Complete Thesis_double spaced abstract.pdf

Laugerud administration when newly relocated peasants began to establish agricultural
cooperatives, decreasing the availability of laborers for sugar and cotton in the mid 1970s.
Despite the problems with forcibly relocating peasants to the Franja, the region continued to be a
destination for military investing and enrichment. The region earned the nickname “The Zone of
the Generals.” During 1972-1982 all three presidents rewarded their supporters, military or PID,
by giving land titles and business subsidies in the Franja region. Furthermore, any domestic or
foreign corporations establishing a presence in the Franja received a five year exemption on state
taxes and a one year exemption on any import taxes (Black, 1984, 30). Economic development
for private gain in the Franja was paid for by the Guatemalan state.
The 1973 oil embargo restarted the efforts to find oil in Guatemala, Mexico and Belize.
Substantial oil fields were discovered in Guatemala in 1974 under the presidency of General
Arana. It was first estimated that the amount of oil discovered would be enough to render
Guatemala self-sufficient and to provide oil for export to the United States; however, in the long-
term Guatemala’s needs exceeded the amount produced and it was unable to refine its oil, so it
had to import refined oil from the United States. The inability to produce electricity continued to
hinder industrial development. Industrial output had increased during the late 1960s up until the
early 1970s. Output then began to decline from 1972 to 1977. Industrial output also decreased
from 33.2% of exports to 23.3% of exports (Black, 1984, 35). In the 1970s industrial output only
contributed to approximately 16% of gross domestic product; up from 11% of gross domestic
product in 1950 (Jonas, 1991, 76; Dunkerly, 1988, 202). Light industrialization during the 1960s-
1970s in Guatemala did not lead to a decrease in import dependency; rather, it led to an increase
in dependency on parts and equipment from the United States.
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