more debt, without translating into more productive investment or greater exports. One only has to look at the condition of roads, hospitals, ports, or airports. Guatemala is copying Mexico’s vice without first building its virtue.
Mexico, despite all its mistakes, succeeded in building a genuine export-oriented industrial base, although limited by monopolies, dependence on the United States, and low internal competition. Guatemala has not even reached that point. Today it increases spending and deficits on top of an economy whose true backbone is the money sent by those who had to leave.
But the most painful mirror is not Mexico. It is found in countries that twenty-four years ago were poorer than we were. In the year 2000, Armenia had a GDP per person far below Guatemala’s. Today it has surpassed us. Georgia as well. Both countries transformed economies that seemed trapped in post-Soviet backwardness while Guatemala became increasingly dependent on consumption and remittances. The contrast becomes even more evident in daily life: in 2000, the average Georgian needed forty-two months of income to buy the same Corolla that Demetrio purchased in twenty-seven. Today, he needs only ten salaries.
What did Armenia and Georgia do? They changed the model. They reduced taxes, opened space for private investment, aggressively fought state corruption, and eliminated barriers that restrained economic activity. Georgia, after 2004, implemented one of the deepest anti-corruption reforms in the post-Soviet world. The result was not a miracle. It was the logical consequence of creating an environment where producing, investing, and entrepreneurship became attractive again.
The phenomenon did not occur only in Eastern Europe and the Caucasus. Panama chose to become the logistical and financial hub of the hemisphere—and went from US$6,856 per person in 2000 to US$17,123 in 2024. Costa Rica chose precision medical manufacturing and free-trade zones, and tripled the gap separating it from Guatemala. The Dominican Republic, which in 2000 was only 30% wealthier than us, is now 110% wealthier—supported by investment exceeding 28% of GDP, a threshold Guatemala has never reached. None waited for perfect conditions. All made a strategic decision about their model before having all the resources to execute it. Remittances may ease the present. But they do not build a different future.
The problem is not that remittances arrive. The problem is that they have ended up replacing a development strategy. Today they finance much of the consumption that sustains economic growth and, at the same time, generate enough political comfort to avoid meaningful reforms. It is a cycle that works as long as remittances continue to grow. But they depend on factors Guatemala does not control: U.S. immigration policy, the health of the American economy, and the willingness of new generations of migrants to keep sending money home. When one of those variables changes—and sooner or later it will—the fragility of the model will be exposed. And if by then Guatemala has not built more exports and more productive investment, growth will begin to lose its real support.
Demetrio still managed to correct course in time. His son reduced the excesses and succeeded in buying the Corolla in nineteen months instead of twenty-seven. But if Guatemala continues expanding spending, postponing reforms, and celebrating remittance-driven growth as though it were a development strategy, Demetrio’s grandson may discover that the car is once again out of reach.
Not because the world changed.
But because Guatemala decided to imitate what does not work and call it progress.
And for that stomachache, Alka-Seltzer will no longer be enough.
Ramiro Bolaños, PhD. President of the Center for Thought and Action: Factoría Libertatis
