GUATEMALA

Tax burden goal is rescheduled
Filed October 28, 1998

THE MINISTER of Public Finance, Mr. Pedro Miguel Lamport, announced that the Accompanying Commission of the Peace Accords agreed to reschedule to 2002 the goal of 12 per cent tax revenue relative to gross domestic product (GDP).

The Minister recalled that the petition to reschedule the goal, originally targetted for the year 2000, was forwarded to the Accompanying Commission several months ago by his predecessor in the Ministry, Mr. José Alejandro Arévalo.

Lamport explained that in order to insure the achievement of the new goal, the Government intends to enact a minimal short-term programme to maintain a steadily growing tax burden, which includes specific fiscal actions and the hiring of foreign trade testing and inspecting companies.

In addition, in order to define long-term fiscal policy, Lamport announced that the Ministry, in conjunction with the Accompanying Commission, will shortly promote a wide ranging consensus-seeking process with the country's political, economic and social forces, in what was termed a National Forum for a Fiscal Pact. Preparatory actions for such an agreement will be carried out in the remaining months of 1998 and the process is expected to conclude by mid 1999.

As input for the Forum's activities, the Ministry of Finance will immediately proceed to do the necessary research and analysis on how to enlarge the tax base and fortify legal sanctions for tax evasion and the Public Ministry's and Judiciary System's investigative and sanctioning capabilities.

Another, aspect of the accord with the Accompanying Commission, said the Minister, is that the Central Government reiterated its commitment to strengthen the municipalities' fiscal management capabilities and to promote an new fiscal culture.

Lamport stated that in order to follow-up on planned fiscal objectives for the next years, the Ministry of Finance and the Accompanying Commission will meet on a quarterly basis to review the Tax Administration Superintendence's operating results and progress on the Fiscal Pact.

Government pushes privitization
Filed October 10, 1998

Some 56 state enterprises are to be sold off. Among them are two electric generating plants, the railroads, post offices, airport terminals, seaports, the Guatemalan Social Security Institute and the Tourism Institute.

The intention of the government is that funds from the sales will boost GDP for this year to 5 per cent and would also stimulate the economy.

The state-owned electricity company, ECSSA has already been sold. It was bought for US$520 million by a consortium comprising of TPS de Ultramar (U.S.), Iberdrola Energía (Spain), and Electricidad de Portugal.

Half of the profits the government has achieved from this sale will go towards reducing the country's $1 billion internal debt and the remainder will go toward expanding the rural electrification programme.

Under the conditions of the sale the new owners are obliged to provide service to 70 per cent of the estimated one-third of the population that currently has no access to electricity.

The state-owned telephone company, Telecomunicaciones de Guatemala, is the process of being sold.

Minister Fritz Garcia-Gallont said that bids lower than $700 million will not be accepted. The government hopes to get a minimum price of $800 million. Of this, half is earmarked for reducing the internal debt.

The price fetched from the sale of the electricity company has led the government to have the view that investors are impressed with the, "transparency" of the privatization process and the general state of the economy.

According to the president of Banco de Guatemala, Edin Velásquez the funds realised from the sale of state enterprises would reduce monetary pressures resulting from the debt by strengthening reserves, which in turn will shore up the currency and keep inflation down.

Apart from reducing debt, the money obtained will also be utilised in social programmes.

Drug trial begins
Filed September 12, 1998

Opening arguments began this week in Puerto Barrios, in the so-called "German Connection" drug trafficking case in which 14.8 kg (32.56 lbs) of cocaine ended up in a shipment of ornamental plants en route to Germany from Guatemala in April of 1997. All six defendants deny any knowledge of the drugs or how they got into the 'ornamentals'.

Three suspects lynched in Guatemala
Filed September 05, 1998

GUATEMALA CITY (AP) ­ A mob of 3,000 people lynched three suspected criminals and burned their bodies in the northern department of Alta Verapaz, police said.

The lynching occured in the hamlet of Quebrada Seca in the municipality of Fray Bartolome de las Casa, 100 miles (160 kilometers) from Guatemala City. It was not clear what the suspects were accused of.

Hundreds of local residents prevented security forces and local officials from entering the hamlet, said National Civil Police director Angel Conte Cojulun.

Crime soars
Filed August 14, 1998

CRIME continues to rise in this Central American country. Armed robberies, rapes, violent assaults and even murders are common place here. Shootings and kidnapping are also regular occurrences.

Curiously many of the crimes seemed to be aimed at Americans.

A U.S. State Department advisory notes that a recent trend is in the involvement of armed groups in extortion and other criminal activities.

It pointed out that no area in Guatemala can be described as being "always safe." It said that even during daylight heinous crimes occur.

Between September 1997 and April 1998, five U.S. citizens were murdered in Guatemala, four were residents of Guatemala while the other was a tourist.

Fifteen U.S. citizens were raped during the period July 1997 to January 1998. Two of these incidents were bus hijacking and in one case the occupants were students and three staff members of an American university.

Mayors meet
Filed July 31, 1998

MAYORS from El Salvador, Honduras, Nicaragua, Panama, Costa Rica, Guatemala, Mexico, Cuba, The Dominican Republic and Spain, met from July 14-16 in Guatemala City. This was disclosed by the Civil Initiative for Democracy, a private organization. The forum addressed issues such as construction of democracy and local powers, work of municipalities and the role of the mayors' offices. One of the aims of the exercise was to try to bring the cities of the Latin American region closer.

New ambassador

THE first ambassador of Guatemala to Cuba after 36 years of interrupted diplomatic relations, Mr. Willy Kalschmitt, has arrived in Havana. In a statement at the Jose Marti International Airport, Havana, the diplomat stated his satisfaction for having been appointed as the representative of his government to Havana and underlined that this was the first step as to enhance bilateral relations in different sectors. Ambassador Kalschmitt will soon present his credentials as ambassador extraordinary and plenipotentiary of Guatemala to Cuba.

copyright© CWI 1998