USAID CBJ FY 2002: Guatemala

PROGRAM: Guatemala
TITLE AND NUMBER: Support the Implementation of the Priority Peace Accords, 520-006
PLANNED FY 2001 OBLIGATION AND ACCOUNT: $13,951,000 (ESF)
PROPOSED FY 2002 OBLIGATION AND ACCOUNT: $10,000,000 (ESF)
STATUS: Continuing
INITIAL OBLIGATION: FY 1997 ESTIMATED COMPLETION DATE: FY 2003

Summary: Guatemala suffered more than 36 years of internal conflict, which formally ended with the signing of the final Peace Accords at the end of 1996. Four years later, despite some progress, many Peace Accord commitments remain unfulfilled. The primary goal of the objective is to provide direct support to the implementation of the Peace Accords signed in December 1996. Over the past four years, the objective has provided support to the Government of Guatemala (GOG), and private nongovernmental and public international organizations to assist in meeting the more than 400 commitments of the Accords. These call for fundamental reforms to the structure of the government, the justice system, tax policy, and social services delivery systems. A lasting peace and more stable democracy benefit the entire population of Guatemala, but especially the indigenous who have been historically excluded from political, economic and social development.

Key Results: USAID's special objective focuses on four critical areas to support the peace process: (1) national reconciliation process advanced through follow-up of the Historical Clarification Commission (HCC); (2) capacity of indigenous communities developed for broader participation in economic, social, and political arenas; (3) Access to factors of production in ex-conflictive areas broadened; and (4) key state institutions and policies reformed to sustain the peace process.

Performance and Prospects: Results in FY 2000 fell short of expectations. While progress has been made on over two-thirds of the Accord commitments, many of the most difficult structural reforms such as demobilization of the Estado Mayor Presidencial remain. Continued USG support over the extended strategy period for the objective will be needed to achieve key remaining commitments. On becoming President, Portillo committed to fulfilling all 119 pending Peace Accord commitments during his tenure, and appointed many strong Peace Accord and human rights advocates to his cabinet and key advisory positions. He also promised follow through on recommendations of the HCC and broad participation of civil society in discussions of fiscal and governance issues. Business, civil society, and government representatives reached agreement in May on principles and commitments to implement a fiscal pact. However, the Executive Branch's resolve to put forth a sound fiscal reform program based on these principles wavered when opposition arose in Congress to a needed increase in the value added tax. The consensus achieved soon unraveled, and the opportunity to effect fiscal reform and bolster 2001 revenues was lost. As a result, the administration failed to meet seminal Peace Accord targets for increased revenue collection and its corollary, social investment. The recent exposure of numerous acts of corruption and financial mismanagement by GOG authorities, coupled with rising crime rates, has seriously diminished citizen confidence in the Peace Accords and key democratic institutions.

While these events threaten the sustainability of the Peace process, there was progress on key Peace Accord commitments, resulting in part from USAID support. The Education and Health Ministries pushed ahead on mandated service expansion, increasing access to bilingual education and rural health services to marginalized, indigenous populations. The Land Fund (FONTIERRA) and the Land Conflict Resolution Commission (CONTIERRA) increased their outreach, helping to resolve dozens of land conflicts and issue an unprecedented number of titles to small landholders. These programs and direct USAID assistance (ranging from university scholarships and literacy to community infrastructure, exhumations, and mental health services), have begun to lay the foundation for increased participation by indigenous peoples in Guatemala's development.

In line with recommendations of the HCC report, during FY 2000, USAID continued to directly assist victims of human rights violations, supporting exhumations in 16 communities. More than 18,000 persons in 158 communities in Chimaltenango and El Quiche have benefited from related mental health services, and from educational scholarships and community level infrastructure projects. Another 8,369 families in 49 of the most conflictive areas benefited from infrastructure projects, requiring communities to overcome internal conflict and work together toward common goals. In March 2000, our final demobilization activity was concluded, assisting 386 demobilized members of the Unidad Revolucionaria Nacional Guatemalteca (URNG) to undertake productive activities. USAID's aid to war victims through demonstration projects, served as a model for the GOG to initiate limited government reparations and assistance to victims in 2001.

USAID continued its professionalization of educational promoters and in-service training of bilingual teacher. In 2000, 72 promoters and 156 teachers in Quiche Department completed training; another 237 promoters will complete their studies in 2001. During FY 2000, 150 indigenous scholarship recipients received university degrees, bringing the total number of university graduates to 240. Another 1,047 persons (49% women) continue in university degree programs, in many newly established rural campus programs. Permanent scholarship funds were also established at two other universities. USAID-supported literacy activities, however, fell short of targets because of drastic cuts in GOG support for USAID's key partner, the National Committee for Literacy; higher than expected costs; and drop out rates in USAID-financed nongovernment organization literacy programs.

Expanded GOG and USAID financial support for FONTIERRA and CONTIERRA led to the resolution of 89 conflicts in 2000, including several long-standing conflicts over land purchased to resettle displaced and returning populations. The pace of land titling has been accelerated (5,949 titles issued to date), with titles increasingly issued in the names of both husband and wife -- a significant legal reform for women's rights. Secure land ownership, while essential, cannot alone assure that small landholders increase incomes. USAID's partnership with the Nontraditional Exporters Guild (AGEXPRONT) is helping to promote private investment in rural areas through investment studies and establishing electronic business centers; in 2000, $900,000 in new investments were made.

USAID also funded a unique public-private initiative to develop specific proposals to reform national State security and intelligence functions, and supported efforts of the Secretariat for Peace to increase dialogue among civil society and governmental actors on unmet Accord mandates related to indigenous and women's rights. Overall, public interest in the peace process waned in 2000, as memories of the war faded, and the economy, crime and governance issues assumed center stage as principal concerns of Guatemalans. Changes in the Peace Monitoring Commission and other issues have left the Peace Process without a strong champion. Against this backdrop, we expect performance to be mixed in 2001. Strong performance should continue on key fronts such as land titling, justice reform, improving indigenous participation and expanding social services in indigenous areas, and weaker performance in areas such as increased revenue collection and the legal reform agenda. Continued donor assistance focussed on the strong performing areas, on key windows of opportunity, and on forestalling efforts to roll back key reforms, will be important to sustain the Peace Process.

USAID plans to obligate $13,951,000 in ESF funds in FY 2001, which will support activities to: promote justice reform and improved prosecution, including expansion of justice centers and implementation of a reformed criminal procedures code ($2,000,000); improve economic and fiscal policies, including activities to enhance transparency and accountability in the budget and expenditure process ($2,600,000); promote human rights, reconciliation and conflict prevention, including HCC follow-up and military reform ($3,000,000); support access to land and secure title for rural families, including ex-combatants, and productivity-enhancing infrastructure investments ($4,300,000); and promote literacy, indigenous leadership and participation, including continuation of the EDUMAYA scholarship program ($2,050,000).

In FY 2002, if funded at the $10 million control level in ESF, USAID will finance activities to: support justice reform, improved prosecution, and implementation of a reformed criminal procedures code ($2,000,000); improve economic and fiscal policies and reduce corruption ($2,100,000); promote human rights and reconciliation, including HCC follow-up and military reform ($2,200,000); support access to land and secure title, and productivity-enhancing infrastructure investments ($2,800,000); and promote educational reform and indigenous leadership and participation ($900,000).

Possible Adjustments to Plans: The absence of an adequate fiscal reform program combined with declining investor confidence and economic slow-down will force the GOG to make tough choices to meet social spending targets and address problems of crime and citizen security. The objective will renew its efforts in support of improved fiscal and economic policies with the Ministry of Finance, as well as to support efforts to improve the efficiency of public sector spending. In the near term, the budget pressures felt by ministries will continue to grow. Against this backdrop, the assistance of foreign experts to aid in complex reform processes (such as human rights, justice, intelligence/security reform, settlement of land conflicts, and land access) will continue to be crucial. United States Government support in FYs 2001-2003 will be on these few key areas, although at a reduced level of funding due to significant reduction in ESF. Other activities previously supported with ESF will be phased out.

Other Donor Programs: The GOG's estimate of the subscribed contributions of donors for the Peace Accord commitments through 2000 is approximately $2.2 billion. The Inter-American Development Bank (IDB), the World Bank, the European Union, Japan, Spain, and the Nordic countries pledged just over $1.6 billion toward the process. These funds are supporting infrastructure projects, the establishment of a new civilian police force, justice sector reform, strengthening of civil society organizations, and direct assistance to war-affected communities. A donor dialogue group has been formed to engage the President and cabinet in frank discussions to implement Peace commitments and key reforms.

Principal Contractors, Grantees, or Agencies: USAID's program supports reform and service delivery programs being carried out by Guatemalan NGOs, two branches of the Government, the Land Fund (FONTIERRA), and Guatemalan universities and private foundations. Other implementing partners include the United Nations Development Program, U.S. NGOs (e.g., CARE, Conservation International and the Cooperative Housing Foundation), the Canadian Center for Studies and International Cooperation, and the University of Texas.

FY 2002 Performance Table

Guatemala 520-006

U.S. Financing

(In thousands of dollars)

	Obligations		Expenditures		Unliquidated
Through September 30, 1999	0	DA	0	DA	0	DA
	0	CSD	0	CSD	0	CSD
	75,011	ESF	42,412	ESF	32,599	ESF
	0	SEED	0	SEED	0	SEED
	0	FSA	0	FSA	0	FSA
	0	DFA	0	DFA	0	DFA
Fiscal Year 2000	0	DA	0	DA
	0	CSD	0	CSD
	20,000	ESF	18,427	ESF
	0	SEED	0	SEED
	0	FSA	0	FSA
	0	DFA	0	DFA
Through September 30, 2000	0	DA	0	DA	0	DA
	0	CSD	0	CSD	0	CSD
	95,011	ESF	60,839	ESF	34,172	ESF
	0	SEED	0	SEED	0	SEED
	0	FSA	0	FSA	0	FSA
	0	DFA	0	DFA	0	DFA
Prior Year Unobligated Funds*	0	DA
	0	CSD
	0	ESF
	0	SEED
	0	FSA
	0	DFA
Planned Fiscal Year 2001 NOA	0	DA
	0	CSD
	13,951	ESF
	0	SEED
	0	FSA
	0	DFA
Total Planned Fiscal Year 2001	0	DA
	0	CSD
	13,951	ESF
	0	SEED
	0	FSA
	0	DFA
			Future Obligations		Est. Total Cost
Proposed Fiscal Year 2002 NOA	0	DA	0	DA	0	DA
	0	CSD	0	CSD	0	CSD
	10,000	ESF	10,000	ESF	128,962	ESF
	0	SEED	0	SEED	0	SEED
	0	FSA	0	FSA	0	FSA
	0	DFA	0	DFA	0	DFA

Guatemala

Activity Data Sheet

FY 2002 Performance Table

Guatemala 520-006

U.S. Financing