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Economic Development of Central America Econ. 4200 - Spring 2004 – Dr. Taylor - page 66 / 153

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Those proposals were the basis for the realization of a peace agreement worked out under the auspices of the United Nations in December 1996. But the underlying causes of the violence still must be addressed (e.g. 70 percent of the Maya Indians still live in poverty, and more than 80 percent are illiterate).

Although the fighting has ended, fear persists.

The Economy…

As you might imagine, a 36 year civil war has disrupted and drained the Guatemalan economy.

The agricultural sector accounts for about one-fourth of GDP, two-thirds of exports, and half of the labor force. Coffee, sugar, and bananas are the main products.

Former President Arzu (1996-2000) worked to implement a program of economic liberalization and political modernization.

President Portillo has continued the liberalization program but with more sporadic results.

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