Amcham expresses concern about the institutional weakening and says it has already begun to affect foreign direct investment

Michael Taylor
Michael Taylor

Global Courant

Amcham stated that there is concern “over the institutional weakening that has lacerated democracy, hindering the conclusion of a legitimate electoral process,” and which, it indicates, also began to affect the attraction of Foreign Direct Investment (FDI).

The entity added in a statement that they motivate the different powers of the State to provide the necessary confidence in the country, avoid polarization and resolve through dialogue; that the decision made at the polls during the first round be respected, to comply with the second electoral round on August 20 and prepare for a change of government on January 14, 2024.

Asked about the impact or repercussion that this situation is having on FDI, Waleska Sterkel de Ortiz, executive director of that organization, responded that they have received calls from several Amcham partner companies “concerned about the lack of certainty.”

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“Uncertainty is not good. The eyes of the world are on Guatemala. The election process must be respected,” added the executive.

He explained that one of the elements that investors analyze is the lack of certainty in a country because this uncertainty can have a significant impact on their investments and on the business climate in general.

“Political, economic and legal certainty is crucial for making informed investment decisions and for business stability,” added the board through the communication office.

“When there is uncertainty, investors may face additional risks, such as unforeseen changes in government policies, economic instability or legal uncertainty. These factors can negatively affect investment returns and make long-term planning difficult,” he said, though he did not name any amount of investment or number of companies affected to date.

He explained that investors usually assess the level of certainty in a country before making investments, since they seek more predictable and stable environments to protect their assets and maximize their returns.

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In its statement Amcham details important points, given the situation facing the electoral process:

Concern for the institutional weakening that has lacerated democracy, hindering the conclusion of a legitimate electoral process. US and Guatemalan companies seek to operate in a business climate with political and economic stability. But, the attraction of Foreign Direct Investment (FDI) begins to be affected by the lack of legal certainty. We encourage the different powers of the State to provide the necessary confidence in the country, avoid polarization and resolve through dialogue. We urge all citizens to remain calm, so that the electoral process can advance in a transparent and coherent manner. In order to strengthen democracy and the country’s institutionality, without hindering the economic activity that generates employment and development in the country. We reiterate that the institutions are called upon to respect the decision of the polls and to comply with the mandate to carry out the second round of elections on August 20, as well as to prepare for a change of government on January 14, 2024.

In figures

Guatemala attracted foreign direct investment (FDI) for US$394.6 million in the first quarter of 2023 according to data from the Bank of Guatemala, representing a growth of 30% compared to the same period in 2022 when it stood at US$303.9 million.

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Amcham expresses concern about the institutional weakening and says it has already begun to affect foreign direct investment

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