Background

Guatemala suffers from very high inequality, both between urban and rural inhabitants, and between indigenous and non-indigenous people.  Rural inhabitants make up 61 percent of Guatemala’s population and 74 percent of them are poor, 24 percent are extremely poor, and 43 percent are illiterate.  80 percent of Guatemala’s indigenous peoples live in rural areas, where they account for 52 percent of the rural population, so they are particularly affected by rural poverty.

Agreeing on a national strategy for rural development and poverty reduction has been high on the political agenda since the signing of the 1996 Peace Accords.  With the participation of civil society, the Government has developed a Strategic Agenda for Integrated Rural Development (“Agenda Estrategica para el Desarrollo Rural Integral”), approved by the Cabinet in March 2005.

The strategy seeks to go beyond the vision of rural development as simply agricultural development and to adopt a more comprehensive, integrated approach.  It combines development of institutions and infrastructure with promotion of broad-based growth opportunities in rural areas.

The World Bank is supporting Guatemala’s rural strategy through a Rural Economic Development Project, approved in March 2006.

Project objective

To increase the incomes of the rural population, and especially indigenous groups, in the selected departments.

Project activities

• Improving the competitiveness of rural productive supply chains with strong indigenous participation.  This involves investments in market access, technical assistance, seed capital, financial services, and productive infrastructure investments, in particular telecommunications and internet provision.
• Strengthening the institutional capacity of public entities involved in the program.  A new model of public management focused on territorial development will be introduced, with indigenous involvement.