VZCZCXYZ0006
RR RUEHWEB

DE RUEHGT #1088 1531623
ZNR UUUUU ZZH
R 021623Z JUN 06
FM AMEMBASSY GUATEMALA
TO RUEHC/SECSTATE WASHDC 9841
INFO RUCPDOC/USDOC WASHDC
RUEHRC/USDA WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS GUATEMALA 001088 
 
SIPDIS 
 
DEPT PASS USTR 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON EINV EFIN ETRD GT
SUBJECT: ECONOMIC LEGISLATION STAGNATES IN CONGRESS 
 
 
¶1.  (SBU) SUMMARY: DURING THE FIRST FOUR MONTHS OF ORDINARY 
SESSIONS, CONGRESS PASSED ONLY 10 NEW LAWS, WITH 22 ECONOMIC 
BILLS (PLUS 54 FROM 2005) WAITING TO BE REVIEWED BY THE 
RESPECTIVE COMMITTEES BEFORE THEY CAN BE DISCUSSED BY THE 
PLENARY.  IMPORTANT PROPOSALS SUCH AS AMENDMENTS TO THE MINING 
LAW AND THE FREE TRADE ZONES LAW, AND A COMPETITIVENESS LAW, 
ARE PENDING APPROVAL, ALONG WITH SEVERAL IN THE POLITICAL 
AREA.  PRIVATE SECTOR AND SOCIAL ORGANIZATIONS BLAME 
CONGRESSIONAL COMMITTEES FOR THE SMALL NUMBER OF LAWS 
APPROVED.  OTHER COMMENTATORS CITE POLITICAL MOTIVES OF 
VARIOUS PARTIES FOR BLOCKING THE LEGISLATIVE AGENDA, OFTEN 
THROUGH CALLING MINISTERS TO TESTIFY FOR SEVERAL DAYS AT A 
TIME.  THE LACK OF ADEQUATE LEGISLATION HAS OFTEN TIED THE 
HANDS OF THE BERGER ADMINISTRATION.  END SUMMARY. 
 
¶2.  (SBU) DURING THE FIRST PERIOD OF ORDINARY SESSIONS 
(JANUARY 14 TO MAY 15), CONGRESS APPROVED ONLY 10 NEW LAWS, 
AND NONE IN THE ECONOMIC AREA.  THE PERIOD OF EXTRAORDINARY 
SESSIONS HAS BEEN MORE PRODUCTIVE, WITH SEVEN LAWS APPROVED 
FROM MAY 18 TO JUNE 1, INCLUDING THE KEY CAFTA IMPLEMENTATION 
BILL.  FROM JANUARY 2005 TO MAY 2006, 76 ECONOMIC BILLS WERE 
SUBMITTED TO CONGRESS (54 IN 2005 AND 22 IN 2006) AND REFERRED 
TO THE RESPECTIVE COMMITTEES FOR REVIEW.  WITH THE EXCEPTION 
OF THE TAX EVASION LAW THAT HAS BEEN DISCUSSED AND APPROVED IN 
ITS FIRST AND SECOND READINGS, THE REMAINING LAWS HAVE NOT 
REACHED THE PLENARY.  THE CAFTA IMPLEMENTATION BILL WAS ONLY 
APPROVED ON MAY 18 DURING THE PERIOD OF EXTRAORDINARY 
SESSIONS, AND AFTER SUBSTANTIAL LOBBYING BY BUSINESS GROUPS 
AND THE EMBASSY. 
 
¶3.  (U) ACCORDING TO CONGRESS' LEGISLATIVE OFFICE, THE 
COMMITTEES ON ECONOMY AND FOREIGN TRADE, PUBLIC FINANCE, 
AGRICULTURE, COMMUNICATIONS, ENERGY AND MINES, AND LABOR ARE 
REVIEWING THE ECONOMIC BILLS SUBMITTED IN 2005 AND FIRST 
MONTHS OF 2006.  THE LARGEST NUMBER OF PROPOSALS HAS TO BE 
REVIEWED BY THE COMMITTEE ON PUBLIC FINANCE (46) AND THE 
COMMITTEE ON ECONOMY AND FOREIGN TRADE (10).  SOME OF THE 
IMPORTANT BILLS PENDING FOR APPROVAL INCLUDE AMENDMENTS TO THE 
MINING LAW AND TO THE FREE TRADE ZONES LAW, A MINIMUM WAGES 
LAW, A CIVIL SERVICE LAW, A COMPETITIVENESS LAW, A RURAL 
DEVELOPMENT LAW, A LAW ON PUBLIC-PRIVATE PARTNERSHIPS AND A 
LAW TO ALLOW THE USE OF ETHANOL FOR VEHICLES. 
 
¶4.  (U) THE DIRECTOR OF THE CHAMBER OF INDUSTRY AND OTHER 
BUSINESS GROUPS HAVE HIGHLIGHTED THE IMPORTANCE OF THE PENDING 
LAWS, AND CRITICIZED THE CONGRESSIONAL COMMITTEES FOR NOT 
DOING THEIR WORK PROPERLY.  HE MENTIONED THE SIGNIFICANCE OF 
THE ORGANIZED CRIME LAW, THE TAX EVASION LAW, AND THE CIVIL 
SERVICE LAW, WHICH IF APPROVED WOULD PROVIDE LEGAL CERTAINTY 
TO INVESTORS.  CARLOS BARREDA OF THE SOCIAL ORGANIZATION 
COLLECTIVE SAYS THE SMALL NUMBER OF LAWS APPROVED REVEALS THE 
NEED TO AMEND CONGRESS' ORGANIC LAW TO HELP EXPEDITE THE 
APPROVAL PROCESS.  HE AND OTHER ANALYSTS BELIEVE THE REMAINING 
MONTHS OF 2006 WILL BE THE LAST OPPORTUNITY TO APPROVE 
COMPLICATED PENDING LEGISLATION, SINCE 2007 IS AN ELECTION 
YEAR.  THE PRESIDENT OF CONGRESS RECENTLY RECOGNIZED IN PUBLIC 
THAT THE PASSAGE OF LAWS HAS BEEN SLOWER THAN IN PREVIOUS 
YEARS, BUT SAID THAT IT IS PART OF THE LEGISLATIVE PROCESS. 
 
 
WHARTON