US embassy cable - 05GUATEMALA2644

UNCLAS SECTION 01 OF 03 GUATEMALA 002644 
 
SIPDIS 
 
DEPT PASS MILLENIUM CHALLENGE CORPORATION FOR JIM VERMILLION 
AND FRAN MCHAUGHT 
TREASURY FOR JAIME FRANCO 
USAID FOR ADOLFO FRANCO AND STEPHEN BRENT 
 
AIDAC 
 
SENSITIVE 
 
E.O.  12958: N/A 
TAGS: ECON, SOCI, EAID, EFIN, GT 
SUBJECT:  GUATEMALA INCREASINGLY FOCUSING ON HEALTH AND 
EDUCATION 
 
 
1. (SBU) Summary:  Although Guatemala's social indicators 
still lag behind most countries in Latin America, the Berger 
administration has made education and health a top priority 
and has undertaken convincing initiatives that are moving the 
country in the right direction.  The relevant indicators are 
trending upwards, including in Millennium Challenge areas such 
as expenditures on primary education and immunization.  The 
GOG has increasingly involved stakeholders such as private 
sector and civil society organizations in policy formulation 
and program implementation, so the long-term outlook is 
positive.  In education, the GOG recently completed a series 
of consultations that culminated in the launching of "Vision 
Educacion," a public-private collaboration that defines 
national goals in education through 2025.  Despite Guatemala's 
average educational attainment of only four years and low 
health indicators, a consensus has emerged that the country's 
human capital must improve for it to compete successfully in 
the global economy and achieve a more just and equitable 
society.  The real test of this consensus will be the 
government's ability to raise the necessary funds to support 
these ambitious goals.  End summary. 
 
BUDGET COMMITMENTS 
 
2.  (U) Total revenues for 2005 are projected at just over 10% 
of GDP and spending just over 13%.  Measured in GDP terms, GoG 
expenditures in 2004 were estimated at 1.21% for health and 
2.5% for education, of which 1.29% was for primary education. 
Education and health make up over one-fifth of the 
administration's budget request for 2006, representing over 
half of discretionary spending (61% of the 2006 budget is 
mandated by Constitutional, legislative or debt service 
commitments).  Tropical Storm Stan recovery efforts should 
alter this picture somewhat, as support comes from other 
agency budgets to rebuild schools and health centers. 
 
3.  (U) A recent study by the Central American Institute for 
Fiscal Studies (ICEF) notes the particularly high priority 
placed in the 2006 budget submission on primary education, 
which has been assigned two-thirds of the Ministry of 
Education's proposed budget and accounts for over three- 
quarters of the Ministry's 13% nominal budget increase. 
Unfortunately, the tradeoff is a diminished focus on pre- 
primary and basic level education goals, which are not 
adequately addressed in the 2006 budget to meet the goals of 
"Vision Educacion".  Health spending, which increased in 2005, 
remains level in real terms in the 2006 proposal.  However, 
the GOG hopes to improve the quality of spending and direct 
targeted increases to specific areas of greatest need such as 
child immunization and pre-natal care. 
 
EDUCATION 
 
4.   (SBU) Minister of Education Maria del Carmen Acena has 
been one of the most dynamic and innovative members of the 
current Administration, boldly taking steps to confront 
deficiencies in the education sector.  Public opinion polls 
rate her as one of the most effective of all ministers, 
suggesting that changes initiated are being felt even at local 
levels.  She has pushed hard to develop a long-term vision for 
the sector through a participatory process involving civil 
society and the business sector.  The resulting "Vision 
Educacion" sets targets for the future, such as 100% primary 
school coverage for girls and boys, reduction of illiteracy to 
22% (from 29% in 2004), and revitalization of intercultural 
bilingual education, and identifies steps that need to be 
taken to get there.  As a result of the Minister's efforts, 
Guatemala's powerful business elite is increasingly committed 
to long-term systematic improvement of the education sector 
and is matching government and donor resources with its own 
contributions to make this a reality. 
 
5.  (U) The current administration can be credited with 
continuing support for the following positive education 
trends: 
     - Net primary school enrollment has jumped 4.4 percentage 
points from 2002 to 2004, increasing from 87.5% to almost 92%. 
     - The gross primary education completion rate has 
increased 5.9 percentage points from 2002 to 2004, going from 
59% to 64.9%. 
     - The rate for girls during the same period increased by 
6.2 percentage points (although girls' school completion still 
lags 3.2 points behind the overall). 
     - The first grade dropout rate has decreased four 
percentage points from 2002 to 2004, going from 38.4% to 
34.4%. 
     -  "Inefficiencies" in the primary school system (costs 
related to students who fail or repeat grades) have dropped 
six percentage points from 2002 to 2004, from 43% of the 
primary education budget to 37%. 
 
6.  (SBU) Historically, policies and investment decisions in 
the education sector have been made without the benefit of 
solid data and analysis.  If gathered at all, such data were 
not shared or published.  Today, a culture of evaluation in 
the education sector is being embraced by the GOG and key 
stakeholders such as teachers, NGOs, donors, and the private 
sector.  Standards are being defined, testing instruments are 
being developed and used, and data are shared.  More 
importantly, analysis of data is now the basis for key policy 
reforms and serves as the foundation for the work of Vision 
Educacion.  This vision has been translated into detailed 
proposals for policy reforms in four key areas for the period 
2005-2008:  a) education quality; b) teacher development; c) 
improved financial management; and d) school infrastructure. 
 
HEALTH 
 
7.  (U) Progress in the health sector is being demonstrated 
particularly through increased immunization coverage.  This 
is especially impressive when compared to data from prior 
administrations.  Immunization rates have jumped from 43% in 
1995 (source: Domestic Household Survey) to 91.1% in 2003 and 
94% in 2004 (source: verified Ministry of Health data).  The 
Ministry of Health (MoH) has also unconditionally adopted an 
integrated strategy for child survival, health, and nutrition 
in Guatemala.  This integrated care strategy reaches women 
and children at the community level and reduces morbidity and 
mortality--including malnutrition in children--by maximizing 
access to quality care services.  This strategy is being 
implemented in 369 of the MoH's geographic areas and 7,707 
smaller communities, and is benefiting approximately 3.6 
million children under age five and women of reproductive age. 
In addition, the First Lady of Guatemala's, Creciendo Bien 
(Growing Well) program is using the same integrated strategy 
in 193 communities, reaching another 7,359 children and 6,204 
women.  This will be expanded to 2,000 communities by the end 
of 2006.  The GoG uses an innovative approach to expand basic 
health services in rural and remote areas--rather than 
building government health posts, NGOs are contracted to 
provide basic services in accordance with the MoH standards 
and guidelines.  This takes advantage of the inherent capacity 
of NGOs that already have a presence in many of these areas. 
 
8.  (SBU) Despite opposition from some elements of Guatemalan 
society, the Berger Government--through the MoH--has 
demonstrated its commitment to family planning by continuing 
to be the major provider of family planning services.  In 
2005, there were 308,914 new users reported through the public 
health system alone, exceeding the target of 270,000 by 14%. 
Couple years of protection increased to 576,531, a 9% increase 
in just one year.  The MoH officially incorporated family 
planning in the basic package of services delivered 
nationwide.  Advocacy efforts by NGOs led the Congress to 
assign an additional US$3.2 million to the 2005 health 
budget for the National Reproductive Health Program.  For the 
first time in Guatemala's history, the Ministry of Finance 
created a line item in the 2006 budget for reproductive 
health. 
 
9.  (U) Evidence shows that adequate medical care--including 
skilled attendants during labor, delivery, and early 
postpartum--could prevent 75% or more of maternal and neonatal 
deaths.  At 41%, Guatemala has one of the lowest percentages 
of births attended by skilled health personnel.  To address 
this problem, especially in indigenous communities, the MoH 
has launched a program for 120 Mayan nurses' aides to be 
trained as skilled birth attendants, which merges modern 
medicine and Mayan tradition.  More importantly, the MoH has 
committed to include positions for these trained 
Mayan birth attendants on its staffing rolls, especially in 
predominantly indigenous areas. 
 
10.  (SBU) Comment:  Increasing social sector spending and 
achieving greater equity have been on the political agenda in 
Guatemala since the Peace Accords were signed in 1996. 
Significant donor resources were invested in social programs 
during the immediate eight-year period following the Accords. 
However, as opposition to the corrupt Portillo administration 
mounted, government effectiveness suffered noticeably and the 
process lost momentum.  The current administration has put 
forth its plan and is having some success rallying private 
sector support for a more ambitious socio-economic agenda. 
Improvements in the quality of spending are already yielding 
results, particularly in the most sensitive areas of primary 
education, immunization and pre-natal care.  However, spending 
remains modest and is still too low to meet the GoG's more 
ambitious goals.  Private sector buy-in to the social agenda, 
while providing some funding and encouragement, will need to 
translate into support for long-term fiscal reform for all of 
the government's plans to become a reality. 
 
Derham