Socrates said —according to Plato in his dialogue with Cephalus— that keeping one’s word is a foundational principle of justice and coexistence: “The essence of justice consists in each person fulfilling what was promised and returning what was received.” Aristotle confirmed this in his Nicomachean Ethics (340 B.C.): “Legal justice must be followed once laws are approved; whoever transgresses them suffers harm and social dishonor.” And Friedrich Hayek summarized it in Law, Legislation and Liberty (1979): “Respecting contracts —keeping one’s word— is fundamental to the rule of law and the evolution of a free society.”
Guatemala has forgotten that elementary lesson. From the colonial era to the present day, our economic history has been a catalogue of broken trust. Governments that change the rules, contracts declared invalid, confiscated property, unpaid debts, and broken promises. It is no coincidence that the world sees us as an unreliable partner: we have cultivated that image through centuries of poor decisions.
Right now, President Arévalo is breaking records in international litigation, but above all he continues a long tradition of tarnishing Guatemala’s honor before the world. In just one year, his government has already accumulated an international ruling of USD 64.5 million against it in the Energía y Renovación Holding case; it faces a potential USD 100 million lawsuit from Mayaníquel, and the decision not to renew the oil contract with Perenco —a company with French and British capital— was a diplomatic recklessness. Offending France and the United Kingdom with an improvised cancellation in order to benefit a Mexican company through an obscure emergency contract is, in diplomatic terms, equivalent to a direct insult against two historic allies.
This present situation is not an isolated event. It is the continuation of a historical pattern. As Murdo MacLeod explained in his study of the colonial economy of the Kingdom of Guatemala: “If patriotism and fear of the law suggested to the Central American businessman that he should not smuggle, why did he do it? The answer was desperation. (…) By 1680, it was evident to any ambitious merchant that direct trade with foreign markets was the only path toward relative prosperity and reward for his efforts.” For centuries, the lack of legal certainty has fueled conflict and litigation, pushing international investors to resort to ICSID, the World Bank tribunal, because here there is no certainty that signed agreements will be respected.
This practice goes back a long way. In 1767, the expulsion of the Jesuits decreed by Charles III confiscated schools, estates, and convents. The warning was clear: in these lands, property could vanish by decree. A century later, in 1871, the liberals Miguel García Granados and Justo Rufino Barrios applied the “dead hands” laws: they expropriated ecclesiastical and communal property. For the Holy See and for Catholic Europe, Guatemala became marked as a place unsafe for property rights.
The English debt of 1825, issued by the Central American Federation, remained unpaid for decades. Rafael Carrera partially recognized it, Estrada Cabrera attempted to renegotiate it, and only Jorge Ubico paid it more than a century later. For the British, Guatemala was synonymous with default for over one hundred years.
In 1920, Carlos Herrera y Luna, founder of Ingenio Pantaleón, became president after the fall of Estrada Cabrera. As a serious businessman, he attempted to revoke harmful contracts with the United Fruit Company. The response was a coup d’état that overthrew him and installed General José María Orellana, who answered to the interests of the American fruit company. Guatemala then learned the wrong lesson: strongmen obey external economic power, not the law. Shortly afterward, in 1941, under Jorge Ubico, the State confiscated German properties in Verapaz, San Marcos, and other departments. Having the wrong nationality was enough to lose property, investments, work, and the legacy of generations. Germany has never forgotten that affront.
Under Romeo Lucas García (1980), the CELGUSA paper plant in Zacapa collapsed just days after being inaugurated. Spain never recovered its investment; but in 2001, under Alfonso Portillo, Guatemala recognized a debt of more than USD 500 million. A few years later, in 2006, Óscar Berger’s government declared the Ferrovías contract with the American company RDC harmful to the State. In 2012, an international ruling forced Guatemala to pay USD 11.3 million. The signal was unmistakable: contracts could be invalidated according to political convenience. In 2010, during Álvaro Colom’s administration, the Marlin Mine, operated by Montana Exploradora (Goldcorp, Canada), was suspended due to precautionary measures issued by the Inter-American Commission on Human Rights. There was no monetary compensation, but there were global headlines. Guatemala had become a country where even mining investments lacked certainty.
Only through virtue, and through the strength of honoring what has been promised, do countries change their destiny. Guatemala will be no exception if we decide to honor our word.
In 2016, the Quetzal Container Terminal (TCQ), corruptly awarded during Otto Pérez Molina’s government to the Catalan company TCB, was declared null by Jimmy Morales’s administration. The Dutch company APM Terminals, which had acquired the operation, paid USD 43.2 million in civil reparations to the State. The money entered public coffers, but Guatemala’s international reputation remained damaged.
Under Jimmy Morales, the Exmingua case emerged in 2016 involving the “La Puya” mine. The American company Kappes, Cassiday & Associates is claiming USD 350.5 million over suspended licenses. Alejandro Giammattei generated another bombshell: the Grupo Energía Bogotá/TRECSA arbitration, involving a USD 403 million claim for breaches in the transmission network. Furthermore, in 2020, during his administration, a tariff dispute erupted with TECO Energy, an American shareholder in EEGSA, which resulted in another international condemnation: USD 26.8 million. The CNEE, our electricity regulator, was exposed as an institution incapable of generating predictability. And under the same Giammattei administration appeared Mayaníquel, with intentions of claiming USD 100 million, which nobody knows how Bernardo Arévalo’s government will handle. A clear example came in June 2025, when Guatemala was ordered in the Energía y Renovación Holding case to pay USD 64.5 million. And months later, with Perenco, Arévalo’s government not only canceled a key contract, but also damaged relations with France and the United Kingdom by improvising emergency awards to a Mexican company.
The balance is devastating. In final rulings alone, Guatemala has lost more than USD 114 million in present value. In ongoing claims, it faces more than USD 1 billion. If we add CELGUSA, the historical cost exceeds USD 1.6 billion.
But money is only part of the story. The real cost is reputation. Guatemala has the lowest percentage of foreign direct investment relative to GDP in all of Latin America: while Panama has reached 10%, Nicaragua exceeds 6%, Costa Rica 5%, and the Dominican Republic reaches 4%, Guatemala barely hovers around 1.6%. And it is not because of a lack of opportunities, but because of an excess of distrust.
Our history explains it: from the expulsion of the Jesuits to the Perenco oil contract, we have turned noncompliance into a State policy. We have confiscated, annulled, renegotiated, and defaulted. And every time, the world has taken note.
And here arises the question we cannot avoid: if Guatemala were a person, with this history of defaults, lawsuits, and frauds, would you trust it with your money? Would you invest in its business? Think about it. That is how the world sees us.
This is the invisible wall blocking our development. A wall taller than any border, heavier than any debt. And we can only tear it down if we recover the elementary virtue of honoring what we promise.
In the coming articles we will see the contrast. Just as Guatemala has broken trust again and again, history offers us examples of men and women who built it. From Terentilius Arsa in republican Rome to George Washington, Margaret Thatcher, Ronald Reagan, and Javier Milei, we will discover in a series of three articles some 35 historical heroes of trust. And we will understand that only through virtue, and through the strength of fulfilling promises, do countries change their destiny. Guatemala will be no exception if we decide to honor our word.
