US embassy cable - 05GUATEMALA2395

UNCLAS SECTION 01 OF 02 GUATEMALA 002395 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PREF, CVIS, SMIG, EAID, MASS, PHUM, AEMR, ASEC, ETRD, EAGR, GT 
SUBJECT: GUATEMALA NEEDS TPS 
 
REF: (A) GUATEMALA 2386 (B) GUATEMALA 2352 (C) 
     GUATEMALA 2273 
 
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Summary and Introduction 
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1.  Embassy Guatemala strongly supports granting Guatemalans 
living in the United States Temporary Protected Status (TPS) 
following Hurricane Stan, which produced floods and mudslides 
that have devastated the country.  Guatemala is in a state of 
calamity and will be hard pressed to address any additional 
demands for jobs, housing, roads, bridges, schools, water and 
sanitation services that the return of Guatemalans living 
illegally in the U.S. would require.  On the eve of CAFTA 
coming into force, Hurricane Stan delivered a body blow to 
Guatemala, which was already suffering from high poverty 
rates, fragile public institutions and an astonishing wave of 
gang-related crime.  The GOG is overwhelmed with addressing 
the need to clean up the damage, restore basic services and 
build shelters for the survivors.  Granting Guatemalans TPS 
for 12 months would ease the burden on the Berger 
administration as it contends with the massive task of 
overseeing country-wide recovery and reconstruction efforts 
by postponing the return of Guatemalans until the country is 
better able to absorb them.  It would also provide a 
substantial support to the Berger government, which has 
boldly undertaken major fiscal reforms in order to increase 
social sector spending and to create jobs, measures that will 
in the long term create incentives for potential migrants to 
stay in Guatemala.  Extending TPS to Guatemalans would also 
give us added leverage in our efforts to increase GOG 
cooperation in the expedited removal from the U.S. of 
Guatemalans apprehended at the border. 
 
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Stan's Devastating Impact 
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2.  Starting October 1, torrential rains spawned by Hurricane 
Stan produced floods and mudslides that destroyed large 
sections of the country.  The GOG is still assessing the 
damage, but preliminary information suggests that it was the 
most devastating natural disaster to strike Guatemala since 
the 1976 earthquake.  Due to closed roads and cloudy skies, 
there are parts of the country that the authorities have not 
been able to reach, neither by land nor air.  The official 
death toll is currently 664, but this number is expected to 
rise.  One UN agency has estimated the death toll at 2,055. 
The storm destroyed or damaged at least 200,000 homes.  There 
are over 140,000 persons taking refuge in shelters and 
uncounted thousands more left homeless or taking refuge in 
private homes.  At least 14 highways were blocked by 
mudslides, caved in or washed away, leaving 847 km of roads 
completely impassable and another 1001 km passable with 
extensive delays.  Over a hundred bridges were damaged or 
destroyed.  The GOG conservatively puts the price tag for 
infrastructure repairs at $320 million, but the disruption to 
economic activity caused by road and bridge damage will be 
much higher.  Subsistence farmers across the Mayan indigenous 
highlands suffered severe losses.  Cash crops for export were 
also badly impacted.  The Federation of Guatemalan Coffee 
Growers, an umbrella organization of 150 cooperatives, 
reports that losses from flooding could be 10 to 15 percent 
of the nation's crop, leading to high unemployment in the 
harvest season, which is just beginning.  Preliminary 
estimates indicate at least $400 million was lost in corn, 
beans, coffee, sugar and other crops, and another $140 
million lost in livestock.  All told, the GOG believes 1.5 
million persons were directly affected and another two 
million indirectly affected by storm damage. 
 
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Dire Economic Conditions 
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3.  Preliminary estimates indicate that Hurricane Stan's 
damage to the economy will lead to a contraction of two 
percent in Guatemala's GDP over the coming year.  Guatemala's 
economy was already experiencing anemic economic growth 
before Stan due to a number of external factors, including 
surging energy prices.  Indeed, on a per capita basis, GDP 
has not grown in five years.  Per capita income of over 
$2,000 is skewed by a very wealthy elite; over 55% of the 
population lives in poverty (under two dollars per day) and 
at least a further 15% in extreme poverty (under one dollar 
per day).  Poverty and economic marginalization of much of 
the indigenous population remain major challenges, and 
socio-economic indicators are among the lowest in the Western 
Hemisphere.  Prior to Stan, up to half the working population 
was unemployed or underemployed.  In terms of absolute 
numbers, Guatemala has far more people in extreme poverty 
than any other country in Central America.  Many of the 
country's poorest live in the highlands, areas hardest hit by 
Hurricane Stan. 
 
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Guatemala's Stability at Stake 
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4.  President Berger has used his first two years in office 
to undertake major structural economic reforms, such as 
reducing the military by 50% and increasing tax collection. 
He has reoriented the savings to increased social spending, 
which in the long run creates jobs and decreases the 
incentives for Guatemalans to emigrate to the U.S.  The 
Berger administration has, furthermore, been a strong partner 
in efforts to combat narcotics trafficking, alien smuggling 
and terrorism.  Its desire to cooperate with us on a broad 
range of issues was evident in FM Briz's encouraging response 
to our request for GOG cooperation in accelerating the 
removal of Guatemalans apprehended at our borders (ref C). 
Guatemala has made much progress since the 1996 peace accords 
that ended 36 years of an internal armed conflict that took 
200,000 lives.  The country is still desperately poor, 
however, and fragile state institutions are riding herd over 
a host of social problems that could easily re-ignite.  The 
GOG has responded well to the initial challenges of Hurricane 
Stan, but the work of preventing widespread hunger, meeting 
public health needs and rebuilding damaged infrastructure 
will severely test the Berger Administration's ability to 
meet Guatemala's basic needs.  The success or failure of that 
effort will determine popular attitudes toward democratic 
governance and institutions.  Success in responding to the 
hurricane damage will strengthen democracy in Guatemala; 
failure will weaken it.  TPS is the single most effective 
means the USG has at its disposal to help Guatemala recover 
from Hurricane Stan.  The GOG understands that TPS would be 
of limited duration.  We recommend granting TPS for the next 
twelve months in order to give the GOG the space it needs to 
recover from the effects of Hurricane Stan and to get the 
economy up and running again. 
 
DERHAM