Guatemala

Digital Ecosystem Country Assessment (DECA) Report

Publication Date: May 9, 2023

Guatemala Digital Ecosystem Country Assessment (DECA)

The Guatemala DECA report outlines the key aspects of Guatemala’s digital ecosystem and provides nine recommendations for creating a more inclusive, safe, and enabling environment.

Resource Type: Country Assessment

Country: Guatemala

Sector: Cross-Cutting

Guatemala does not have a central strategy or policy for the digitalization of government services or systems. However, the recently approved Law for the Simplification of Requirements and Administrative Procedures (Ley Antitrámites) applies to all government entities and aims to advance government administrative management through the digitalization of procedures and forms. While Guatemala is home to relatively high network coverage, gaps in internet use persist and innovative solutions face regulatory barriers. One of the key drivers of this usage gap is low affordability. The digital divide persists across gender, geography, income, education and literacy, and ethnicity, and was highlighted and exacerbated by the COVID-19 pandemic. In 2021, the greatest barrier to mobile internet adoption for urban Guatemalans was safety and security while the greatest barrier for Guatemalans living in rural areas was literacy and skills. Nine percent more women than men report that handset cost is a major reason they do not use the internet and four percent more women than men report information security as a key barrier. These gaps widen when gender intersects with indigenous households, especially those headed by women tend to be less economically stable and therefore less able to prioritize internet access given its high cost in Guatemala.

The Guatemala DECA took place between October 2021 and October 2022. It included desk research, consultations with USAID/Guatemala and eight weeks of virtual interviews. A total of 76 interviews were conducted with stakeholders from civil society, academia, the private and public sectors, and international development organizations as well as five focus group discussions with a total of 33 USAID/Guatemala project participants. Eighteen participants were women, they ranged in age from 16 to 67 years old, roughly half of whom identified as being from an Indigenous community.

The USAID/Guatemala Country Development Cooperation Strategy includes three Development Objectives:

1. Partner with the Government of Guatemala and other stakeholders to increase economic prosperity, inclusion, and stability in areas with high irregular migration
2. Partner with the Government of Guatemala and other stakeholders to strengthen effective and accountable governance to improve quality of life and reduce irregular migration
3. Partner with the Government of Guatemala and other stakeholders to improve justice and security to reduce irregular migration

Pillar 1: Digital Infrastructure and Adoption

• Challenges to policy implementation hampers the inclusive expansion of Guatemala’s connectivity infrastructure.
• The legal, policy, and regulatory environment for telecommunications face gaps in terms of capacity, transparency, and accountability.
• Some innovative solutions and business models led by civil society, international cooperation organizations, and the private sector exist for last-mile connectivity, but they are challenged by market and regulatory inefficiencies.
• The digital divide in Guatemala has several converging dimensions. Key drivers include: geography, gender, and ethnicity with affordability of internet and devices, low digital literacy, and gaps in connectivity coverage

Pillar 2: Digital Society, Rights, and Governance

• While there is an increased citizen demand for digital government services, government capacity and local-level adoption may require support.
• Digital rights require greater protection by law; gaps in the legal framework open the door for online harassment with impunity, which is an especially concerning risk for women, LGBTQI+, and children and youth given Guatemala’s history and present-day situation with offline violence against these groups.
• Cybersecurity has improved when it comes to policy on paper, but policy in action and government, citizen, and organizational cybersecurity capacity could be bolstered.
• Media, namely radio and television, are dominated by five media conglomerates. However, a vibrant new ecosystem of independent media is emerging online.

Pillar 3: Digital Economy

• Over the last decade, government entities charged with the development of the digital economy have adopted long-term policies aimed at supporting the inclusive growth of the digital economy. Interviewees from the government and from other public sector entities agree that additional support is needed to ensure that these policies are implemented.
• Connectivity gaps, insufficient banking infrastructure, lack of locally adapted features in design elements of digital financial products, and low levels of digital and financial literacy in target populations are key drivers of Guatemala’s low levels of digital financial inclusion. However, there may be an opportunity for greater digital financial inclusion in Guatemala’s high volume of remittances.
• There is unprecedented growth in the FinTech ecosystem, but their innovations do not reach the majority of the population. This is especially true for marginalized and vulnerable populations, especially the considerable proportion of the population that is unbanked.
• The startup and e-commerce ecosystems are growing, but require a more supportive policy and regulatory environment to fully reach their potential and contribute to national competitiveness.
• There is a mismatch between the digital skills supplied by Guatemala’s talent pool and those demanded by local and international tech companies. This is underscored by a considerable gender and ethnic inclusion gap in the digital talent pool.