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The Economic Activity of Guatemala

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The republic of Guatemala has largely, and quite excessively, been dependent on coffee and banana plantations for economic growth. From the time of World War II, the country’s administration has been encouraging the development of other industries such as mining and manufacturing in order to counterbalance this dependence and give way to more and maybe bigger possibilities for Guatemala. During the 1970s, government established a development plan, supposedly within a time span of 5 years, meant to limit import of goods and hence, increase domestic revenue. This plan was finally put to work in 1985. Before the 1990s, Guatemala’s per capita gross national product hovered about $900. In 2005, the recorded gross national product has grown to $2,403 per capita.

Agriculture is the largest industry in the republic. About half of the country’s labor force is employed in this area and production accounts for almost 30% of Guatemala’s gross domestic product. The primary profit-making crop in Guatemala is coffee. Most of the large plantations that produce most harvest are found south of the highlands. Bananas and cotton are also vital commercial resources. Banana plantations are concentrated along the Pacific coast, close to the Caribbean. Guatemala is also one of the top producers of sugarcane in the world. Among other crops, corn, rice, wheat, and beans are produced for local consumption. Pigs, poultry, and cattle are likewise raised for this purpose.

Forestry is another key resource in the country. Products like cabinet woods, balsam, chicle, and essential oils contribute significantly to the Guatemalan economy. The country also ranks among the world’s biggest producers of chicle, an ingredient indispensable for the manufacture of chewing gum.

Mining and manufacturing are relatively not as big as the agriculture and forestry sectors. Only moderate quantities of petroleum are produced in Guatemalan oil fields and mineral products as lead, nickel, zinc, chromites, and silver, are likewise found only in considerable amounts. Similarly, manufacturing operations are mostly small scale. Major products of this industry include food and beverages, paper, textiles, apparel, wood items, plastics, and others more.

The unit of currency in the republic of Guatemala is the quetzal, which is partitioned into 100 centavos.