At the end of May 2013, nearly 1000 people gathered at the Camino Real hotel in Guatemala City’s exclusive Zona 10 for the Guatemala Investment Summit. They were addressed by then-president Otto Pérez Molina, and discussed proposals such as gold and nickel mining in the eastern department of Izabal, the construction of airports in various parts of the country and sovereign wealth funds.

Guatemala’s minister of economy, Sergio de la Torre, told attendees that Guatemala was “the best country for foreign investment in the region, because we offer macroeconomic and political stability, clear rules and tax laws, and growth opportunities [that] few countries in Latin America [can match]”, according to daily newspaper Prensa Libre.

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The largest economy and most populous country in Central America, Guatemala was hoping to attract up to $11bn of investment from the event, which had been organised by the Chamber of Industry and the Ministry of the Economy. Despite its large market share and the wealth of its endowment with natural resources, in 2012 Guatemala – known as ‘the land of eternal spring’ thanks to its temperate climate – had one of the lowest rates of FDI in the region, a mere 2.3% of GDP, which put it ahead only of El Salvador among its neighbours.

War on drugs

The reasons for this investment shortfall are complex. Only a few years ago, Guatemala appeared to be spinning out of control. In addition to a long-standing problem with local maras (street gangs), Mexican cartels – pushed south by the country’s then-president Felipe Calderón’s militarised campaign against drug traffickers – began to proliferate throughout Guatemala.

None made more of a mark than Los Zetas. Formed by members of a Mexican army unit designed to combat drug trafficking that went rogue and became the armed wing of the Matamoros-based Gulf Cartel, Los Zetas struck out on its own in 2010 and since then has been reinforced by deserters from Los Kabiles, a special-operations unit of the Guatemalan army trained in jungle warfare and counterinsurgency tactics.

Los Zetas announced its presence in Guatemala in spectacular fashion with the March 2008 killing of Guatemalan drug lord Juan ‘El Juancho’ José León Ardón and 10 other people in the eastern state of Zacapa, and it subsequently established a strong foothold in the country, but especially in the departments of El Petén and Alta Verapaz in the north, and Izabal in the east. In May 2011, 27 farm workers were found massacred in El Petén, a crime blamed on Los Zetas. Subsequently the dismembered body of the prosecutor investigating the case was found in Alta Verapaz. Both departments were subject to state-of-siege orders during the 2008 to 2012 presidency of Mr Pérez’s predecessor, Álvaro Colom.

After Mr Pérez took office in January 2012, the violence in Guatemala became less spectacular, though there is little evidence to suggest that Los Zetas, or Mexico’s Sinaloa Cartel, which also has a presence in Guatemala (its leader, Joaquín ‘El Chapo’ Guzmán Loera, was arrested in Guatemala in June 1993 and escaped from Mexican custody eight years later) have been scared off.

During Mr Pérez’s tenure, the descent into violence (in a country that experienced a bloody 30-year civil war) seemed to slow somewhat. Ambitious projects such as the plan presented by the national economic infrastructure development agency to build a port on the border between Guatemala and Mexico now appears to be a real possibility.

Questions of guilt

Mr Pérez, a former general in the Guatemalan army, came with his own baggage. During the 1982-83 dictatorship of Efraín Ríos Montt and the military offensive in Guatemala’s western highlands, Mr Pérez served as a military commander in El Quiché, one of Guatemala’s most heavily indigenous and war-torn departments. Earlier this year, Mr Ríos Montt was convicted of genocide by a Guatemalan court over the army’s actions in El Quiché at the time. Though the conviction was later vacated and Mr Ríos Montt’s legal status remains unresolved, the links between the two men have raised questions regarding the potential culpability of Mr Pérez.

The matter has been complicated further by Mr Perez's resignation from the presidency and arrest on charges of corruption. His vice-president, Alejandro Maldonado, will serve the remainder of Mr Pérez's four-year term, which is due to end in mid-January.

Both Mr Colom and Mr Pérez have had sometimes tense relations with the Guatemalan anti-impunity commission, a UN-mandated body that since 2007 has been charged with investigating criminal organisations in the country and exposing their links to the state, and which has experienced varying degrees of success. Until June 2010, the commission was under the direction of Carlos Castresana, a Spanish magistrate experienced at prosecuting drug-related cases in Mexico. Mr Castresana resigned after charging the Colom government with undermining the commission’s work, and the mantle of leadership was passed to Francisco Dall’Anese Ruiz, the former attorney general of Costa Rica. Mr Dall’Anese himself announced that he was quitting earlier this year. Guatemala’s own attorney general, Claudia Paz y Paz, however, is widely respected and remains in place.

Slow poisoning

An equally thorny issue in Guatemala is the country's chaotically managed mining sector. During a 2012 mining dispute near the town of Totonicapán, soldiers – sporadically used by Mr Pérez for law enforcement duties – opened fire on unarmed indigenous protesters who had blocked a major road. Eight protesters died and 34 were wounded. Eight army privates and a colonel were arrested for the killings.

In May this year, Guatemala’s multicultural law association and a social justice organisation released a study claiming that mining near the municipality of San Miguel Ixtahuacán in the department of San Marcos had resulted in at least 100 cases of diseases related to high concentrations of arsenic, which amounted to “slow poisoning”. Researchers at the University of Michigan and the University of Ghent in Belgium came to similar conclusions. The company operating in the area, Mina Marlin-Montana Exploradora, is a subsidiary of Vancouver-based Goldcorp.

In a country buffeted by such unrest, the response to events such as the Guatemala Investment Summit 2013, which had a greater-than-expected attendance, may be a sign that things are changing, if Guatemala can get a handle on the violence and political instability and address the yawning economic inequalities that underpin it.

Guatemala’s riches go beyond its natural resources: a vibrant tourist industry boasts the old colonial city of Antigua, a Unesco World Heritage Site, and the popular and picturesque Lake Atitlán.

However, it will be a tough road. To emphasise this, in June, near the city of Quetzaltenango, where thousands of foreign students study the Spanish language, an armed attack on a police station in the town of Salcajá left eight policemen dead. The attack has been blamed upon drug trafficking gangs.