But the Foundation for Economic Research says tight goals set by international lending institutions are choking development. An expert who supports restructuring the nation's economy says the new plan clearly indicates the President is having difficulty sticking to his economic agenda. But even the use of force by De Leon part may be no match for businesses that refuse to pay taxes, or public employee unions that oppose privatization. A controversial aspect of the plan is the proposed overhaul of the tax collection system. Guatemala currently collects less than half of all taxes due, and about one-third of what Finance Minister Richard Aitkenhead says the nation needs to meet its fiscal requirements.
Estimates indicate two-thirds of all businesses pay no taxes at all.
But even tough tax enforcement measures won't close the gap in next year's budget. According to the economic expert, any of these measures can be positive if they raise funds for long-term economic growth. He says Guatemala should build its economy through promoting exports. Politicians opposed to De Leon's Congressional clean up the fingerprints of powerful economic sectors on the President's plan. Christian Democrat President Alfonso Cabrera saysbusinessmen hoping to buy healthy state companies at fire sale prices are pushing De Leon to privatize the few remaining state assets.