FUNDESA was established in 1984 during a crucial juncture in Guatemala’s history. Emerging from a protracted internal armed conflict, the country faced a daunting task: transforming its socio-economic landscape to attract foreign direct investment while crafting public policies aimed at enhancing competitiveness. In its early days, FUNDESA focused primarily on promoting Guatemala’s image on the global stage, endeavoring to help the world recognize the country’s vast potential. Over time, however, the organization’s mission evolved. Today, FUNDESA is deeply invested in improving internal public policies that facilitate investment and infrastructure development, solidifying its position as a leading voice on matters of competitiveness and productivity.

As a private, non-profit organization composed of business leaders, FUNDESA adopts a collaborative approach, engaging with all public institutions, including the government, Congress, and the judicial branch. This cooperation has been particularly crucial since 2020, when the COVID-19 pandemic underscored the need for a resilient and adaptive economy. In response, FUNDESA established a comprehensive ten-year roadmap designed to outline the necessary actions for bolstering foreign direct investment and improving infrastructure. “Among our goals is the acceleration of road network construction from 200 kilometers annually to an impressive 2,000 kilometers, along with enhanced connectivity for ports and airports”, says Juan Carlos Zapata, Executive Director of FUNDESA.. The plan also emphasizes investing in human capital through education and skills development, focusing on training in English, programming, mathematics, and managerial skills.

Moreover, the agenda places significant emphasis on legal certainty and digitalization. A clear strategy is being implemented to digitize processes within public administration, reflecting a commitment to modernizing the state’s operational capabilities. Through a variety of events, forums, publications, and partnerships with public institutions, FUNDESA strives to elevate the critical issues necessary for Guatemala’s economic and social advancement.

“Guatemala No Se Detiene,” a strategic initiative led by FUNDESA, represents a comprehensive plan aimed at attracting foreign investment. This initiative is built on the foundation of establishing legal certainty, particularly for infrastructure projects that can significantly enhance Guatemala’s attractiveness to international investors. The recent approval of new legislation is set to facilitate this endeavor. The “Guatemala No Se Detiene” initiative underscores the importance of a digital transformation, with a vision for a fully digital state supported by the recently enacted Anti-Red Tape Law, mandating all executive institutions to digitize their processes by August 2024.

“Key reforms are also underway to modernize legislation, enhance competitiveness, and promote national agreements focused on transparency”, points out Juan Carlos Zapata. Collaborations with countries like Estonia, recognized for its robust e-governance framework, have bolstered Guatemala’s digital agenda, providing a model for effective governance in the digital age.

Despite allocating 7% of its GDP to infrastructure, Guatemala’s investment in this sector pales in comparison to countries like the Dominican Republic, which invests over 34% of its GDP, including 5% in public investment. Guatemala’s overall investment level, around 17% of GDP, limits its progress and growth potential. Consequently, there is a pressing need to refine contracting processes and land acquisition methods for infrastructure projects. Current regulations mandate that all Public-Private Partnership (PPP) initiatives require Congressional approval, often resulting in significant delays. For instance, the Escuintla-Puerto Quetzal highway project, the first PPP initiative in the country, took nearly three years to gain approval. Proposed reforms aim to enable self-sustainable projects to bypass Congressional approval, instead allowing authorization by the governing board of ANADIE, the agency responsible for overseeing PPPs. Additionally, a recent ruling by the Constitutional Court permits municipal-level PPPs, which could expedite local infrastructure projects such as the proposed “Green Corridor,” intended to connect Guatemala City with surrounding municipalities.

At present, a pivotal legislative effort, the Strategic Road Infrastructure Law (Initiative 5431), is awaiting approval. This legislation seeks to enhance investment in road infrastructure, a vital component for improving mobility and logistical connectivity in Guatemala. The need for such development is pressing, as Guatemala lags behind many other nations in Latin America regarding infrastructure advancement.

Despite these challenges, Guatemala harbors substantial opportunities for growth. With a youthful population—averaging just 27 years old—and rapid urbanization, the country stands at the brink of transformation. Currently, 53% of the population resides in urban areas, a figure projected to rise to 80% in the coming years. This demographic shift is catalyzing demand for infrastructure, technology, and real estate development, a trend evident in the ongoing construction boom in Guatemala City.

Furthermore, the country benefits from competitive electricity and telecommunications laws, a stable macroeconomic environment, and a consistent currency exchange rate, which has remained unchanged for over two decades. These factors position Guatemala as an attractive destination for nearshoring, particularly in sectors such as manufacturing, food production, textiles, and technology.

However, to fully unlock its potential and attract the foreign investment needed to drive economic growth, Guatemala must prioritize significant advancements in infrastructure, legal reforms, and human capital development. As FUNDESA continues its mission to elevate the country’s competitiveness and productivity, the future holds promise for Guatemala, a nation poised for a brighter economic horizon.