Envío Digital
Central American University - UCA  
  Number 193 | Agosto 1997



Poverty: Protagonist Of the Post War

Now that war is no longer the main actor, there appears on stage the undeserved poverty of huge numbers of people. There is consciousness of this problem, and there are efforts that try to make definite breaks with the past.

Juan Hernández Pico, SJ

Guatemala's drop in the United Nations Human Development Index was the country's most significant news in June. According to that report, which is published annually by the UN Development Program, Guatemala fell 17 places between 1990-the first year the report was published-and 1997. Today the country is in 117th place out of 175 classified countries. In Latin America and the Caribbean, only Nicaragua (127) and Haiti (156) are below it.

Guatemalan men have a 65.6-year life expectancy (women 68). Adult literacy reaches just 55.7%. Only 2% of the population reads newspapers and 5% watches television. A mere 57% has access to health services, 64% to potable water and 59% to sewage systems. Twenty-two percent of one-year old children has not been fully immunized against tuberculosis; 25% has not against measles. Almost 4% of the Guatemalan population is disabled. There are 4,000 people per doctor (four times more than in Costa Rica) and 7,043 people per nurse (more than triple Costa Rica). Women have an average of 5.3 children.

Smallest Social Spending

Studies by the World Bank and the UN's Economic Commission for Latin America (ECLA) indicate even more alarming data. The World Bank study titled "Poverty, Inequality and Human Capital Training, 1950-2025," notes that the greatest percentage of poor people in Latin America and the Caribbean are found in Central America: some 60%. Of them, 36% lives in extreme poverty. The World Bank defines poverty as earning below two dollars daily per person, while the line of extreme poverty is drawn at one dollar per person per day. In the Andean countries 44% of the population is poor and 25% lives in extreme poverty. In the Caribbean, the figures are 38% and 19%. In Brazil, 35% and 23%. In Mexico, 26% and 17%. And in the countries of the Southern Cone, 10% and 5%.

In its 1996 study, "Social Panorama of Latin America," ECLA indicates that Guatemala has the lowest social spending as a percentage of the GDP in Latin America as well as the lowest social spending per capita. In the same 1994-95 period, Argentina spent around $700 per capita and Costa Rica some $400, while Guatemala did not even spend $50.

A Dragging Economy

This accumulation of dramatic data has had a strong impact on the country. Most government officials received the information philosophically, attributing its fundamental cause to the devastation produced by the prolonged armed conflict that ended with the signing of peace accords on December 29, 1996. But Foreign Minister Eduardo Stein focused the problem more specifically in his declarations. He reaffirmed that one of the country's most serious problems is the preponderance of speculative financial investment as opposed to productive investment. This observation points to the root of what ECLA calls "the capacity of the 10% of Latin America's population with the highest income to sustain or augment its total income," while "the participation of the 40% of the poorest homes in that total income" remains the same or deteriorates. ECLA thus focuses on the persistence of enormous inequities in the distribution of wealth.
Stein's comments also coincide with a prediction by Michel Camdessus, director of the International Monetary Fund, that "the next international economic crisis will begin with a bank crisis," because a large number of banks and other financial institutions in the world "have not expanded their base of capital to reflect its greater size" and economic importance, especially in the developing countries. They are thus walking the dangerous path of speculative investment that multiplies money but not the base of wealth that money is supposed to represent.

Raise Taxes?

With reference to the country's social-economic problem, the peace accords suggest the need to raise taxes by some 50%. They specifically propose hiking the tax burden from 8% of the GDP to 12% by the year 2000.

Since these accords were signed, both the international community and the URNG have been reminding the government and the country of this priority. Even more, it appears that the $1.9 billion that the international community promised the government in Brussels last January to fulfill the peace accord commitments are conditioned on increasing the state's fiscal income. Holland's minister of development cooperation has indicated this, as has the IMF director and the vice president of the European Union.

This commitment places the Arzú government in a difficult dilemma. It must achieve a significantly higher fiscal income level than the current one to guarantee the injection of international funds that will permit the national renovation project contained in the peace accords to be implemented. But if that increased tax income is not achieved by improving collection methods, it must come from raising existing taxes or creating new ones, which could unleash greater tax evasion or a contraction of private investment.

The efforts of Finance Minister José Alejandro Arévalo are aimed at improving current tax collection practices and making them more efficient with the creation of a Superintendence of Tax Administration (SAT). The minister hopes to increase the confidence level of taxpayers, close the doors through which tax evaders traditionally escape, and reform some already existing taxes. But to create the SAT, he must overcome the opposition of the second largest congressional bench, Ríos Montt's FRG. The FRG is systematically blocking government bills that require more than a simple majority for passage.

Privatize or Not?

Guatemala is also facing the problem of what to do with state investments, especially the generation and distribution of energy, public works infrastructures to improve communication between different regions of the country and with other countries, telephone and postal communications, etc. Everyone in Guatemala agrees that these services must be modernized. Their differences emerge when discussing the means of achieving that modernization. The government is promoting privatization, particularly of the Electric Company (EEGSA), the Guatemalan Telecommunications Enterprise (GUATEL) and the retirement pension funds, as well as the whole social security system. In addition, it has already closed the General Office of Public Works and is contracting the construction of important road works to private companies.

Several of the opposition parties, including centrist and rightwing ones that promoted privatizing these state businesses in their 1995 electoral programs, now oppose the government project, alleging hastiness and lack of transparency. The left has not opposed privatization on principle, but does question the sale of state companies like GUATEL, which are basically profitable and can be more so. It also doubts whether privatization can be achieved without favoring a private telecommunications oligopoly, which would be worse than the state monopoly because it would leave users with no defense against large rate hikes. Third, it fears that the state prefers to sell shares in order to pay its domestic debts rather than carrying out a serious tax reform. The URNG leadership expressed these concerns on April 15 in a political declaration titled "Risks and Dangers for Democracy and Peace: This is a Crucial Moment," and again on April 25 in the call for May 1 International Labor Day activities.

In any case, legislation permitting the sale of any autonomous state institutions requires more than a simple majority vote in Congress. The difficulty of winning this vote for the government's project and the inability to negotiate the incorporation of opposition amendments to it have led the government to seek a way out of its dilemma by modifying the Law of State Contracts, which the majority governing party (PAN) bench can push through the Congress with its own votes. But protests against modifying this law have been filed with the Constitutionality Court.
To complicate things further, the 1997 budget was developed based on the funds that would come from the sale of state shares, a procedure questioned at the time by a number of opposition representatives. This bogging down of the government produced an initiative by Vice President Luis Flores to call for "updating meetings," in which the first issue to be addressed would be state modernization.

Development with What Resources?

At the core is the inescapable need for the state to contribute to Guatemala's extremely costly human development. Where will the resources come from to fulfill the peace accords in this area? That is what is up for grabs. The peace accords commit the government to increase "public spending in education by the year 2000 to 50% more of the gross domestic product than was spent in 1995," with this percentage to rise if tax collection evolves successfully.

Among other concrete pledges, that increase will be needed to "facilitate access by the entire population between 7 and 12 years of age to at least three years of school before the year 2000, to "raise the literacy rate to 70% by the year 2000," to develop "adult education, training and technification programs" and "training programs in communities and businesses to upgrade and retrain workers."
The same public spending increase should also occur in the health sector, according to the peace accords. In particular, there is a concrete commitment to dedicate at least half of public health spending "to preventive care and the reduction of infant mortality to 50% of the 1995 level by the year 2000," as well as certify the eradication of measles by the same year.

The peace accords cover similar commitments in the areas of social security, housing, job development and "the transformation of land tenure and use," with the objective of incorporating "the rural population in economic, social and political development."
All of this assumes enormous economic resources. Added to all that are the costs of an agrarian modernization policy; the development of a land bank; the handing over of 100,000 hectares to small and medium legally organized peasants for natural resources management in 1999; public investment programs in the country's poorest areas between 1997 and 2000; rural development with an emphasis on basic infrastructure, rural training and credit programs, and especially the new institutions that are supposed to be created to resolve land conflicts; and the construction of a new, modernized and appropriately updated property registry, beginning this year.

Recent land conflicts in the eastern part of the country, especially the department of San Marcos, as well as community boundary conflicts in the departments of Solola and Totonicapán which cost ten deaths, emphasize the urgency of putting into practice the agricultural modernization and land access projects contained in the peace accords.

An Arduous Task

In Foreign Minister Stein's view, offering the country assurances of a modernized state, able to carry out the peace accord commitments efficiently and efficaciously, means abandoning the route of financed subsidies with exaggerated domestic debt and beginning to "reduce the domestic debt and balance public finances."
The public particularly resents the economic and security problems. In Stein's judgment, these have been the issues of greatest concern since the war ended and have led to "more intense public criticism than ever before." Given that, the long-term structural reforms the government is promoting presage "a very difficult stage, in which we will have to work arduously to correct distortions and vices inherited from the past."
What is more clear today than ever is that the task of restructuring the economy and gearing it toward sustainability and equity is indeed enormous, given the backwardness and shocking lack of social justice.

Three ex-Comandantes Cause Controversy

June 30 is Army Day. It is traditionally a day off and is celebrated with bellicose splendor. It is also the day for announcing changes, promotions and retirements among the officers. The President of the Republic and the Commander in Chief of the Army tend to preside over the ceremonies.

Father Hermógenes López Coarchita, the first Catholic priest to become a victim of Guatemalan repression, was assassinated on this same day 19 years ago. Hermógenes, the parish priest of San José Pinula, a municipality near the capital, a simple priest close to his people, had spoken out, even in newspapers, against the unconstitutional custom of forcibly recruiting young men from rural areas.

Since 1991, the June 30 military parade has also coincided with the pilgrimage of religious and human rights activists from the place where, a year earlier, a specialist of the Presidential High Command assassinated anthropologist Mirna Mack to the temple where a mass is celebrated in honor of Guatemalan martyrs.

This year the military parade was not held on the Marte Field, but at Constitution Plaza, in the central park in front of the National Palace. It was as if to emphasize the army's submission to civilian power in the symbol of its Commander, the President of the Republic.

For the first time, the tone of the parade was not one of more or less sophisticated armaments or the camouflaged faces of special counterinsurgency troops, the feared “kaibiles”. The first women cadets marched, Polytechnic School students marched together with Army engineer units, with the cars the use for agricultural and construction tasks. The environmental care units and public medical attention units also marched. Naturally, the Air Force airplanes and helicopters were present, but the emphasis was clearly different from previous years; it was a parade of a peace-time army, re-outfitted for civic purposes.

The greatest surprise of the parade was on the presidential platform. Alongside the President and Commander in Chief and his wife, the cabinet and the Army High Command, three of the four ex-Comandantes of the URNG, special guests of the President and the Defense Minister, General Julio Balconi. The three who attended were Comandantes Ricardo Ramírez (Rolando Morán), Jorge Ismael Soto (Pablo Monsanto) and Ricardo Rosales (Carlos González). Conspicuously absent was Rodrigo Asturias (Gaspar Ilóm). No other political or nongovernmental Guatemalan of any weight was on that platform. When the parade ended, the President gave the URNG leaders a cordial hug.

Members of the left of Guatemala's civil society did not understand why the URNG leaders were on the presidential platform on Army Day rather than on the pilgrimage in memory of the martyrs. Among those who demonstrated their distaste for this contradiction is president of the Mirna Mack Foundation and Nobel Peace Prize alternative Helen Mack, and columnist, old Social Christian union leader and URNG dissident Miguel Angel Albisúrez. Others think that the presence of the URNG leaders was a correct way to seal both reconciliation with their former military enemies and civilian authority over the army.

URNG: A New Pact

In mid-June, these same three former URNG comandantes, two of whom-Ricardo Ramírez and Jorge Soto, respectively-were elected as president and vice president of the URNG provisional directorate, went to the Registry of Citizens to formalize the first steps to make the URNG a political party. In addition to establishing in a sworn statement its name, acronym, principles and ideological foundations, political, economic, social and cultural postulates, statutes and legal representative, they must gather a list of 4,162 registered citizens who proportionally represent at least 50 municipalities from 12 of the country's 22 departments.

Guatemala's political left now includes three groupings: the Democratic Front for the New Guatemala (FDNG), already a party, and two others which are becoming parties: the URNG and the United Left. Will they join together or will they compete in the political arena? It's too soon to say.

In Jorge Soto's opinion, the roots of the divisions among the Guatemalan are not in "political or ideological differences, because at their heart they want the same thing; it's a problem of leadership." Others state that the differences have to do with the authoritarianism of the current leaders and with their ethical deficiencies symbolized by, for example, their denial of the existence of the mysterious "Mincho," an alleged URNG guerrilla presumably disappeared when comandante "Isaias," head of the group that kidnapped Olga de Novella in October 1996, was captured.

Changes in the Army

Another surprise on Army Day was that there were no changes among the top brass in the military hierarchy. The President appeared to have confirmed General Julio Balconi Turcios as Defense Minister, General Sergio Camargo Muralles as Defense Chief of the High Command and General Otto Pérez Molina as Army General Inspector.
Three days later, however, Arzú dismissed Generals Balconi and Camargo from their respective posts, without naming General Perez Molina as his new Defense Minister. Numerous analysts are competing to show their knowledge of both internal army movements and Guatemalan policy by trying to explain what lies behind these changes, which had been expected on Army Day, not three days afterward. It is most likely that we will not know the real reasons, or at least all of them, for some time.
The most cited reason has been that the President finally found the real or at least profusely publicized discrepancies between Generals Balconi and Camargo intolerable, and thus relieved both of their posts. It does not appear much of an exaggeration to think that the Defense Minister's invitation to the URNG leaders to occupy seats on the presidential platform may have been the straw that broke the camel's back.

By firmly establishing his authority over the formerly "deliberative" Guatemalan Army in this way, the President appears also to have demonstrated that he is not only nominal Commander in Chief of the Army, but has the backing to exercise the power of his position. Furthermore, he apparently skipped over General Pérez Molina, who is from the same graduating class as the two dismissed generals, to name other top-level officers who had no role in the peace accord negotiations and do not have leadership in the army comparable to his.
All of this would leave President Arzú as the true arbiter in the Army's power struggles, having reduced them to strict relationships of hierarchical discipline, at least for now. Thus he seems to have handled these relationships in practice according to the principles that military theory sustains. If this is true, the presidential move was bold and not without risk.

Presidential Astuteness?

Other analysts think that President Arzú proceeded according to more astute parameters, reproducing the pattern that he inaugurated when he named two military men with opposing characteristics to the top army echelons. His goal was to balance them in a game of complementary and at times conflictive opinions and advice.

These two men were Balconi, a serene and moderate military negotiator who played a protagonist role in the peace accords, a fairly close relative of the legendary guerrilla Turcios Lima; and Camargo, a more bellicose officer, more in contact with the protagonists of the war, who had recently been a military camp commander.

Even though that duo has served its purpose, the President may have found another useful one. General Hector Barrios Zelada, who will be Defense Minister, is well known as an intellectual and organizer of the academic preparation of high-level officers. He occupied the post of commander of the Mariscal Zavala barracks, one of the most prestigious in the army.
The new Defense Chief of the High Command, General Marco Tulio Espinoza, is famous for his astuteness and intrigue in organizing the military intelligence services, particularly from his recent post as Chief of the Presidential High Command. He earned the animosity of many in this post, because the 1996 occupation of Congress by soldiers during debate on the bill that would restrict certain union organizing rights is attributed to him. So is the organization of the anti-kidnapping commandos responsible for the disappearance of "Mincho."
Some observers note that, with this move, President Arzú got General Espinoza out of his immediate presence and demoted the rank of Presidential High Command by naming a colonel rather than a general as Espinoza's successor. That could be the beginning of the end of the Presidential High Command, currently a super-militarized structure.

Other observers, however, accuse the President of giving in to his fascination with Espinoza. They say he failed to take advantage of his show of authority at the moment of these changes to dismiss Espinoza on suspicion of having authorized what is now known as the last forced disappearance of the war, that of Mincho.

Some of those who criticize the URNG leaders for their presence on the presidential platform on Army Day also criticize President Arzú for naming Espinoza. They note that while the UN Secretary General publishes the dismissal of MINUGUA employees for failing to officially investigate Mincho's presumed disappearance, the President of Guatemala is rewarding the supposed brains behind that act with a promotion.

"That Different Country"

The complex structures of power sometimes resist monocolor analyses. This appears to be the case with the changes in the upper echelons of the Guatemalan military. The important thing will be whether or not these changes favor the country's progressive demilitarization. If, together with many other changes, they are sufficiently profound, they will require prolonged efforts of prudence, good judgment and audacity.
Something has advanced. Foreign Minister Eduardo Stein declared that "if there were no movements in the correct direction in this process and if there were no decanting effort, I think that a good number of us would have already left. Because some of us, and I say this without wanting to sound presumptuous, don't feel committed just to a government for four years. This administration set as one of its fundamental objectives laying the groundwork for a transformation of the country that will take much longer than its four years of responsibility. It is to that different country that one feels committed. A nation cannot change by decree."
These are large words. No one has the right or the desire to say that they are not authentic or are excessively idealistic. Or that they come from arrogance or politicizing.

In Guatemala the great protagonist today is the undeserved poverty of the majority of the people. But there is also an awareness of other problems and efforts to try to sow fundamental differences with the past. They are seeds of hope.

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