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GUATEMALA: Crisis Hits
Local Governments in Pocketbook
By Danilo Valladares
GUATEMALA CITY (IPS) - Incomplete infrastructure
works and development projects and dismissals of
teachers and municipal employees are some of the
consequences of the global economic crisis in rural
Guatemala, due to the central government’s decision
to cut the budget for the country’s 333 municipal
administrations.
With the 125 million dollar budget cut decided in
May, the total annual budget for municipal
governments this year will be equal to that of 2008
– President Álvaro Colom’s first year in office:
around 500 million dollars (compared to a total
municipal budget of 405 million dollars in 2007 and
403 million dollars in 2006).
"A highway in the village of Pacomón and several
schools in the district of San Sebastián Central
will not be built now," complained Sacapulas Mayor
Pedro Pu of the right-wing Guatemalan Republican
Front (FRG), the party headed by former dictator
Efrain Rios Montt.
Sacapulas is located in Quiché in northwestern
Guatemala, one of the provinces hit hardest by the
1960-1996 civil war between the URNG guerrillas and
government forces, when the army completely
destroyed hundreds of native villages, along with
all the inhabitants. Some 200,000 people – mainly
Maya Indians - were killed in the armed conflict.
The government of Colom – the country’s first
left-leaning leader in over 50 years – cut Pu’s
municipal budget by 300,000 dollars, or 30 percent
of the total. The Sacapulas city government serves
more than 32,000 Quiche Maya people.
"The explanation that they gave us was that it was
because of the international economic crisis, but I
don’t believe them because they’re giving money to
other government institutions that aren’t doing
anything," Pu told IPS.
The government measure is aimed at cutting an 875
million dollar fiscal deficit, which has forced the
Colom administration to adopt austerity measures and
spending cuts.
Local governments are responsible for meeting the
basic needs of people in rural areas, which are home
to 72 percent of the country’s 13 million people,
half of whom are poor and 17 percent of whom live in
extreme poverty, according to United Nations
figures.
Indigenous people make up a majority of the
population in Guatemala.
Municipal governments are in charge of providing
water, sanitation, garbage collection, education and
infrastructure. However, much of the rural and poor
urban population of this impoverished Central
American country lack basic services.
Nearly all local governments are completely
dependent on central government funds, because they
have few or no other sources of revenue. In
Sacapulas, the mayor says he manages to raise around
37,500 dollars a year, or four percent of the annual
budget. The rest comes from the central government.
The communities affected by the budget cut are
already facing severe difficulties, including a drop
in family remittances sent home by Guatemalans
living abroad, triggered by the global crisis.
In the first quarter of this year, remittances
shrank six percent, compared to the same period last
year.
The situation has forced municipal governments to go
into debt in order to meet local demands and
obligations. "Our government is thinking of taking
out a two million quetzal (250,000 dollar) loan to
avoid laying off staff or bringing projects to a
halt," town councilor Aura Vargas in the town of
Teculután, in the eastern province of Zacapa, told
IPS.
"If we don’t go into debt, we would have to lay
people off and suspend projects, which would make
the economic situation of entire families even
worse," said Vargas, president of the women’s
association in the municipal government, dedicated
to fomenting women’s participation in local
politics.
Other municipalities, like the tourist city of
Antigua Guatemala in the south, known for its
colonial architecture, had no choice. "Between
yesterday and today we had to lay off 20 workers and
we are also suspending work on five high priority
public works projects," Mayor Adolfo Vivar said on
Jun. 9.
"They cut our budget by 1.2 million quetzals
(150,000 dollars), and that obviously has caused us
problems in terms of spending and functioning,"
Vivar, of Colom’s left-wing National Union of Hope (UNE),
told IPS.
However, he said the central government had no
alternative, in the face of the world economic
crisis.
Jocotán, in the southeastern province of Chiquimula
near the Honduran border, is facing a similar
situation. "We are considered one of the poorest
municipalities in the Chortí Maya region in eastern
Guatemala, and we were surprised when our funds were
cut, but we pressured the government and they gave
part of it back," Mayor Ramón Díaz told IPS.
But what his government has recovered is not enough,
and the administration will have to lay off
teachers. "They were budgeted until October, but
under these circumstances we will only be able to
pay them up to August," lamented Díaz, of the FRG.
The situation highlights the need to strengthen the
municipal government’s own sources of revenue and to
decentralise the public administration.
Their heavy dependence on the central government
means local administrations do not have the power to
create new taxes, which only the legislature can do.
With the aim of changing this, the national
association of municipal governments and the
Guatemalan association of mayors and indigenous
authorities (AGAAI) have proposed a draft municipal
tax code, which would enable local governments to
levy municipal taxes or taxes on the use of
publicity, or on commercial and professional
activities, for example.
They have also recommended several reforms to the
municipal code, in order to make the contributions
they receive from the central government more fair
and equitable.
But so far, there has been no positive response from
parliament.
"There has been a lack of political will on the part
of Congress to approve these initiatives," Carlos
Guárquez, executive coordinator of AGAAI, told IPS.
"Moreover, some sectors in the country would not
benefit from the collection of local taxes by
municipal governments, but it is indispensable for
achieving local development."
Rigoberto Quemé, the president of the
non-governmental Munikat Institute, which advocates
the strengthening of local government, complained
that many factories bring no benefits to
municipalities, or even cause harm, by dumping waste
in the rivers, for instance.
The adoption of a municipal tax code is also
important for that reason, he told IPS, because it
would make it possible to sustainably increase the
local governments’ own funds to deal with problems
like pollution. Because "the municipal government is
seen as a kind of Cinderella - no one wants to give
it anything, and if they do, there are conditions
and strings attached," he told IPS. |
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