Decree 900 - Background

Background

When Árbenz was elected in 1951, Guatemala had a high GDP but extremely unequal distribution of land: 2% of the population controlled 72% of the arable land. Only 12% of this land was under cultivation. Much of the population without land was poor, and had associated health problems. Indigenous people had been treated as subordinate for hundreds of years, and had become increasingly impoverished and dependent on wages from plantation work. Indigenous people were also required to serve as migrant laborers through legal coercion, as Guatemala's coffee industry expanded rapidly from the 1870s through the 1930s.

After Juan Jose Arévalo won the 1944 election, Guatemala created a reformist constitution in 1945. This constitution explicitly stated that the government should protect communal land and create policies that would lead to equitable distribution of wealth. Article 88 of the 1945 Guatemalan Constitution, which served as the legal basis for Decree 900, stipulates: "It is a primary function of the State to develop agricultural activities and industry in general, toward the end that the fruits of labor shall preferentially benefit those who produce them and that the wealth shall reach the greatest number of inhabitants of the Republic." Article 90 recognizes the existence of private property, but suggests that rights to property could be waived in the social interest. This constitution marked the beginning of the Ten Years of Spring, also known as the Guatemalan Revolution: a period of democratization and liberal reforms.

Árbenz sought to transform Guatemala from a feudalist to a capitalist economy by distributing capital and creating infrastructure to increase production. The wish to transform Guatemala into a competitive capitalist nation led Árbenz to push for the construction of a national highway, a new port, a hydroelectric power plant—and for increased cultivation of unused lands.