Collapse of Guatemala’s Ruling Party Boosts Chances for Baldizon

A corruption scandal that forced the resignation of Guatemala’s vice president is the latest difficulty facing the ruling Patriot Party as it struggles to find a presidential candidate for elections in September.

Roxana Baldetti resigned as vice president Friday amid a customs fraud controversy that claimed her top aide last month. She said she is innocent. The Patriot’s presidential candidate, former Infrastructure Minister Alejandro Sinibaldi, earlier had quit the party, saying it had lost its way, after authorities arrested the country’s tax chief for customs tax fraud. Sinibaldi may keep his candidacy alive with a third party.

President Otto Perez Molina on Monday announced three nominees to serve as vice president and said anyone responsible for tax fraud will have to face the courts. Even before the latest scandal, opposition candidate Manuel Baldizon already had double the support of any other candidate in the race to lead Central America’s biggest economy.

“Sinibaldi dropping out of the race for the Patriot Party and the implosion of the Patriot Party just further weakens the party and further bolsters Baldizon’s chances in September,” Eurasia Group analyst Risa Grais-Targow said in a phone interview.

Baldizon said on his Twitter account on Friday that Baldetti’s resignation “is a victory for the people” and that “justice should be done.” Yet he had to suspend a campaign rally on Saturday in the colonial city of Antigua after marchers turned out with signs reading “it’s not your turn” and “no more corrupt politicians.”

Polling Data

Four months before the vote, a poll released last week by Guatemalan firm ProDatos showed Baldizon leading the field with 30 percent. Former first lady Sandra Torres and Sinibaldi were tied for second with 14.7 percent each. The survey of 1,200 people had a margin of error of 2.8 percentage points.

Guatemala’s next president will oversee a government that has struggled to boost tax revenue that is already one of the lowest in Latin America as a share of gross domestic product and projected to fall further. Fraud and the smuggling of goods costs the government the equivalent of 3.6 percent of GDP, according to Raquel Zelaya, director of Guatemalan think tank ASIES.

“Tax collection morale is as low as the ground,” she said.

Baldizon’s move to name former central bank President Edgar Barquin as his running mate is a positive sign to investors, said Grais-Targow.

“Guatemala has very well-run macroeconomic policy and a very strong central bank,” she said. “Those are things that aren’t going to change.”

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