Corruption Downgrade To Ratings

Guatemalan President Álvaro Colom is backpedalling to restore confidence in the country's security institutions, after another series of high-level corruption allegations. On February 28 the president was forced to sack his interior minister, Raúl Velásquez, after an internal investigation revealed US$2.4mn of state funds had been diverted to offshore accounts. This was followed a few days later by corruption scandals involving key officials in the country's fight against drug traffickers. The result of these moves have been a significant downgrade to Guatemala's short-term political risk ratings, as we see a growing risk to the current administration's near-term ability to govern effectively.

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