Comedian Taps Fury Over Corruption, Wins Guatemala Voteby
Official results show landslide victory for political outsider
Morales says mining royalties are `ridiculous' and `unjust'
Jimmy Morales, a comedian who never held elective office, won Guatemala’s presidency on Sunday after voter fury over corruption scandals fueled months of protests in Central America’s biggest economy.
Morales, who ran under the slogan "neither corrupt nor a thief,” won 67 percent of the vote. Former First Lady Sandra Torres conceded the race after official results showed her with about 32 percent of the vote.
The landslide win for the 46-year-old political neophyte came in a year that saw Guatemala’s president, vice president and central bank chief jailed for allegedly being involved in separate corruption scandals. After taking office Jan. 14, Morales will oversee a $59 billion economy which exports coffee, textiles and gold and serves as a gateway between Latin America and the U.S. for migrants and drug trafficking.
He is expected to announce a transition team today and said his economic advisers would meet with congress to discuss next year’s budget proposal. Cabinet announcements will come in mid-December, he said.
“We should take advantage of this moment to launch our true image, an image of what we really are, a country of honest, just and friendly people,” Morales told supporters Sunday night, vowing to have “zero tolerance” for corruption.
“We want change and not more of the same,” said Henry Dieguez, a 44-year-old teacher, after voting in Guatemala City. “We want fresh faces and new ideas.”
During the campaign, Morales said he would seek to change Guatemala’s 1 percent metal mining royalty, which he called "ridiculous" and "unjust.” Attempts to boost royalties in recent years have failed. Guatemala has struggled to boost tax revenue that is already among the lowest in Latin America as a share of gross domestic product and is projected to fall further.
In an Oct. 24 interview, Morales also said he would seek to expand the tax base by encouraging informal workers and small businesses to join the formal economy. He has pledged to lower interest rates for small and medium business loans and promised to increase the government budget to crack down on corrupt officials.
"Corruption is the main topic on the agenda, and that’s going to continue," said Paulo de Leon, director of research group Central American Business Intelligence. "Jimmy isn’t from the political establishment, and I think that’s why he’s been able to capture people’s discontent with the political class in the country."
Morales will also inherit a proposed budget for 2016 of 72.4 billion quetzals ($9.4 billion) that would include a fiscal deficit of 1.9 percent of gross domestic product. The plan calls for 11 billion quetzals in debt issuance for 2016, up from 4 billion quetzals this year. Outgoing Finance Minister Dorval Carias said the government would consider selling global bonds to finance the spending gap.
The yield on Guatemala’s 5.75 percent dollar bond maturing in 2022 has risen 32 basis points this year to 4.73 percent. Moody’s Investors Service rates Guatemala at Ba1, one level below investment grade, while Standard & Poor’s has it a step lower at BB.