VZCZCXYZ0020
OO RUEHWEB

DE RUEHGT #2252/01 3231137
ZNR UUUUU ZZH
O 191937Z NOV 07
FM AMEMBASSY GUATEMALA
TO SECSTATE WASHDC IMMEDIATE 4364

UNCLAS GUATEMALA 002252 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV CONS PREL GT
SUBJECT: SCENESETTER FOR CODEL COLEMAN 
 
Introduction 
------------ 
¶1.  Your November 23 - 24 visit will afford you a chance to 
view adoptions processes and practices in Guatemala.  You 
 
will also have the opportunity to review our efforts to 
promote economic development, poverty alleviation, democracy, 
and rule of law, following the 1996 signing of the Peace 
Accords, which put an end to the 36-year armed internal 
conflict.  The United States and Guatemala enjoy a cordial 
bilateral relationship, and all indications are that that 
will continue to be the case under President-Elect Colom, who 
will take office in January. 
 
Adoptions 
--------- 
¶2.  Guatemala is the second-largest source for babies adopted 
by American parents, after China.  Americans adopted over 
4,500 babies here in FY2007, and the number increases every 
year.  The vast majority of adoptions are relinquishment 
cases, in which a sole parent voluntarily waives all parental 
rights.  Legislation that would bring Guatemala into 
compliance with the Hague Convention on International 
Adoptions is pending before Congress, and may be passed this 
year.  Since the U.S. will become Hague-compliant on April 1, 
2008, it is important that Guatemala approve its own 
Hague-implementing legislation this year, in order to permit 
continuation of adoptions to the U.S.  Hague compliance will 
ensure that the system provides safeguards for both the 
children and the prospective parents. 
 
Democratic Progress 
------------------- 
¶3.  The United States and Guatemala have historically enjoyed 
good relations.  The United States is Guatemala's largest 
trade partner, foreign investor, and assistance donor.  The 
United States is home to more than one million Guatemalans -- 
most of whom are there illegally -- who this year will send 
back to Guatemala over $4 billion in remittances (equal to 
12% of GDP).  In 2007, DHS deported more than 20,000 illegal 
Guatemalan immigrants, and U.S. immigration reform is a topic 
of major interest here. 
 
¶4.  Trade and investment ties strengthened when CAFTA came 
into force one-and-a-half years ago.  Two-way trade has 
increased 8.4%, and foreign direct investment has tripled. 
GDP growth for 2007 is forecast at 5.6%, and year-on-year 
inflation is 7.7%, due mostly to increasing oil and food 
prices.  Guatemala's conservative fiscal policy, with 
deficits averaging only 1.5% of GDP, has resulted in public 
sector debt that is among the lowest in the region. 
Guatemala is working hard to qualify for a compact with the 
Millennium Challenge Corporation. 
 
¶5.  Guatemala returned to democracy in 1986, and ten years 
later signed the Peace Accords that ended 36 years of 
internal armed conflict.  Tens of thousands of persons were 
killed (including U.S. Ambassador John Mein, assassinated by 
Marxist guerrillas in 1968).  The chronically under-funded 
state is weak but trying to contend with enormous social 
problems.  According to the World Bank, Guatemala has one of 
the most unequal income distributions in the hemisphere, and 
a poverty rate of 51%. 
 
¶6.  On November 4, Alvaro Colom of the National Union for 
Hope (UNE) Party won a runoff presidential election against 
retired General Otto Perez Molina, with 52.8% of the vote. 
His inauguration is scheduled for January 14.  Colom, who 
defines himself as a Social Democrat, is a successful 
businessman whose vocation for addressing Guatemala's 
pressing problems of pervasive poverty and the social 
exclusion of the large indigenous population led him to get 
into politics.  Despite his upper-middle class background, he 
has extensive experience with indigenous communities and 
rural development.  He seeks to continue Guatemala's good 
relations with the United States, and has kept a distance 
Qrelations with the United States, and has kept a distance 
from Latin American leaders such Venezuela's Hugo Chavez and 
Cuba's Fidel Castro.  Colom's UNE has more seats in 
Guatemala's fractured Congress than any other party, but is 
nonetheless short of a majority.  Striking alliances with 
opposition parties will therefore be key to advancing the 
government's agenda. 
 
Berger Leaving a Promising Legacy 
--------------------------------- 
¶7.  The Berger Government is working hard to ensure a 
successful transition to the new Colom administration.  The 
incoming and outgoing administrations are committed to 
ensuring that successful initiatives, such as tax reform and 
sound macro-economic management, are not interrupted by the 
transition.  President Oscar Berger took office in January 
2004, elected by a center-right coalition (GANA).  A former 
businessman and Mayor of Guatemala City, President Berger 
brought to his administration a cadre of respected and proven 
leaders with credibility and integrity.  The Berger 
Administration has advanced a broad set of reforms that have 
improved transparency and accountability, spurred economic 
growth, increased investment in education and health, 
advanced public administration reform, and secured vital 
legislation necessary for more effective administration of 
justice.  These achievements reflect the Administration's 
success in building political momentum for reform among civil 
society, the private sector, and even among disparate 
political parties. 
 
¶8.  Despite the Berger Administration's progress on many 
other fronts, the security situation remains critical.  Gangs 
and narcotraffickers are responsible for much of the current 
crime wave, and Guatemala remains a major conduit for 
northbound cocaine and heroin.  The National Police are 
widely viewed as corrupt and ineffective; citizens at times 
take the law into their own hands.  In order to combat 
organized crime and official complicity and corruption, the 
Congress approved installation of the UN's International 
Commission Against Impunity in Guatemala (CICIG).  CICIG's 
international prosecutors and investigators will buttress 
weak security organizations.  The Army, which most 
Guatemalans hold in relatively good regard, revamped its 
doctrine to emphasize respect for human rights, external 
threats and international peacekeeping.  Guatemala has been a 
reliable partner in UN peacekeeping missions, maintaining 
troops in Haiti and Congo, and operating a school for Central 
American peacekeeping forces.  U.S. security assistance to 
the Guatemalan military remains limited, however, since bans 
on FMF and IMET imposed in 1990 remain in place. 
Derham