The recent publication of the National Survey of Living Conditions (Encovi 2023) has reignited the debate on poverty in Guatemala. According to the National Statistics Institute (INE), 56% of Guatemalans, equivalent to 9.7 million people, live in poverty, a figure that has remained almost unchanged since 2000. Of these, a concerning 16.2%, or 2.8 million, live in conditions of extreme vulnerability.
For libertarians, fighting poverty means maximizing individual opportunities. Daniel Fernández and Olav Dirkmaat, in UFM Market Trends, observe that GDP per capita grew 41% between 2000 and 2022. Using ECLAC methodologies, they recalculated the poor population according to the international threshold of USD 6.85 per day at 26.6%, a value very similar to the World Bank’s 24.1%.
Hugo Maúl, member of the INE, highlights in his article “Poverty: The Problem Is Not the Formula, It Is Reality,” that the stagnation for more than two decades in poverty levels demonstrates the inability of the current economic model to generate the necessary opportunities.
I agree with the idea that the real challenge is not whether poverty has increased or decreased, but how to eradicate it. Isaiah Berlin, defender of classical liberalism, distinguishes between negative liberty (freedom from interference) and positive liberty (freedom to realize one’s own potential). From this perspective, poverty is a barrier that limits positive liberty, preventing people from achieving their full potential. As a libertarian, I am committed to fighting for a society where the government limits its interference, but also opens more opportunities so that fewer and fewer people lack the possibility of choosing the standard of living they desire.
According to the World Bank, Guatemala ranks 109th in global poverty, with 24.1% of the population affected, similar to countries such as Tajikistan, Namibia, and Senegal. We are far from Finland or Switzerland, which have eradicated poverty through greater economic freedom. We are also behind our regional peers, who, with more economic freedom, (Switzerland is ranked 2nd, Finland 12th, Chile 21st, Uruguay 27th, Costa Rica 37th, Panama 52nd, Dominican Republic 56th, and Guatemala 63rd) have reduced poverty such as Chile, with 1.3%; Uruguay, with 1.6%; Costa Rica, with 4.4%; Panama, with 4.8%; and the Dominican Republic, with 6.1% poverty.
The solution lies in promoting national and foreign investment, accumulating more capital, creating more businesses, reducing bureaucracy, increasing transparency, and streamlining processes. We need more economic freedom, more growth, and a transformative model for our country and its educational system.
The countries with less poverty than Guatemala share characteristics such as greater economic freedom; higher GDP per capita; rapid growth; more years of schooling; and a strong capacity for critical thinking. We are so far behind in our average schooling levels of 5.7 years that they are equivalent to those of Finland in 1860; Switzerland in 1890; Uruguay in 1970; Panama and Costa Rica in 1975; the Dominican Republic in 1985; and Chile in 1990.
According to the INE, in Guatemala no one with higher education lives in extreme poverty, while 44.2% of those without studies are poor. If 63% of the 22 billion invested in education are allocated to preschool and primary education, why are 42.9% of those who only complete primary school still poor? If those who reach secondary and university education rarely fall into extreme poverty, why does only 9% of the education budget go to basic and diversified education? Despite the budget expansion of 14 billion, less than 10% was allocated to education.
The solution lies in promoting national and foreign investment, accumulating more capital, creating more businesses, reducing bureaucracy, increasing transparency, and streamlining processes. We need more economic freedom, more growth, and a transformative model for our country and its educational system. I invite everyone, from citizens to business and political leaders, to take responsibility for driving this challenge forward.
In the coming weeks we will explore how to generate more wealth, but in the meantime let us agree that in order to reduce poverty and create more opportunities, education must be a national priority if we truly wish to build a strong and prosperous Guatemala.
