Imagine a country where every family contributes more than 5,000 dollars a year to the government, only to receive broken roads, stagnant schools, and understocked hospitals. That is Guatemala in 2025.
With a budget of 148 billion quetzales (around 19.2 billion dollars), the State allocates between 65% and 70% to current expenditures — salaries, contracts, operations — leaving only crumbs for real investment. Of that spending, 3.12 billion goes to line item 029, temporary contracts that, far from strengthening public services, often serve to repay political favors.
Meanwhile, nearly 80% of opinion leaders, according to the Diestra Perception Diagnosis, believe the country is heading in the wrong direction. And it is not difficult to understand why: with a life expectancy of barely 69 years and an average of 5.7 years of schooling — levels comparable to Togo, Angola, or Haiti — Guatemala remains stuck at the lowest levels of human development, not only in Latin America, but in the world.
Although the State represents only 15.8% of GDP — far below the regional average of 29.7% — its inefficiency is alarming. Of the 148 billion budgeted for 2025, around 104 billion are consumed by operations. Each inhabitant contributes, on average, 1,090 dollars per year to sustain a state apparatus that neither improves roads nor transforms airports nor reduces malnutrition nor strengthens security.
The increase in the budget between 2023 and 2025 — from 124 to 148 billion — has only deepened the fiscal deficit, increasing the public debt that our children will pay through inflation, higher taxes, or lower growth.
Line item 029 is a glaring example: in Health alone, it represents 20-25% of personnel spending, yet many positions are administrative, not medical. With those funds, 6,000 new health positions could be financed, bringing medical care to forgotten communities.
In Education, where 22 billion quetzales will be spent in 2025, 70-75% goes to salaries, but students barely reach 5.7 years of schooling. We are last in Latin America, tied with Haiti, which spends only 51 dollars annually per student, while Guatemala triples that figure without obtaining better results. Being more inefficient than Haiti is not easy, but we are achieving it.
The World Bank warned as early as 2017 that corruption (22.8%), political instability (21.2%), and informality (17.4%) are the main obstacles for businesses. Obtaining a permit can take up to 93 days; managers dedicate nearly 10% of their time to useless procedures. Bureaucracy does not just delay; it suffocates.
The latest Diestra Perception Diagnosis confirms the exhaustion: 76% believe Guatemala is doing badly, and 57.6% say “definitely not” to the current direction. Only 1.5% remain optimistic without reservations. The report identifies seven critical crises: ungovernability, insecurity, economic stagnation, collapsed infrastructure, deficient health and education systems, and corruption. Without profound changes, discontent will open the door to populism or instability.
And far from correcting course, current decisions are worsening the problem.
Guatemala exports only 17% of its GDP, compared to economies such as Singapore or South Korea, where exports exceed 50%. But while the world enters trade wars, here minimum wage increases of 10% are decreed without measuring the consequences: punishing the profitability of exporters, agricultural companies, and service businesses. And what will happen this year if we repeat the mistake of increasing the minimum wage another 10%? We would rise from fourth to second place in Latin America, above Uruguay and Chile, despite ranking last in education — and beware, because Bukele’s government has just decreed a 12% increase in the minimum wage in El Salvador.
As Nassim Taleb warned, systems fail when leaders do not face the consequences of their mistakes. Will we have the courage to rescue Guatemala before it is too late?
Furthermore, with another 18% increase in the budget for 2026, public spending will soon exceed the total value of our exports. And what will we receive in return? More bureaucracy, less competitiveness, and a strangled labor market.
It is not true that the Guatemalan State is small.
According to the Ministry of Economy report, public administration is the country’s largest formal employer, 35% larger than the commerce sector, and ranks third in highest salaries. And the results? Where are they?
In the United States, Elon Musk leads the Department of Government Efficiency (DOGE), with the goal of saving 200 billion dollars annually by reducing bureaucracy and unnecessary spending. Instead of expanding the State, they seek to optimize it. That disruptive mindset is precisely what Guatemala urgently needs.
What would happen if we adopted zero-based budgeting, where every spending item must be justified from scratch?
What would happen if we promoted a true digital transformation, not merely digitizing forms, but automating processes, eliminating bureaucracy, and exposing corruption?
What would happen if we professionalized public service, hiring based on merit and rewarding results as Singapore does?
What would happen if we audited all 029 contracts, eliminating ghost positions and redirecting resources to real services?
A Guatemalan DOGE is not a dream: it is an urgent necessity.
A project that reduces operating expenditures by at least 30% over five years would free resources for infrastructure, health, security, and education — the things that truly matter.
Otherwise, Guatemala’s macroeconomic stability — its last remaining pillar — will collapse under the weight of debt, inefficiency, and disillusionment. As Nassim Taleb warned, systems fail when leaders do not face the consequences of their mistakes.
Will we have the courage to rescue Guatemala before it is too late?
