Caribbean & Central America - January 2020

Alejandro Giammattei took over as Guatemala’s new president on 14 January. While little is known about his plans for the nation, there are various significant issues that he needs to address.

Giammattei and his Vamos government are set to inherit a raft of problems from his predecessor Jimmy Morales (Frente de Convergencia Nacional, 2016-2020), who has made little headway in dealing with poverty, corruption, and security concerns. Much like Morales, Giammattei, a former head of the prison service under the Óscar Berger administration (2004-2008), is a right-wing conservative with links to the military and far-right civilian elements. In fact, such are the links between the two camps that the new president has already been dubbed ‘Jimmyttei’ by Guatemalans concerned that they will end up with more of the same from their new leader.

Corruption - a common thread

Public corruption remains a major public concern and has made headlines in recent years. After former president Otto Pérez Molina (Partido Patriota, 2012-2015) was forced out of office amid a huge graft scandal, hope surged that the country had turned a corner on official corruption, with the help of the United Nations-backed International Commission against Impunity in Guatemala (Cicig). However, Morales refused to renew Cicig’s mandate, and it ceased operations in September 2019.

Giammattei was no fan of Cicig either, having been subject to an investigation in relation to allegations of extrajudicial killings that occurred during his time as head of the prison service, for which he was imprisoned but ultimately acquitted, so the timing of its exit saved him a potentially unpopular political decision. Yet corruption is nonetheless a huge problem for the new president. He will find himself walking a tightrope between an electorate that is more conscious than ever of graft and its nefarious effects, and allies in the traditional elites whose interests could be affected by a crackdown on corruption. In fact, Giammattei’s promise to end the corrupt practices of the past with the aid of a new national anti-corruption commission was met with scepticism by many observers.

Corruption also affects efforts to deal with Guatemala’s many pressing issues, such as rampant child malnutrition and stubbornly high poverty rates. Almost half of children under five are chronically malnourished, part of a wider issue in a country where 59% of the population lives below the poverty line on the latest (2014) World Bank figures. This is despite fairly strong economic growth in recent years, with GDP growth rates of 3.1% in 2016, 2.8% in 2017 and 3.1% in 2018. Giammattei also needs to work on increasing Guatemala’s tax revenue of just 10.3% of GDP in 2018 according to the United Nations Economic Commission for Latin America & the Caribbean (Eclac) which is the lowest percentage of any Latin American country. This is a longstanding problem which looks set to have worsened under Morales, whose removal in January 2018 of Juan Francisco Solórzano Foppa, the head of the tax authority (SAT), attracted concerns given he was well respected and received Cicig’s backing.

The low tax take is just one facet of wider issues with an economic system that feeds inequality, relies heavily on the informal labour market, and fails to provide adequate education. As a result, equitable growth remains out of reach. Giammattei needs to kickstart the state sector and pull in more public money to fund social programmes that would benefit the millions of Guatemalans that are struggling to survive, particularly in areas such as the so-called ‘Dry Corridor’ (a tropical dry forest region on the Pacific side of Central America) that are suffering the effects of climate change and give them a reason to stay at home rather than migrate to the US.

Relations with the US could have deep ramifications

The question of migration leads us to perhaps the most unpredictable issue for Giammattei: relations with the US and President Donald Trump. In July 2019 the Morales government signed a migration deal with the US which allows US authorities to deport asylum seekers to Guatemala if they passed through that country during their journey to the US. This has the potential to create huge problems in an impoverished nation, placing huge strain on public services that cannot support the local population as things stand and perhaps stoking a wave of xenophobia, as seen in various South American countries that have received Venezuelan migrants. Worryingly, Giammattei has said that the Morales government has not shared details of the deal, but it seems unlikely that Giammattei would be able to renegotiate with a Trump administration that so far had no qualms about threatening to suspend crucial aid payments in pursuit of migration deals. Trump has also threatened to tax remittances, which represent 12% of Guatemala’s GDP, underlining the reality that Giammattei will have to appease the US throughout his term.

The new president will also have to deal with security issues. Guatemala retains one of the highest homicide rates in Central America, third to El Salvador and Honduras with 22.48 homicides per 100,000 in 2018. Giammattei is pledging to combat this with a ‘mano dura’ (repressive) approach to crime. He has made headlines with pledges to fight violence and organised crime “with testosterone”; enact a law against terrorism that criminalises gang membership; restore the death penalty; and deploy the military to fight crime, a policy which has been used by his predecessors. While a December 2019 report in Spanish daily El País featured an interview with a high-ranking member of the Mara Salvatrucha street gang, who offered to work with Giammattei in “pacifying” the streets in return for rehabilitation programmes, such policies are a hard sell to voters who have been affected by gangs. The new realities of Giammettei’s role as president mean he will likely fall back on tough policies which traditionally go down well with voters.

It doesn’t appear that Giammattei has much to worry about in terms of popular protests. Since the mass mobilisations of 2015 that contributed to the downfall of Pérez Molina there has been little appetite for protest, and social movements have been criminalised. There remains a stark divide between indigenous peasant farmer movements, that are concentrated in rural areas and tend to focus on opposing extractive projects, and the urban population that appears so far unaffected by the protest wave in Latin America.

The situation is more restive in the legislative and judicial branches of government (see sidebar). First of all, congress did not approve a new budget for 2020, which means Giammattei will have to work with the same amount of resources allocated in the 2019 budget (Q87.715bn [US$11.37bn]) plus an extra Q750m authorised in that budget last year. At the end of November 2019 local daily, Prensa Libre, reported that government officials are working to reallocate funds where they are needed most, but the Giammattei government will likely need to request more money from congress in early 2020.

Giammattei will also face a congress in which the opposition Unidad Nacional de la Esperanza (UNE), of his second-round opponent, former First Lady Sandra Torres (2008-2012), will be the largest party. UNE has 54 seats in the newly expanded 160-member unicameral legislature, compared with 16 for Vamos with 17 other parties making up the remainder. The legitimacy of the legislature has also been badly affected by the Morales years, in which legislators appeared more concerned about shielding themselves from corruption investigations than running the country.

• Key elections

Elections for a new set of judges for the supreme court (CSJ) and appeals court also need to be held. This was due to take place last year but a constitutional court (CC) ruling suspended the process after admitting appeals which claim procedural irregularities. This meant that the term of the sitting judges has continued beyond constitutional limits which was meant to end on 13 October 2019. Continued uncertainty in this area will impact trust in the judicial system and could make it harder for the Giammattei government to attract foreign investment.

• Homicides

While in recent years, Guatemala’s homicide rate has declined, think-tanks such as International Crisis Group (ICG) attribute this to the United Nations-backed International Commission against Impunity in Guatemala (Cicig). ICG research suggests Cicig’s work helped contribute to a 5% average annual decrease in murder rates. Cicig’s departure has raised some question marks as to whether this trend will continue.