Complete Thesis_double spaced abstract.pdf

President Arbenz (1950-1954):
Economic Development through Export Led Growth through Economic Modernization
The ouster of Ubico in 1944 marked the official start of the revolutionary movement in
Guatemala. Under President Arévalo and President Arbenz significant economic changes were
instituted in an attempt to lessen the influence of the two dominant and overbearing economic
players, the “foreign monopolies and the landed oligarchy” (Jonas, 1991, 26). The two most
important items to be rectified were modernizing the agricultural sector, including diversifying
agricultural production, and increasing the autonomy of the Guatemalan economy. A few years
after the revolution Guatemala was still heavily dependent on the United States for investment
and purchase of exports; it was also still dependent on a select few mono-crops for export, coffee,
cotton, and bananas. In the early 1950s Guatemalan coffee constituted 80% of all Guatemalan
exports; the United States consumed 83.2% of all Guatemalan exports and provided 62.9% of all
imports to Guatemala. Post Ubico, the Guatemalan leadership desired diversified foreign
investments, national decision making ability in regards to the economy, diversified agriculture,
and an ability to redistribute state resources. President Arbenz believed the path to independence
could be achieved through import substitution industrialization, a route endorsed by the World
Bank and the United Nations, with an emphasis on the natural resources available to Guatemala.
Arbenz instituted upgrades to domestic infrastructure, including building or improving upon a
national highway, an Atlantic port, and a hydroelectric plant; the goal of the infrastructure
projects was to enable Guatemalan firms to compete with the foreign firms already in Guatemala.
Arévalo and Arbenz did not attempt to remove the capitalist structures in place in Guatemala,
rather they sought to increase competition between foreign and domestic interests, as well as to
modernize and diversify the Guatemalan economy.
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