Too much discussion of Guatemala’s worrying state of corruption and impunity in light of President Morales’ decision to expel CICIG, the UN-backed anti-corruption body.
But what about the economy?
On Jan. 9, a Moody’s investor service report said that expelling CICIG would result in a credit negative rating for the country. This put Guatemala’s business community on alert. Its immediate effect is that interest rates could go up.
“Foreign investment has constantly declined in the last five years,” said Juan Carlos Zapata, executive director of the Guatemalan Development Foundation (Fundesa), to AQ. “Investors are concerned about the country’s precarious rule of law and about some questionable court rulings that have hurt businesses,” he says.
But Zapata considers the investors are more concerned about getting proper regulations than with the future of CICIG. “Regardless of what happens, the fight against corruption will continue,” he says.
Other critics of Morales’ decision suggested breaking Guatemala’s commitment to the UN could deter foreign investment.
“Who would risk investing in a country where there are no legal guarantees?” asked Marielos Chang, co-founder of Red Ciudadana, an organization that promotes open government and transparency in elections. “Ethical companies that care about transparency and compliance will not want to invest in a country like this one,” she told AQ.
“The way the government is trying to terminate the CICIG agreement before its time sends a terrible message to the international community and to investors,” Phillip Chicola, a political analyst, told AQ. “A country that doesn’t respect its courts is telling investors that that their assets are at risk.”