VZCZCXYZ0000
RR RUEHWEB

DE RUEHGT #1468/01 3310713
ZNR UUUUU ZZH
R 260713Z NOV 08
FM AMEMBASSY GUATEMALA
TO RUEHC/SECSTATE WASHDC 6521
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHME/AMEMBASSY MEXICO 5006

UNCLAS GUATEMALA 001468 
 
SIPDIS 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON SOCI ELAB ENRG PGOV GT
SUBJECT: GUATEMALA CITY'S ZONE 18, THE OTHER SIDE OF THE 
TRACKS 
 
REF: GUATEMALA 775 
 
¶1. (SBU)  Introduction: On November 18, Poloffs toured 
Guatemala City's high crime district of Zone 18 to examine 
political and economic issues in a part of the capital less 
frequented by Embassy staff.  As part of the visit officers 
toured a local market, met with local community leaders, 
visited the local police precinct, and met with an AMCIT 
businessman operating a maquila in the area.  Residents of 
Zone 18 are worried about insecurity, and most expressed 
growing concern regarding inflation, a lack of economic 
opportunity, and a drop in remittances.  While the maquila 
industry in Zone 18 is struggling, there is a large amount of 
upper-middle class residential construction generating some 
employment in Zone 18. End Introduction. 
 
Local Market Feels Global Economic Squeeze 
------------------------------------------ 
 
¶2. (SBU) The local market servicing Zone 18 residents of 
Colonia Maya and the surrounding neighborhoods continues to 
do brisk businesses, but local merchants complain about a 
drop in sales and increased costs.  The market, which 
occupies one block of a major street in Colonia Maya, was 
started in 1990 with 10 vendors, and now includes 162 stalls 
offering products ranging from meat and produce to clothing 
and cooking ware.  The total cost to market sellers of 
operating a stall is approximately $2 (U.S.) a day, of which 
$.60 (U.S.) is paid to the municipal government.  The 
municipal employee in charge of the market stated that his 
area of responsibility was the collection of stall rents and 
verification that stalls sold only items they were authorized 
to sell.  As he made these statements while standing in front 
of a stall selling only pirated CDs, Poloff asked him if he 
had authorized the sale of pirated CDs.  He grew nervous and 
stated that enforcing copyright laws was the responsibility 
of the national police. 
 
¶3. (SBU) All vendors questioned stated that sales have been 
down in recent months, with the owner of a stall selling 
clothing complaining that sales were down 60 percent in the 
last three months.  All vendors also stated that the price of 
goods had increased, with chicken increasing 37 percent since 
¶2007.  Most blame the price increases on increases in fuel 
prices and animal feed, and complained that even though fuel 
prices have fallen recently the prices for consumer goods 
have remained high.  Other vendors blamed the U.S economic 
slowdown for the local market's problems, saying that falling 
remittances from the U.S. diminished consumers' purchasing 
power.  One member of the market's leadership council who is 
a chicken vendor stated that this was the worst economic 
period he had ever seen, but looking on the bright side he 
added that his children have been eating more chicken since 
sales have been so slow. 
 
¶4. (SBU) Vendors stated that crime in the area was high, but 
thanks to the four Municipal Police assigned to protect the 
market during working hours there had been no incidents in 
recent months.  In private one of the local leaders told 
Poloff that members of the local gang had recently demanded 
that vendors begin paying a combined $700 (U.S.) per month 
"tax," and that the leadership council was attempting to 
negotiate a lower monthly payment.  He stated that he had 
informed the National Police of the extortion, but did not 
expect them to investigate the case.  He said that he 
believes they will soon have to begin paying the gang. 
 
Police Doing What They Can With Limited Resources 
--------------------------------------------- ----------- 
Q-------------------------------------------- ------------ 
 
¶5. (SBU) Poloffs toured the El Limon Police Substation in 
Zone 18 which provides security for over 200,000 residents. 
The officer in charge of the substation, Custodio Boteo, 
stated that he had 20 National Civilian Police (PNC) officers 
and two trucks assigned to his substation.  He added that 
this gave him at most six officers per shift to patrol his 
area of responsibility.  According to Boteo, every time his 
men arrested someone he had to dispatch two officers and one 
vehicle to the nearest courthouse.  He stated that the 
booking and arraignment process takes an average of 12 hours, 
which further reduces the number of police he has to provide 
security to the local population.  Boteo informed Poloffs 
that he had worked in El Limon for over four years, and that 
the secret to his success is that he has good relations with 
community leaders.  A testament to Boteo's local popularity 
is that two years ago he was transferred to another position, 
but returned to El Limon after local community leaders and 
citizens petitioned PNC headquarters for his return.  By all 
accounts Boteo is working well with the local population to 
improve security, but due to a lack of resources and an 
 
overly cumbersome judicial system he has had limited results. 
 
¶6. (SBU) Boteo stated that insecurity was a major problem in 
El Limon, with the biggest problem being gang related 
extortion of bus drivers and local businesses.  He added that 
most of the leadership of the local gang was already in 
prison, but that the ever-growing number of underage gang 
members continued to frustrate efforts to combat extortion. 
When asked how the local situation could be improved he 
offered a list of concrete and well-reasoned changes to 
improve local security.  He stated that if officials at the 
Zone 18 Prison would ensure that cell phone inhibitors 
already in place at the prison were always turned on, then 
gang leaders would immediately be cut off from both their 
support networks and those they are seeking to extort.  He 
also said passage of the pending arms and ammunition law, 
with its much more stringent penalties for carrying 
unregistered weapons, would provide his men with a tool to 
take criminals off the streets.  Lastly, he said Guatemala 
needed to change the way it dealt with underage criminals, 
suggesting the need to create youth detention centers that 
would remove children involved in gangs from the influence of 
older gang members, and provide them education and 
counseling.  When prompted about the need for more resources 
he added that he could use at least double the number of 
agents currently assigned to El Limon.  (Comment: Poloffs 
were surprised by Boteo's concrete and non-resource related 
ideas on how to improve local security.  The fact that a 
local PNC leader is working well with community leaders and 
examining the problem of local security with an eye toward 
addressing the underlying problems, as opposed to simply 
requesting more resources, offers hope for improving security 
in Zone 18.  End Comment.) 
 
Gentrification in Notorious Zone 18 
----------------------------------- 
 
¶7. (SBU) Poloffs met with Estaurdo Zapeta, an indigenous 
leader and local radio talk show host who lives in Zone 18, 
to discuss recent changes in the area.  Zapeta lives in one 
of several gated communities in Zone 18 that offer middle 
class lifestyles surrounded by low income housing.  Zapeta 
stated that while Zone 18 had historically been one of the 
worst parts of the capital, recent development projects in 
the area, coupled with worsening of security in most of the 
other parts of the city, had made Zone 18 comparatively safer 
then other areas.  He stressed that the major problem now 
preventing further development was the negative (and in his 
mind undeserved) reputation the area had in the rest of 
Guatemala.  To underscore this point he met with Poloffs in a 
new U.S.-style shopping complex and pointed to a nearby gated 
condo community as proof that Zone 18 was changing for the 
better.  He acknowledged that one of the catalysts of this 
change was the ability of those moving to Zone 18 to afford 
private security, stating that his own private complex of 102 
houses had a force of six armed private guards 24-hours a 
day, for which each resident pays $50 (U.S.) a month.  Zapeta 
acknowledged that private security was beyond the reach of 
the average resident of Zone 18, but stated that many of the 
poorer local communities were seeking to close off their 
neighborhoods in emulation of the up-scale private enclaves. 
 
¶8. (SBU) Zapeta was positive on the future of Zone 18, 
stating that several planned shopping centers and housing 
complexes would help to continue the transformation of Zone 
18 from a low income area to a middle class zone.  Zapeta 
Q18 from a low income area to a middle class zone.  Zapeta 
acknowledged that the majority of the current residents of 
Zone 18 could not afford to live in the new housing projects 
or shop in the western style shopping complexes, but he 
insisted that the increased employment opportunities these 
developments would bring to the area would improve the living 
standards of local residents.  (Comment: While there is 
obviously a great deal of new development in parts of Zone 18 
focused on housing and shopping for the middle class, it is 
not clear if these gentrification programs will in the end 
help the local residents or simply displace them.  End 
Comment.) 
 
Maquilas in Trouble 
------------------- 
 
¶9. (SBU) While new shopping centers and upscale housing 
complexes provide increased employment opportunities for 
local residents, the maquila industry in Zone 18 is in 
decline.  Poloffs met with AMCIT maquila owner Teddy Lee, who 
painted a dim picture of the future for an industry that has 
for years provided many of the jobs in Zone 18.  He claimed 
that there used to be over 500 maquilas in Guatemala and now 
there are well under 200.  Lee stated that his maquila 
employs 350 Zone 18 residents, and has been in operation for 
 
seven years, but he doubted that he would be in business thistime next year.  He acknowledged that insecurity ws a 
problem, and that several maquilas have been targeted for 
extortion by gang members, but stated that this is a 
secondary concern when compared to economic factors. 
 
¶10. (SBU) Lee said that in the last seven years local wages 
have continued to increase while the exchange rate has 
remained steady or worsened, which has slowly decreased the 
sector's competitiveness.  He stated that recent U.S. 
economic problems have greatly exacerbated his company's 
problems.  In the last three months he has seen a 30 percent 
decrease in new orders from the U.S. along with several 
cancellations.  He has had to take smaller orders to keep 
operating at 100 percent capacity, which has further hurt his 
bottom line.  As December approaches, Lee has heard that up 
to five foreign owners of maquilas are considering leaving 
the country to avoid paying the end of year bonus equivalent 
to one-month salary to each employee mandated by Guatemalan 
law. (Note: It is not uncommon for foreign owners of maquilas 
in financial trouble to close the business and leave the 
country without paying back wages and bonuses.  End Note.) 
 
Public Transport Focal Point of Insecurity 
------------------------------------------ 
 
¶11. (SBU) Insecurity is a hot button issue across Guatemala, 
but how people define insecurity changes from area to area. 
In more affluent neighborhoods kidnappings, home invasions, 
and carjackings are the topics of conversation while in areas 
like Zone 18 the focal point is invariably the extortion and 
murder of public bus drivers.  Nearly every person questioned 
in Zone 18 mentioned extortion on public transportation or 
the murder of bus drivers as a major concern.  Zapeta stated 
that this was due to the fact that few Zone 18 residents 
owned cars, and most needed to take some form of mass transit 
to jobs and markets. The most common form of violence against 
the mass transit system is that gangs regularly target bus 
drivers who refuse to pay extortion.  So far this year 110 
bus drivers have been murdered in Guatemala, including a 
23-year old bus driver who was killed the day after Poloffs' 
trip only a few blocks from the area visited. 
 
¶12. (SBU) Local residents claim that in addition to these 
high-profile killings, robbing of passengers happens daily in 
Zone 18.  Boteo acknowledged that robbery of bus passengers 
was a common occurrence in the area, but that few victims 
report the crimes to police.  He stated that he does 
investigate the killings of bus drivers that occur in his 
area, but that unless the criminal is caught in the act the 
odds of a successful prosecution are slim.  He added that 
most of the gang members who actually kill bus drivers are 
around 15 years of age, and thus can not be effectively 
prosecuted even if they are caught.  (Comment: Local 
newspapers have taken to updating the running total of bus 
drivers killed as a means of highlighting security problems, 
but what is more troubling than the high number of bus 
drivers killed is that so far this year only one person has 
been detained for murdering a bus driver. End Comment.) 
 
¶13. (SBU) Boteo stated that typically gangs use 15-year old 
members or pregnant women to approach bus drivers with 
extortion demands, but also co-opt bus drivers into extortion 
schemes.  Often gangs will recruit a bus driver to collect 
the gang's "tax" from other drivers, allowing that bus driver 
to keep a percentage of the profits.  He stated that the 
Qto keep a percentage of the profits.  He stated that the 
current rate of extortion is around $13 (U.S.) per bus per 
day.  He added that as most buses must transit several zones, 
bus drivers are often forced to pay daily protection money to 
several different gangs to operate safely.  (For more on 
Guatemala's growing problem with extortion of the public 
transit sector see reftel.) 
 
Comment 
------- 
 
¶14. (SBU) While the general concerns of Zone 18 residents 
mirror those of the more affluent sectors of the capital, how 
those concerns are defined varies.  The overriding concern 
with kidnapping and robbery in higher income areas is 
replaced by extortion of mass transit in lower income areas, 
and economic concerns are defined by the local increase in 
the cost of chicken and produce.  What was surprising was 
that even though the residents of Zone 18 view their concerns 
and problems in local terms, they are finely attuned to how 
events on the national and international level affect their 
standard of living.  When asked why business has slowed, 
street vendors with little or no apparent education discussed 
how the U.S. economic downturn had translated into less 
chicken purchased in a Zone 18 market stall.  It is unclear 
 
if ongoing development in the area will improve the lot of 
Zone 18 residents, or if continued maquila closures coupled 
with gentrification will mean a continued loss of jobs and 
housing.  It is clear that local residents are watching the 
Colom administration closely and hoping for positive change. 
McFarland