Interview: Juan Carlos Zapata, executive director FUNDESA

2023-10-05 20:19:00

Juan Carlos Zapata, executive director of FUNDESAspoke with República in relation to the celebration of this year’s National Meeting of Entrepreneurs for Development (ENADE) in Guatemala City.

Today, Thursday, the 17th edition of ENADE takes place. What new aspects can we expect in this edition?

— It will focus on the need to invest in quality infrastructure. Which constitutes one of the fundamental pillars of human development and a path towards shared and sustainable prosperity.

The motto of this edition is “Infrastructure for Human Development.” In addition, we will have the participation of prominent speakers, such as the former Argentine president Mauricio Macri.

Carlos Melo will be there, a specialist in investment projects and former representative of the Inter-American Development Bank (IDB) in different countries. Including Guatemala from 2017 to 2022.

Other notable experts include the presence of Jaime Li Ojeda, leader of the infrastructure and public-private investment promotion area of ​​the Torres y Torres Lara studio (Peru).

In view of the motto of the event, what are the main challenges facing Guatemala?

— Infrastructure in Guatemala represents a limitation for human development. And a great challenge to attract investments to the country.

To close the infrastructure gap, currently estimated at almost 100 years, it is also essential to accelerate the construction of the road network. We should increase the pace of road construction from 201 to 1,400 km per year.

In the department of Guatemala it is observed that there is congestion because not enough investment is being made in the road network. This area is the one that generates the most taxes and the most GDP. But it is the one with the least investment in this matter per person compared to the rest of the country with only 25 centimeters per inhabitant. The national average is 1 meter per inhabitant.

There is already a portfolio of 64 projects that represent an investment of US$7,000M. Of which, 11 are projects within port areas, 38 are road sections from port to port or border to border, which includes bridges. There are others for the metropolitan area, such as the Metrorriel. Not only to connect the capital, but to have a railway in the country. In addition to the section of the railroad from Mexico to Escuintla.

What are the main challenges regarding ports?

— Of the three subsectors, the port sector is the one that has advanced, although not optimally. Investments have been made in the infrastructure of the Quetzal and Barrios ports. As for the rankings, we are not yet in the last positions.

The effort to increase investments and facilitate the operation of private ports must be a reality.

Developing ports with great draft and depth would allow the entry of larger ships and would contribute to the reduction of logistics costs in the country. Another fundamental aspect is the expansion of access roads to establish efficient logistics corridors.

Private investment must be allowed and a solid regulatory framework established through a Maritime Port Authority Law.

How has funding grown in recent years?

— In Guatemala, public investment is very limited, representing 1.7% of GDP, most of which is allocated to roads. However, it is considered that we should be investing at least between 5% and 6% of GDP.

What are the obstacles that have prevented further progress in public-private partnerships?

—It is the lack of a law that allows all highway contracts not to have to be approved by Congress.

Currently, all projects must go through Congress. Which significantly slows down the process and discourages the presentation of new projects.

On the other hand, a reform is required that allows unsolicited proposals so that any investor can present pre-investment study projects.

What are the problems in obtaining financing from international organizations such as the World Bank or the IDB?

— Unlike other Latin American nations, all loans here must go through Congress for approval. This process can slow down the approval of loans and financial projects, which represents a challenge for the country.

Furthermore, in the General Budgets that the Government approves annually, a pattern is observed to reduce the budget assigned to the Ministry of Communications.