The country emerged from military rule in 1986. Democratic fundamentals are progressively but slowly taking hold. The transitions of power in 2016 from Alejandro Maldonado Aguirre to Morales, and subsequently to Giammattei in 2020 were smooth, and elections are increasingly considered free and fair. Several fraud claims emerged during the 2019 general election. However, the process was recognised by international electoral observers as broadly democratic. The 14 January 2020 transition from Morales to Giammattei was peaceful as the political class has widely recognised the electoral results.

The president in Guatemala is responsible for national defence and security, and is the titular commander-in-chief of the armed forces. The president can resort to exceptional powers in times of national emergency, and can nominate and remove ministers, officials and diplomats. The president appoints the cabinet and a governor to administer each of the country's 22 departments. The legislative branch of government is compounded by a unicameral Congress with 160 seats. Of these, 128 are directly elected by simple majority vote, and the remaining 32 are elected by proportional representation vote. Congress members serve a four-year term. Congress elects the president of the judiciary (who is also president of the CSJ), judges and other officials. A Constitutional Court (headed by the president of the CSJ) rules on constitutional issues. A human rights procurator has powers to take up human rights cases.

Democratic institutions remain fragile. Right-wing members of the oligarchy and military appear to have accepted that democratic liberalisation is inevitable, but retain important positions of power. There is no justice ministry. The attorney-general, the fiscal-general and the national procurator-general share responsibility for the legal system; this shared responsibility often leads to poorly co-ordinated and time-consuming investigations. The Supreme Court of Justice (CSJ) heads the judiciary.

The major parties do not differ greatly in their political outlook; there is broad consensus on the need for market-friendly economic policies and a hard-line position on improving the security situation. However, long-term policymaking is often sidelined by Congress. In fact, Giammattei's right-of-centre Vamos party holds 17 legislative seats (out of 160) in Congress. As such, the need for cross-party support frequently delays effective policymaking. Moreover, policymaking is routinely sidetracked in favour of issues regarding corruption investigations affecting high-level politicians.

Political parties are generally weak and often built around personalities rather than having long-standing roots in society. As a result, cohesive public policy initiatives from one government to the next are rare, despite the lack of ideological differences. The fluid nature of Guatemalan politics means that new political parties and potential presidential contenders can emerge rapidly and with little history behind them. As noted, party allegiances are tenuous and political movements rise and fall with the popularity of their leaders. Backing from the powerful business community can also make or break politicians.

Regarding its foreign relations, the US is the country's most important trading partner, a position entrenched by the Central America Free Trade Agreement (CAFTA-DR) that came into effect in 2006, but the country has limited influence over domestic politics. Right-wing Guatemalans resent US measures designed to foster democratic progress and respect for human rights; left-wingers are suspicious of US intentions and demand retribution for US involvement in oppressive regimes. The US is increasingly concerned by international drug traffickers' use of Guatemalan territory and airspace, and the involvement of former and current members of the security services in serious crime, including drug trafficking. The US has deployed marines to assist Guatemala with its struggle against organised criminal groups over the past few years, particularly in hotspots along the Guatemala-Mexico border. More recent concerns of US-Guatemala relations have to do with the increasing influx of undocumented Guatemalans entering the US since 2017.

Guatemala has adopted a largely pro-business stance wherein foreign investors can establish or form joint ventures with local companies. The government imposes no restrictions on foreign ownership in sectors that typically have limits on foreign ownership in other Latin American countries. However, the regulatory environment is highly unpredictable and legislation enforcement is weak. Key stakeholders, including the organised business sector have significant levels of influence on the passage of legislation. 

The risk of the nationalisation or expropriation of foreign-owned assets is slim; any government would be unwilling to risk Guatemala's image with foreign investors by mounting a sustained campaign against their operations. However, Heightened contract risk has been particularly noted in the mining sector since 2016. Moreover, environmental-sensitive sectors, such as energy and mining, are the key focus of heightened integrity risks. Favouritism, conflicts of interest and nepotism are widespread in regards to the awarding of government contracts. Widespread allegations of irregularities and favouritism are more common with contracts awarded to local companies which have a longstanding patronage relationship with the government. Social awareness against corrupt business practices has increased in recent years. 

Sovereign risks are low, though should not be discarded. The country’s economy fared the 2015 political crisis relatively well as a result of sound macroeconomic policies over the past decade, low public debt-to-GDP levels and favourable external liquidity. A persistently low tax base makes public finances vulnerable to fluctuations in economic performance. Structural reforms are necessary for the country to increase fiscal revenues to meet its financial obligations and support economic growth in the long term. 

Guatemala is considered a Hybrid Regime in the 2020 Democracy Index, developed by The Economist Intelligence Unit (EIU), where the country ranks 93 out of 167 countries scored.

The country ranks 127 at the 2019 Human Development Index developed by the United Nations Development Programme.

Corruption and a weak rule of law are the main operational hurdles in Guatemala. The country’s burdensome bureaucracy is compounded by petty corruption at all levels and branches of government, and means that companies can lack legal certainties when embroiled in justice processes. Infrastructure is widely deficient and in need of major investments while an overall unskilled labour force remains a hurdle for industries requiring high-skilled labour.  Labor strikes are increasingly likely as job cuts because of the spread of the coronavirus disease (COVID-19)-virus-related downturn are implemented. Sectors most likely to face increased strike risks include cargo transportation, manufacturing, and textiles. Companies that operate in Guatemala regularly are likely to face operational challenges when dealing with national and municipal governments. These range from barriers in obtaining and acting on resource development permits to corruption and bribery demands.

Cumbersome bureaucracy, including lengthy processes to obtain permits and a non-transparent legal system, is one of the main operational hurdles in Guatemala. Despite some improvements, much legislation relevant to business is out-of-date, while existing provisions are not consistently implemented. Moreover, the Labour code stipulates a minimum threshold of 90% of employees to be Guatemalan.

The Central American countries' electricity grids are connected by a single 1820-km (1130-mi) electricity line, making them particularly susceptible to power outages and blackouts that have affected all of Central America during the last decade.

The infrastructure is largely deficient. Roads outside major urban areas are often poorly maintained and are highly vulnerable to floods. Paved roads are rare in remote rural areas and overland travel can be difficult following bad weather because floods and landslides regularly cause disruption. There is no functioning rail network and major ports are in need of significant investment to modernise facilities and expand capacity. Driving conditions are dangerous due to poorly maintained roads, lack of lighting, and unsafe driving habits; fatal accidents are common. Additionally, accidents or general road rage have been known to lead to violent confrontations.

There are also significant risks on roads and highways due to the presence of criminal elements, notably in rural areas. Attacks and other criminal activities along highways in rural areas, notably in border regions (e.g. Petén department), due to the presence of arms, human, and drug traffickers. Criminals sometimes erect roadblocks to force cars to stop before their occupants are robbed or assaulted, including during the day.

Driving at night outside of cities should be avoided whenever possible and travel in groups of two or more vehicles is recommended. In cities, always drive with windows rolled up, doors locked, and valuable items stored out of sight; when in heavy traffic, leave room to maneuver between you and the car ahead.

Crime and accident rates are high on public transportation, notably municipal buses in the capital, as well as on intercity buses. Bus drivers and passengers may also be attacked by gang members in the context of extortion rackets and thus most buses should be avoided. Transmetro buses can be considered relatively safe.

Never hail a taxi off the street and only use official companies (e.g. Taxi Amarillo Express), called in advance. Unlicensed taxi drivers have been known to rob or assault their passengers. 

Note that crime rates tend to be particularly high around airports.

Overall, Guatemala ranks 96 out of 190 countries scored at the 2020 Doing Business Index by the World Bank and 149 out of 198 at the 2020 Corruption Perception Index by the Transparency International Organization.

Levels of crime and violence have remained high in recent years despite a year-on-year fall in the murder rate since 2009. Guatemala's main violent risk drivers include well-structured gangs and transnational trafficking organizations. Narcotics cultivation and evolving transit routes have attracted Mexican cartels to the country, especially along the pacific coast and Guatemala's border with Mexico. Guatemala City remains the dominant hotspot for criminal violence where street gangs include the Mara Salvatrucha (MS-13) and Barrio 18 (M-18). Cross-border coordination with neighboring countries, especially Mexico, is growing and criminal groups have instigated operational destabilization actions over 12 months including prison riots and targeted attacks in public spaces. Sectors at greatest risk include public transit, cargo transport, and SMEs. Corruption reaches the highest levels of government, further facilitating criminal penetration of state institutions.

The spread of the coronavirus disease 2019 (COVID-19) virus and associated job losses increase the probability of strikes and protests. Although corruption is the main focus of civil unrest, protests over a range of political, economic and human rights issues regularly take place in the centre of Guatemala City. Occasional anti-government and anti-corruption protests have reduced in size and frequency since 2018, but public perception of government mishandling during the economic pandemic fallout in 2020 and high-level corruption investigations are likely indicators of future demonstrations. Transport- and heavy cargo-related strikes disrupt port and border customs processes as well as delay supply-chain deliveries at least every couple of months. Community activism in opposition to resource development projects is also strong, particularly in Guatemala's northeast, and periodically results in localized property damage.

Threats of war in Guatemala remains low, despite several shooting incidents on the border with Belize ( Guatemalan government still lays claim to a large proportion of Belize's sovereign territory; talks on the matter are on-going). Military patrols from both countries occasionally engage in cross border fire along the Sarstoon River delta and Chiquibul National Park. The border issue is likely to be resolved diplomatically, with a referral to the International Court of Justice (ICJ), which has been addressing aspects of the territorial claims since 2008. The restarting of the 36-year civil war that was resolved in 1996 is also unlikely as most of the rebel groups involved in the conflict have disbanded or joined formal political processes.

There are no known terrorist groups operating in Guatemala. However, in January 2020, the government said that it would seek to classify street gangs as terrorist organizations. Criminal groups, including transnational criminal organizations and street gangs, carry out planned assassinations and use grenades to target business infrastructure to enforce extortion demands. Such actions are typically economically, rather than politically, motivated. Some former members of Guatemala’s intelligence and security establishments who are accused of terrorist acts during the country’s 36-year civil war have since formed crime and corruption rings that reach the highest levels of the government. However, these are unlikely to significantly threaten government stability.

Overall, Guatemala ranks 115 out of 163 within the 2020 Global Peace Index by the Institute for Economics and Peace.

In this regard, it should be highlighted that, although there is no risk of contracting yellow fever in Guatemala, the government requires proof of vaccination for travelers arriving from countries with a risk of yellow fever transmission. A single dose of YF vaccine is sufficient to confer sustained life-long immunity against the disease.

Guatemala ranks 125 out of 195 within the 2019 Global Health Security Index, a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), developed with The Economist Intelligence Unit (EIU).

Guatemala is a subtropical highland oceanic climate, characterized by high temperatures and humidity levels. The dry season lasts from November until March (mild temperatures, low humidity) and the rainy season from June until October. Humidity during the rainy season, accompanied by high temperatures regularly reaching 38°C (100°F), particularly along the Pacific coast. Nights are generally cold in mountainous areas.

Guatemala is highly vulnerable to natural disasters. Powerful earthquakes regularly strike the country. In 1976, an earthquake with a magnitude of 7.6 on the Richter scale left 26,000 dead and devastated parts of the country. More recently, an 8.2-magnitude offshore earthquake struck the region in September 2017, resulting in damages in the southwestern department of San Marcos.

Offshore earthquakes can trigger tsunamis. If in a coastal area when an earthquake strikes, immediately look to see if a tsunami alert has been issued (either by the government or the Pacific Tsunami Warning Center). If in doubt, move inland following tsunami evacuation routes if designated and/or seek higher ground.

The country is also home to a number of active volcanoes, including the Fuego, Pacaya, and Santiaguito volcanoes. Eruptions have been known to result in flight disruptions, including at Guatemala City's La Aurora International Airport (GUA).

Guatemala is vulnerable to hurricanes, tropical storms, and tropical storm remnants coming from both the Pacific and Caribbean. The Pacific hurricane season officially runs from May 15 to November 30, and the Atlantic hurricane season from June 1 to November 30. In June 2014, Tropical Storm Boris caused flooding and property damage, along with five deaths.

Torrential rains can lead to deadly flooding and landslides, particularly during the rainy season (May/June to November). Some 300 people were killed in a landslide that buried the village of El Cambray Dos (15 km [10 mi] east of the capital) in October 2015; another 12 people died in a landslide in San Pedro Soloma in June 2017. Furthermore, severe flooding in September/October 2017 left at least 26 people dead and hundreds of thousands of people affected; numerous roads and bridges were blocked by the floodwaters.

Forest fires are common during the dry season.

If you plan to visit Guatemala, stay informed by the Coordinadora Nacional para la Reducción de Desastres - CONRED or dialing 119 (24/7).