Tuesday, September 08, 2015

Guatemalan President goes to jail

Last week, Guatemala witnessed high drama and historic change. In three days, the Perez, the President became a prisoner on corruption charges. On 1 September, the Congress passed a unanimous resolution (all the 132 deputies present in the chamber including the members of the Patriotic Party of the President) to remove the immunity from prosecution of President Otto Perez Molina. On 2 September, the Attorney General requested for an arrest warrant after which Perez  submitted his resignation at midnight. On 3 September, a judge issued an order for arrest following which Perez was taken to a court for preliminary hearing and then put in a jail on the same day. 
The Guatemalans have been protesting ever since the corruption scam called as La Linea (the line) surfaced in April in which several millions of dollars have been taken as bribes by officials who let businessmen import without customs duty. The chief of Customs and some officials were charged and detained. In May, the Vice President resigned after her name was linked to the scam. She is in jail facing trial. On 21 August, the investigators revealed the involvement of President Perez himself. Thereafter, the protests intensified with tens of thousands of youth, businessmen and indigenous people calling for the impeachment of President Perez. It was not driven by any political party. It was pure civil society in action. The organizers had used social media such as facebook extensively. The protestors were careful and did not indulge in any violence and in fact some of them wore masks in the beginning, fearing retaliation from the regime. Guatemala has a terrible human rights record. The country had gone through a deadly civil war for 36 years till 1996 in which several hundred thousands of people were killed. The indigenous people who form the majority of the population and are the poorest, bore the brunt of the military crackdown. Even now, Guatemala has one of the highest murder rates in the world.

The Guatemalans could not believe that they have brought down a powerful President by peaceful protests  in a country known for violence. They consider it as a revolution and turning point in their history. Perez was not some weak or ordinary politician. He was a General in the army and was one of the strong men of the feared military regime before the restoration of democracy. More importantly, he was also the head of the military intelligence unit. Perez was said to have been behind killings of political opponents and innocent people, although he was never formally charged.

The corruption charge against Perez is not that big by Latin American or even Indian standards. He is alleged to have received 800,000 dollars as bribe. Perez himself argued that he would not have taken the risk for such a paltry amount. He mentioned that he was offered ten times more money by 'El Chapo' Guzman, the Mexican drug mafia don when arrested by the military unit lead by Perez in Guatemala some years back.
Credit for the unprecedented and courageous investigation against the high and mighty should go to the proactive pursuit of the case by CICIG, the United Nations International Commission against Impunity in Guatemala established in 2007. The name of the Commission reveals it all. It was created to add strength to the local agencies considered weak and corrupt. Perez had reluctantly extended the tenure of the UN Commission which is a headed by a Colombian. With their support, the Guatemalan investigators had collected evidence from tapping of thousands of  phone conversations and emails exchanged between businessmen and officials spread over a year. 
Three days after jailing the President, Guatemala went ahead with the elections on 6 September as previously scheduled to elect a new President and Congress. The voters have punished the traditional politicians by voting for Jimmy Morales, a political outsider, who has emerged as the front runner with 24% votes. Morales, who is a popular TV comedy actor has told the voters" For the last twenty years I have made you laugh. If I become president, I promise I won't  make you cry". The centre-right candidate Manuel Baldizon, who was leading in the opinion polls before the scam, is tied for second position with the Leftist candidate Sandra Torres. A second round of elections will be held on 25 October between Morales and the candidate who came( this will be confirmed later this week) in second position. Until the new elected President assumes office on 14 January, the vice president Alejandro Maldonado has been sworn in as the interim President. 
The Guatemalan political leaders and officials who had taken for granted their impunity in the past have now been given an unequivocal notice. The Guatemalan people have tasted power, lost their fear and gained courage and confidence as democratic stake holders. 
It is important to note that President Perez did not use force or other means to stop the investigation or the protests. Nor did he attempt any coup. Perez himself had told the media that he could have derailed the investigations or changed the prosecutor but he did not. He had declared that he would let himself be subject to the law while claiming that he did not receive any bribe. To be fair to him, Perez was not bad as President and he did not show any authoritarian attitude. The army has remained neutral and did not try to rescue their ex-colleague in trouble. The courage of the Attorney General and the investigators in going after the very top of the government, has strengthened their offices. This is good news for the stability and institutional strength of the young democracy of the country.

The victory of the peaceful anti-corruption movement of the Guatemalans against all odds, is an inspiration for those protesting against corruption in Latin America and other parts of the world.

Guatemala is the largest market in Central America with a population of 15.8 million and GDP of 58.7 billion US Dollars. The macroeconomic fundamentals of the country are fairly strong with inflation under 3%, external debt at 33% of GDP and forex reserves at 7.6 billion dollars. The average annual GDP growth in the last four years is 4%. It was 4.2% in 2014 and is projected to be 4% in 2015. 
Guatemala matters to Indian business for two reasons. It has emerged as a significant market in Central America for India's exports which have been increasing steadily over the years and has almost tripled from 87 million dollars in 2009-10 to 229 million in 2014-15. Secondly, the Indian cardamom exporters keep an eye on Guatemala which plays a critical role in international prices as the largest producer and exporter of cardamom, having overtaken India in the last few decades. 
The Ministry of External Affairs is planning a Central American business summit in Guatemala city in early 2016 during the next India- SICA (Central American Integration System- the regional group of seven Central American countries) political dialogue. 

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