Local Competitiveness Index: 203 municipalities improved and 137 fell back compared to 2020

The World Economic Forum defines competitiveness as the set of institutions, policies and factors that determine the level of productivity of a country.

“A competitive economy is a productive economy, and productivity leads to growth, which allows higher levels of income,” said Juan Carlos Paiz, president of Fundesa during the presentation.

The ICL was created based on this methodology, and its objective is to be a tool that allows comparative evaluation of competitiveness in the country at a sub-national level, providing information on the existing gaps in those factors (12 pillars) that directly contribute to increase productivity at the territorial level in Guatemala.

The document has information on 43 indicators from more than 20 official sources and is calculated for the 340 municipalities, 22 departments and 9 intermediate cities.

The findings:

According to the results of the ICL 2021 there are 27 municipalities with a score between 60 and 80 points; It is followed by 249 municipalities with scores between 40 and 60 points; and 64 municipalities with scores between 20 and 40 points.

Jorge Benavides, research partner at Fundesa, in charge of the study, commented that only 12 countries worldwide have between 80 and 100 points in terms of competitiveness; and unfortunately Guatemala does not report municipalities in that category, therefore, the challenge is to get a municipality to locate in that category in the near future.

The 27 municipalities with a score greater than 60 points are the following:

“Competitiveness not only involves economic issues that interest us as entrepreneurs, but also highlights the importance of solid institutions, infrastructure, technology, health and education, the labor market and innovation in development. This implies joining efforts between the central government, mayors, businessmen, academia and civil society to cover the work agendas, ”Paiz highlighted.

The municipalities that advanced and retreated are:

Intermediate Cities Update

Advances in the last 5 years:

  • The Intermediate Cities have a population of 6.02 million, which increased by 360,000 in 5 years (the cities represent 19% of the territory and 36% of the country’s population.
  • Population aged 1.37 years. Average age: 28.80 (the national average age is 27.26 years)
  • Demographic bonus: TO. Metropolitana and CT Antigua (the next city will be CP Escuintla)
  • START: from being 45.22% of the national GDP to being 56.04% (participation increase: 10.82% in 5 years)
  • PIB per cápita: + $ 2,568 in 5 years | 1.57x the national (growth 40.82% vs. 13.46% at the national level)

Devadit Barahona, director of the Board of Directors of Agexport commented that the export activity is present in 107 municipalities of the country with mainly agricultural production, but also manufacturing, aquaculture and fishing, handmade and services.

Therefore, the Local Competitiveness index is becoming increasingly important, because the territories can strengthen their potential to attract more productive investments and create the conditions for generating more jobs at the local level.

In addition, said Barahona, it is relevant in the framework of the inter-institutional effort Guatemala No Se Detiene, which is committed to attracting more investment and strengthening the country’s exportable offer, through one of the strategies that is the creation of three economic corridors that include intermediate cities and municipalities, under a comprehensive vision, creating ideal scenarios for economic growth and the articulation of policies in these territories.

“It is at that time that the ICL becomes an analysis tool so that public and private actors can make informed decisions,” concluded Barahona.

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