Project description

Title: Strengthening Guatemala's Position on the International Market
Commissioned by: European Union
Financier: European Commission / EuropeAid
Country: Guatemala
Lead executing agency: Ministry of Economics
Overall term: March 2008 to February 2011

Context

The trade agreement with the European Union and Central and North America constitutes an opportunity and a challenge for Guatemala at one and the same time.

The overall economy of the country has grown only slowly over the past few years, and average per capita income is stagnating. A positive tendency is becoming apparent in regard to foreign trade, however: the proportion of non-traditional products has been rising and has now outgrown exports of coffee, bananas and sugar. If positive economic development is to gather momentum, exports must continue to be diversified and competitively marketed. State institutions and private companies should therefore be promoted, so that they can react effectively to circumstances as they change.

The programme Strengthening Guatemala's Position on the International Market, financed by the European Union, is one facet of the European engagement to strengthen the country's economic development and promote its integration into regional and international economic entities.

Objective

Guatemala's economy and labour market improve sustainably.

Approach

GIZ International Services advises the Ministry of Economics on planning, implementing and monitoring the programme. The focus is on five outcomes:

• Strengthening institutions
  Public and private institutions are enabled to devise and implement economic policies, and to contribute to the promotion of investments and foreign trade relations. 
• Raising quality standards
  Quality infrastructure, for example in terms of norms, accreditation, certification and metrology, is developed and expanded, so that Guatemalan products become competitive on international markets.
• Promoting foreign trade
  Measures are taken to improve the image of Guatemalan products on international markets: public relations campaigns, trade fairs, market analyses and so on.
• Strengthening of major negotiators
  Major negotiators in the public and private sectors are trained to represent Guatemala's interests successfully during the negotiation of international agreements.
• Improving the investment climate
  Analyses are conducted and strategies developed and carried out with an eye to creating framework conditions that attract investors and increasing the readiness of foreigners to invest in Guatemala.

Results achieved so far

The project is in its third year of implementation. So far it has contributed to the following results:

Strengthening institutions
A national policy on foreign trade and investment promotion has been developed by means of a public-private dialogue. The Ministry of Economics thus has a framework that enables a target-oriented approach to promotional instruments. Through training, human and technical resources as well as strategy development, the capacity and efficiency of the relevant institutions (including the national export promotion agency Guatemala Trade&Invest) and sections of the Ministry of Economics (including the Market Information department of the Trade Commission) have grown and their service delivery has improved. The establishment of a register of credit guarantees, a patent register and an IT-enabled business register has boosted businesses’ access to relevant information and capital.

Strengthening the national quality system
The national quality system is organised efficiently and ensures standardisation, accreditation, certification and metrology, thus improving the prospects of Guatemalan products on international markets. A proposal for legislative reform of the national quality system and a law on metrology have been submitted. Eight national laboratories are better equipped and specialist staff have been trained.

Promoting foreign trade
The establishment of a department for market analysis and information within the Ministry of Economics, as well as an integrated information system and the promotion of Guatemala Trade&Invest, has improved services for businesses, particularly their access to market and export related information.
Additionally, the programme contributes to improving the image of Guatemalan products and services abroad by supporting Guatemala’s participation in international fairs and trade missions and the expansion of the national programme for economic delegations.

Strengthening negotiation skills
The conditions for the efficient administration of rulings from international trade agreements have been created by the introduction of a training programme in the Ministry. So far, 43 participants have taken part in seminars to improve their negotiation and communication skills, as well as their knowledge of international agreements. The programme has successfully contributed to the introduction of a post-graduate course on Central American integration law. Up to now, 30 people have graduated from the course.

Improving the investment climate
A process has been launched to lay down an integrated investment promotion policy and an action plan for its implementation. With programme support, an investment promotion section (Invest Guatemala) was established within Guatemala Trade&Invest.