Guatemala Country Study Assignment: Vasundhara Pandey

Country Study Assignment- Guatemala
Vasundhara Pandey
Roll no 77, MMS I JBIMS
[e-mail]

Part- I
Introduction
Conducting pure financial analysis of a proposal is like running half the race. It needs to be supplemented with a good understanding of all the elements that the proposal will affect or be affected by. Understanding the political economy of a space helps in getting a good sense of the drivers of growth for that particular space.
Guatemala is popularly known as the ‘Land of eternal spring’. Its most important contribution to the world is coffee. Guatemala is the third largest exporter of coffee in the world. Along with that it is a natural habitat for various endangered species and a land of varied natural resources.

It conducts presidential form of elections. There is a court of constitutionality which has a 5 member team, which officially advises the president. Its members are appointed by the Supreme Court, Congress, the president, the University of San Carlos, and the bar association. The president, who is also commander-in-chief of the armed forces, appoints most military officers, the 22 governors, and other important public and diplomatic officials. Presidential duties include preserving public order, proposing laws, and making an annual presentation of the budget.
There is a 113 member National Congress elected for four-year terms. Ninety-one members are elected from departmental constituencies, while 22 are elected by proportional representation. The Congress imposes taxes, executes the national budget, declares war and makes peace, ratifies treaties and conventions proposed by the president. Congress elects the president of the judiciary and judges of the Supreme Court and courts of appeals. The president may veto congressional bills, but Congress may override by a two-thirds

One such case took place in 1998, when the BAN-GUAT spent over $500 mn to prevent the currency from depreciating. Despite its efforts, the currency depreciated by 15%.
As of 2002, the formal banking system consisted of 32 private commercial banks, three state banks, and several financial houses. Over 18 international banks are represented in one form or another. The five largest banks control approximately 45% of total assets. Several financial institutions collapsed in 1998 and 1999, prompting the government to bring banks into line with the Basel convention on minimum capital requirements. In 2001, the money market rate, was 10.6%.
Along with the BAN-GUAT, the Fund for the Regulation of the Bond Market was created to promote security issues. On account of the Guatemalan preference for concrete investments, there is a hardly developed securities market. The National Stock Exchange of Guatemala known as the Bolsa Nacional de Valores started in 1989 which is also the largest of Guatemala's stock exchanges, where shares from private companies in the country and other securities are traded. There are two other, major stock exchanges, the Bolsa Nacional Global and the Bolsa Agrícola. They were merged to form the Corporación Bursatil in 1994. Three government bonds are traded on the exchanges, including CENIVACUS, CERTIBONO, and