Alliance for Prosperity of the Northern Triangle AmCham Guatemala Position Paper

Alliance for Prosperity of the Northern Triangle AmCham Guatemala Position Paper

 

Written by:

Juan Pablo Carrasco de Groote – Vicepresident of AmCham Guatemala

The following is a position paper from the American Chamber of Commerce in Guatemala (AmCham) as it relates to the United States government’s initiative “Alliance for the Prosperity of the Northern Triangle” / “Alliance for Prosperity” (A4P) which covers three countries:  El Salvador, Honduras, and Guatemala.

Background:

 Over the past years, a wave of emigration has occurred from the Central American Northern Triangle countries to the United States, with a number of these immigrants being unaccompanied children.  Such wave has created social, political and financial pressures within the United States and simultaneously, with 9% of the region’s population emigrating, has negatively affected the Northern Triangle by creating a serious drain of human resources.

On February 2, 2015, the United States Obama-Biden Administration, through the United States Department of State, sent the 114th Congress their FY2016 Congressional Budget Justification (CBJ).  The CBJ requested over $1 billion USD in 2016 foreign assistance to be directed towards the Northern Triangle region in order to address the underlying causes of the over 112,000 children and family members crossing the U.S. border in 2014.  Approximately $785 million in Development Assistance funding through the USAID would mainly focus on improving the business climate for private-sector job creation in Central America, focusing on “job creation” for the most vulnerable populations through what is called the “Alliance for Prosperity”.

The Alliance for Prosperity (A4P) offers a great opportunity to stimulate the economies of the Northern Triangle nations and help to further shift positively the internal political and social aspects. In order to address the emigration issue, the A4P initiative has published four goals:

  1. Stimulate the productive sector to create economic opportunities;
  2. Develop economic growth opportunities;
  3. Improve public safety and enhancing access to legal systems; and
  4. Strengthen institutions to increase people’s trust in the state.

AmCham Recommendations:

 As a representative of the private sector promoting bilateral trade and investment with the US, AmCham believes that business provides stability and prosperity for the region and is vital to address the issues of A4P.  Furthermore, AmCham considers that in order for A4P to be successful, the region’s governments should provide security, a strong rule of law that enables business to operate with proficiency and fairness without corruption, and stable tax, regulatory and monetary policies.

While the published background for the A4P did not provide much detail on the definition or the expected results of the initiative, AmCham believes the following considerations should be taken into account in order to achieve the four goals of A4P:

 

  1. Economic Opportunity:  In order to have prosperity in the regions most effected by emigration, the first priority is to provide economic opportunity in these areas.  As most of the emigration areas are from the rural regions, AmCham believes that stimulating the economy within the rural areas through business development is the initial solution.  By enhancing businesses within these regions, additional job opportunities and infrastructure, such as ports and roads, will flood into these areas.  Particularly given the geographical nature of these areas, focusing on improving the agricultural sector in these regions will provide for a sustainable economic growth. To be successful in this endeavor, issues relating to basic corn and bean production as well as improved wages for cash crops will need to be addressed by both the public and private sectors.  When the agricultural sector has seen success in these regions, other traditional business can and will develop.  In turn, the end result will be much less emigration.  Further sustainable business solutions would include amongst others, development of the necessary infrastructure (ports, roads, multimodal facilities in the border with Mexico, etc.), logistics and customs facilitation, and fiscal benefits which promote investment in these areas.

 

  1. National Security:  Due to a variety of factors, security for both citizens and businesses within Guatemala causes varying levels of instability and is often the underlying reason that many Guatemalan citizens send their children to immigrate north.  Extortion, drug trafficking, and gang-related activities are commonplace in many regions of the county.  Additionally, where theft is commonplace, many businesses everyday activities are threatened due to the instability and extortion.  To achieve the goals of A4P, the underlying security risks must be addressed to ensure that both citizens and businesses feel confident to remain within the country. Effective cooperation between the public and private sector will be key to address and face this issue.

 

  1. Education and Workforce Training:  The areas of emigration also lack the education and vocational training needed to assist citizens to becoming financially stable.  One solution could be to offer electronic/web-based solutions that would work alongside existing governmental educational structures to help train and educate citizens for technical training skills and/or English as a second language.  Providing web-based education and training is a low-cost model to reaching a larger number of individuals and preparing them for the workforce.  For example, multinational companies often use Guatemalan call centers to facilitate international customer service experiences.  By training citizens to speak languages such as English, A4P would be providing technical skills that would be able to put into immediate use at call centers in this areas.

 

  1. Health Care:  Just as with United States President Obama’s work towards ensuring U.S. citizens have access to health care to improve the lives of Americans, Guatemalans are at an even greater disadvantage in terms of receiving access to health care.  Some studies have shown that a major reason for emigration is access to medical care.  AmCham would propose private sector/volunteer solutions and programs to this issue and would promote government involvement when such governments could be found and could reduce the need for emigration.

 

With the above considerations and recommendations, it is important to consider that AmCham has within its membership the means to implement such programs, existing products and programs to assist in the goals, and would be available to discuss this paper in more detail.

AmCham is a non-profit service organization, committed to fostering trade and investment between the United States and Guatemala and to provide effective support for membership needs by using all available technical and human resources.   AmCham offers many benefits, including networking and business facilitation opportunities, government relations, sector committee participation, events, commercial information resources, job bank services, publications, and more.

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