VZCZCXYZ0005
RR RUEHWEB

DE RUEHGT #1135/01 1622357
ZNR UUUUU ZZH
R 112357Z JUN 07
FM AMEMBASSY GUATEMALA
TO RUEHC/SECSTATE WASHDC 2953
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHME/AMEMBASSY MEXICO 4325
RHEHNSC/NSC WASHDC
RHMFIUU/CDR USSOUTHCOM MIAMI FL

UNCLAS GUATEMALA 001135 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV EAID KDEM PHUM SOCI ELAB GT
SUBJECT: LEADING PRESIDENTIAL CANDIDATES SPEAK OUT AT 
CHAMBER OF INDUSTRY FORUM 
 
REF: A. GUATEMALA 1057 
 
     ¶B. GUATEMALA 858 AND PREVIOUS 
 
Sensitive but unclassified.  Please protect accordingly. 
 
¶1. (SBU) Summary:  Guatemala's leading presidential 
candidates highlighted the key challenges facing Guatemala 
and outlined their economic plans during a June 6 public 
forum hosted by the Chamber of Industry.  All five candidates 
stressed the need for macroeconomic stability and greater 
economic development to compete globally and to improve the 
standard of living for all Guatemalans, especially in the 
country's rural areas.  They agreed on the need to improve 
the investment climate, attract domestic and foreign 
investment, increase productivity, reduce poverty, combat 
violence, promote tourism, and regulate the informal sector, 
but did not differentiate among themselves by articulating 
specific measures or funding sources to achieve their goals. 
End summary. 
 
¶2. (U) The five leading presidential candidates -- 
center-left Colom (UNE), right-wing Perez Molina (PP), 
center-right Giammattei (GANA), Nobel laureate Menchu (EG), 
and former evangelical pastor Caballeros (Viva) -- shared 
their visions of Guatemala's future and economic development 
at a June 6 forum hosted by the Guatemalan Chamber of 
Industry as part of its 12th Industrial Congress and 2007 
InduExpo.  In attendance were the Chamber's Board of 
Directors and members, cabinet ministers, members of 
Congress, members of the press and diplomatic corps, and 
representatives of international organizations.  The 
candidates were each allotted nine minutes to present their 
platforms, followed by three minutes to respond to questions 
from the Chamber's Board of Directors and three minutes for 
closing remarks. 
 
¶3. (U) Rigoberta Menchu (EG), the first to speak, set the 
tone by noting that Guatemala is a country that has 
experienced much suffering and that economic stability will 
enhance political stability.  She proposed a "social 
economy," stressing the need for greater economic development 
to guarantee social equality and a better life for all 
Guatemalans.  Economic growth and development, however, must 
correspond to the reality of Guatemala, which she described 
as a "multi-lingual, multi-ethnic, pluralistic country," and 
provide opportunities for all sectors of the population.  She 
outlined an economic plan focusing on control of inflation 
and respect for labor rights and the rule of law.  She urged 
better access to credit and greater public and private 
investment, and pledged to control corruption to restore 
credibility to government institutions, and to bring an end 
to Guatemala's "discriminatory past" by initiating a new era 
of confidence to guarantee "a prosperous future" for 
Guatemala and Central America. 
 
¶4. (U) Harold Caballeros (Viva) echoed Menchu's platform, 
stressing the need to strengthen Guatemalan institutions, 
promote "zonas francas" (tax-exemption zones), reduce poverty 
and malnutrition in the country's interior, and ensure access 
to education, health, and credit, especially for commercial 
agricultural activities.  He noted also the need to 
strengthen public-private partnership, develop the tourism 
industry, and invest in social capital, educating the 
population to ensure a more representative democracy.  He 
urged Guatemala to take advantage of its four sources of 
capital:  human, financial via exports, natural via tourism, 
and social via security, justice, and participation.  He 
pointed out that it is the responsibility of the business 
sector, not the State, to generate new jobs but that the 
State must create the economic and social conditions for job 
creation and investment.  He estimated that 74.5 percent of 
vendors operate in the informal sector. 
 
¶5. (U) Front-runner Alvaro Colom (UNE) outlined a plan for 
macroeconomic stability by lowering inflation, strengthening 
the banking system, and increasing national productivity, 
with the aim of reaching 6 percent economic growth by 2011 
and lowering inflation to less than 3 percent with no greater 
than 1 percent in fiscal deficit.  He pledged to create 
703,000 new jobs in the public and private sectors and to 
legalize the informal sector.  He highlighted competitiveness 
as key to democratic efficiency and noted that insecurity is 
a problem that affects every sector of the population. 
Guatemala spends millions on private security, which takes 
away from productive investments, thus reducing Guatemala's 
competitiveness.  It needs to establish clear rules for 
business, reform its tax system, and control security to be 
competitive. 
 
 
¶6. (U) Retired army general Otto Perez Molina (PP) noted that 
more than 70 percent of the population live in rural areas in 
extreme poverty and that investment in health, education, and 
rural development would provide greater opportunities for the 
poor.  In his view, private investment has not resulted in 
sustainable development due to two primary reasons: 
insecurity and the investment climate.  Perez Molina, an 
advocate of hard-line ("mano dura") measures to combat crime, 
underscored the theme of security as the base for improving 
the investment climate and public confidence.  He estimated 
that the cost of violence is 7.5 percent of GDP, compared to 
3 percent in neighboring countries.  He noted that in 2006 
foreign direct investment (FDI) totalled approximately USD 
325 million, with Guatemala ranking 75 out of 125 countries 
for competitiveness (2005 World Economic Forum global 
competitiveness index), and that Guatemala needs to attract 
more FDI for its economic growth.  He promised to guarantee 
security to increase investment and to provide Guatemalans 
better economic opportunities. 
 
¶7. (U) Alejandro Giammattei of the governing party (GANA) 
described Guatemala as a poor country with lack of 
opportunities and focused on the need for a national policy 
of industrialization for sustainable development and clear 
rules for investment.  He envisioned a better investment 
climate through promotion of the rule of law, elimination of 
corruption and organized crime, protection of labor rights in 
the informal sector, access to micro-credit, and improvement 
in infrastructure.  He emphasized the importance of creating 
incentives to generate jobs, developing non-traditional 
products for export, and promoting clean energy, tourism, and 
rural development.  He expressed concern over the growing 
informal economy, asserting that the government needs to 
address the unregulated movement of goods across Guatemala's 
border with Mexico and use the military to control contraband 
activity and IPR violations. 
 
¶8. (SBU) The second round of the forum required the 
candidates to respond to follow-up questions from the 
Chamber's Board members.  The questions posed by the Board 
were directed at each candidate's economic plan.  The 
responses were vague, often a repetition of the candidate's 
opening remarks.  Additionally, most of the candidates 
circumvented the questions entirely.  When the moderator 
asked Menchu about her agrarian reform policy and whether or 
not she planned to expropriate land, she responded only that 
her proposal was not about expropriation but about legalizing 
irregularities in land titles; she did not provide any 
details about how she would accomplish her goals.  She 
affirmed that the indigenous do not oppose globalization or 
mining as long as all sectors of the population benefit. 
 
¶9. (SBU) Comment:  The electoral season continues to be 
characterized by indifference and apathy with many 
Guatemalans lacking confidence in the government to resolve 
the country's problems.  This joint public appearance of the 
leading candidates drew a disappointed reaction from those in 
attendance who had hoped to hear more specifics.  The forum 
was marked by non-differentiated thematic positions, strong 
on rhetoric and aspiration but weak on specifics for 
addressing Guatemala's ills.  While Caballeros and Colom 
provided more details about their plans than the other 
candidates, none of the five candidates elaborated specific 
strategies or focused on the financial resources they would 
need to implement their proposals should they win the 
elections.  There was no clear victor; however, Perez Molina 
and Caballeros, who appeared the most confident and 
articulate, gave a strong showing, while apparent 
front-runner Colom (Ref A) turned in a relatively lackluster 
performance.  Menchu spoke about the "other Guatemala" -- the 
marginalized indigenous and poor -- which she claims to 
represent but seemed to lack vision for bridging the gap 
between the two Guatemalas in a globalized society. 
Derham