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  Number 277 | Agosto 2004
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Berger’s First Six Months: Just Putting Out Flames?

Six months into his term, President Berger said he has felt “much more like a fireman than a president.” To see what lies behind this confession, it’s worth looking at his first steps on several strategic issues: the army, corruption taxes, crime...

Juan Hernández Pico, SJ

The honeymoon for President Oscar Berger’s government ended much sooner than anyone expected, cut short by two factors. The first was the huge jump in prices triggered both by measures to increase profits for Guatemala’s capitalists, especially the oligopoly of sugar producers and distributors, and by the uncontrollable rise in fuel prices, which had a particularly sharp impact on the cost of electricity, water, transportation and gas—four key areas that in turn affected all other prices.

The second was the equally uncontrollable violence that afflicts Guatemalans on a daily basis. It takes many forms: violent murders of women (283 in the first seven months of the year), assaults and homicides on city buses, kidnappings (including a new, “quick” version), house break-ins, extortion, robberies, youth gangs, police corruption and car theft, to name only some.

Other problems have also undermined people’s hopes and exhausted their patience. Again to name but a few, violent police evictions of day laborers and landless peasants from farms they have occupied has aggravated the ongoing agrarian crisis. Repeated promises of compensation to peasants who were formerly civic patrol members contrasted with the dribbles of compensation issued so far to war victims sparks discontent and divisions, which turns into unimaginable anger when set alongside the proposal by Congress members to increase their already abundant salaries. Then there are the foot-dragging investigations of fiscal crimes, judges who act according to their own caprice, etc., etc., etc.

The fiscal package

Does the government have a clear, viable, publicly known political program that it is implementing step by step? It doesn’t appear to, but more importantly, it seems not to have a serious financial and economic program. The Fiscal Pact’s Technical Commission proposed a set of measures to deal with the budget deficit left by the previous government, but they were shortsighted and not guided by the major principles of the pact itself. And given the time it took the commission to gather the nearly forty proposals that it analyzed and forged into a single package, it would probably have been better to call the Fiscal Pact forum together again and resurrect its Follow-Up Commission. At least it would have applied the Pact’s principles and thus taken advantage of the high expectations and enormous good will people initially felt towards Berger’s government.

The commission’s fiscal package only contained a special—and temporary—tax on business earnings, to be collected for only three years at a rate of 1.5% the first year, 1% the second and 0.5% the third. It proposed increasing the sales tax, lowering the income tax threshold, and taxing workers’ year-end bonuses, all of which affect the poor most. It would reestablish and increase the tax on alcoholic beverages and soft drinks, and increase the fuel oil tax. The package
also contained a request to authorize the government to issue over US$650 million in bonds. It did not, however, include a public spending plan to specify how the funds collected through this package, if approved, would be used.

GANA pacts with the FRG

This final package proved to be an apple of discord in Congress. All benches tried to win points with the public as populists, thus fulfilling the most pessimistic predictions about the results of a fragmented Congress in which no party holds a majority. First, the fragile bond that kept together the Great National Alliance (GANA) on whose ticket Berger won the presidency was broken. Víctor Ramírez, head of the GANA bench and the leading congressional representative of Berger’s faction of GANA (called M-17), announced that an agreement had been reached with the head of the Guatemalan Republican Front (FRG) bench, Arístides Crespo, to push through the fiscal package. President Berger himself had paid a visit to FRG founder Efraín Ríos Montt—theoretically under house arrest—to share a cup of coffee with him. This dubious alliance of convenience, which the President defended as a pragmatic necessity but offended many people, led retired general Otto Pérez Molina to resign from his post as presidential commissioner for national security. Pérez Molina took up his seat in Congress and led his Patriot Party followers over to the opposition, leaving GANA with only 40 of its 48 representatives.

It’s one thing to make such a pact with the FRG, and yet another to visit retired General Ríos Montt, who has been accused of genocide and other serious crimes against humanity, including many of the massacres detailed in the reports published by the Catholic Archbishop’s office and the Historical Clarification Commission. Once again, it was clear that the Guatemalan government does not take seriously the conclusions of that commission’s 1999 report, “Guatemala, Memory of Silence.” It is likely that Pérez Molina resigned out of political spite rather than an attack of ethical scruples. He had not been consulted about the alliance with the FRG, which deprived him of the leverage he had used to maneuver his party around the law governing electoral reform and political parties.

The trouble was not unexpected. Berger’s government would have been better off without the alliances made to form GANA, and especially without the Patriot Party, whose leader cast a shadow of militarism over the government and led people to fear that he would use the coalition to promote his own presidential candidacy in 2007. Ignoring the strength of civil society and the grassroots social movements to which he should be looking for support, Berger turned to the FRG in the hope of passing a fiscal law that would help his government replace the funds that the FRG itself is suspected of having diverted through corruption, leaving the new government in a fiscal black hole.

This deal with the FRG also angered the National Union for Hope (UNE) and the National Advance Party (PAN), which had signed a governability agreement in January. The UNE seemed to be swallowing the surprise of finding itself politically in the dark, albeit with difficulty, but the PAN was furious. Its legislative spokesperson, the histrionic Mario Taracena, promised to block the fiscal package in defense of the “people’s interests.” From the left, the New Nation Alliance (ANN), with its four seats, vowed to oppose anything that included any more indirect taxes, since they further undermine the already beleaguered economy of the poor. The URNG, with its two seats, took the same position.

Approved with major revisions

After tough and tense negotiations, the package was completely revised. The lower individual income tax threshold, the fuel oil tax and the tax on year-end bonuses were all eliminated. The changes to the business tax and the special, temporary tax to support the peace accords went into effect on July 1. Congress also approved a higher tax on alcoholic beverages and soft drinks, and allowed the government to issue and sell treasury bonds totaling some $550 million, over $100 million less than the amount requested.

Only the PAN and the URNG still refused to vote to approve this version of the pact. As the vote was getting underway, Mario Taracena distributed in Congress a list of people—he used the term “evaders”—who owed the significant sum of $400 million in taxes because of adjustments or fines.

Many people are predicting that the government will have to ask for new taxes within six months—not only because of
a probable shortfall but also because the fiscal year was changed in the new law to run from January 1 to December 31, rather than July 1 to June 30. Thus, FY 2004 will only cover six months, from July 1 to December 31. Hugo Maúl, a member of the Fiscal Pact’s Technical Commission, publicly stated that while it is impolitic to admit it and likely to cost him in the next elections, he considers it inevitable that the sales tax will have to go up by at least three percentage points, to 15% or even higher. Without this extremely unpopular move, he said, the goal established in the Peace Accords of setting the tax burden at 12% of the country’s GDP will be unreachable.

“Inside Pharaoh’s palace”

A tacit hypothesis underlies this statement, of course, which is that no government in Guatemala will ever have the political strength to increase the income tax on wealthy individuals and companies to rates anywhere near as high as those found, for example, in the countries with which we are trying to negotiate free trade agreements. Nor will it have the strength to levy taxes on financial transactions, especially speculative ones, seriously confront contraband or educate tax collectors and pay them enough not to be tempted by bribes to let people get away with tax evasion and fraud.

If the Fiscal Pact is not taken back up, it will amount to nothing more than a few buckets of water thrown on the fire. This government, which includes some of the most prominent figures from the country’s business sector, surely understands this better than anyone. Will these people have the clarity and courage to begin a dialogue in which they decide to contribute a fair share of their own personal fortunes and company profits to carve a place in the history books as the revolutionary founders of a new system? Can they understand that without a fight against poverty that grows out of greater labor and capital productivity, and without a fairer distribution of the benefits, we will not have a credible democracy? Or will they once again fulfill the old adage that those inside Pharaoh’s palace do not look beyond their own doors?

State asks pardon for the murder of Myrna Mack

On April 22, in a formal event in the National Palace of Culture’s Peace Garden—where the Peace Accords were signed—President Berger accepted the Inter-American Human Rights Court verdict that the Guatemalan state was guilty of the murder of the anthropologist Myrna Mack and the denial of justice for 13 years. On behalf of the state, he asked forgiveness for this crime, thus setting a precedent that would have been unthinkable a decade ago.

Unfortunately, neither the text he read—which was too similar to that read earlier by the Supreme Court president and put his assistants in a bad light—nor the “improvised” text drafted by his Cabinet requesting forgiveness recognized the specific responsibility of the army or the Presidential General Staff in Mack’s murder. This is especially lamentable since former Colonel Juan Valencia Osorio, who headed the Presidential General Staff’s intelligence department at the time of the assassination and is now a fugitive, has already been convicted in absentia to 30 years in jail for the crime.
Lucrecia Hernández Mack, Myrna’s daughter, and Helen Mack, her sister, also spoke at the event, which was inaugurated by Frank La Rue, director of the Presidential Human Rights Commission. Perhaps the most impressive part of the event was the presence of the army, including officers of all ranks from army specialist right up to general, who heard their words and the President’s request for pardon.
That event was preceded by a Mass in the Cathedral presided over by the bishop of Jalapa, Julio Cabrera, who also spoke in the Peace Garden. The Jesuit priest Ricardo Falla gave the homily. Both Falla and Cabrera enjoyed Myrna’s confidence and friendship.
A few days earlier, the Government Minister had asked forgiveness for the killing of Police Inspector José Merida Escobar because of his persistent investigation into Myrna Mack’s death. And several days later, President Berger presided over another event to ask for pardon for the murder of Luis de Lión, the famous indigenous author of El tiempo comienza en Xibalbá. And in June, Berger gave Rosalina Tuyuc, president of the commission to compensate war victims, nearly $40 million, thus beginning to fulfill one of the recommendations of the Historical Clarification Commission. All these are very positive events, at least symbolically giving the last word to those persecuted during the war and showing that society is beginning to recognize the justice of their cause and their innocence.

The greatest achievement:Reducing the army

The government’s most important move during its first six months has been to reduce the size of the Guatemalan army, one of the pending objectives of the Peace Accords. Since the end of the civil war, it has been reduced to 33% of its size, some 15,500 troops. Some officers and soldiers have been forced into retirement with monetary compensation, while others have signed up for a voluntary retirement plan, also with compensation. In all, 11,663 army personnel have been demobilized.

This process, which has seemingly taken place without protest, in fact entailed more than a few backroom conflicts. To begin with, the figures delivered to President Berger to serve as a starting point were inflated, not subtracting officers and soldiers who had already been retired. According to reliable sources, the President was able to calmly insist on the proper reductions because he managed to get more precise military and financial information, which suggests that he can be much more than an amiable politician. As a result, the reductions have touched all ranks in the army, from soldiers to generals.

The compensation has also been paid out in installments, beginning with some $56,000 allotted to the generals. According to the newspapers, some $50 million in total has been budgeted to pay the compensations. One aspect of the reduction felt most positively by people has been the removal of army posts in Playa Grande (Ixcán, Quiché), Santa Cruz del Quiché, Cobán (Alta Verapaz), Quetzaltenango and San Marcos, and the Justo Rufino Barrios Brigade in the capital. Since April, Guatemala has been divided into five military zones: Huehuetenango in the west, Suchitepéquez in the south, Jutiapa and Zacapa in the east, Petén in the north and the capital.

The “dinosaur” is still out there...

Those with first-hand experience of army repression felt enormous relief at seeing it disappear from amidst the civilian population. Others, however, who took advantage of the army’s presence either out of ideological affinity or personal interests, are now more anxious. The idea expressed by retired General Héctor Alejandro Gramajo that “politics is the continuation of war by another means” remains very much alive among some military personnel who were given an honorable and even lucrative discharge, especially those who are now in the Association of Military Veterans of Guatemala (AVEMILGUA). This is reflected in the words of retired General José Luis Quilo Ayuso, AVEMILGUA’s president: “Those who didn’t win on the battlefield are trying to win in the political arena.” He said the reduction “has left breaches in our security and a defenseless people,” as though to tell us that we’re still threatened and will always be at war. The same sentiments appear to have inspired the anonymous threat sent to President Berger and other government members accusing them of “hatred, resentment and thirst for vengeance” against the Guatemalan army.

In the eyes of former union leader and current human rights activist Miguel Angel Albizures, it all comes down to the famous short story by Tito Monterroso, which consists of a single line: “When he woke up, the dinosaur was still there.” Militarism is still here... and its days are not yet numbered.

Modernizing the army: A pending task

The second part of President Berger’s plan for the army—its modernization—is still pending. The plan is to dedicate 0.1% of the GDP to create an “extremely mobile and flexible army, with modern technology,” according to the army spokesperson. Since Guatemala’s GDP is $24 billion, that would come to $24 million. But the money won’t be worth anything without appropriate information and communications systems for administration and logistics, appropriate vehicles—including rapid patrol boats, planes and helicopters—and the weapons to make this proposed modernization a reality.

All of this must be obtained somewhere. It would cost much less to obtain it through legal transactions from the United States than from Taiwan or Israel, without considering the illegal option of arms trafficking on the black market. But this isn’t currently possible due to the US Congress’s ban on military sales to the Guatemalan army because of its brutal human rights violations.

Vice President Eduardo Stein was given the task of visiting the United States to clear the way for Congress to lift its ban. Despite the government’s firm insistence on reducing the army’s size and the new Army Doctrine presented to the President on June 30, the 133rd anniversary of its institutionalization, Stein didn’t find a favorable response either from Congress or from Washington’s civil society institutions that track the human rights situation, especially in Latin America. Stein reported that he informed these organizations of the changes taking place in Guatemala’s military institutions, but although their people recognize that there has been progress, it does not yet appear to have taken root deeply enough. Furthermore, people are still waiting for other signs of progress, which have not yet appeared anywhere on the horizon. They are waiting, specifically, to see that those responsible for the crimes against humanity committed during the civil war are taken to court. They also have questions about the costs of modernizing the army.

Corruption in the army administration

Many officers are now concerned, and justifiably so, over the possible loss of their military pensions. The Military Retirement Institute (IPI), which contains the Army Bank and other companies, has suffered over the past six years from the results of risky speculative investments. There is talk about investments of tens of millions of dollars in the Russian Stock Exchange, which went up in smoke in the 1998 crisis. The trouble ran so deep that for some time there were rumors of a possible Army Bank merger with the Mortgage Credit Bank—also affected by corruption—and even of its possible bankruptcy. More dangerous yet is the corrupt diversion of tens of millions of dollars uncovered since the current government took office. The accused now under house arrest include several IPI board members, among them retired General Adolfo Arévalo Lacs, childhood friend of ex-President Alfonso Portillo and former minister of defense and government.

Whoever was responsible, this corrupt management reflects other spectacular failures that military officers had to swallow in the 1970s, when their “assaults” on the country’s traditional economic power through a policy of kidnapping, extortion and killings failed to wring any concessions. Rumors swirled around the notorious kidnapping of cement magnate Enrique Novella and the murder of beer magnate Raúl Castillo Love. The generals had to content themselves with what they could extract (generally in the form of land and contraband) from managing important state institutions such as the old Land Reform Institute, the Property Registry and the Customs Office.

Where have all the retired military officers gone?

But the Guatemalan army’s problem runs broader and deeper still. The US State Department has stripped several of its former chiefs—including retired Generals Manuel Antonio Callejas and Francisco Ortega Menaldo—of their visas to enter
the United States. The US government normally doesn’t take such a step in response to human rights violations, but rather based on suspicion of involvement in money laundering or drug trafficking.
That raises the question of where all the military leaders and soldiers have gone after being forced into retirement or agreeing to participate in a voluntary retirement plan. Are they filling their time with honorable, creative leisure activities, thanks to their pensions and other compensation? Have they found dignified work in private security companies or other private businesses? Are they working for themselves? Or have they joined the networks of the hidden powers and organized crime?
As Matthew Creelman wrote in Inforpress, the traditional analytical typology of military “hardliners” and “institutionalists” has to be crossed with other categories, including direct participation in the dirty war, in which “everyone was muddied so no one dares denounce anything”—or as General Gramajo said, “they’re not going to drag us through the streets as they did the Argentines.” Another important category is participation in illegal or corrupt activities. Yet another has to do with the sense of identity—which took on mythic-religious proportions—among many army members growing out of their belief in their role as the country’s defenders. And another has to do with the ties forged between members of the same graduating class or between mentors and students from different graduating classes, between “godfathers” and “godsons.”

Necessary and risky

Guatemala has paid an incalculable financial and human cost for its army. Some see it as a reasonable amount for defending the country against communism, while for others there is no way to compensate for the blood unjustly spilled, the cruel divisions sown among ethnic groups, the crushing of any attempts to attack poverty and redistribute wealth. One pending problem is how to pay for the cost of the corruption generated by the use of arms. At issue here isn’t ideological corruption, but rather pure and simple corruption born out of greed. This kind of corruption aims to profit from a primitive, violent and unscrupulous accumulation of criminal capital, which is globally tied to the networks of illegal trafficking and kept alive, like all the others, by money laundering.

One thing for sure is that the reform of the army, whether it leads to its modernization, the reinforcement of its traditional role under another government, or its gradual extinction—and no one can predict the results of such a complex endeavor—is a necessary but risky operation. The risk shouldn’t frighten anyone. It should lead to skillful and intelligent management of the crises it entails. Intelligence, without skill, ends up impractical, while skill without intelligence ends up slipshod. At stake in this plan regarding the army, which could take the government’s entire term, are issues as important as recovering, rescuing or even recreating Guatemalan citizenship; establishing a politics of dialogue rather than threats and the transformation of weapons of war into tools of peace—all possibilities inherent in the constitutional republican system but hardly ever embraced in our nation’s history.

The nightmare of most Guatemalans

On July 19, shortly after the government completed its sixth month in office, Government Minister Arturo Soto and his entire team resigned. Three days later, President Berger swore in his successor, Carlos Vielman, and his new team: three deputy ministers (of security, administration and community support) a new head of Police and a new legal adviser.
Vielman previously served as presidential commissioner for transparency. His new team is very young, all in their thirties, and includes a women as deputy minister of community support. The outgoing minister, a former Supreme Court magistrate, said he resigned because this had been the agreement with the President: that he would spend six months cleaning out and institutionalizing a ministry that had gone through four ministers and six police chiefs under Portillo’s government and was mired in corruption.

Whatever the agreements and intentions, the undeniable fact is that security has not improved at all in these six months and crime is the nightmare of most people who live in Guatemala. People feel overwhelmed, in a constant state of distrust of whoever is sitting next to them on the bus or approaches the door of their house or their children’s school.

Healing wounds

The investigation, accusation and arrest of high state officials on corruption charges demonstrated the Berger government’s determination to contain a hemorrhage that threatened to bleed the state to death. The specter of “Colombianization” is rising on the horizon. The investigations in the United States against former President Portillo (now a fugitive in Mexico) former Vice President Francisco Reyes, Secretary of the Presidency Julio Girón, Portillo’s brother-in-law Juan Riley and former minister Arévalo Lacs, as well as the arrest of comptroller Oscar Dubón Palma, several officials implicated in fraud in the Social Security Institute, former Minister of Government Byron Barrientos, former Minister of Finance Eduardo Weymann, the banker Francisco MacDonald (later freed on bail) and former comptroller and former superintendent of the Tax Administration Office Marco Tulio Abadío Molina, along with the house arrest decreed against Ríos Montt, have all been aimed at healing the festering wounds caused by economic or political corruption.
This government’s fight against corruption may have altered the plans of criminal capital and its henchmen, incrusted in the highest state levels during Portillo’s government. It may have motivated them to test the government’s will by organizing a campaign of violence, in which common crime, gang violence and the angry expressions of desperation by many people excluded from honest jobs are confused with the violence of organized crime and the hidden powers.

Innovative initiatives

Some members of Berger’s government have responded to the corruption riddling state structures with a dangerous pessimism. It is as though they feel that if the problem has spread so far, it can’t be addressed.

It is important to note that in the midst of this climate of insecurity, President Berger rejected the dangerous idea of decreeing a curfew in the urban areas considered most dangerous. The Human Rights Ombudsman launched an important initiative by calling for a Front Against Violence, which many institutions in the Catholic Church and the Ecumenical Forum for Peace hastened to join. A grand civic march was set for August 13, accompanied by religious events involving prayer and celebration. Werner García, a young graphic designer, came up with one of the most striking initiatives: a kilometer of vignettes on nonviolence and peace.

Another important step was to name the Security Advisory Council, an institution established by the Peace Accords, with members appointed by the President from a list drawn up by civil society organizations. It includes seven members: Enrique Alvarez (representing grassroots organizations), Max Quirín (former ANACAFE president), Julio Balconi (former defense minister), Carmen Rosa de León (former director of the government commission to support the return of refugees), Adela de Torrebiarte, Helen Mack and Sandra Muralles (all from pro-justice organizations). The council is responsible for advising the President and other security-related officials who request its advice.

A climate of desperation

Obviously, there are no quick or easy solutions to a problem as complex as lack of security. The first recommendation that the Security Advisory Council might make to the President is that in addressing this problem the government should plot a serious course, leaving politics aside. For a long time to come, Guatemalans will have to live with a gap between their expectations of peace and the possibilities of solving the phenomena of violence embedded in the culture left us by the war, a culture based on violence and illegality. Perhaps the best thing President Berger can do now is clearly and courageously spell out what he thinks can be done and can’t be done, the results that can be expected in the short, medium and long term and the financial and especially educational means required to achieve them. He would also do well to explain why the police are so effective in evicting peasants and day laborers occupying farms and so ineffective against crime in the capital.

The prevailing violence must be thoroughly investigated, which requires help from the international community. Among other things, the whole network of private security companies must be scrutinized. There is no doubt that private security companies get jobs and capital from people involved in the mafioso networks of criminal capital that are behind much of the crime in this country. But the problem is more complex, and goes beyond overtly criminal activities. At one point, there was talk in Church circles about “explosive revolutions of desperation.” Those who withdraw their capital from productive, commercial or service investments in Guatemala and place it instead in speculative investments, who create poorly paid jobs, commit or tolerate tax evasion and fraud against the state’s health, education and public security structures—are they not feeding the explosive revolutions of desperation that are now manifest in crime? To take just one example: day laborers in the coffee plantations who lost their jobs with the collapse in coffee prices can earn their old month’s wage in just one hour working as “human torches,” marking nocturnal landing strips for drug trafficking planes.

The plagues pursued by the US

In the imperial mentality of the United States, drug trafficking, illegal migration and terrorism have now taken the place once held by the revolutionaries of the 1960s, 70s and 80s, who were guilty—in US eyes—of establishing beach heads for Soviet communism. In those decades, the US built up Latin America’s armies and financed counter-revolutions to fight this plague. Now, its Congress prefers to pass a Patriot Act that undermines human rights in its own territory, while asking the congresses of our states to allow its anti-drug police to operate in our territories. It prefers to use Guantánamo as an offshore “human rights haven” where it claims that basic human rights don’t apply and to build a wall along the border with Mexico to keep out migrants. It prefers to turn Guatemala into a bulwark on the southern front by educating the migration and customs police and turning a blind eye to other kinds of contraband that don’t involve drugs, migrants or terrorists. It prefers to wage war in Iraq to stir up patriotism and fear among its own population, hopeful of reelecting the most extreme rightwing administration in its recent history.

Under these circumstances, the idea of finding help from the US coffers and sophisticated arsenals to modernize the Guatemalan army won’t get anywhere. The international obsession with security doesn’t apply to Guatemalan society. What does apply is the principle of freedom of investment being forced on us through free trade agreements, even when they violate our own Constitutions—a path that can convert this and the rest of our region’s countries into the garbage dumps of history. The one thing that can save us is the dignity of our people. The problem of violence, overtly emblematized in gangs—and clandestinely lurking in the minds that impoverish and plunder us—cannot make us forget the dignity that remains alive in the vast majority of our populations.

Juan Hernández Pico, sj. is the envío correspondent in Guatemala

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