High gear.

Guatemalan Finance Minister Hugo Beteta has broad experience as a consultant for multilateral organizations in infrastructure, water and development projects. After working at entities including the Inter-American Development Bank and the World Bank, he had an academic career as well. He holds a doctorate in development economics from the Massachusetts Institute of Technology. One of his goals is to hold the line on Guatemala's 2% public deficit. Beteta spoke with LATIN TRADE Mexico Correspondent Marisol Rueda about Guatemala's economic future.

Guatemala is expecting its biggest economic growth of the last 30 years. How has this come about?

There have been several drivers. Non-traditional agriculture, as well as highly specialized agriculture, is going very well, as are the service and construction sectors. Call centers also have been very strong. Guatemala has not reaped the boom from raw materials that the rest of Latin America is enjoying because we are not an oil or mining country. This year we are expecting economic growth of 5.4%. On the other hand, the macroeconomic side is very stable; Guatemala has a third of Central America's GDP [gross domestic product]; we have the lowest external debt of Latin America and our international reserves are robust.

What are the areas in which Guatemala will benefit most under the DR-Cafta free trade agreement?

The fact that as a region we have an instrument for innovation creates an incentive structure that's very interesting for labor modernization and environmental management. Of course, it establishes an important window of opportunity for foreign investors who want to take advantage of the logistics capacity of the country to sell to the United States. Early this year it was announced in Davos that manufactured goods that use Mexican materials, for example, will be treated as if they were Central American; the entire textile industry, if it uses fabrics of Mexican manufacture, will export to the United States duty free, which opens even more opportunities. We also have begun, as a Central American bloc, negotiations on free [trade] with Europe.

How will the infrastructure problems, long delayed, be resolved?

We have a reforms structure in place that is very important for developing sectors such as electricity and telecommunications, which rely on modnernized judicial and regulatory frameworks. Unlike other countries in the region, many of the reforms are already in place. In the case of the roads, ports and airports infrastructure, we have had a boom in public investment. We are finishing at the end of this year six international airports in the country and we are investing in roads. Major laws have been passed that will allow for the construction of the road link that connects Central America and Mexico, and we have made important advances in public-private participation with the support of Chile and Brazil.

What measures are being employed to attract investment?

We have a coordinating entity to serve enterprises. Last year the [World Bank] report Doing Business named Guatemala one of the eight biggest reformers of the business climate in the world and one of the top three in the region. We also have a national competitiveness strategy; just last year we went up 20 points in the global competitive index of the World Economic Forum.

What solutions do you have for the gang violence problem?

Most investors have very high returns and they remain in the country. Of course, gangs are a regional tropic, but I don't think it's a determining factor. I believe that good government, transparency, the quality of infrastructure and of human resources are very important matters [to attract investment]. Unlike other countries, Guatemala has chosen not to have tougher laws but rather to follow a route toward security that contemplates human rights, preventive action with youth, and a focus on job and educational opportunities. We have tried to involve the private sector in giving at-risk youth labor opportunities.

What actions do you take with those who are already involved in gangs?

We did a pretty heroic thing. It was the intervention of Pavon, which is the main penitentiary system in the country. For more than 20 years, an entire area of Pavon was under the control of the inmates. It had become an important place for the planning for crimes. We went in with all the force of the law with a very successful operation and we disarmed that penitentiary. We are building six new, high-security prisons and reforming the entire jail system.