Guatemala - Current economic position and prospects (Vol. 1 of 2)

RESTRICTED V MLJ CA3 Vol. 1 This report was prepared for use within the Bank and its affiliated organizations. I They do not accept responsibility for it' accuracy or completeness. The report. may not be published nor may it be quoted as representing their views. I. x.T1rV1EXTATTnxAT PANTK IOP PR Tn TPTTRUTTCTM% A nIT ThTTTT OVPMVMT TMT\rrVMNATTCV..TAT T1VVTCPTMPMTThJT ASSOCTAT!OV CURRENT ECONOMIC POSITION A 1 T- T r ,rT 1- I'n OF GUAT EMALA (in two volumes) VC)TO.TMF T December 17, 1970 Central America and Caribbean Department  EQUIVALENTS Currency US$1.00 = 1 Quetzal (Q) Measures and Weights 1 manzana = 0.69 hectares (ha) = 1.727 acres 1 quintal = 46 kilograms (kg) = 101 pounds 1 banana box = 42 pounds  TABLE OF CONTENTS VOLIyME I Paee No. BASIC DATA SUMMARY AND CONCLUSIONS .......... T. PROB TEMS ^AND P PRO_P .CTS 1 Past Growt-h and Developmer.t Problem s...... A Development Strategy for the 1970's 4 II. AGRICULTURE. 9 The Role of Agriculture. 9 Maini Problerus .. . . . . . . . . . . . . . . .9 Agricultural Development in the 1970's 13 III. INDUSTRY AND TOURISM . 23 A. Industry ..........................,,.23 Recent Developments .2 Prospects .24 Policies for Industrial Development .2 B. Tourism .. Recent Developments ................... 29 Prospects ................... i s iV. PUBLIC INVESTMENT AND FINANCE ..31 A. Public investment .. Past Performance .31 Required Future investment Levels .J Transport .34 Power and Telecommunication ............. 35 Education .37 Health .39 Housing .41 Thiis report is based on the findings of an economic mission to Guatemala in April 1970 composed of Messrs. Klaus Huber (Chief), Elio Gonelia (Econo- mist), Roberto Echeverria (Economist), Euric Bobb (Economist), Bo Rassmuson (Investment Analyst), Harley Hinrichs (Consultant - Fiscal Economist), Roberto Egli (Consultant - Agricultural Economist).  Table of Contents (Continued) Yage Nr B. Financing Requirempnts 41 Recent Trends . .41 Finanning the Plann -42 C. Mobilization of . i 45 The Revenue Structure .46 The Expenditure Structure 48 Fiscal Capacity .49 Tax PoliCi.S fv, . .... . _ . ................ 53 Summing-up: Alternative Approaches 57 V. MONEY AND CREDIT .58 Mobilization of Private Savings . .58 Di'rectilon of' Private Credit arA Intitutiona LJ4.~cL