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Economic and Social Development – 2000

Following the rescheduling of the taxation target from 2000 to 2002, the Follow-up Commission spearheaded a consultative process involving many sectors of society, which culminated in the signing of the Fiscal Pact for a Future with Peace and Development. The Pact clarified the long-term plans the Government would need to follow in order to enact a fiscal policy in keeping with the Peace Agreements. A similar consultative process led by the Follow-up Commission established the Political Agreement for Funding Peace, Development and Democracy in Guatemala. This agreement added specific measures for tax reform and paved the way for further reform policies negotiated between the executive and legislative branches.¹

The Government continued to falter in its implementation of policies related to rural development. No comprehensive rural development strategy was yet proposed, definitions of agrarian and environmental jurisdictions had not been set, the land registry issue was unresolved, and the land rights of indigenous communities were not codified. The Government did make some steps in the right direction with its environmental policies, but the agricultural policy it set for 2000-2004 lacked guarantees for multiculturalism, procedures to ensure indigenous peoples would be involved in decisions about their own development, and affirmative action programs for women and rural youth. By the end of 2000, BANRURAL increased its loan portfolio with a focus on areas most affected by the conflict.²

The Government did not invest nearly as much time and energy as was needed to address the country’s labor problems. The main improvement was the increase in the minimum wage. The main corresponding problem was the Ministry of Labor had neither the financial resources nor the institutional capacity to ensure that historically exploited workers—indigenous persons, women, children and rural agricultural workers in general—would be treated fairly and paid their due wages.³

The new governmental authorities were quite slow in reviewing all the social development programs and hindered progress in so doing. The approved budget for public investment was cut by 20% and spending even fell short of budgeted amounts, which especially affected spending in the country’s poorest areas. The spending reductions did not adversely affect public health programs. The new National Health Plan 2000-2004 set budgeted spending levels consistent with the Agreements, included measures to decentralize and improve coordination, and prioritized extending access to health care to groups previously unreached by the services, especially indigenous women and migrant workers.⁴

While adequate amounts were budgeted for housing development programs, FOGUAVI was deactivated and spending ceased, leading to a spike in unemployment among construction workers and growing discontent among the would-be beneficiaries of new housing.⁵

The network of local development councils was not living up to its intended purpose of engendering broad social participation in municipal and community projects. Despite reform measures enacted by the Executive Branch designed to foster local participation in the selection of leaders, gubernatorial candidates put forward by non-governmental members of development councils were largely sidelined.⁶

1. “United Nations Verification Mission in Guatemala: Report of the Secretary-General,” United Nations General Assembly (A/55/175), July 26, 2000.
2. “United Nations Verification Mission in Guatemala: Report of the Secretary-General,” United Nations General Assembly (A/55/175), July 26, 2000; “United Nations Verification Mission in Guatemala: Report of the Secretary-General,” United Nations General Assembly (A/55/973), June 1, 2001.
3. “United Nations Verification Mission in Guatemala: Report of the Secretary-General,” United Nations General Assembly (A/55/175), July 26, 2000.
4. Ibid.
5. Ibid.
6. Ibid.