From Nearshoring to Local Jobs: How Escuintla Could Reshape Guatemala’s Regional Economy

An OECD study finds that Escuintla, despite strong economic potential and a strategic location, is held back by weak infrastructure, skills gaps and governance challenges that limit inclusive growth. It argues that sustainable, place-based industrial development, backed by better skills, connectivity and local integration—is key for Guatemala to turn global opportunities into shared prosperity.

As global supply chains are redrawn by geopolitical tensions, climate risks and new technologies, Guatemala finds itself facing both opportunity and risk. A new OECD study by the OECD Development Centre and the OECD Centre for Entrepreneurship, SMEs, Regions and Cities focuses on Escuintla to understand how regions, not just countries, can compete in this changing world. The report’s message is clear: national stability matters, but the real battle for investment, jobs and sustainability is increasingly being fought at the regional level.

Strategic Location, Uneven Gains

On paper, Guatemala is well-positioned. It is close to North America, has coastlines on both the Pacific and Atlantic oceans, and enjoys access to more than 40 markets through 14 trade agreements. These advantages matter as companies look to nearshore production closer to the United States. Yet the report shows that Guatemala has struggled to turn location into broad-based growth. Exports are still dominated by primary goods and low-technology manufacturing, while higher-value activities remain limited and geographically concentrated. Most investment and economic activity are clustered around Guatemala City, leaving many regions behind and reinforcing long-standing territorial gaps.

Stability Without Enough Investment

Guatemala stands out in Latin America for its macroeconomic stability. Growth has averaged around 3–4% for more than a decade, inflation has been moderate, public debt is low, and the currency is stable. This consistency gives investors confidence and provides space for public spending. But the OECD points out a major disconnect: investment remains too low. Total investment is around 15% of GDP, far below regional averages, and public investment in infrastructure is among the lowest in Latin America. Weak roads, poor logistics, limited digital connectivity and gaps in basic services continue to raise costs for businesses and reduce quality of life, especially outside urban centres.

Skills: The Missing Link

The report identifies human capital as Guatemala’s most serious constraint. Despite a young population and a long demographic dividend, education and skills outcomes lag badly. Secondary and tertiary enrolment rates are low, learning outcomes are weak, and disparities between regions are stark. Informality dominates the labour market, affecting more than 80% of workers, while firms struggle to find people with the right technical skills. This mismatch limits productivity and discourages higher-value investment. The OECD stresses that technical and vocational education, dual training systems, recognition of skills gained informally and better job-matching services are essential if investment is to translate into decent, formal jobs.

Escuintla: Strong Economy, Deep Challenges

Escuintla captures Guatemala’s contradictions in one place. It is one of the country’s richest departments, with the second-highest GDP per capita, a major port, fertile land and key transport corridors. Industrial activity is expanding, and new development zones are emerging. Yet social and environmental weaknesses undermine this economic strength. Tertiary education attainment is extremely low, insecurity is severe, broadband access is limited and road quality is poor. Environmental problems, such as inadequate wastewater treatment, air pollution and low use of renewable energy, threaten long-term sustainability. These factors make it harder for Escuintla to attract skilled workers and higher-value industries, despite its strategic location.

Industrial Parks as a Test Case

The OECD sees place-based industrialisation as a potential way forward. Industrial parks and special economic zones can attract investment, but only if they are well designed and tightly linked to local development. Tax incentives alone rarely work. What matters more is reliable infrastructure, skilled labour, clear rules, environmental standards and strong ties to local firms and communities. The Synergy Industrial Park in Escuintla illustrates this potential. Developed by the private sector, it targets higher-value industries and invests in renewable energy and sustainability. Early results show promise, with thousands of jobs created. But the report warns that long-term success will depend on deeper integration, training local workers, linking small firms into supply chains, involving communities in decisions and managing shared resources transparently.

A Regional Path to Shared Prosperity

The report’s central conclusion is simple: regional attractiveness cannot be built through incentives or branding alone. It depends on everyday realities, schools that work, roads that connect, institutions that coordinate, environments that are protected and jobs that are formal and productive. For Escuintla, the challenge is to turn economic momentum into inclusive and sustainable growth. For Guatemala, the lesson is broader: in a fragmented global economy, long-term prosperity will depend on empowering regions with the skills, infrastructure and governance they need to shape their own futures.