The Oligarchy

The direct result of Guatemala’s Spanish colonial legacy granting privileges to Spanish-born elites is the modern-day oligarchy. In many cases, families can trace their roots to these colonial-era criollo families. As in neighboring El Salvador, where there is frequent reference to “The Fourteen Families,” the Guatemalan oligarchy has a strong history of intermingling to the exclusion of outer echelons of society.

For the purpose of this discussion, the oligarchy will also encompass the “new rich” and the subsequent generations of landowning business elites who remain firmly in control of Guatemala’s politics and economy.

Much has been written about the Guatemalan elite’s support for right-wing governments and military policies aimed at eliminating the threat of Communist subversion during the country’s civil war (1960–1996). Although the war had genocidal aspects, it was also very much related to the distribution of wealth and the 1950s-era reforms that threatened economic elites’ hegemony. In essence, the oligarchy allied with the military in an attempt to maintain the status quo.

The oligarchy also found a willing ally in the United States, which was happy to support Guatemalan elites in their emulation of U.S. consumption patterns and the expansion of private enterprise. Stephen Connely Benz, in his book Guatemalan Journey, provides some interesting insights on Guatemala’s oligarchy and the way in which U.S. government aid via the U.S. Agency for International Development (USAID) may have unknowingly exacerbated Guatemala’s inequitable social structures.

He argues that capitalism, prior to the arrival of USAID, already functioned in its most brutal form in Guatemala, and he points to the history of “the conservative oligarchy and the essentially feudalistic economic system that remained the principal obstacle to a more equitable distribution of wealth.” He goes on to say that, “This oligarchy did not care for democracy, modernization, or even economic liberalism; what it cared for was the perpetuation of an extremely lucrative arrangement...It was, in short, a segment of society that had long gotten its way and was principally interested in maintaining its privileges—reform was the furthest thing from its interests, unless by economic reform one meant lower export taxes, privatization of services, and the liberalization of price controls.”

In essence, Benz argues, U.S. aid money given to support agro-industry and free enterprise went directly to the oligarchy and thus helped perpetuate the continuance of a “wildly unjust, cash-crop-driven economy that necessitated U.S. aid for the impoverished masses in the first place.”

More recently, the Guatemalan elites’ uncontested hold on the reins of power can be seen in the stalling of the 1996 peace accords. Although the accords contain many provisions that would contribute to make Guatemala a more just society, the vast majority of these reforms have fallen by the wayside. Ironically, the major economic reforms taking place since the signing of the peace accords largely involve the lower export taxes and privatization of services Benz speculated about.

On a practical level, you can see the Guatemalan elite at fancy restaurants, shopping malls, and hotel lobbies in Guatemala City. You’ll recognize them by their entourage of bodyguards, nannies to mind the children, and chauffeur-driven late model luxury cars. They’ll greet each other in courteous fashion and it will seem like everyone in the restaurant knows each other and is part of the same tight-knit clan.

On a positive note, absent large quantities of U.S. foreign investment in Guatemalan real estate and tourism infrastructure, the oligarchy’s presence has given Guatemala the condos, office buildings, and five-star hotels it would otherwise lack.

The Upper and Middle Classes

Guatemala’s upper class has close ties to the oligarchy, and there is a bit of a gray area where the two intersect. Social class in Guatemala is very much about putting on appearances in an attempt to gain favor with the upper echelons of society. Statistically, Guatemala has the third-highest per capita private aircraft ownership in the Americas, which gives you some idea of the purchasing power of wealthy Guatemalans.

The country’s wealth can also be seen in the fact that many homes that would be considered high-end in neighboring Central American countries such as Nicaragua and Honduras would be quite middle class in Guatemala. To give you an idea of how this is possible, keep in mind that the wealthiest 10 percent of the population receives almost half of all the income and the top 20 percent receives two-thirds.

Some might argue that Guatemala has no true middle class, but I would disagree. Middle class in Guatemala most certainly looks different than it does in the United States and even neighboring Central American countries. It’s also proportionally smaller, but not altogether nonexistent. You’ll find most of the country’s middle class living in urban areas such as Guatemala City and Quetzaltenango.

Lower Classes

It’s no surprise that, in a country where race and social standing go hand in hand, the vast majority of the country’s poor are of Mayan descent. This applies to those living in poverty in highland villages and urban slums or trying to eke out a living in the Petén lowlands. About 80 percent of Guatemala’s population lives in poverty, with about two-thirds of that number living in extreme poverty on less than $2 a day. Guatemala’s social indicators, such as infant mortality and illiteracy, are among the worst in the hemisphere.