Economic Activity and Tourism in Guatemala

Our first glimpse of the physical features of this country came during a Guatemala City tour when we viewed a three dimensional map about the size of a small children’s playground. From our vantage point about thirty feet on a platform the most obvious thing about the topography was the ubiquitous mountain ranges in the country.

Our tour guide pointed out that about 70% of the country is mountainous, including 32 volcanoes, several of which are still active. The fascinating part about Guatemala is how the physical features really determine the settlement and growth patterns in the country. The principles of economic geography are at the heart of this evolution.

Firstly, the mountain ranges are not conducive to agriculture since the rich volcanic material of the ice ages has taken the best agricultural soil into the valleys between the mountains so this is where the crops are planted. Many of the homes take advantage of the rich soil near the bottom and form sloped terraces where the soil is above average and rain water is more plentiful.

Crops of all kinds are grown including: onions, tomatoes, herbs, sugar cane, bananas, pineapples, citrus, and grains, in just about every location that is capable of agricultural output.

So, in a mostly agricultural society, farmers predominate and people around them produce/import other goods like clothing, footware, furniture, hardware, housewares, crafts and other goods that people need for day to day living.

The tourist trade is an added part of this equation since tourists bring discretionary dollars to a needy population.

The effect of increased numbers of tourists brings more wealth to the region but if there are too many tourists the net effect is an increase in prices for the locals as well.

Craft vendors in Antigua, a well developed, colonial tourist town near Guatemala, are mostly Mayan natives with little disposable income. They are faced with long rides from their poorer neighbourhoods in order the sell to tourists on the streets. Most will never be able to afford to open a business in Antigua so they are relegated to an inferior status on the streets, even though their goods may be of reasonable quality and offered at a fair price.

Essentially, there are fewer vendors on the streets of Antigua, since the tourists are attracted to the fancy shops and boutiques owned by companies of all sizes.

So, the dilemma for government tourist promoters is to ensure that the local vendors and market stall operators continue to benefit from the tourism dollars. By excluding them in towns like Antigua, they and their families will not benefit from more tourism.

As often happens, initiatives like tourism development that give the poor a boost in the beginning, end up being circumvented and gradually provide more revenue for those who least need it, the already well-heeled business types.

A balance must be struck to get the money moving downwards to those in society who need it the most.