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Latin America and Caribbean Region Sustainable Development Working Paper 21

Spatial Analysis of Rural Economic Growth Potential in Guatemala

February 2005 By:

Jeffrey R. Alwang Paul B. Siegel David Wooddall-Gainey

The World Bank Latin America and Caribbean Region Environmentally and Socially Sustainable Development Department (LCSES)

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Sustainable Development Working Paper No. 21


February 2005 ———————————

By: Jeffrey Alwang Paul B. Siegel

David Wooddall-Gainey

The World Bank Latin America and the Caribbean Region

Environmentally and Socially Sustainable Development Department

34633

Jeffrey Alwang is a Professor in the Department of Agricultural and Applied Economics, Virginia Polytechnic Institute and State University, Blacksburg, Virginia. Paul B. Siegel is a World Bank-FAO/CP Consultant, in the Environmentally and Socially Sustainable Development Department (LCSES) of the World Bank’s Latin America and Caribbean Regional Vice Presidency. David Wooddall-Gainey is an Information Systems Specialist, Virginia Polytechnic Institute and State University, Blacksburg, Virginia. This paper was prepared for the Central American regional study, “Identifying Drivers of Sustainable Rural Growth and Poverty Reduction in Central America,” carried out for the Central America Environmentally and Socially Sustainable Development (CA ESSD) Department in the Latin America and Caribbean (LAC) Region of the World Bank. Martin Raine was the Sector Manager and Francisco Pichon the Task Team Leader for the study. The authors thank José Miguel Duro, Director of MAGA-SIG, for access to the maps and data, and for his insightful comments and suggestions. We extend our thanks to Janice Molina for designing the cover, editing the report, and preparing it for publication. The findings, interpretations, and conclusions in this document are those of the authors, and should not be attributed to the World Bank, its affiliated organizations, members of its Board of Executive Directors or the countries they represent. Additional copies may be obtained from Paul B. Siegel ([email protected] or tel. 202-473-4434) or from Diana Rebolledo ([email protected] or tel. 202-473-9205).

Cover photo credits:

World Bank Photo Library

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mailto:[email protected]

Contents

Abbreviations and Acronyms................................................................................................... iv Foreword ..................................................................................................................................... v Executive Summary ................................................................................................................. vii Main Text .................................................................................................................................... 1 I. Introduction ..................................................................................................................... 1 II. Data and Methods............................................................................................................ 2 III. Overview of Rural Poverty in Guatemala ....................................................................... 2 IV Description of Rural Space.............................................................................................. 2 V. Agriculture, Economic Potential and Poverty ................................................................. 4 Agricultural regions of Guatemala .................................................................................. 4 Economic potential and poverty...................................................................................... 6 VI. Conclusion....................................................................................................................... 8 References ................................................................................................................................... 9 List of Tables Table 1 Rural and Indigenous, Ethnic Group 24 Table 2 Population and Poverty Rates by Region 24 Table 3 Population Change by Region and Department, 1994-2002 25 Table 4 Determinants of Municipio-level Changes in Population (Regression Results) 26 Table 5 Characterization of Agricultural Regions of Guatemala 27 Table 6 Method Used to Produce Map of Zones of Economic Potential 29 List of Figures Figure 1 Map of Guatemala 11 Figure 2 Guatemala's Regions and Departments 12 Figure 3 Transportation Infrastructure and Population Centers 13 Figure 4 Population Densities 14 Figure 5 Agricultural Land Use 15 Figure 6 Population-adjusted Road Densities 16 Figure 7 Population Change, 1994-2002 17 Figure 8 Agricultural Potential 18 Figure 9 Agricultural Regions of Guatemala 19 Figure 10 Economic Potential 20 Figure 11 Poverty Rates 21 Figure 12 Poverty Densities 22 Figure 13 Vulnerability to Food Insecurity 23

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Abbreviations and Acronyms

AVANSCO Asocación Para el Avance de las Ciencias (Association for the Advancement of Social Sciences)

CA Central American ENCOVI Encuesta de Hogares (see LSMS) ESSD Environmentally and Socially Sustainable Development Department ESW Economic Sector Work FAO Food and Agriculture Organization FAO/CP FAO Cooperative Program GIS Geographic Information System GoG Government of Guatemala Ha Hectare IFPRI International Food Policy Research Institute LAC Latin America and Caribbean LSMS Living Standard Measurement Survey MAGA Ministry of Agriculture and Livestock MAGA-SIG Ministry of Agriculture Geographic Information System Mz Manzana (land measure equal to 0.7 ha) SIG Sistema de Información Geográfica (see GIS) WFP World Food Program

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Foreword

Current thinking in the Latin America and Caribbean (LAC) Region, as evidenced by the

World Bank’s recent LAC Rural Development Strategy, stresses how differences across space within the region create the need for sub-national, territorial approaches to development planning. Agro-ecological conditions, access to infrastructure and services, household asset distributions, and household responses to these conditions all vary dramatically within countries and within sub-regions of the countries. Like other countries in LAC, growth and development in Guatemala have been concentrated in areas where agro-ecological conditions are favorable for export agricultural products. Because of its varied topography, limited road coverage, and historical investment patterns that favored certain areas, economic opportunities for rural households in Guatemala are heavily influenced by geographic space. Improved geographic analysis is necessary to understand how space-specific conditions affect development prospects. This understanding will help in the design of area- and asset-specific rural investment strategies. This paper, which is based on a background paper for the report “Drivers of Sustainable Rural Economic Growth and Poverty Reduction in Central America: Guatemala Case Study,” provides insights into use of spatial analyses to help inform "territorial approaches" to rural development in Central America.

John Redwood Department Director

Environmentally and Socially Sustainable Development Latin America and the Caribbean Region

The World Bank

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Executive Summary Because of varied topography, limited road coverage, and historical investment patterns that favored certain areas, economic opportunities in rural Guatemala are heavily influenced by geographic space. Like other countries in Central America, growth and development have been concentrated in areas where agro-ecological conditions are favorable for agricultural export products. Economic potential is largely determined by spatial assets and, as a result, the spatial distribution of human and physical assets is of interest to policy design. If physical and infrastructure assets contribute to economic growth, then growth-oriented investments should be targeted toward areas with more favorable natural assets. But if poverty rates are higher in more isolated areas with less infrastructure and longer travel times to markets and population centers, then growth-oriented investments might bypass such areas, exacerbate regional inequalities, and increase social problems. This spatial analysis addresses these issues. It is descriptive in nature and is intended to provide an overview of the spatial organization of Guatemala’s rural economy. As expected, more densely populated areas are also those with better road and other forms of infrastructure. Many of the areas

with the highest proportions and densities of poor and food-insecure households also have relatively good prospects for economic growth, indicating that there are no stark tradeoffs between area growth potential and poverty reduction potential. Despite this area potential, poorer households lack complementary assets that allow them to take advantage of economic opportunities. The convergence between areas with high poverty rates and high poverty densities means that area-based targeting of investments could be effective for poverty reduction. Results of the analyses indicate that a spatially differentiated rural development strategy is appropriate for Guatemala. The paper offers some suggestions for differentiated rural development options in different regions of the country based on their economic potential. Keywords: Guatemala, spatial analysis, geographic information systems, rural development, poverty mapping

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I. Introduction The Latin America and Caribbean (LAC) Regional Rural Development Strategy (World Bank 2002) acknowledges that new approaches are needed to operationalize strategies and investments to promote sus-tainable poverty-reducing economic growth. A central theme of this reappraisal of rural development strategies is that agriculture cannot serve as the sole engine of poverty-reducing growth in the rural economy, and that a more balanced and integrated multi-sectoral and spatial approach to rural devel-opment is needed. The uneven distribution of factors such as agro-ecological potential, access to infrastructure and services, house-hold assets, and livelihood strategies means that development strategies should be tai-lored to sub-national areas. This tailoring requires improved geographic analyses that consider the heterogeneity of areas and the distribution of households’ assets within areas. The need for area- and household-specific strategies adds complexity to the formulation of rural development strategies, investment priorities, and the design of pro-ject interventions. Because of varied topography, limited road coverage, and historical investment patterns that favored certain areas, the economic opportunities of rural households in Guate-mala vary across space. As with other coun-tries in Central America, growth and devel-opment have been concentrated in areas where agro-ecological conditions are favor-able for agricultural export products. Road networks and other infrastructure have been built to support production in coffee- and banana-producing areas of Guatemala and Honduras, in coffee- and cattle-producing areas of Nicaragua, and in other high export-potential areas around the region. Economic potential is determined by spatial assets and, as a result, the spatial distribution

of human and physical assets is of interest to policy design. If physical assets and infra-structure contribute to economic growth, then growth-oriented investments should be targeted toward areas with more favorable asset bases. On the other hand, if poverty rates are higher in more isolated areas with less infrastructure and longer travel times to markets, then growth-oriented investments might bypass such areas, exacerbate regional inequalities, and increase social problems. This spatial analysis is designed to address these issues and set the stage for a more in-depth analysis of determinants of growth in rural areas.1 It is descriptive in nature and is intended to provide an overview of the spa-tial organization of Guatemala’s rural econ-omy. We begin by showing the distribution of population compared to the distribution of transportation infrastructure. As expected, more densely populated areas are also those with better roads and other forms of infra-structure. We compare these distributions with the spatial distribution of economic growth potential as determined by agricul-tural potential and access to transportation infrastructure. We examine the spatial distribution of pov-erty and food insecurity to understand the relationship among population density, growth potential, and these outcomes. Many areas with the highest incidences and densi-ties of poor and food-insecure households also have relatively good prospects for eco-nomic growth, indicating that there are no stark tradeoffs between area growth poten-tial and poverty reduction potential. How-ever, many poorer households in these areas lack complementary assets and, as a result,

1 The spatial analysis was complemented by an analysis of household-level assets using LSMS data (see Alwang 2004) and part of a more ex-tensive country case study that also included qualitative analyses (see World Bank 2005b).

2 LCR Sustainable Development Working Paper No. 21

they are unable to take advantage of eco-nomic opportunities. Furthermore, the ag-gregate nature of the spatial analysis can mask substantial intra-regional differences in access to infrastructure. II. Data and Methods Data for this analysis come from a variety of sources, with the major one being the Geo-graphic Information System of the Ministry of Agriculture (MAGA-SIG)2. These data are supplemented with data from the 2002 population census and the vulnerability as-sessment conducted by MAGA and sup-ported by the World Food Program (GoG/WFP 2002)3. Several maps were created using GIS tech-niques by generating combinations of vari-ables and overlaying them. An example of a map created by overlaying variables is the map generated by overlaying transportation infrastructure and population centers. An example of a new variable is the map of poverty density for which we used the exist-ing poverty map, municipio-level area and municipio-level census data to generate a measure of poverty density (poverty rate x population/km2). The map for agricultural potential at the municipio level was prepared by the director of MAGA-SIG, José Miguel Duro, after consultations with the study team. This agricultural potential map was used to generate a map of “economic poten-tial” by overlaying it with a road density map. The GIS analysis was augmented by regres-sion analyses of the determinants of popula-tion change by municipio from 1994 to 2002.

2 See http://www.maga.gob.gt/sig/ for more information. 3 The population census and the vulnerability assessment are part of the MAGA-SIG database.

III. Overview of Rural Poverty in Guatemala Poverty in Guatemala is primarily rural, with the rural poor accounting for about 81 percent of all poor and 93 percent of all extreme poor (see Table 1). Poverty is also higher among indigenous households which account for about 43 percent of the total population and about 58 percent of the poor and 72 percent of the extreme poor. Most poor rural households are highly dependent on agriculture (subsistence farming and agricultural jobs) for their livelihoods (World Bank 2004). Poverty is associated with lower levels or productivity of assets, including labor, education, physical assets (including basic utility services, land, and housing), and social capital. Geographic location and household size are also found to be important correlates of poverty (World Bank 2005b). While poverty is clearly a national problem in Guatemala, poverty rates are significantly higher in the “poverty belt” in the Northern, Northwestern, and Southwestern Regions of the Western Altiplano (see Table 2).4 Many of the rural poor in this poverty belt tend to be located farther from main roads (often lacking all-weather transport infrastructure), have little or no land, and are located on hillsides with poorer agricultural potential (Puri 2003). IV. Description of Rural Space Guatemala is politically divided into 22 Departments (Departamentos), which in turn consist of a number of Municipalities

4 The “poverty belt” is located primarily in the Northern (Departments of Alta Verapaz, Baja Verapaz), Northwestern (Departments of Huehu-etenango, Quiché), and Southwestern (Depart-ments of San Marcos, Quetzaltenango, Sololá, Totonicapán) Regions.

http://www.maga.gob.gt/sig/

Spatial Analysis of Rural Economic Growth Potential in Guatemala 3

(Municipios). The National Statistics Insti-tute has aggregated these Departments into eight Regions5 (Figures 1 and 2). Guatemala City is the only population center whose population exceeds one million, but other population centers with more than 100,000 inhabitants are scattered around the country (Figure 3). The most densely popu-lated areas are those surrounding the capital city and in the Western Altiplano (Figure 4) moving toward the western border with Mexico. The Western Altiplano includes the Northwestern and Southwestern Regions and is among the poorest areas in Central America. Areas along the Pacific Coast and along the Honduran and Salvadoran borders are also relatively densely populated as are several Departments in Northern Region. In Petén and the eastern coastal region, popula-tion densities lower than 80 people per square kilometer predominate. Road networks stretch west from Guatemala City into the coffee-producing areas of the Western Altiplano and south toward the productive agricultural areas along the Pa-cific Coast (Figure 5). Another major road network runs east through the coffee-producing areas near the eastern highlands and tropical fruit-producing areas of the eastern coastal plain6. Areas of low popula-tion density in the Northern and Petén Re-gions are underserved by transportation infrastructure. Petén has only two significant road networks, and no roads exist northwest of Cobán in the Northern Region. Road density adjusted for population7 is a measure of access to markets that may be associated with economic growth potential. In Nicaragua, for example, the Drivers of

5 We use the administrative regions here; later we examine differences by agricultural regions. The latter cross administrative borders, but are useful means of grouping by production patterns, livelihood strategies, and agricultural systems. 6 Detailed description of agricultural production regions is found below. 7 For details, see GoG/WFP (2002), p. 30.

Growth case study found that road density is an important determinant of economic po-tential and growth, and is generally concen-trated in areas relatively close to Managua (World Bank 2005a). In Guatemala, road access is highest in areas around Guatemala City and selected areas of the Western Alti-plano (Figure 6). The latter are coffee-growing areas and roads were constructed to provide access for coffee exports. In con-trast, the eastern parts of the country near the Atlantic Coast have very low road densi-ties, in part due to their low population den-sities. An important contrast emerges in Figure 6 which shows very low road densi-ties in the northern half of Guatemala and uniformly higher densities in the southern half. This result mirrors the distribution of population where the northern half has much lower population densities than those of the south (Figure 4). It also shows a possible growth constraint in the north due to lack of infrastructure. Population change between the 1994 and 2002 censuses did not follow a regular spa-tial pattern. While areas near Guatemala City grew most rapidly, other high-growth municipios are spread around the country (Figure 7 and Table 3). The northern portion of the country experienced higher rates of population growth than the south, but the higher growth rate is largely explained by lower population densities in 1994. In the north, population grew most quickly in Alta Verapaz, while growth in Baja Verapaz was modest. Several municipios in Petén grew rapidly, but these areas are comprised of agricultural frontier areas and the 1994 population base there was very low (con-tributing to a high rate of growth). In most Western Altiplano municipios, population growth was below the national average, and some experienced very low rates. In general, except for areas very near the urban center, the southern and eastern portions of the country experienced very low population growth rates between 1994 and 2002. Population changes are caused by the natural rate of increase (births minus deaths) plus


net migration. The natural rate is not likely to differ significantly by region or depart-ment8, but rural Guatemalans have a long history of internal migration (Comité Técnico Interinstitucional 2002). Seasonal migration, where families seek temporary work usually in agriculture, is common, and destinations include the Southern Coast and eastern plantations. An estimated 800,000 to 1 million Guatemalans migrate on a seasonal basis each year (SEGEPLAN 2002). Perma-nent migration occurs as well, with the pri-mary destinations being Guatemala City and the Petén Region (Comité Técnico Interin-stitucional 2002). It is estimated that about 40 percent of total permanent migrants re-side in Guatemala City (SEGEPLAN 2002). Regional urban centers also attract many mi-grants. These include Quetzaltenango, Hue-huetenango, and Tononicapán (Western Alti-plano); Antigua Guatemala (Central Region); Salama (Baja Verapaz); Puerto Barrios and Jalapa (East). Migrants to urban centers are generally employed in the informal sector, in maquiladoras, in construction and ser-vices. Migrants to Petén generally head there in search of agricultural land. A regression of the determinants of popula-tion change sheds light on the sources of growth (Table 4). Growth was highest in the more densely populated municipios and lowest in areas where the share of total agri-cultural land to perennials was highest. Population growth was also lowest in areas with the best potential lands. This finding may be explained by higher rates of titled land in such regions; while land quality is high, access to such land may be out of the reach of typical migrants. The findings about perennials and land quality are also explained by the coffee crisis: coffee regions generally have high quality lands and higher

8 The poor generally have higher levels of fecun-dity than the non-poor (Comité Técnico Interin-stitucional 2002), so that poorer areas are likely to have higher birth rates, but death rates are also likely to be higher as poverty grows. There is no known regional disaggregation of the natural rate of population increase for rural Guatemala.

proportions of such lands planted to peren-nials. These regions also appear to have experienced out-migration (or at least sig-nificantly lower rates of population growth). V. Agriculture, Economic Potential, and Poverty Information on agricultural potential com-bined with access to infrastructure is used below to create a map of economic potential. Due to the importance of agriculture and particularly of newer agricultural export crops (World Bank 2005b) to growth poten-tial in many rural areas, we begin by inves-tigating how agricultural potential varies over space. The map of agricultural potential highlights the commercial agricultural areas of the Pacific Coast and the relatively high productivity areas of the Atlantic Coast (Figure 8)9. The densely populated Western Altiplano has high slopes (and as a result, relatively lower productive potential) but relatively deep volcanic soils. This area is moderately productive but does not have the same productive potential as the coastal regions. The Northern and Petén Regions have moderately to highly productive soils as do several areas in eastern Guatemala; however, as noted above, these areas have limited access to infrastructure. Agricultural regions of Guatemala A recent study conducted by the social sci-ence research group AVANSCO divides Guatemala into five agricultural regions (AVANSCO 2002). Each of these is com-prised of subregions with different typolo-gies of producers. The regions consist of the Western Altiplano, the Southern Coast, the East, Alta Verapaz, and the Northern Low-

9 This map was created with a composite of variables representing soil type and quality, soil depth, and slope. Data are aggregated to the municipio level and the aggregation surely masks important intra-municipio hetereogeneity.


lands (Figure 9). The agricultural regions differ according to characteristics (density of population, land tenure, type of farm, etc.), products, and livelihood strategies (see Ta-ble 5 for a description of the regions’ major characteristics). Significant variation occurs within the larger regions; for example, AVANSCO divides the Western Altiplano into 16 subregions, including five coffee-producing subregions. The Western Altiplano is characterized by small-scale (minifundio) farms producing subsistence crops, together with mixed sub-sistence-market orientation, and some wholly market-oriented producers of horti-cultural crops and coffee. While land tenure is relatively secure (mostly through tradi-tional informal mechanisms) and land rental markets function fairly well, there are prob-lems with a progressive shrinking of land per household member. As population has increased, families have had to divide the land among their children who in turn divide it among theirs. The youngest adults find themselves facing land scarcity. This scar-city, in turn, induces the adoption of alterna-tive livelihood strategies including seasonal or long-term migration, especially abroad (see Table 5). Many migrants from land-scarce areas in the Western Altiplano move toward the Southern Coast where they work on plantations and often rent small plots of land for their food needs10. Others migrate internationally, many to Chiapas, Mexico, where they participate in coffee production. Another problem in the Western Altiplano is the legal recognition of land. A significant number of farmers accessed land through communal property, based on the indigenous tradition of sharing resources. However, these lands can only be recognized at the communal level; in other words, because farmers do not legally own the land, their ability to invest may be hindered. Some communal disputes over land and resources

10 The vast majority of seasonal migrants in Guatemala come from the Western Altiplano (SEGEPLAN 2002).

(such as water) within a territory have re-sulted in violent confrontations. The Southern Coast is dominated by large-scale export-oriented producers, together with minifundios. The large-scale export-oriented industry is mostly dedicated to sugar cane and sugar production. It is among the most modern and organized industries in the country. It is also an important source of agricultural jobs for many seasonal workers from the Western Altiplano and other north-ern departments. Overall working conditions have improved in the last 20 years, with better salaries and infrastructure to house and serve workers. However, salaries may still be considered low for a physically de-manding job. The minifundios are linked to the production of export crops such as ba-nanas, other fruits, and coffee as well as subsistence crops. Land tenure is relatively secure for minifundios. The Alta Verapaz Region has relatively low population densities and a mix of small-scale and plantation farms. It is considered an agriculturally underdeveloped region with large amounts of uncultivated lands and a slow legalization process for small farms. Slow legalization has resulted in squatting and some land invasions. On many larger farms, landless peasants are able to cultivate subsistence crops in exchange for work, but conditions are poor as peasants have few legal rights. Production in small and large farms is varied, ranging from coffee and cardamom to forestry (under an environ-mental conservation law) and horticulture. Other small industries and livelihood strate-gies include handicrafts, dairy production, micro industry, and migration. The East is characterized by a mix of subsis-tence farming, small-scale farming with market orientation, and plantation agricul-ture. Local workers supply melon, banana, and plantain plantations with seasonal and permanent labor. In addition, medium- to large-scale coffee producers and smaller-scale tobacco producers demand agricultural workers. The area’s agriculture is closely


connected with internal and international markets; roads do a good job serving the areas in the East with the highest agricul-tural production. Many minifundios are dedicated to subsistence crops, especially in the southern part of this region. Land tenure among these farmers is uncertain and land invasions and squatting are common. Land conflict is not as acute as in other parts of the country. The Northern lowlands are comprised mainly of the Department of Petén, an agri-cultural frontier area with abundant natural resources and limited infrastructure. In the 1950s the central government encouraged migration into this area. This migration was not a planned process and land grabbing soon followed. Land grabbing persists today and has resulted in uncertain land tenure and security. Land was allocated to municipios, cooperatives, and associations of farmers for cultivation and exploitation, but municipal limits, land plot boundaries, and rules of land use rules are often ignored. Lack of well-defined land rights has contributed to overexploitation of land that may not be well-suited for traditional agriculture. De-forestation and overuse of land threaten protected areas. Most farmers in the Northern lowlands pro-duce subsistence crops along with some cash crops and cattle. Isolation and lack of infra-structure have prevented growth of export-oriented agriculture. Two potential resources are not yet fully exploited: a forestry indus-try and tourism. Economic potential and poverty No systematic methodology or consistent set of variables has been used to map zones of economic potential in rural areas (Rodríguez and Thomas 1998). At least two variables are generally used to identify and classify rural economic potential. For example, the Government of Nicaragua uses three factors: agricultural potential, climatic risk, and ac-cess to services (Arce and others 2002).

Pender and Hazell (2000) use two vari-ables—one representing agricultural poten-tial and the other representing access to in-frastructure and markets—to generate a classification of more and less favored areas. In general, the number and combination of variables used in an economic potential mapping exercise depends on data availabil-ity and purpose of the exercise. A rough measure of economic potential was generated by overlaying the map of agricul-tural potential (Figure 8) with the map of road densities (Figure 6), as shown in Figure 11. The methods used to generate this map are shown in Table 6. Zones of high eco-nomic potential predominate on the South-ern Coast, in scattered areas of the Western Altiplano, near Guatemala City, and in the East, particularly along the Salvadoran bor-der. The map of extreme poverty shows that poverty rates are only weakly associated with lack of access to transportation infra-structure and limited agricultural potential (Figure 12). The municipios with the highest poverty rate are found in remote areas of the Western Altiplano, in the larger municipios in the Northern Region, and in scattered border regions along the Honduran and Sal-vadoran borders. These areas are all rela-tively low in road density and also have limited agricultural potential, but there is some overlap between high poverty and high economic potential areas in the Western Altiplano and the East. Poverty rates are much lower along the Pacific Coast, around Guatemala City, and in Eastern Guatemala approaching the Atlantic Coast. While the latter areas have relatively low road densi-ties and at best medium “agricultural poten-tial,” people there have enough opportunity (particularly land) to be able to reduce their poverty. Areas southwest of Guatemala City all have extreme poverty rates of below 10 percent. The combination of good infrastruc-ture access and high agricultural potential appears to be reducing poverty.


High poverty areas along the Honduran and Salvadoran borders in Southeastern Guate-mala represent somewhat of a conundrum. These areas have relatively high access and agricultural potential, but also relatively high rates of poverty. These areas might be targeted for high labor-demand investments (inside and outside of agriculture), but de-spite good “spatial” conditions, measures of well-being are lagging behind potential. Some areas in the Western Altiplano fall under similar conditions: decent infrastruc-ture access and good lands, but high rates of poverty. The mountains in the Western Alti-plano leave many people almost completely isolated even though transportation access is, on average, quite good. Intraregional heterogeneity is masked by the municipio-level analysis (World Bank 2005b). Although population densities decline as we move away from Guatemala City, they do not decline at as fast a rate as the poverty rate increases. Poverty densities (the number of extremely poor people per square kilome-ter) are highest in the Western Altiplano, in the areas around Quetzaltenango and Hue-huetenango, and westward to the Mexican border (Figure 12). These areas also have very high poverty rates and the geographic correspondence between high poverty rates and high poverty density11 means that there is little or no tradeoff in targeting high pov-erty areas for growth-promoting interven-tions. WFP also identifies these areas as the most vulnerable to food insecurity (Figure 12). The Western Altiplano is an obvious target for poverty-reducing investments and is especially promising because of its rela-tively high economic potential. The combi-nation of high population densities, rela-tively good infrastructure, and good soil quality shows that the area has economic potential. However, persistent high rates of poverty show that this potential is not being tapped; to the extent that it is being tapped, the poor are not able to participate. Despite 11 And, by inference, high population density.

high road densities, internal travel times within these topographically complex mu-nicipios limit participation in the market economy. The asset bases of the poor in this region may need to be strengthened before they can benefit from growth-related spill-overs (see Siegel 2005). This descriptive analysis suggests that more needs to be known about human and other assets in order to design appropriate interventions. Low population densities along the Hondu-ran and Salvadoran border region are associ-ated with much lower poverty densities than those in the Western Altiplano. Here we witness a tradeoff between poverty rates and poverty densities. Because of the high pov-erty rates in some of these municipios, a project or investment need not have an ex-plicit targeting mechanism; leakages to the non-poor are reduced in areas with higher poverty rates. On the other hand, because population densities are low, projects should be targeted to specific population clusters, or the investment or program should be se-lected based on low cost of delivery over space. Investments such as health clinics should obviously be targeted to population clusters. Others, such as schools, are placed so as to guarantee a reasonable standard of access, even in low population density areas. Our analysis indicates that the number of schools per capita tends to be highest in the most remote areas. Agricultural development programs such as land titling and distance delivery of technical services may also be appropriate in low density areas because they can be delivered across space at a minimal cost. Such pro-grams may also be appropriate due to good agricultural potential and infrastructure in these areas. VI. Conclusion Economic potential has a strong spatial pat-tern in Guatemala, with high-potential areas close to the capital city, along the Pacific


Coast, and in other areas with favorable soil and road conditions. Due to the high density of roads and favorable agroclimatic condi-tions in the southern part of the country, growth potential there is high. This finding hints that a differentiated development strat-egy may be appropriate. Because northern areas have less access to infrastructure, growth strategies may be more inward look-ing there than in the more favored southern areas. Population growth patterns have not fol-lowed expected economic growth patterns. In general, high economic potential areas did not experience greater population growth from 1994 to 2002. Some areas of high agricultural potential are actually grow-ing much slower than the national average, suggesting that access to productive re-sources in these areas may limit opportunity and stimulate migration out of these regions. Poverty rates and poverty densities overlap in many areas, indicating that programs targeted to high poverty rate areas will also reach a large number of the poor. This over-lap highlights the desirability of targeting

growth and poverty-reducing investments toward the Western Altiplano, with special attention to the missing assets of the poor. As this area was also shown to have good growth potential, additional analysis is needed to understand why so many house-holds in a favorable region remain poor. Like other countries in LAC, growth and development in Guatemala have been con-centrated in areas where agro-ecological conditions are favorable for export agricul-tural products. Because of its varied topog-raphy, limited road coverage and historical investment patterns that favored certain areas, economic opportunities for rural households in Guatemala are heavily influ-enced by geographic space. Improved geo-graphic analysis is necessary to understand the relationship between space-specific con-ditions and development prospects. The analysis in this paper sheds light on this relationship and represents a solid basis to begin a more in-depth analysis of specific determinants of household well-being, and also for more in-depth spatial analyses.


References Alwang, J. (2004) “Analysis of the relationship between assets, strategies and household well-being for Guatemala.” Appendix 3 for World Bank (2005b) “Drivers of Sustainable Rural Growth and Poverty Reduction: Case Study for Guatemala.” Report No. 31191-GT. Washington, D.C. Arce, C., E. Budinich, and R. Ubila (2002) “Consultoría para el rediseño de la cartera de progra-mas orientados al desarrollo productivo en el área rural de Nicaragua: informe final.” Managua. AVANSCO (2002) Regiones y Zonas Agrarias de Guatemala. Cuaderno de Investigación No. 15, Guatemala City. Comité Técnico Interinstitucional (2002) Encuesta Nacional de Condiciones de Vida ENCOVI 2000: Perfil de la Pobreza en Guatemala. Instituto Nacional de Estadística. De Janvry, A. (2002) “Geography of Poverty, Territorial Growth and Rural Development.” Paper presented to USAID/LAC Rural Economy Workshop: Promoting Rural Prosperity, February 4, Washington D.C. See www.ruralprosperity.com/presentations.cfm De Janvry, A., E. Sadoulet, and C. Araujo (2002) “Geography of Poverty, Territorial Growth and Rural Development.” Paper presented at Annual World Bank Conference on Developing Econo-mies Economists’ Forum. April 30, 2002. World Bank, Washington, D.C. Government of Guatemala/World Food Program (2002) Cartografía y Análisis de la Vulnerabili-dad a la Inseguridad Alimentaria en Guatemala. Ministerio de Agricultura, Ganadería y Ali-mentacion, Unidad de Planificación Geográfica y Gestión de Riesgo, Guatemala. See http://www.maga.gob.gt/sig/ Pender, J. and P. Hazell (2000) “Promoting Sustainable Development in Less-Favored Areas.” FOCUS 4, Brief 1. IFPRI: Washington, D.C. Puri, J. (2001) “Transport and Poverty in Guatemala: A Profile using Data from the ENCOVI 2000.” Technical Paper No. 8. Guatemala Poverty Assessment (GUAPA) Program. Background paper for World Bank (2004). Rodríguez, A. and N. Thomas (1998) Mapping Rural Poverty and Natural Resource Constraint in Dry Areas. ICARDA Social Science Papers #6. International Center for Agricultural Research in the Dry Areas: Aleppo, Syria. SEGEPLAN (2002) Política de Desarrollo Social y Población. Secretaría de Planificación y Pro-gramación de la Presidencia, Guatemala. Siegel, P.B. (2005) “Using an Asset-Based Approach to Identify Drivers of Sustainable Rural Growth and Poverty Reduction in Central America: Conceptual Framework.” Agriculture and Rural Development Department, Latin America and the Caribbean Regional Office. Policy Re-search Working Paper Series No. WPS 3475. The World Bank: Washington, D.C. See www.worldbank.org/research

http://www.ruralprosperity.com/presentations.cfm

http://www.maga.gob.gt/sig/

http://www.worldbank.org/research


World Bank (2002) Reaching the Rural Poor in the Latin America and Caribbean Region. Wash-ington, D.C. World Bank (2004) Poverty in Guatemala. World Bank Country Study. Washington, D.C. World Bank (2005a) “Drivers of Sustainable Rural Growth and Poverty Reduction: Case Study for Nicaragua. Environmentally and Socially Sustainable Department, Latin America and the Caribbean Regional Office. Report No. 31193. Washington, D.C. World Bank (2005b) “Drivers of Sustainable Rural Growth and Poverty Reduction: Case Study for Guatemala.” Environmentally and Socially Sustainable Department, Latin America and the Caribbean Regional Office. Report No. 31191-GT. Washington, D.C. See http://tinyurl.com/5jzzp

http://tinyurl.com/5jzzp


Figure 1: Map of Guatemala


Figure 2: Guatemala's Regions and Departments

Metro Region 1. Guatemala Northern Re-gion 2. Alta Verapaz 3. Baja Verapaz Northeastern Region 4. Zacapa 5. Chiquimula 6. El Progreso 7. Izabal

Southeastern Region 8. Jutiapa 9. Jalapa 10. Santa Rosa Central Region 11. Sacatepéquez 12. Escuintla 13. Chimaltenango

Southwestern Region 14. Quetzaltenango 15. Totonicapán 16. San Marcos 17. Suchitepéquez 18. Retalhuleu 19. Sololá

Northwestern Region 20. Quiché 21. Huehuetenango

Petén Region 22. Petén

http://www.segeplan.gob.gt/guatemala/dem1.html























Figure 3: Transportation Infrastructure and Population Centers

Source: Drivers of Growth team and MAGA-SIG


Figure 4: Population Densities

Source: Drivers of Growth team using data from Census of Population and Housing, 2002


Figure 5: Agricultural Land Use

Source: MAGA-SIG.


Figure 6: Population-adjusted Road Densities

Source: MAGA-SIG.


Figure 7: Population Change, 1994-2002

Source: Drivers of Growth team using data from MAGA-SIG and Census of Population and Housing, 1994 and 2002.


Figure 8: Agricultural Potential

Source: Drivers of Growth team and MAGA-SIG.


Figure 9: Agricultural Regions of Guatemala

Source: Drivers of Growth team with information from AVANSCO (2002).


Figure 10: Economic Potential

Source: Drivers of Growth team.


Figure 11: Poverty Rates

Source: MAGA-SIG


Figure 12: Poverty Densities

Source: Drivers of Growth team using data from MAGA-SIG and the Population Census, 2002.


Figure 13: Vulnerability to Food Insecurity

Source: MAGA-SIG, VAM analysis


Table 1: Rural and Indigenous, Ethnic Group

No. of Persons No. of Poor No. of Extreme Poor

Total 11,385,411 (100%)

6,397,903 (56.2%)

1,786,682 (15.7%)

Rural 6,987,587 (61.4%)

5,205,352 (81.4%)

1,663,099 (93.1%)

Indigenous 4,844,032 (42.6%)

3,687,600 (57.6%)

1,281,674 (71.7%)

of which: K’iche 1,073,324

(9.4%) 691,009 (10.8%)

204,493 (11.5%)

Q’eqchi 736,163 (6.5%)

614,315 (9.6%)

279,377 (15.6%)

Kaqchiquel 1,011,802 (8.9%)

633,523 (9.9%)

137,603 (7.7%)

Mam 940,865 (8.3%)

844,308 (13.2%)

321,545 (18.0%)

Other indigenous 1,081,878 (9.5%)

904,445 (14.1%)

338,656 (19%)

Source: World Bank 2004, pp. 258-259. Table 2: Population and Poverty Rates by Region Region Code

Region Name Share of Total Popula-

tion %

General Poverty Rate

%

Extreme Poverty Rate

%

Share of Total Poor in Country %

Share of Extreme Poor in

Country %

Share Pop. Without

Motorable Road %

I Metropolitana 21.7 18.6 0.6 6.9 0.9 3.2 II Norte 8.1 84.0 39.1 12.1 20.1 17.8 III Nororiente 8.2 51.8 8.9 7.6 4.7 18.3 IV Suroriente 8.8 68.6 20.1 10.7 11.3 14.4 V Central 10.7 51.7 8.7 9.8 6.0 9.5 VI Suroccidente 26.5 64.0 17.0 30.1 28.6 16.1 VII Noroccidente 12.9 82.1 31.5 18.8 25.9 20.5 VIII Petén 3.3 68.0 12.9 4.0 2.9 2.3 Total Guate-

mala 100 56.2 15.7 100 100 13.3

Source: World Bank 2004, p. 258.


Table 3: Population Change by Region and Department, 1994-2002 Population

Region Department 2002 1994 Percent Change,

1994-2002 Metro 2578526 1740988 48.1 Guatemala 48.1 North 1017730 699257 45.5 Alta Verapaz 49.7 Baja Verapaz 30.8 Northeast 1003097 749328 33.9 El Progreso 32.1 Izabal 31.9 Zacapa 35.5 Chiquimula 35.7 Southeast 975778 749829 30.1 Santa Rosa 29.6 Jalapa 37.1 Jutiapa 26.0 Central 32.7 Sacatepéquez 43.5 Chimaltenango 35.8 Escuintla 25.1 Southwest 2837361 2139414 32.6 Sololá 38.6 Totonicapán 32.8 Quetzaltenango 34.6 Suchitepéquez 31.4 Retalhuleu 28.2 San Marcos 30.8 Northwest 1468818 1072043 37.0 Huehuetenango 38.7 Quiché 34.5 Petén 333389 224884 48.2 Petén 48.2

Source: Population Census, 1994 and 2002.


Table 4: Determinants of Municipio-level Changes in Population (Regression Results)

Dependent variable: log population 2002- log population 1994 Variable Description Source Coefficient tIntercept 0.3156558 23.71

popden Population density Census 1994 0.0000527 3.14perrate % Agricultural land in per-

ennials Agricultural Census, 2003

-0.049732 -2.25

roadkm Road density MAGA-SIG 0.0355232 0.85sum_porce_ Soil quality (composite

variable) MAGA-SIG -0.192051 -1.65

Source: Regression results.


Table 5: Characterization of Agricultural Regions of Guatemala Region Main characteristics Main products Livelihood strategies Western Altiplano

Small holdings and subdivision of parcels Private land ownership Some commercialization, particularly in horti-cultural areas Substantial amounts of contract agriculture, particular in export-oriented production Heterogeneity and diversified livelihood strate-gies

Maize and beans, coffee, pota-toes, horticulture (for domestic and international markets), de-ciduous fruits

Subsistence production Off-farm labor supply Micro-industry Petty trading Migration (internal and international) Migration and land renting

Southern Coast

Large-scale, commercial producers Use of seasonal contract labor Some small-scale producers (many in coffee and banana areas) Some land redistribution efforts Private land ownership

Sugar cane, coffee, banana, African palm, livestock, rice (small-scale), maize and beans (small-scale), tobacco (small-scale)

Mixed subsistence farming with off-farm labor supply Some petty trading Permanent employment on plantations International migration Fishing (subsistence and market-oriented) Micro-industry (textiles, ceramics, dairy pro-duction)

Alta Vera-paz

Small-, medium-, and large-scale agriculture Low population densities and relatively large holding sizes Diversified production systems depending on location Cooperative farming in coffee- and cardamom-producing areas Some squatters on plantations

Coffee, cardamom, maize and beans, horticulture (for domestic and international markets), poul-try, small-scale livestock, exten-sive livestock (Polochic valley), rice (large-scale), cacao

Subsistence production Land renting (and production on rented land) Small amounts of off-farm labor supply (to plantations) Micro-industry (dairy production, handicrafts) Migration (internal and international)


Region Main Characteristics Main Products Livelihood Strategies East Large-scale mixed with small-scale agriculture

Generally low population densities Substantial amounts of contract agriculture, particular in export-oriented production of hor-ticultural crops Plantation agriculture producing banana, palm, oil, some rice Irrigated melon production with 3 crops per year in some areas Some large-scale livestock farms Exposure to flooding and hurricanes is rela-tively high in low-lying areas

Basic grains, maize and beans, dairy, horticultural products, tobacco, coffee, plantain and banana, small animals, Afri-can palm, melons, livestock, tropical fruits and citrus, pine-apple, some small-scale sugar cane

Subsistence production Small-scale production of market and export crops Land renting (and production on rented land) Labor supply to plantations (banana, melon, plantain) to medium-large coffee growers and to small-scale tobacco producers Micro industry (shoemaking, dairy, forest-based handicrafts) Petty trading Migration to Guatemala City and internation-ally

Northern Lowlands

Frontier agriculture; extensive land use Medium- and large-scale farms Uncertain tenure in many areas Significant amounts of protected areas, but problems of environmental degradation are widespread Oil production

Basic grains, livestock, short-cycle horticultural crops, for-estry, small amounts of coffee and cardamom

Subsistence production Mixed agriculture/forest exploitation Off-farm employment (oil industry and tour-ism) Little or no export agriculture

Source: Adapted from AVANSCO, 2002


Table 6: Method Used to Produce Map of Zones of Economic Potential Agricultural Potential (pre-pared by MAGA-SIG)

Agricul-tural Po-tential (grouped into 3 zones)

Road Density (WFP map)

Road Density (grouped into 3 zones)

Economic Potential Zone (grouped into 3 zones)

Very High High Very High High High Very High High High High High Very High High Medium

High Medium High

Very High High Medium Low

Medium High

Very High High Low Low Medium Very High High Very Low Low Medium High High Very High High High High High High High High High High Medium

High Medium High

High High Medium Low

Medium High

High High Low Low Medium High High Very Low Low Medium Medium Medium Very High High High Medium Medium High High High Medium Medium Medium

High Medium Medium

Medium Medium Medium Low

Medium Medium

Medium Medium Low Low Low Medium Medium Very Low Low Low Low Low Very High High Medium Low Low High High Medium Low Low Medium

High Medium Low

Low Low Medium Low

Medium Low

Low Low Low Low Low Low Low Very Low Low Low Very Low Low Very High High Medium Very Low Low High High Medium Very Low Low Medium

High Medium Low

Very Low Low Medium Low

Medium Low

Very Low Low Low Low Low Very Low Low Very Low Low Low

LCR Sustainable Development Working Papers For back issues please contact Janice Molina at the World Bank ([email protected]) No. Title Date Author

20 Lessons of Indigenous Development in Latin America: The Proceedings of a World Bank Workshop on Indigenous Peoples Development

September 2004 Shelton H. Davis, Jorge E. Uquillas, Melanie A. Eltz

19 Responding to Climate Change: Proposed Action Plan for the World Bank in Latin America

June 2004 Walter Vergara

18 Programas de microcrédito y capital social entre mujeres indígenas

January 2004 Carmen Tene Guadalupe Tobar Dolores Bolaños

17 Sistema Participativo de Planificación, Seguimiento y Evaluación de Proyectos con Pueblos Indígenas

January 2004 Gloria Vela Axel Borchgrevink

16 Good Dams and Bad Dams: Environmental Criteria for Site Selection of Hydroelectric Projects

November 2003 George Ledec Juan David Quintero

15 Social Capital as a Factor in Indigenous Peoples Development in Ecuador

August 2003 Jorge E. Uquillas Martien Van Nieuwkoop

14 CFC Markets in Latin America December 2002 ICF Consulting / World Bank

13 World Bank Approaches to the Brazilian Amazon: The Bumpy Road toward Sustainable Development

November 2002 John Redwood III

12 Microfinance Prospects in Brazil September 2001 Steven N. Schonberger

11 Local Governments and Sustainable Rural Development: The Rural Municipalities Project (Protierra) in Nicaragua

December 2000 Maurizio Guadagni and others

10 Strengthening Indigenous Organizations: The World Bank’s Indigenous Capacity-Building Program in Latin America

December 2000 Jorge E. Uquillas Teresa Aparicio Gabara

9 La raza y la pobreza: Consulta interagencias sobre afrolatinoamericanos (available in English)

November 2000 Proceedings of June 2000 roundtable in Washington

8 Incorporación de aspectos de género y desarrollo en las operaciones del Banco Mundial: Avances y recomendaciones

April 2000 (published in English in 1998)

Caroline Moser Annika Törnqvist Bernice van Bronkhorst

7 Perceptions of Urban Violence: Participatory Appraisal Techniques (available in Spanish)

February 2000 Caroline Moser Cathy McIlwaine

6 Defining Ethnodevelopment in Operational Terms: The Ecuador Indigenous and Afro-Ecuadoran Dev. Project

January 2000 Martien van Nieuwkoop Jorge E. Uquillas

5 Violence and Social Capital: Proceedings of the LCSES Seminar Series, 1997-98

August 1999 Caroline Moser Sarah Lister

4 Youth Gangs and Violence in Latin America and the Caribbean: A Literature Survey

August 1999 Dennis Rodgers

3 Youth Violence in Latin America and the Caribbean: Costs, Causes, and Interventions

August 1999 Caroline Moser Bernice van Bronkhorst

2 A Conceptual Framework for Violence Reduction (available in Spanish)

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