Small countries like Guatemala hold little leverage in global energy markets; not surprisingly, Guatemalans are also strongly feeling the adverse effects of rising petroleum prices in their daily activities.

As the saying goes, good business trumps politics—and Guatemala proves the maxim true. Although firmly opposed to acceding into the Petrocaribe agreement with Venezuela in 2008, President Otto Pérez Molina is now looking south to Venezuelan President Hugo Chávez’ Petrocaribe organization for any possible relief. He is left with few choices as fuel prices hover closer to 40 quetzales ($5.15) per gallon.

Guatemala has tried to position itself as a Central American petroleum hub through efforts to get off the ground construction of a possible regional refinery and by attracting investments into the exploration and production of its designated drilling blocks. But despite these efforts, Guatemala has not been able to finalize any refinery deals nor has it attracted much international interest in its oil exploration activities.

More recently, in 2011, to the dismay of government officials, only two natural resource companies submitted bids for the four drilling blocks made available to investors that year. With up to 12 potential onshore and offshore oil areas currently available for exploration, Guatemala will have to raise the country’s profile in key global energy hubs. Another key challenge for bringing in energy investment is putting forth clear and more investment-friendly laws.

Over the past weeks, an unprecedentedly open debate has arisen over the wisdom of prevailing anti-drug policy in the Western Hemisphere. The present U.S.- led  strategy, which relies heavily on aggressive interdiction and law enforcement, is being openly called a failure and even counterproductive by some Latin American leaders, who are asking for renewed discussion of other options, including, most notoriously from the U.S. perspective, the legalization of consumption. The heavy emphasis of anti-drug policy on repression, say these critics, has encouraged the domination of the drug trade by well-organized, heavily armed, ruthless and extremely violent cartels, with horrifying effects.

Not coincidentally, the epicenter of the debate is Central America, a transshipment center for up to 80 percent of drugs headed for the U.S., where criminal gangs have overwhelmed weak governments and helped make some of these societies—especially Honduras and Guatemala—among the world’s most dangerous. One of the most interesting aspects of the debate is that the argument for legalization is being promoted most forcefully by Guatemala’s newly-elected president, Otto Pérez Molina, a right-leaning ex-general and former director of military intelligence during the country’s civil war: nobody’s idea of a naïve idealist.

The U.S., whose treasure, power and prestige has been invested in the war on drugs (a term now officially abandoned) since the Nixon administration, has reacted defensively to criticism. The Obama administration sent Homeland Security Secretary Janet Napolitano on a tour of the region to attempt to tamp down opposition, while Vice President Joe Biden met with the regions’ presidents soon after. Biden said last week that while the U.S. was not opposed to discussing the merits of drug policy, there was no chance that the U.S. would change its position against legalization. In the end, Biden mentioned in Tegucigalpa, Honduras, last week only that the Obama administration was asking the U.S. Congress for $107 million in continuing security assistance for the region in the coming year.

Guatemala’s recently passed fiscal reform, scheduled to take effect in 2013, raises taxes for upper-middle-class and wealthy earners.

Fiscal reform is an issue of particular importance in Guatemala, a nation with one of the world’s greatest gaps in income distribution. While Guatemala’s annual GDP is the highest in Central America, tax rates have consistently hovered around 10 percent, the lowest in the entire region. The international community has long encouraged fiscal reform as an obvious step toward reducing debt and inequality. In a visit to the country in 2010, U.S. Secretary of State Hillary Clinton expressed firm support for the measure.

As part of the 1996 Peace Accords ending Guatemala’s 36-year civil war, the government agreed to raise tax revenues as a percentage of GDP from 8 percent to 12 percent by the year 2000. The previous administration, under President Álvaro Colóm, made repeated efforts to pass a fiscal reform only to be blocked by resistance from congress and the private sector.

However, last month the fiscal reform package passed in expedited fashion as a matter of national urgency: with more than 105 of 158 representatives supporting it, Guatemala’s Congress was able to hold an immediate vote, bypassing a lengthy debate process. It passed in Congress with 102 votes, a near two-thirds majority.

The reform will allow Guatemalans earning less than 48,000 quetzales (US $6,200) yearly to pay nothing in taxes; currently all earning above 36,000 quetzales (US $4,645) are obliged to pay. Those earning over 300,000 quetzales (US $38,709) annually will pay 7 percent income tax, up from 5 percent. Middle-class earners making between 48,000 and 300,000Q will pay 5 percent.

At the end of February, Americas Society released a white paper titled Political Representation & Social Inclusion: A Comparative Study of Bolivia, Colombia, Ecuador, and Guatemala as a part of its Social Inclusion Program.

The white paper aims to answer the question: Does the increased presence of Indigenous and Afro-descendant representatives in national legislatures make a difference for these populations? The report presents the findings and conclusions of Americas Society’s Ford Foundation-funded research on political inclusion, with a goal to help bring greater attention to the gains and challenges of race- and/or ethnicity-based political representation in Latin America. It analyzes how political representation of traditionally marginalized populations has changed over time, from 1986 to 2012, and if it has affected policy in favor of these populations.

The report draws on field research conducted in Bolivia, Colombia, Ecuador, and Guatemala—four countries with sizable Indigenous and/or Afro-descendant populations. The comparative report and individual country case studies explore the unique political and social movements and constitutional reforms that paved the way for greater ethnic or racial representation and their effectiveness in representing and defending their communities’ demands once in office. In total, 12 congressional sessions and two constituent assemblies between 1986 and 2012 are observed.

Access the full white paper: Political Representation & Social Inclusion: A Comparative Study of Bolivia, Colombia, Ecuador, and Guatemala.

A través del hemisferio occidental, activistas ciudadanos fuera del sector público luchan cotidianamente por los derechos humanos y una sociedad más justa e igual; en la comunidad maya guatemalteca, Aura Lolita Chávez es una lideresa que defiende los derechos de los pueblos mayas, y recién la entrevisté.

Ella fue nacida en Santa Cruz del Quiché—160 kilómetros al noroccidente de la capital guatemalteca. Lolita es la fundadora y coordinadora del Consejo de Pueblos K’ichés, una instancia integrada por lideres indígenas de distintas regiones del departamento de Quiché y que busca fomentar una mayor participación de los sectores marginados y discriminados de la sociedad guatemalteca.

Su constante lucha a favor de los pueblos indígenas le ha costado una serie de acciones en su contra como denuncias en el Ministerio Público y en otras instancias judiciales porque constantemente lucha por la defensa de la vida, madre naturaleza, la tierra y el territorio. También, propugna mensajes de lucha y resistencia ante las políticas estatales que marginan o relegan a los indígenas a posiciones no deseadas, una de sus fuertes luchas es contra la explotación y exploración minera y la mala utilización de los recursos naturales, también es conocida por la organización de protestas y el bloqueo de carreteras para que las autoridades atiendan las peticiones de los pueblos indígenas.

Entre sus principales metas está el lograr una mejor calidad de vida para los pueblos de Quiché—por ello en una actividad recientemente declaró que los pueblos indígenas están en contra de las mínimas regalías que las grandes empresas mineras dejan al Estado sin que las comunidades afectadas se vean beneficiadas. Por ello exclamó, “Decimos sí a la vida y no a las regalías, porque nuestra tierra no se vende, se recupera y se defiende.”

AQ Online today launches its weekly Monday Memo that looks ahead to what it expects to be the top headline grabbers for the week. The top anticipated stories for the week of February 27 include: Hugo Chávez’ surgery; U.S. Secretary of Homeland Security Janet Napolitano’s current five-country Latin America tour; U.S. Vice President’s forthcoming visit to Mexico and Honduras; the search for a new prime minister in Haiti; and FARC suspending kidnappings in Colombia.

Chávez' Cancer: As the Venezuelan president heads to Cuba for a second surgical operation, the rumor mill on his real health status will continue as will the discussion about what its implications will be for Venezuela's October presidential election. Christopher Sabatini, AQ editor-in-chief, observes: “While it may translate into sympathy support, President Chávez' lack of transparency about his illness and treatment will likely raise fears among some Venezuelans about their future and a potential successor—irrespective of what the president says upon his release.”

Napolitano on Latin America Tour: U.S. Secretary of Homeland Security Janet Napolitano begins a five-country tour today through Wednesday in Mexico, Guatemala, El Salvador, Costa Rica, and Panama. According to a Department of Homeland Security (DHS) press release, Secretary Napolitano will be accompanied by Acting Commissioner of U.S. Customs and Border Protection David Aguilar and DHS Assistant Secretary for International Affairs Alan Bersin. Her visit is likely intended to reiterate support for security measures like the Central America Regional Security Initiative and reinforce counter-trafficking efforts to interdict narcotics through key transit points.

Biden to Mexico and Honduras: U.S. Vice President Joe Biden will visit Mexico and Honduras on March 4-6, meeting with both Presidents Calderón and Lobo. Why is the Vice President going to Honduras?  While Mexico remains an important economic, diplomatic and strategic partner in the war on drugs, the trip to Honduras is a mystery. Since the 2009 coup, Honduras has become the murder capital of Central America. Two weeks ago, a fire at a Honduran prison left 350 inmates dead—an incident that Human Rights Watch blamed on poor and overcrowded conditions in Honduran prisons.

Haiti Prime Minister Watch: The abrupt resignation of Haitian Prime Minister Gary Conille on Friday culminated weeks of disagreement between him and President Michel Martelly. The departure of the former UN diplomat and favorite of the international aid community is a blow for both political stability in Haiti and for donor nations that had great hopes in a government that included his technical skills. Jason Marczak, AQ senior editor, says: “Expect President Martelly to move quickly in naming a successor, with a candidate likely announced this week.” Foreign Minister Laurent Lamothe is one possibility as is Chief of Staff Ann-Valerie Milfort. However, both would face a tough confirmation by an opposition-controlled legislature. 

FARC Hostage Release: Colombia's FARC announced on Sunday that it will suspend all kidnapping and free remaining prisoners. Is this a political ploy or a true change in tactics? Given the group's decentralized nature, it is unclear whether the FARC secretariat can actually enforce the order, if it chooses to do so. Expect renewed debate this week on whether this may help to clear the way for an eventual peace dialogue or if the current strategy should continue without talks.

With a visit this week to Washington by Guatemalan Foreign Minsiter Harold Caballeros, and an impending first-time visit to Guatemala City by U.S. Secretary of Homeland Security Janet Napolitano, Guatemala appears to have momentarily captured the attention of the United States. For Guatemala, the bilateral relationship is a top foreign policy priority. In addition, the over 1.2 million Guatemalans living in the U.S. are an economic lifeline to their native country, representing 10 percent of Guatemala’s GDP .

Guatemala’s fate is invariably tied to its Northern Triangle neighbors; each face an uphill battle in increasing the protections for migrants, reducing rampant organized crime and strengthening incomplete security apparatuses. For the U.S., relations with Guatemala are largely viewed within a larger Central American context, particularly through the Sistema de Integración Centroamericana (Central American Integration System—SICA). Guatemala also is the beneficiary of USAID projects and the U.S. as well supports Guatemala’s UN-mandated Comisión Internacional Contra la Impunidad en Guatemala (International Commission Against Impunity in Guatemala—CICIG). Still, funding increases for the Central American Regional Security Initiative is one area in which Guatemalans are lobbying for more support. 

With democratic consolidation solidifying in Guatemala, the U.S. has the opportunity to address other Guatemala-specific issues that lie near the forefront of the bilateral relationship. One would be granting Temporary Protection Status for undocumented Guatemalans living in the U.S., the economic lifelines of Guatemala. Another would be for the U.S. to further boost investments in security and development to the levels that other regional and global partners receive from the United States. Lifting the current military cooperation embargo against Guatemala would further provide the country with the technology, know-how and equipment to fight organized crime within its territory, a problem that is severely crippling the central government. Considering that Guatemala shares a border with Mexico and is used as a “bridge” for most narcotics trafficked to the United States, Guatemala should be part of the solution to the violence plaguing the isthmus. 

President Otto Pérez Molina of Guatemala said Monday that his country and others in Central America should consider legalizing drugs to help reduce violence in the region. Speaking at a press conference with President Mauricio Funes of El Salvador after a meeting on crime and security issues, Pérez Molina said, “We’re bringing the issue up for debate. If drug consumption isn’t reduced, the problem [of drug trafficking] will continue.” Funes, too, said he was “open to discussion” in his country on the matter.

Pérez first indicated his support for legalization in a radio interview on Sunday, saying his proposal would include legalization of consumption and transportation of drugs. He plans to bring the issue up at a summit of Central American leaders next month.  The U.S. Embassy in Guatemala responded to the proposal with strong criticism, issuing a statement in which it said to legalize drugs would represent “a threat to public health and safety.” Pérez Molina said he considered the statement to be “premature” and that the U.S. should be a part of the debate.

Pérez Molina, a former general, was elected in November 2011 and took office last month promising to crack down on crime, including military action against drug cartels. In his first month in office, he has transformed himself into one of the strongest voices in favor of legalization. Anita Isaacs, a Guatemala expert and professor of political science at Haverford College, said the change could be a political calculation to pressure the U.S. into providing Guatemala with more military aid, while Pérez Molina’s backers say the change reflects a realization that, with continued U.S. demand for drugs, Guatemala will never have the resources to stem the flow of drugs north.

A growing number of Latin American leaders have expressed support for the legalization of drugs. President Santos has said it is a theme that “must be addressed,” and that he would be open to legalizing drugs if the entire world were. Former Presidents Vicente Fox, of Mexico, and Fernando Enrique Cardoso, of Brazil, have also expressed support.

Después de las elecciones generales realizadas en Guatemala en septiembre del año pasado y de la toma de posesión de esa autoridades electas el mes pasado, se ha constatado que la inclusión de más mujeres en puestos de toma de decisiones sigue siendo un reto tanto para las autoridades y una de las demandas del movimiento de mujeres en este país, pues los datos muestran nuevamente un estancamiento en el tema.

Para Dora Amalia Taracena—de la organización Convergencia Cívico Político de Mujeres—un hecho histórico en el país es que por primera vez asumió una mujer como Vicepresidenta de la República, Roxana Baldetti, lo que se considera un avance innegable y digno de reconocer.

Taracena señaló que en el Congreso de la República la situación hasta este momento es la misma, pues en esta nueva legislatura se reporta la presencia de 19 diputadas de 158, al igual que a nivel de alcandías donde de 333 puestos, sólo siete son ocupados por mujeres.

La profesional indicó que a nivel de ministerios, de 14 sólo tres están dirigidos por mujeres: educación; desarrollo social; y ambiente y recursos naturales. Se está a la espera de la oficialización de las secretarías para saber cuántas mujeres serán incluidas.

As the global marketplace becomes increasingly competitive, the pressures of manufacturing costs have risen to the forefront. These challenges drive the locations of manufacturing, where products are transported and where investors look to spend their capital. It seems that the days of faulty, substandard major projects in Central America are over as individual governments take seriously the attractions for businesses to manufacture in other world regions.

From Guatemala to the end of the isthmus at Panama, Central American nations have all realized that the only way their countries can be competitive in the modern global economy is by building a first-class infrastructure. These outputs must offer sufficient capacity to handle the demands of the movement and delivery of goods, people and services in a cost-effective and efficient manner. Every country is pouring significant funds into infrastructure, with Panama, Guatemala and Costa Rica leading the pack. 

Panama, which is often considered to be the “hub of the Americas” in terms of maritime and aviation, has spent over $3 billion in projects related to the widening of the Panama Canal, and another $3 billion in the construction of a metro-rail transportation system, among other initiatives.  Meanwhile, Costa Rica has posted an impressive growth rate in recent years due primarily to tourism and producing high-value products. However, Costa Rica has been criticized for its lack of infrastructure and for the bureaucratic delays that surround the approval of any major project. With hopes of sustaining its current growth, Costa Rica has responded to this criticism by reforming its concessions law to further attract investment as well as signing a historic free-trade agreement with China, aimed at attracting heavy infrastructure-related foreign direct investment as it recently did.