Ex-Prison Boss Wins Guatemala Election With U.S. Ties in Flux

(Bloomberg) -- A former director of prisons won Guatemala’s presidential election on Sunday, pledging to crack down on crime and boost growth to stem a flow of migrants fleeing to the U.S.

Alejandro Giammattei beat former first lady Sandra Torres with 59% of the vote to 41% with 97% of votes counted. Torres’ party conceded defeat late on Sunday in Guatemala City. Roughly 3.4 million of 8.1 million registered voters turned out to vote, or 42% of turnout, well below normal levels, according to electoral authority president Julio Solorzano.

Giammattei, who oversaw the country’s riot prone prison system from 2002-2007, promised to curb crime and said he will target annual economic growth of 6% with market friendly policies to reduce poverty.

He criticized a safe-third country agreement with the U.S. that could force the Guatemala to take in thousands of U.S.-bound asylum seekers, mainly from El Salvador and Honduras, and said the nation isn’t capable of handling an influx of migrants.

“We can’t handle those that we have, much less foreigners,” he said Sunday. “You are going to find a president who knows how to build our country.”

A 63-year-old surgeon, Giammattei succeeded in his fourth bid for Guatemala’s presidency. He was absolved of his role in the extrajudicial killing of 10 prisoners in 2006 during a raid on a Guatemala jail while he served as director of the nation’s penitentiary system.

Giammattei “comes from a conservative party and most of his campaign was based on an open economy and increasing investment,” said Adriana Thomas, Mexico-based analyst for Control Risks. “He’s very pro-business,” she said.

At 24% of GDP, Guatemala’s debt level is among the lowest in the world. The International Monetary Fund recommended this year temporarily increasing the budget deficit of 1.8% of GDP. Giammattei said in June he favors a deficit of 2.5% of GDP to boost development and reduce poverty.

Guatemala’s Central Bank President Sergio Recinos said in an interview on Friday that he doesn’t expect a major shift in economic policy under the new administration, but recommended a tax reform to boost government revenues of around 10% of GDP, among the lowest in the western hemisphere.

“There needs to be an effort to increase tax revenues and increase the quality of spending on human capital,” Recinos said. “A tax take of 10% isn’t enough to meet Guatemala’s social needs.”

In addition to revenue shortfalls, Giammattei will inherit a fractured congress where no party has a majority.

In June, Giammattei’s party won 16 seats in the 160-member unicameral congress, the second largest block after Torres’s party with 53. He will be sworn in to a four-year term on Jan. 14.

To contact the reporter on this story: Michael McDonald in San Jose, Costa Rica at mmcdonald87@bloomberg.net

To contact the editors responsible for this story: Juan Pablo Spinetto at jspinetto@bloomberg.net, Daniel Cancel

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