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U.S. Department of State

Diplomacy in Action

Guatemala (08/04)


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For the most current version of this Note, see Background Notes A-Z.

Flag of Guatemala is three equal vertical bands of light blue (hoist side), white, and light blue with the coat of arms centered in the white band; the coat of arms includes a green and red quetzal (the national bird) and a scroll bearing the inscription LIBERTAD 15 DE SEPTIEMBRE DE 1821 (the original date of independence from Spain) all superimposed on a pair of crossed rifles and a pair of crossed swords and framed by a wreath.

PROFILE

OFFICIAL NAME:
Republic of Guatemala

Geography
Area: 108,890 sq. km. (42,042 sq. mi.); about the size of Tennessee.
Cities: Capital--Guatemala City (metro area pop. 2.5 million).
Other major cities--Quetzaltenango, Escuintla.
Terrain: Mountainous, with fertile coastal plain.
Climate: Temperate in highlands; tropical on coasts.

People
Nationality: Noun and adjective--Guatemalan(s).
Population (2004 est.): 14.3 million.
Annual population growth rate (2004 est.): 2.61%.
Ethnic groups: Mestizo (mixed Spanish-Indian), indigenous.
Religions: Roman Catholic, Protestant, traditional Mayan.
Languages: Spanish, 24 indigenous languages (principally Kiche, Kaqchikel, Q'eqchi, and Mam).
Education: Years compulsory--6. Attendance--41%. Literacy—70.6%.
Health: Infant mortality rate—36.9/1,000. Life expectancy--65.19 yrs.
Work force salaried breakdown: Services--40%; industry and commerce--37%; agriculture--15%; construction, mining, utilities--4%. Fifty percent of the population engages in some form of agriculture, often at the subsistence level outside the monetized economy.

Government
Type: Constitutional democratic republic.
Constitution: May 1985; amended November 1993.
Independence: September 15, 1821.
Branches: Executive--president (4-year term). Legislative--unicameral 158-member Congress (4-year term). Judicial--13-member Supreme Court of Justice (5-year term).
Subdivisions: 22 departments (appointed governors); 331 municipalities with elected mayors and city councils.
Major political parties: Gran Alianza Nacional (GANA--a coalition of three parties), Guatemalan Republican Front (FRG), National Advancement Party (PAN), National Union for Hope (UNE), New Nation Alliance (ANN), Unionists (Unionistas), Patriot Party (PP)
Suffrage: Universal for adults 18 and over who are not serving on active duty with the armed forces or police. A variety of procedural obstacles have historically reduced participation by poor, rural, and indigenous people.

Economy
GDP (2002 est.): $23 billion ($46.2 billion PPP).
Annual growth rate (2002 est.): 2.2%.
Per capita GDP (2002 est.): $2,068 ($3,700 PPP).
Natural resources: Oil, timber, nickel.
Agriculture (22% of GDP): Products--coffee, sugar, bananas, cardamom, vegetables, flowers and plants, timber, rice, rubber.
Manufacturing (13% of GDP): Types--prepared food, clothing and textiles, construction materials, tires, pharmaceuticals.
Trade (2002): Exports--$2.24 billion: coffee, sugar, cardamom, bananas, fruits and vegetables, petroleum, apparel. Major markets--U.S. 30%, Central American Common Market (CACM) 39%. Imports--$6.08 billion: fuels and lubricants, industrial machinery, motor vehicles, iron, and steel. Major suppliers--U.S. 36%, CACM 11%, Mexico 10%.

PEOPLE
More than half of Guatemalans are descendants of indigenous Mayan peoples. Westernized Mayans and mestizos (mixed European and indigenous ancestry) are known as Ladinos. Most of Guatemala's population is rural, though urbanization is accelerating. The predominant religion is Roman Catholicism, into which many indigenous Guatemalans have incorporated traditional forms of worship. Protestantism and traditional Mayan religions are practiced by an estimated 40% and 1% of the population, respectively. Though the official language is Spanish, it is not universally understood among the indigenous population. However, peace accords signed in December 1996 provide for the translation of some official documents and voting materials into several indigenous languages.

HISTORY
The Mayan civilization flourished throughout much of Guatemala and the surrounding region long before the Spanish arrived, but it was already in decline when the Mayans were defeated by Pedro de Alvarado in 1523-24. During Spanish colonial rule, most of Central America came under the control of the Captaincy General of Guatemala.

The first colonial capital, Ciudad Vieja, was ruined by floods and an earthquake in 1542. Survivors founded Antigua, the second capital, in 1543. In the 17th century, Antigua became one of the richest capitals in the New World. Always vulnerable to volcanic eruptions, floods, and earthquakes, Antigua was destroyed by two earthquakes in 1773. The remnants of its Spanish colonial architecture have been preserved as a national monument. The third capital, Guatemala City, was founded in 1776, after Antigua was abandoned.

Guatemala gained independence from Spain on September 15, 1821; it briefly became part of the Mexican Empire, and then for a period belonged to a federation called the United Provinces of Central America. From the mid-19th century until the mid-1980s, the country passed through a series of dictatorships, insurgencies (particularly beginning in the 1960s), coups, and stretches of military rule with only occasional periods of representative government.

1944 to 1986
In 1944, Gen. Jorge Ubico's dictatorship was overthrown by the "October Revolutionaries," a group of dissident military officers, students, and liberal professionals. A civilian President, Juan Jose Arevalo, was elected in 1945 and held the presidency until 1951. Social reforms initiated by Arevalo were continued by his successor, Col. Jacobo Arbenz. Arbenz permitted the communist Guatemalan Labor Party to gain legal status in 1952. By the mid-point of Arbenz's term, communists controlled key peasant organizations, labor unions, and the governing political party, holding some key government positions. Despite most Guatemalans' attachment to the original ideals of the 1944 uprising, some private sector leaders and the military viewed Arbenz's policies as a menace. The army refused to defend the Arbenz government when a U.S.-backed group led by Col. Carlos Castillo Armas invaded the country from Honduras in 1954 and quickly took over the government. Gen. Miguel Ydigoras Fuentes took power in 1958 following the murder of Colonel Castillo Armas.

In response to the increasingly autocratic rule of Ydigoras Fuentes, a group of junior military officers revolted in 1960. When they failed, several went into hiding and established close ties with Cuba. This group became the nucleus of the forces that were in armed insurrection against the government for the next 36 years. Four principal left-wing guerrilla groups--the Guerrilla Army of the Poor (EGP), the Revolutionary Organization of Armed People (ORPA), the Rebel Armed Forces (FAR), and the Guatemalan Labor Party (PGT)--conducted economic sabotage and targeted government installations and members of government security forces in armed attacks. These organizations combined to form the Guatemalan National Revolutionary Unity (URNG) in1982. At the same time, extreme right-wing groups of self-appointed vigilantes, including the Secret Anti-Communist Army (ESA) and the White Hand, tortured and murdered students, professionals, and peasants suspected of involvement in leftist activities.

Shortly after President Julio Cesar Mendez Montenegro took office in 1966, the army launched a major counterinsurgency campaign that largely broke up the guerrilla movement in the countryside. The guerrillas then concentrated their attacks in Guatemala City, where they assassinated many leading figures, including U.S. Ambassador John Gordon Mein in 1968. Between 1966 and 1982, there was a series of military or military-dominated governments.

On March 23, 1982, army troops commanded by junior officers staged a coup to prevent the assumption of power by Gen. Angel Anibal Guevara, the hand-picked candidate of outgoing President and Gen. Romeo Lucas Garcia. They denounced Guevara's electoral victory as fraudulent. The coup leaders asked retired Gen. Efrain Rios Montt to negotiate the departure of Lucas and Guevara. Rios Montt had been the candidate of the Christian Democracy Party in the 1974 presidential elections and was widely regarded as having been denied his own victory through fraud.

Rios Montt was at this time a lay pastor in the evangelical protestant "Church of the Word." In his 1982 inaugural address, he stated that his presidency resulted from the will of God. He formed a three-member military junta that annulled the 1965 constitution, dissolved Congress, suspended political parties, and canceled the electoral law. After a few months, Rios Montt dismissed his junta colleagues and assumed the de facto title of "President of the Republic."

Guerrilla forces and their leftist allies denounced Rios Montt. Rios Montt sought to defeat the guerrillas with military actions and economic reforms; in his words, "rifles and beans." In May 1982, the Conference of Catholic Bishops accused Rios Montt of being responsible for increased militarization of the country and for continuing military massacres of civilians. General Rios Montt was quoted in the New York Times of July 18, 1982 as telling an audience of indigenous Guatemalans, "If you are with us, we'll feed you; if not, we'll kill you."

The government began to form local civilian defense patrols (PACs). Participation was in theory voluntary, but in reality, many Guatemalans, especially in the heavily indigenous northwest, had no choice but to join either the PACs or the guerrillas. Rios Montt's conscript army and PACs recaptured essentially all guerrilla territory--guerrilla activity lessened and was largely limited to hit-and-run operations. However, Rios Montt won this partial victory at an enormous cost in civilian deaths.

Rios Montt's brief presidency was probably the most violent period of the 36-year internal conflict, which resulted in about 200,000 deaths of mostly unarmed indigenous civilians. Although leftist guerrillas and right-wing death squads also engaged in summary executions, forced disappearances, and torture of noncombatants, the vast majority of human rights violations were carried out by the Guatemalan military and the PACs they controlled. The internal conflict is described in great detail in the reports of the Historical Clarification Commission (CEH) and the Archbishop's Office for Human Rights (ODHAG). The CEH estimates that government forces were responsible for 93% of the violations; ODHAG earlier estimated that government forces were responsible for 80%.

On August 8, 1983, Rios Montt was deposed by his own Minister of Defense, Gen. Oscar Humberto Mejia Victores, who succeeded him as de facto President of Guatemala. Mejia justified his coup, saying that "religious fanatics" were abusing their positions in the government and also because of "official corruption." Seven people were killed in the coup, although Rios Montt survived to found a political party (the Guatemalan Republic Front) and to be elected President of Congress in 1995 and 2000. Awareness in the United States of the conflict in Guatemala, and its ethnic dimension, increased with the 1983 publication of the book I, Rigoberta Menchu, An Indian Woman in Guatemala. The book recounts the life of the title character, a young woman whose often tragic life experiences reflect the experiences common to many indigenous people suffering under that nation's injustices.

General Mejia allowed a managed return to democracy in Guatemala, starting with a July 1, 1984 election for a Constituent Assembly to draft a democratic constitution. On May 30, 1985, after 9 months of debate, the Constituent Assembly finished drafting a new constitution, which took effect immediately. Vinicio Cerezo, a civilian politician and the presidential candidate of the Christian Democracy Party, won the first election held under the new constitution with almost 70% of the vote, and took office on January 14, 1986.

1986 to 2003
Upon its inauguration in January 1986, President Cerezo's civilian government announced that its top priorities would be to end the political violence and establish the rule of law. Reforms included new laws of habeas corpus and amparo (court-ordered protection), the creation of a legislative human rights committee, and the establishment in 1987 of the Office of Human Rights Ombudsman. The Supreme Court also embarked on a series of reforms to fight corruption and improve legal system efficiency. With Cerezo's election, the military moved away from governing and returned to the more traditional role of providing internal security, specifically by fighting armed insurgents. The first 2 years of Cerezo's administration were characterized by a stable economy and a marked decrease in political violence.

Dissatisfied military personnel made two coup attempts in May 1988 and May 1989, but military leadership supported the constitutional order. The government was heavily criticized for its unwillingness to investigate or prosecute cases of human rights violations. The final 2 years of Cerezo's government were also marked by a failing economy, strikes, protest marches, and allegations of widespread corruption. The government's inability to deal with many of the nation's problems--such as infant mortality, illiteracy, deficient health and social services, and rising levels of violence--contributed to popular discontent.

Presidential and congressional elections were held on November 11, 1990. After a runoff ballot, Jorge Serrano was inaugurated on January 14, 1991, thus completing the first transition from one democratically elected civilian government to another. Because his Movement of Solidarity Action (MAS) Party gained only 18 of 116 seats in Congress, Serrano entered into a tenuous alliance with the Christian Democrats and the National Union of the Center (UCN).

The Serrano administration's record was mixed. It had some success in consolidating civilian control over the army, replacing a number of senior officers and persuading the military to participate in peace talks with the URNG. Serrano took the politically unpopular step of recognizing the sovereignty of Belize. The Serrano government reversed the economic slide it inherited, reducing inflation and boosting real growth.

On May 25, 1993, Serrano illegally dissolved Congress and the Supreme Court and tried to restrict civil freedoms, allegedly to fight corruption. The "autogolpe" (or self-initiated coup) failed due to unified, strong protests by most elements of Guatemalan society, international pressure, and the army's enforcement of the decisions of the Court of Constitutionality, which ruled against the attempted takeover. In the face of this resistance, Serrano fled the country.

On June 5, 1993, the Congress, pursuant to the 1985 constitution, elected the Human Rights Ombudsman, Ramiro De Leon Carpio, to complete Serrano's presidential term. De Leon, not a member of any political party and lacking a political base but with strong popular support, launched an ambitious anticorruption campaign to "purify" Congress and the Supreme Court, demanding the resignations of all members of the two bodies.

Despite considerable congressional resistance, presidential and popular pressure led to a November 1993 agreement brokered by the Catholic Church between the administration and Congress. This package of constitutional reforms was approved by popular referendum on January 30, 1994. In August 1994, a new Congress was elected to complete the unexpired term. Controlled by the anti-corruption parties--the populist Guatemalan Republican Front (FRG) headed by ex-Gen. Efrain Rios Montt, and the center-right National Advancement Party (PAN)--the new Congress began to move away from the corruption that characterized its predecessors.

Under De Leon, the peace process, now brokered by the United Nations, took on new life. The government and the URNG signed agreements on human rights (March 1994), resettlement of displaced persons (June 1994), historical clarification (June 1994), and indigenous rights (March 1995). They also made significant progress on a socioeconomic and agrarian agreement. National elections for president, the Congress, and municipal offices were held in November 1995. With almost 20 parties competing in the first round, the presidential election came down to a January 7, 1996 runoff in which PAN candidate Alvaro Arzu defeated Alfonso Portillo of the FRG by just over 2% of the vote. Arzu won because of his strength in Guatemala City, where he had previously served as mayor, and in the surrounding urban area. Portillo won all of the rural departments except Peten. Under the Arzu administration, peace negotiations were concluded, and the government signed peace accords ending the 36-year internal conflict in December 1996. The human rights situation also improved during Arzu's tenure, and steps were taken to reduce the influence of the military in national affairs.

Guatemala held presidential, legislative, and municipal elections on November 7, 1999, and a runoff presidential election on December 26. In the first round the Guatemalan Republican Front (FRG) won 63 of 113 legislative seats, while the National Advancement Party (PAN) won 37. The New Nation Alliance (ANN) won 9 legislative seats, and three minority parties won the remaining four. In the runoff on December 26, Alfonso Portillo (FRG) won 68% of the vote to 32% for Oscar Berger (PAN). Portillo carried all 22 departments and Guatemala City, which was considered the PAN's stronghold. Portillo was criticized during the campaign for his relationship with the FRG's chairman, former Gen. Efrain Rios Montt, the de facto President of Guatemala in 1982-83. Many charged that some of the worst human rights violations of the internal conflict were committed under Rios Montt's rule. Nevertheless, Portillo's impressive electoral triumph, with two-thirds of the vote in the second round, gave him a claim to a mandate from the people to carry out his reform program.

President Portillo pledged to maintain strong ties to the United States, further enhance Guatemala's growing cooperation with Mexico, and participate actively in the integration process in Central America and the Western Hemisphere. Domestically, he vowed to support continued liberalization of the economy, increase investment in human capital and infrastructure, establish an independent central bank, and increase revenue by stricter enforcement of tax collections rather than increasing taxation. Portillo also promised to continue the peace process, appoint a civilian defense minister, reform the armed forces, replace the military presidential security service with a civilian one, and strengthen protection of human rights. He appointed a pluralist cabinet, including indigenous members and others not affiliated with the FRG ruling party.

Progress in carrying out Portillo's reform agenda was slow at best, with the notable exception of a series of reforms sponsored by the World Bank to modernize bank regulation and criminalize money laundering. The administration made some progress on such issues as taking state responsibility for past human rights cases, supporting human rights in international forums, and pressing labor rights reforms, but it failed to show significant advances on combating impunity in past human rights cases, military reforms, and legislation to increase political participation. It renounced a so-called Fiscal Pact that had been established together with business and civil society groups to finance the reforms called for under the peace accords. The government later was involved in a series of high-level corruption scandals, none of which resulted in successful prosecution of those responsible. The United States determined in April 2003 that Guatemala had failed to demonstrably adhere to its international counternarcotics commitments during the previous year. The popularity of the government, as measured by opinion polls, steadily declined as evidence of corruption and mismanagement accumulated.

A high crime rate and a serious and worsening public corruption problem were cause for concern for the Government of Guatemala. These problems, in addition to issues related to the often violent harassment and intimidation by unknown assailants of human rights activists, judicial workers, journalists, and witnesses in human rights trials, led the government to begin serious attempts in 2001 to open a national dialogue to discuss the considerable challenges facing the country. This dialogue has not taken place, despite the creation of the Guatemalan Forum, a coalition of civil society and private sector interests calling for political reforms.

National elections were held on November 9, 2003. Oscar Berger Perdomo of the Grand National Alliance (GANA) party won the election, receiving 54.1% of the vote. His opponent, Alvarado Colom Caballeros of the Nation Unity for Hope (UNE) party received 49.1% of the vote. The new government assumed office on January 14, 2004.

GOVERNMENT
Guatemala's 1985 constitution provides for a separation of powers among the executive, legislative, and judicial branches of government. The 1993 constitutional reforms included an increase in the number of Supreme Court justices from 9 to 13. The reforms reduced the terms of office for president, vice president, and congressional representatives from 5 years to 4 years, and for Supreme Court justices from 6 years to 5 years; they increased the terms of mayors and city councils from 2-1/2 years to 4 years.

The president and vice president are directly elected through universal suffrage and limited to one term. A vice president can run for president after 4 years out of office. Supreme Court justices are elected by the Congress from a list submitted by the bar association, law school deans, a university rector, and appellate judges. The Supreme Court and local courts handle civil and criminal cases. There also is a separate Constitutional Court.

Guatemala has 22 administrative subdivisions (departments) administered by governors appointed by the president. Guatemala City and 331 other municipalities are governed by popularly elected mayors or councils.

Principal Government Officials
President—Oscar Jose Rafael BERGER Perdomo
Vice President—Eduardo STEIN Barillas
Minister of Foreign Affairs—Jorge BRIZ
Minister of Finance— Mar�a Anotnieta del Cid de BONILLA
Ambassador to the U.S.—Jose Guillermo CASTILLO
Ambassador to the UN--Gert ROSENTHAL
Ambassador to the OAS—Francisco Villagr�n de Le�n

The Guatemalan embassy is located at 2220 R Street, NW, Washington, DC 20008 (tel. 202-745-4952; email: INFO@Guatemala-Embassy.org). Consulates are in Washington, New York, Miami, Chicago, Houston, San Francisco, Denver, and Los Angeles, and honorary consuls in Montgomery, San Diego, Ft. Lauderdale, Atlanta, Leavenworth, Lafayette, New Orleans, Minneapolis, Philadelphia, Pittsburgh, San Juan, Providence, Memphis, San Antonio, and Seattle. See the State Department Web page: http://www.state.gov/s/cpr/rls/fco/

POLITICAL CONDITIONS
The 1999 presidential and legislative elections were considered by international observers to have been free and fair. Participation by women and indigenous voters was higher than in the recent past, although concerns remained regarding the accessibility of polling places in rural areas.

Portillo's landslide victory combined with an FRG majority in Congress suggested possibilities for rapid legislative action. However, under the Guatemalan constitution of 1985, passage of many kinds of legislation requires a two-thirds vote. Passage of such legislation was not possible, therefore, with FRG votes alone.

The political balance was disrupted in 2000 when allegations surfaced that the FRG had illegally altered legislation. Following an investigation, the Supreme Court stripped those involved--including President of Congress and FRG chief Rios Montt--of their legislative immunity to face charges in the case. At roughly the same time, the PAN opposition suffered an internal split and broke into factions; the same occurred in the ANN. Reforms essential to peace implementation still await legislative action.

The government increased several tax rates in 2001 in an attempt to meet the target of increasing its tax burden (at about 10.7% of GDP, currently the lowest in the region) to 12% of GDP. However, protestors took to the streets massively when the government sought further increases in August 2001, declaring their opposition to any new taxes until the Portillo administration provided better accountability for the taxes it already received.

Violent harassment of human rights workers presented a serious challenge in 2002 and 2003. Common crime, aggravated by a legacy of violence and vigilante justice, presented another serious challenge. Impunity remained a major problem, primarily because democratic institutions, including those responsible for the administration of justice, have developed only a limited capacity to cope with this legacy. Guatemala's judiciary is independent; however, it suffered during 2003 from inefficiency, corruption, and intimidation. 

In early 2003, the government accepted the Human Rights Ombudsman's proposal for a U.N.-led commission to investigate possible links between illegal clandestine groups or security forces and attacks on human rights defenders and organized crime. By the end of 2003, the agreement was scheduled to be submitted to the Congress for ratification in January 2004. The UN Verification Mission in Guatemala (MINUGUA) continued to monitor peace accord implementation and human rights problems, and the UN extended its mandate to the end of 2004, at the government's request.

Elections for president, considered by international observers to be free and fair, were held in November and December 2003. Oscar Berger of the three-party coalition Grand National Alliance (GANA) won a 4-year term; he took office in January 2004.

ECONOMY
After the signing of the final peace accord in December 1996, Guatemala was well-positioned for rapid economic growth over the next several years, until a financial crisis in 1998 disrupted the course of improvement. The subsequent collapse of coffee prices left what was once the country's leading export sector in depression and had a severe impact on rural incomes. Foreign investment inflows have also been weak, with the exception of the privatization of utilities. Potential investors, both foreign and domestic, cite corruption, lack of physical security, a climate of confrontation between the government and private sector, and unreliable mechanisms for contract enforcement as the principal barriers to new business. On a more positive note, Guatemala's macroeconomic management was sound under the Portillo administration, and its foreign debt levels are modest. The country subscribed to a standby agreement with the International Monetary Fund (IMF) in 2002, which it extended in June 2003 after satisfactorily meeting its targets.

Guatemala's economy is dominated by the private sector, which generates about 85% of GDP. Agriculture contributes 22% of GDP and accounts for 75% of exports. Most manufacturing is light assembly and food processing, geared to the domestic, U.S., and Central American markets. Over the past several years, tourism and exports of textiles, apparel, and nontraditional agricultural products such as winter vegetables, fruit, and cut flowers have boomed, while more traditional exports such as sugar, bananas, and coffee continue to represent a large share of the export market.

The United States is the country's largest trading partner, providing 36% of Guatemala's imports and receiving 30% of its exports. The government 's involvement is small, with its business activities limited to public utilities--some of which have been privatized--ports and airports, and several development-oriented financial institutions. Guatemala was certified to receive export trade benefits under the U.S. Caribbean Basic Trade and Partnership Act (CBTPA), and it enjoys access to U.S. Generalized System of Preferences (GSP) benefits. Guatemala's benefits under both the CBTPA and GSP have periodically been subjected to review due to concerns over serious worker rights protection issues. Passage of labor code reforms in May 2001, and the successful prosecution of labor rights violations against banana union workers dating to 1999 were encouraging, and the review that year was lifted. However, there is continuing concern over the failure to prosecute perpetrators of violence against labor leaders and reinstate workers who have been illegally fired.

Current economic priorities include ratification of a U.S.-Central America Free Trade Agreement, commonly known as CAFTA, which was signed on May 28, 2004. Priorities within CAFTA include eliminating customs tariffs on as many categories of goods as possible; opening services sectors; and creating clear and readily enforceable rules in areas such as investment, government procurement, intellectual property protection, customs procedures, electronic commerce, the use of sanitary and phyto-sanitary measures to protect public health, and resolution of business disputes. Import tariffs have already been lowered together with Guatemala's partners in the Central American Common Market, with most now under 15%.

Other priorities include increasing transparency and accountability in Guatemala's public finances, broadening the tax base, and completing implementation of financial sector reforms. These measures attempt to ensure that Guatemala can comply with the standards of the international Financial Action Task Force for detecting and preventing money laundering.

The United States, along with other donor countries--especially France, Italy, Spain, Germany, and Japan--and the international financial institutions, have increased development project financing since the signing of the peace accords. However, donors' support remains contingent upon Guatemalan Government reforms and counterpart financing.

The distribution of income and wealth remains highly skewed. The wealthiest 10% of the population receives almost one-half of all income; the top 20% receives two-thirds of all income. As a result, about 80% of the population lives in poverty, and two-thirds of that number—or 7.6 million people—live in extreme poverty. Guatemala's social development indicators, such as infant mortality and illiteracy, are among the worst in the hemisphere. Chronic malnutrition among the rural poor worsened with the onset of the crisis in coffee prices, and the United States has provided disaster assistance and food aid in response.

NATIONAL SECURITY
Guatemala is a signatory to the Rio Pact and is a member of the Central American Defense Council (CONDECA). The president is commander in chief. The Defense Minister is responsible for policy. Day-to-day operations are the responsibility of the military chief of staff and the national defense staff.

An agreement signed in September 1996, which is one of the substantive peace accords, mandated that the mission of the armed forces change to focus exclusively on external threats. However, both former President Arzu and his successor President Portillo used a constitutional clause to order the army to temporarily support the police in response to a nationwide wave of violent crime.

The accord calls for a one-third reduction in the army's authorized strength and budget--already achieved--and for a constitutional amendment to permit the appointment of a civilian Minister of Defense. A constitutional amendment to this end was defeated as part of a May 1999 plebiscite, but discussions on how to achieve this objective continue between the executive and legislative branches.

The army has gone beyond its accord-mandated target of reducing its strength to 28,000 troops, and numbered 15,000 troops as of June 2004. It is equipped with armaments and materiel from the United States, Israel, Serbia and Montenegro, Taiwan, Argentina, Spain, and France. As part of the army downsizing, the operational structure of 19 military zones and three strategic brigades are being recast as several military zones are eliminated and their area of operations absorbed by others. The air force operates three air bases; the navy has two port bases. Additionally, recent steps have been taken to redefine the military's mission—the military doctrine has been rewritten, and there has been an increase in cooperation with civil society to help bring about this reform.

FOREIGN RELATIONS
Guatemala's major diplomatic interests are regional security and, increasingly, regional development and economic integration. Guatemala participates in several regional groups, particularly those related to trade and the environment.

The Council of Central American Ministers of Trade meets on a regular basis to work on regional approaches to trade issues. The council signed a Trade and Investment Framework Agreement (TIFA) with the U.S. in 1998, and was part of the negotiations that led to the creation of CAFTA. Guatemala joined Honduras and El Salvador in signing a free trade agreement with Mexico in 2000, which went into effect the following year. Guatemala also originated the idea for, and is the seat of, the Central American Parliament (PARLACEN).

President Bill Clinton and the Central American presidents signed the CONCAUSA (Conjunto Centroamerica-USA) agreement at the Summit of the Americas in December 1994. CONCAUSA is a cooperative plan of action to promote clean, efficient energy use; conserve the region's biodiversity; strengthen legal and institutional frameworks and compliance mechanisms; and improve and harmonize environmental protection standards.

Guatemala has a long-standing claim to a large portion of Belize; the territorial dispute caused problems with the United Kingdom and later with Belize following its 1981 independence from the U.K. In December 1989, Guatemala sponsored Belize for permanent observer status in the Organization of American States (OAS). In September 1991, Guatemala recognized Belize's independence and established diplomatic ties, while acknowledging that the boundaries remained in dispute. In anticipation of an effort to bring the border dispute to an end in early 1996, the Guatemalan Congress ratified two long-pending international agreements governing frontier issues and maritime rights. In 2001, Guatemala and Belize agreed to a facilitation process led by the OAS to determine the land and maritime borders separating the two countries. National elections in Guatemala put a temporary halt to progress in this forum, but discussions are expected to resume in 2004.

U.S.-GUATEMALAN RELATIONS
Relations between the United States and Guatemala traditionally have been close, although at times strained by human rights and civil/military issues. U.S. policy objectives in Guatemala include:

  • Supporting the institutionalization of democracy and implementation of the peace accords;
  • Ratification of a free trade agreement, together with the other Central American countries;
  • Encouraging respect for human rights and the rule of law, and implementation of the Commission for the Investigation of Illegal Groups and Clandestine Security Organizations in Guatemala (CICIACS);
  • Supporting broad-based economic growth and sustainable development and maintaining mutually beneficial trade and commercial relations;
  • Cooperating to combat money laundering, corruption, narcotics trafficking, alien-smuggling, and other transnational crime; and
  • Supporting Central American integration through support for resolution of border/territorial disputes.

The United States, as a member of "the Friends of Guatemala," along with Colombia, Mexico, Spain, Norway, and Venezuela, played an important role in the UN-moderated peace accords, providing public and behind-the-scenes support. The U.S. strongly supports the six substantive and three procedural accords, which, along with the signing of the December 29, 1996 final accord, form the blueprint for profound political, economic, and social change. To that end, the U.S. Government has committed nearly $400 million to support peace implementation since 1997.

Although almost all of the 180,000 U.S. tourists who visit Guatemala annually do so without incident, in recent years the number of violent crime reported by U.S. citizens has steadily increased. Increases in the number of Americans reported as victims of violent crime may be the result of any combination of factors: increased numbers of Americans traveling to Guatemala; increased accuracy in the Embassy's reporting of crime; more Americans traveling to higher risk areas of Guatemala; or more crime.

Most U.S. assistance to Guatemala is provided through the U.S. Agency for International Development's (USAID) offices for Guatemala and Central American Programs (USAID/G-CAP). USAID's programs support U.S. foreign policy objectives by promoting reforms in democratic governance, economic growth, and the social sectors, with special emphasis on the rural indigenous poor whose lives have been most seriously affected by the internal civil conflict. In addition to earning low incomes, these populations have limited economic opportunities for economic advancement, lack access to social services, and have limited access to, or influence over, the policymaking processes. Totaling $50 million to $55 million annually, USAID programs pursue six objectives. These are:

  • Supporting the implementation of the 1996 peace accords;
  • Aiding the improvement of the legal system and assisting citizens in its use;
  • Increasing educational access and quality for all Guatemalans;
  • Improving the health of Guatemalan women, children, and rural families;
  • Increasing the earning capacity of poor rural families; and
  • Expanding natural resources management and conservation of biodiversity.

USAID's largest program is the support of the peace accords. The accords require major investments in health, education, and other basic services to reach the rural indigenous poor and require the full participation of the indigenous people in local and national decision-making. They also call for a profound restructuring of the state, affecting some of its most fundamental institutions--the military, the national police, and the system of justice--in order to end impunity and confirm the rule of law. Finally, they require basic changes in tax collection and expenditure and improved financial management.

USAID's regional Central America Program is also based in Guatemala. Providing between $20 million and $30 million in annual assistance, USAID's regional program--in coordination with the U.S. Embassies in the region and bilateral USAID missions in Nicaragua, Honduras, El Salvador, and Panama--supports four key objectives. These are:

  • Promotion of free trade;
  • Expansion of Central American natural resources management and conservation;
  • Advancement of regional HIV/AIDS services and information; and
  • Rural diversification to enhance incomes.

Principal U.S. Embassy Officials
Ambassador--John Hamilton
Deputy Chief of Mission--Bruce Wharton
Political Counselor—Alex Featherstone
Economic Counselor--Steven Olson
Management Officer--Scott Heckman
Defense Attache--Col. Richard Nazario
Military Assistance Group--Col. Mark Wilkins
Consul General--Michael Jacobsen
Regional Security Officer--Michael Foster
Public Affairs Officer--Mary Thompson-Jones
Drug Enforcement Administration--Micheal O'Brian
Agricultural Attache--Steve Huete
Commercial Attache--Mitch Larson
USAID/G-CAP Director--Glenn Anders

The U.S. Embassy in Guatemala is located at Avenida la Reforma 7-01, Zone 10, Guatemala City (tel. [502] 331-1541; fax [502] 331-8477).

Other Contact Information
U.S. Department of Commerce
International Trade Administration
Trade Information Center
14th and Constitution, NW
Washington, DC 20230
Tel: 800-USA-TRADE
Internet: http://www.ita.doc.gov

American Chamber of Commerce in Guatemala
5a avenida 5-55 zona 14 Europlaza, Torre I Nivel 5
01014 Guatemala City, Guatemala
Tel:  (502) 2333-3899
Fax:  (502) 2368-3536
E-Mail:  trade@amchamguate.com

Caribbean/Latin American Action (C/LAA)
1818 N Street, NW, Suite 310
Washington, DC 20036
Tel.: 202-466-7464
Fax: 202-822-0075



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