In Ibero-America, many countries have implemented competition laws, from Colombia in 1959 to Paraguay in 2014, with the intention of stimulating their economies. However, the results have been modest.
Guatemala’s economic future depends on several essential factors: investment, competition, capital accumulation, and the fight against corruption. These not only influence our capacity for growth, but also define the kind of society in which we want to live. The orientation of the State is crucial in these matters, as it establishes the rules that can lead us either toward progress or stagnation.
In Ibero-America, many countries have implemented competition laws, from Colombia in 1959 to Paraguay in 2014, with the intention of stimulating their economies. However, the results have been modest. Their economic growth rates have not improved significantly, and their economic complexity, which measures the capacity to diversify and sophisticate production, remains limited. This is a problem, since economic complexity is fundamental for structuring robust competition and fostering long-term development.
In our country, barriers to trade remain high. Import Tariff Duties (DAI) range from 0% to 30% and can, for example, reach up to 40% on certain liquors. This unnecessary protection for domestic manufacturers is not the path toward competitiveness. If we simplified this system by establishing a single 10% DAI for all imported products, the entry of goods would become easier, many products would become cheaper because supply would increase, and it would eliminate the discretion of customs officials when categorizing products.
But what would truly make our industries more competitive would be the elimination of the specific tax on alcoholic beverages, which taxes distribution at rates between 7.5% and 8.5%. This and other specific taxes, such as the specific tax on cement or the ISO, not only hinder domestic competition, but also favor foreign producers who do not face these taxes in their countries of origin. Altogether, these taxes represent barely 1.4% of SAT tax revenue, an amount that does not justify the distortions they generate in the market.
Guatemalan liquors, for example, have already demonstrated their competitiveness at the international level. Ron Zacapa Centenario has been a winner in the Super Premium category internationally and has therefore been recognized as the best rum in the world; Indita de Quetzalteca has gained ground in the nostalgic market in the United States, and Cerveza Gallo has won a Gold Medal at Monde Selection competing against more than 500 beers from around the world, while also being distinguished as a “Hot Brand” in the United States. These products prove that we do not need high tariffs to stand out on the global stage. By eliminating specific taxes and reducing import tariffs, we will increase supply, reduce prices, and, most importantly, facilitate capital accumulation for our producers.
If we also dare, if we choose freedom and leave behind the burden of interventionism and corruption, we will not only transform our economy, but also our identity as a nation. Freedom is our opportunity, and it is in our hands to seize it today.
Capital accumulation is the cornerstone of economic development. “Wealth attracts more wealth,” says the popular proverb, and for investment to prosper, we need a regulatory framework that encourages economic freedom. Countries such as Armenia, Georgia, Bulgaria, and Mauritius are examples of the power of open economies with high levels of capital accumulation. Through reforms based on economic liberalization, they have achieved growth rates exceeding 10% annually. In contrast, competition laws, if not accompanied by economic openness, have a very limited impact.
It is precisely this liberalization that can also become our most effective weapon against corruption. We must avoid nepotism and corruption, which grant privileges based on political connections rather than merit. An open economy, with fewer rules and regulators, would reduce the opportunities for officials to grant favors and privileges. By simplifying the system, the gaps that facilitate corruption are eliminated, while at the same time opening new opportunities for all economic actors, even the most disadvantaged.
But this is not merely an economic change; it is a change in mentality. It is believing in ourselves, in our ability to compete and prosper without depending on favors or privileges. It is time to leave fear behind and commit to a Guatemala where every citizen has the freedom to build their own future. Where the rules of the game are clear, fair, and equitable, and where success is measured by each individual’s tenacity and ingenuity, not by their connections.
Furthermore, I can assure you that the world will not wait. The countries mentioned, which not long ago were on the periphery of development, are now protagonists thanks to bold and decisive policies. If we also dare, if we choose freedom and leave behind the burden of interventionism and corruption, we will not only transform our economy, but also our identity as a nation. Freedom is our opportunity, and it is in our hands to seize it today.
