Guatemala Storm Rebuilding To
Cost Up to $1 Billion
GUATEMALA (Reuters) - Rebuilding in
Guatemala after a devastating tropical storm
last month could cost up to $1 billion and
the country must prove to international
donors that it is making every effort to
raise revenues through taxes, President
Alvaro Colom said on Monday.
"We are getting strong support from the
international community but Guatemala has to
demonstrate that it has a high tax level and
transparency," said Colom, who is pushing
for fiscal reform to help fund the national
budget.
About 160 people died in Guatemala when
Tropical Storm Agatha dumped days of rain on
Central America in late May bursting river
banks and causing mudslides.
Bridges, roads and more than 100,000 homes
were destroyed Coffee farms were also badly
damaged, which could reduce Guatemala's crop
by 3 percent.
Colom, touring one of the hardest hit parts
of the country in the eastern department of
Izabal, said it would cost between $650
million and $1 billion to repair damaged
infrastructure.
Guatemala has received some international
aid already -- Japan donated $220,000 in
equipment and building materials, the United
States gave hundreds of thousands dollars in
emergency relief and the European Union has
pledged three million euros for the recovery
effort.
Colom's fiscal reform proposal, which
includes raising income taxes, has faced
stiff criticism from Guatemala's powerful
business chamber and opposition politicians.
The bill has stalled in Congress and will
not be reconsidered until August. Guatemala
has one of the lowest tax collection rates
in Latin America.
"It's no secret that Guatemala has stayed
behind in the area of fiscal reform. We have
to do something to prove ourselves to the
international community," Colom said.
The government could tap the central bank
for a loan if needed.
Guatemala, which prides itself on
high-quality coffee beans that can be sold
for a premium price, saw its 2009/10 harvest
at 3.76 million 60-kilogram bags before the
storm.
Some ripening coffee cherries were knocked
off of trees because of Agatha's heavy rains
and growers worry the humidity and wet
conditions could further damage their crops
with fungus. Coffee was also hit when the
Pacaya volcano near Guatemala City exploded
before the tropical storm spewing ash on
farms. |
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