GUATEMALA

	FY 1998 Actuals	FY 1999 Estimate	FY 2000 Request
Development Assistance	$15,750,000	$16,400,000	$16,350,000
Child Survival & Disease Fund	$7,588,000	$10,485,000	$7,310,000
Economic Support Funds	$25,000,000	$25,000,000	$25,000,000
P.L. 480 Title II	$12,481,000	$28,428,000 *	$17,204,000
* includes emergency food aid in response to Hurricane Mitch

Introduction

Guatemala is into its third year of successfully implementing the historic peace accords signed December 29, 1996. The Peace Accords provide the framework for transforming Guatemala into a more participatory, pluralistic and equitable society. U.S. assistance has played a key role in four areas of the peace process: (1) demobilization, reinsertion, and reconciliation; (2) integrated human capacity development; (3) sustainable productive investment; and, (4) modernization and strengthening of the state. U.S. assistance strengthens fragile democratic institutions and supports justice sector reform while promoting respect for human rights. USAID is also helping to increase income opportunities and access to social services for the rural poor while encouraging sound environmental management. A wide range of U.S. interests are served by supporting the peace process. The consolidation of democracy in Guatemala contributes to long-term growth and stability in the country as well as the region, which is of increasing trade and investment importance to the United States. Guatemala has 35% of the total population of Central America and a similar percent of regional economic production. Successful post-conflict recovery and reintegration supports other major U.S. interests, such as controlling illegal immigration and narcotics trafficking and creating a stronger trading partner, as well as addressing the global issues of environmental protection, global climate change, rapid population growth, and the improvement of human health.

In response to Hurricane Mitch which struck in November, 1998, the USG has contributed $10 million for emergency relief activities and USAID reprogrammed $2.8 million from current activities. Relief assistance included emergency food rations, medical supplies and equipment, construction materials, and Department of Defense helicopter support to facilitate relief efforts. Despite an impressive response by the United States and Guatemalan emergency agencies which minimized loss of life, the hurricane did tremendous damage to the agriculture sector, which is the primary source of livelihood for the majority of those affected. Agriculture sector damages are estimated to be $242 million. It is anticipated that the loss of major export crops, banana, and coffee will contribute to balance of payments pressure and cost the economy 1% in growth. It is estimated that 1999 exports will drop by $365 million, which translates into the loss of jobs for 35,000 people. Hurricane damages to the transportation network which includes roads, bridges, and ports are estimated to be $207 million. A significant percentage of the roads in Guatemala were damaged and 68 bridges were destroyed. Damage to health buildings and equipment is estimated to be $6.9 million. The United States will continue to play a key role in the Government of Guatemala’s (GOG) rehabilitation and reconstruction efforts along with other bilateral and international donors. The US is supporting activities in agriculture, infrastructure, microenterprise lending for reconstruction, and health. This includes the purchase of seeds and agricultural equipment, rehabilitation of crop land, repair and construction of roads, bridges, water supply systems, schools and health posts, the development of a nongovernment organization microenterprise lending program, and efforts to help contain cholera, dengue, and malaria through the purchase of emergency medical supplies and public awareness materials.

The Development Challenge

While Guatemala is the largest Central American country in terms of population (11 million) and economic activity (1998 gross domestic product, GDP $18.4 billion), its largely rural, Mayan population live in extremely difficult conditions. Distribution of land, income and other wealth is highly skewed toward a small percentage of Guatemala's Spanish-speaking population. An estimated 75% of Guatemalans live in poverty, and the roughly five million Mayans are isolated socially, economically, and politically due to geographic and language barriers as well as the lack of educational and economic opportunity. The country's social indicators are among the worst in the hemisphere, and national averages mask even sharper inequalities between ethnic groups and gender. Overall adult literacy is estimated at 65%, but literacy among Mayan women is estimated as low as 30%.Less than half of rural Guatemalans have access to running water, only a quarter have access to electricity and less than one in ten have access to modern sanitary facilities. Infant, child, and maternal mortality rates are among the highest in Latin America, despite decreases in recent years. These indicators reflect the country's persistent under investment in social services and basic rural infrastructure, as well as past practices of political and socioeconomic exclusion of the indigenous population.

The Peace Accords and the subsequent implementation process as a whole is a historic undertaking for Guatemala. There have been dramatic advances in the peace process over the past two years. The initial reconciliation and reintegration process proceeded smoothly. Three thousand ex-combatants were demobilized without violence or loss of life. The Guatemalan Congress negotiated a set of constitutional reforms that will help institutionalize the peace process and key reforms once ratified in a popular referendum. A modernization plan for the judicial system was formulated that lays the foundation for increasing access, fairness, and due process, which are essential to restoring public confidence in the judicial institutions and establishing the rule of law. A key element of the Government of Guatemala’s (GOG) efforts to address one of the most fundamental sources of conflict was the capitalization of the Land Fund, which provides a market-based mechanism for land purchases and titling. The Government's increased budget allocations for social sectors coupled with a comprehensive education reform plan which emphasizes multicultural, multilingual, and multiethnic education are beginning to address major disparities in the delivery of social services.

There have been setbacks on the road to achieving lasting peace. Rising crime and random violence continue to fuel concerns over public security. The Government is still at work on developing an integrated national policy on public security. The April 1998 unsolved murder of Bishop Juan Gerardi has raised national and international concerns over impunity and the ability of the justice system to investigate and prosecute criminal cases. The Government is encountering opposition to its new fiscal package which is needed to sustain the upward trend in revenue collections called for in the Accords.

The requirements for addressing Guatemala's multiple challenges, in addition to financing the costs associated with the peace agreements, are enormous and far exceed the country's current revenue-generating capacity. Increased donor funding is essential to complement domestic financing given the estimated $2.3 billion cost of implementing the Accords between 1997-2000. Additionally, the burden of financing Hurricane Mitch-related reconstruction is estimated to be $550 million. Thus, Guatemala is not considered a candidate for graduation from U.S. assistance in the near term.

Other Donors

The United States continues to be the largest bilateral donor, having pledged $260 million of the total $1.9 billion in donor pledges in support of the Peace Accords over the four-year period 1997-2000. Other important bilateral donors Spain ($168 million), Germany ($65 million), Norway, and Sweden are supporting Peace Accords activities mainly in community development, modernization of the state and the judiciary, and infrastructure. Major multinational donors include the Inter-American Development Bank ($945 million), Central American Bank for Economic Integration, the World Bank ($400 million), the United Nations Agencies, and the European Union with programs supporting demobilization and reinsertion, emergency assistance to affected populations, community development, integrated human development, income generation activities, infrastructure, and modernization of the state. Approximately, $182 millon has been pledged by international donors to support Hurricane Mitch relief and reconstruction efforts. Major donors include Inter-American Development Bank ($61 million), Spain ($29 million) and The World Bank ($13.5 million).

FY 2000 Program

Beyond the special Economic Support Funds (ESF)-funded Peace Program, the range of sustainable development activities supported by USAID has been further focussed to achieve priority development results. In 1998, the Poverty Reduction strategic objective (SO) was reformulated into two SOs, Income and Education. The five development focus areas are: democratic development, improved health for women and children, increased rural incomes, improved access and quality of education services, and sustainable natural resource management. Geographically, USAID programs target the departments most affected by the civil conflict and highest levels of poverty. The proposed mix of $16.4 million Development Assistance, $7.3 million Child Survival and Disease Program Funds, $25 million of Economic Support Funds, and $17.2 million P.L. 480 Title II in FY 2000 will enable the United States to pursue its highest-priority objectives and help address the root causes of Guatemala's longstanding armed conflict, among them, persistent and widespread poverty and social exclusion. As part of the U.S. response to Hurricane Mitch, additional resources are needed for public health, economic reactivation, and infrastructure rehabilitation and reconstruction.

GUATEMALA

FY 2000 PROGRAM SUMMARY
(in thousands of dollars)

USAID Mission Director: George Carner

USAID Strategic and Special Objectives	Economic Growth & Agriculture	Population & Health	Environment	Democracy	Human Capacity Developmnt	Humanitarian Assistance	TOTALS
S.O 1. More Inclusive and Responsive Democracy - DA	---	---	---	3,000	---	---	3,000
S.O. 2. Better Educated Rural Society - CS	---	---	---	---	2,535	---	2,535
S.O. 3. Better Health for Rural Women & Children - DA - CS	--- ---	6,000 4,775	--- ---	--- ---	--- ---	--- ---	6,000 4,775
S.O. 4. Increased Rural Household Income and Food Security - DA - PL 480 T II	3,350 ---	--- ---	--- ---	--- ---	--- ---	--- 17,204	3,350 17,204
S.O. 5. Improved Na-tural Resources Management & Conservation of Biodiversity - DA	---	---	4,000	---	---	---	4,000
Sp.O. Support the Implemen-tation of the Peace Accords - ESF	13,250	---	---	6,000	5,750	---	25,000
Totals - DA - CS - PL 480 T II - ESF	3,350 --- --- 13,250	6,000 4,775 --- ---	4,000 --- --- ---	3,000 --- --- 6,000	--- 2,535 --- 5,750	--- --- 17,204 ---	16,350 7,310 17,204 25,000

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ACTIVITY DATA SHEET

PROGRAM: Guatemala
TITLE AND NUMBER: More Inclusive and Responsive Democracy, 520-S001
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $3,000,000 DA
INITIAL OBLIGATION: FY 1997 ESTIMATED COMPLETION DATE: FY 2002

Summary: Guatemala suffered more than 36 years of internal conflict, which formally ended with the signing of the Peace Accords at the end of 1996. This SO seeks to advance the Peace Accords and deepen democracy by focusing on the interaction between citizen participation and government response. In particular, this SO builds upon previous experience in the democracy sector to strengthen democratic institutions and expand effective participation in political life especially among indigenous and women. The ultimate beneficiaries will be those individuals and groups that have been excluded from such participation.

Key Results: (1) A more effective and responsive criminal justice system through increased functional integration within the system, streamlined and improved transparency of justice administration, and improved legal education; (2) Broader, more effective citizen participation in political decision-making by helping civil society organizations (CSOs) focus on public policy relating to women, the indigenous, and the rule of law; (3) Increased citizen participation in strengthened local governments through support for municipal development activities; and, (4) Improved quality of public policy through a strengthened national legislature which is achieved by improving research and bill drafting capabilities within the Congress.

Performance and Prospects: Performance during the past year has met or exceeded expectations. Through the justice activity, USAID has promoted greater access to justice by helping: to create a Clerk of Courts office in the ten criminal courts in Guatemala City; open three more justice centers (bringing the total to five) outside the capital; establish nine community mediation centers that resolve legal disputes using customary law; train Justices of the Peace that have filled 60 of 118 vacancies; and, expand legal interpreters programs. Legal education has been improved significantly through curricular reform at San Carlos University Law School and the renovation of student law clinics. Nevertheless, the justice system requires major reform before it can effectively deal with cases involving everyday crime let alone high-profile cases. USAID's new justice activity, scheduled to begin in May/June 1999, will help address some of these issues.

USAID has promoted citizen participation in political decision-making by helping to strengthen civil society organizations (CSOs) and providing the opportunity to engage state actors on issues of national importance. Most notable is the work of the National Permanent Commission on Constitutional Reforms of the Indigenous Peoples of COPMAGUA (an umbrella indigenous group) that developed consensus among the indigenous as to what constitutional reforms should be sought, followed by dialogue with congressional representatives that convinced them to include reforms on indigenous rights and practices. This is but one example of USAID providing support to groups previously excluded from political debates. The challenge of the future is to make these CSO efforts sustainable, which USAID is addressing directly through training and technical assistance to target CSOs.

The USAID local government activity will begin implementation in 1999, focused on selected municipalities and local partners. It will promote citizen participation by strengthening channels of communication between the local community and local authorities and foster dialogue on national policies affecting municipalities and citizens at the local level. The on-going USAID Special Development Fund (SDF) provides financial assistance to rural community groups. Focusing on ex-conflictive areas, SDF supports small community development projects (e.g., bridges, roads, school buildings) while promoting democratic participation. Approximately 40 to 50 small community improvement projects are completed annually.

USAID is working to improve public policy through a strengthened national legislature. USAID financing supports implementation of the Guatemalan Congress' Modernization Plan through the operation of the Legislative Technical Assistance Unit. This unit responds to requests by congressional representatives to provide research and draft high-quality bills through legislative interns. The intern program, staffed by volunteer students, is yielding impressive results. Twenty-seven graduates have been placed in paid professional positions, with 17 contracted by Congress. The latter are the congressional staff for six new technical operating units. The Congress has demonstrated its commitment to the program through significant budget support for the new staff and technical units.

The major uncertainty facing Guatemala relates to a national referendum to ratify constitutional reforms and the general elections later this year. The outcome of these votes could have a major impact on the peace process and democratic development.

Possible Adjustments to Plans: No major adjustments in the democracy program are anticipated for the near future. USAID is in the middle of a successful five year strategy, and will primarily strengthen existing activities to ensure they support an evolving democracy sector in Guatemala. Two new activities addressing the problems of violence against women and corruption will be developed. These will help to focus attention on two issues that are restraining democratic development.

Other Donors Programs: Until recently, USAID has been the lead donor in supporting democratic initiatives, particularly in justice sector reform. The United Nations Verification Mission for Guatemala (MINUGUA) continues to be engaged in institutional strengthening and human rights verification. Other donors have recently become much more involved in supporting Guatemala's justice modernization, with the IDB and the World Bank having signed major programs at the end of 1998. Local government and community development also receives support from several donors, including German Technical Cooperation (GTZ) and the IDB. The EU, the Organization of American States, Canada, Sweden, Norway, Spain and Holland either have or are planning investments in this sector.

Principal Contractors, Grantees, or Agencies: USAID activities are implemented with the Guatemalan judicial branch, the Public Ministry, San Carlos University Law School, Guatemalan Bar Association, selected municipalities and the National Congress. Activities are managed by a mix of U.S. partners such as DPK Consulting, Creative Associates, Inc., the University of Texas at Austin, the National Center for State Courts, Development Alternatives Incorporated, and local NGOs and CSOs.

Selected Performance Measures: Performance indicators for this program are in part derived from a national survey that tracks trends in public values and attitudes deemed essential for democratic consolidation and sustainability. The first two indices utilized here measure the legitimacy of key democratic institutions and support for civil liberties.

	Baseline	Target (2000)	Target (2002)
System support index	40% (1993)	42-44%	46-48%
Democratic liberties index	55% (1993)	60-62%	63-65%
% of convictions supported by evidence 1	59%-67% (1996)	90-93%
CSO public advocacy effectiveness 2	23.8% (1998)	27.9%
% of legislative initiatives accompanied by technical analysis 3	43% (1997)	52%
1 A new activity is being designed. Targets will be set by the Fall of 1999. 2 Targets will be set in March 1999. 3 Targets will be set in Fall 1999.

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ACTIVITY DATA SHEET

PROGRAM: Guatemala
TITLE AND NUMBER: Better Educated Rural Society, 520-S002
STATUS: New/Continuing
PROPOSED OBLIGATION AND FUNDING SOURCES: FY 2000: $2,535,000 CS
INITIAL OBLIGATION: FY 1997 ESTIMATED COMPLETION DATE: FY 2002

Summary: The Guatemalan education system is characterized by limited coverage, poor quality, centralized decision-making, urban concentration of resources, and ethnic and gender inequities. In 1996, net primary enrollment was only 69%, leaving an estimated 500,000 school-age children without access to schooling. Over half of all Guatemalan school-age children are indigenous, though only eight percent have access to schooling in their mother tongue. More than 70% of Mayan women cannot read or write. Due to the inadequacies of the education system, the country produces one million illiterate adults every nine years.

The purpose of this SO is to increase educational access, raise educational quality, and enhance the capacity of civil society and the Ministry of Education to define and carry out policies and strategies that recognize the cultural and linguistic pluralism of the country. The direct beneficiaries of USAID assistance include Mayan school-aged children in the Department of Quiche; newly literate individuals, mainly indigenous women and youth; Mayans who will graduate from university degree programs; and bilingual education promoters who will become certified primary school teachers. The indirect beneficiaries include teachers who will be trained in bilingual education programs as well as the future generations of indigenous children who are more likely to be educated because of their parents' improved access to education through the USAID program.

Key Results: (1) Increased access to intercultural and bilingual primary education for Quiche through teacher training, development of multicultural materials and methodologies, and increased parent participation; (2) Greater access to education services for rural communities in the Peace Zone by supporting a university scholarship program for indigenous men and women, training community promoters to be certified rural primary teachers, promoting community models of schooling, and implementing a literary program; and, (3) Reformed educational policies and strategies that enhance gender and cultural pluralism.

Performance and Prospects: This is a new strategic objective, formally approved by USAID in 1998. It continues education activities funded under the former Poverty Reduction SO. Most of the past year focused on the design and early implementation of Peace/ESF funded education activities. The indigenous scholarship program is the most advanced activity with excellent prospects for success. USAID awarded a Cooperative Agreement to Rafael Landivar University to provide scholarships to permit at least 750 indigenous students to graduate from university degree programs. During the first year, Landivar enrolled 806 students, 45% of whom are women. Eighty-eight percent of the USAID scholarship students successfully completed the school year. Scholarship recipients are studying in 30 different career programs including intercultural bilingual education, legal translation and rural health education. Approximately 200 additional scholarship students have been recruited to begin their studies in January 1999. USAID is assisting more than 200 community education promoters who work in refugee and other remote communities to become accredited primary school teachers. The professionalization programs for the promoters are being provided by three local nongovernmental organizations (NGOs). A new community literacy activity will begin in January 1999. The focus is on training rural community members, especially women and youth, in Mayan and Spanish reading, writing, and numeracy skills linked to income generating strategies to improve family welfare.

USAID's new intercultural bilingual primary education program will be underway by April 1999. The geographic focus is on the Quiche Department which experiences a high level of social exclusion and a marked need for expanded access to basic services, particularly intercultural bilingual education. USAID, working with the Ministry of Education and local NGOs, will strengthen teacher training, develop instructional methodologies and materials, and increase parental and community participation in schooling for 70,000 Mayan children.

To support the implementation of the education reforms called for in the Peace Accords, USAID is pursuing a three-pronged approach to strengthen gender equity and cultural pluralism. First, USAID will promote individual and community rights and responsibilities, especially in indigenous areas where community participation was previously discouraged. Second, USAID will enhance the capacity of key civil society organizations, including member NGOs of the National Council for Mayan Education (CNEM), to promote reforms that address the needs of the indigenous. And finally, USAID will provide assistance to the Ministry of Education to implement selected strategies that improve girls' education and cultural pluralism in the primary school system.

Possible Adjustments to Plans: None anticipated.

Other Donor Programs: The World Bank and the Inter-American Development Bank (IDB) are providing major education sector loans to facilitate the expansion of previous USAID pilot activities in the education sector such as the one-room school model, bilingual and intercultural education, and girls education. USAID is joined by German Technical Cooperation (GTZ), United Nations Children’s Fund (UNICEF), United Nations Educational, Scientific, and Cultural Organization (UNESCO), the EU, UNDP, and others focusing on increasing educational opportunities, especially for the rural indigenous. Donor resources directed toward this objective approximate $100 million since the beginning of the strategy period (1997) with USAID contributing about 13% of the total.

Principal Contractors, Grantees or Agencies: Current grantees and contractors include Rafael Landivar University, Save the Children, the American Institutes for Research, Juarez and Associates, World Learning, and local NGOs.

Selected Performance Measures:

	Baseline (1997)	Target (2000)	Target (2002)
Gross primary enrollment ratio in Quiche (girls) (boys)	53% 66%	66% 73%	73% 85%
Illiteracy rates reduced among adult Guatemalans	35%	30%	28%
Number of literate persons trained by USAID-supported programs	0	100,000	250,000
Number of indigenous university graduates/ number of indigenous scholarship recipients	0	450/1000	750/1000

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ACTIVITY DATA SHEET

PROGRAM: Guatemala
TITLE AND NUMBER: Better Health for Rural Women and Children, 520-S003
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCES: FY 2000: $6,000,000 DA; $4,775,000 CSD
INITIAL OBLIGATION: FY 1997 ESTIMATED COMPLETION DATE: FY 2001

Summary: Despite a 40% reduction over the past 20 years, Guatemala has the highest infant mortality rate in Central America and one of the highest in the hemisphere. The high maternal mortality ratio, especially among the indigenous, reflects women's inadequate access to reproductive health services. This SO seeks to improve the health status of Guatemalan women and children at the national level and to diminish the disparity in health indicators between rural Mayan families and the rest of the country. By targeting assistance in seven predominantly indigenous departments, the purpose of the SO is to reduce the infant mortality rate (IMR) by 15% from 51/1000 to 43/1000 live births and to decrease the total fertility rate (TFR) from 5.1 to 4.8 births during the same period. Since the IMR and TFR are 12% and 33% higher, respectively, among Mayans than the national averages for these indicators, USAID is developing new approaches to improve the quality and accessibility of maternal-child health (MCH) services in indigenous communities. An important element of these new models is the reduction of cultural confrontation between indigenous and western health systems. USAID supports both the Guatemalan Government and local NGOs in their efforts to improve health practices. The direct beneficiaries of USAID assistance include women of reproductive age and children under five years of age who are gaining access to preventive and curative MCH services, including reproductive health.

Key Results: (1) Increased use of MCH services following a multi-pronged approach to enhance demand for health care and to improve the quality of care provided at health facilities and by community health workers. The activities are specifically designed to address the factors that give rise to the urban-rural differentials in terms of use of family planning methods, vaccination coverage, prenatal care, intra- and post-partum care, maternal mortality, and infant mortality. These include increasing the geographic and linguistic accessibility of services; improving health providers' technical competence, interpersonal communication skills and cross-cultural understanding; improving community education, and strengthening referral systems; (2) Better management of MCH programs of both the public sector and local NGOs by improving logistics systems to guarantee well stocked rural health facilities, and by strengthening financial and administrative systems; and, (3) Stronger Guatemalan commitment to integrated women's health by engaging local NGOs in advocacy for reproductive rights and helping policy makers use reliable demographic and health data to define policies that will permit more Guatemalan couples to elect the number and spacing of their children.

Performance and Prospects: Performance over the past year has been as expected. All of the established targets for 1998 were met and no problems are foreseen in meeting the 1999 and 2000 targets. The Ministry of Health has introduced major reforms integrating service delivery, significantly improving public health administration. It should be noted that in the wake of Hurricane Mitch, Guatemala has become more vulnerable to measles, cholera, malaria, dengue, and leptospirosis. USAID is working closely with the Guatemalan Ministry of Health and local NGOs to reprogram available resources to reduce the spread of epidemic outbreaks and maintain the lowest possible case fatality rates. USAID is monitoring the incidence of infectious diseases in the post-hurricane period and working closely with other donors and the Ministry to marshall all available resources to confront disease outbreaks.

Possible Adjustments to Plans: No major adjustments to the approved strategy are anticipated. However, during FY 1999, the Mission will design a public health package to strengthen the national capacity to reduce the spread of cholera, malaria, and dengue; and capacity to increase immunization coverage, specially of measles.

Other Donor Programs: The IDB is financing a two-phased health sector reform loan to improve access to basic health services in rural areas and to improve hospital efficiency. USAID coordinates closely with the IDB and the Ministry of Health in the design of community health reforms and provides technical assistance for the implementation of reforms at the local level, especially in the predominantly indigenous areas of the western highlands. USAID and the Pan American Health Organization (PAHO) enjoy a productive working relationship, especially in the area of childhood immunization. Plans are underway for a joint USAID-PAHO initiative to improve the quality of care for childhood illnesses. USAID continues its lead role in the area of reproductive health with other donors such as the European Union and United Nations Population Fund (UNFPA) gradually delivering increased support to reduce maternal mortality and improved reproductive health in the country. USAID is the major donor contributing approximately half of all donor support in the health sector.

Principal Contractors, Grantees or Agencies: Current grantees include the Ministry of Health, the Social Security Institute, the Family Welfare Association (APROFAM), Project Concern International, the Population Council, Management Sciences for Health, the Johns Hopkins Program for International Education in Reproductive Health, the Association for Voluntary and Safe Contraception, and PAHO. Contractors include John Snow International and the University Research Corporation.

Selected Performance Measures:

	Baseline (1995)	Target (2000)*
Infant Mortality Rate per 1,000 live births	51	43
Total Fertility Rate	5.1	4.8
Contraceptive Prevalence Rate	31%	35%
% of Children 12-23 Months Fully Immunized	43%	60%
% of Children <5 Years Treated for Pneumonia	41%	60%
% of Children <5 Years Using Oral Rehydration Therapy or Increased Liquid Intake During Diarrheal Disease	51%	65%
* Targets were set for the year 2000 to help monitor compliance with health commitments made under the Peace Accords for that year

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ACTIVITY DATA SHEET

PROGRAM: Guatemala
TITLE: Increased Rural Household Income and Food Security, 520-SO04
STATUS: New/Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $3,350,000 DA; $17,204,000 Title II
INITIAL OBLIGATION: FY 1997 ESTIMATED COMPLETION DATE: FY 2002

Summary: Poverty in Guatemala is pervasive and severe. The indigenous and rural population have the greatest likelihood of being poor; women are more likely than men to be poor. Access to land and credit is out of reach for those living in rural areas. The lack of adequate economic opportunity to produce sufficient food or to earn an income to purchase food contributes to malnutrition. The poor in Guatemala spend 70% of their total income to purchase basic foods that are often of low nutritional value.

The primary objective of this SO is to increase the capacity of a significant number of poor rural families, particularly women and indigenous people, in selected areas of the country to improve their income. The direct beneficiaries of actions under this SO will be small farmers, microentrepreneurs, and food aid program participants. The indirect beneficiaries will be rural communities living within the selected geographic areas of intervention.

Key Results: (1) Small farmers engage in higher-value production, secure land titles, use sustainable agricultural production practices, and use market information to increase sales; (2) Microentrepreneurs expand their businesses by accessing financial and technical services; (3) Market towns stimulate economic activity by attracting public and private investments; and, (4) Improved family nutrition supported by food aid programs to reduce chronic malnutrition in children under five years of age.

Performance and Prospects: This is a new strategic objective, formally approved by USAID in 1998. It continues income generating and food security activities that were initially funded under the Poverty Reduction SO. Most of the past year has focused on designing new activities; however, a number of activities implemented under the former Poverty Reduction SO are performing as planned.

In 1998, USAID worked closely with the Rural Development Bank to provide technical and financial assistance to 8,500 microentrepreneurs; this represents a 23% increase over the 1998 target figure. USAID is supporting the National Coffee Association (ANACAFE) efforts to help small coffee farmer organizations obtain access to loans and technical assistance in their communities. The coffee industry in Guatemala represents over 30% of the GDP and employs close to 40% of the working population.

Additionally, USAID technical assistance has helped the Ministries of Agriculture (MAGA) and Economy engage the private sector in providing fee-for-service technical assistance and rural credit services for on- and off-farm productive activities. In 1998, MAGA's heavily subsidized extension service has been nearly eliminated and replaced by this model that has been proven in Mexico and Chile. Further technical assistance for this transformation to be successful will come through a direct USAID contract with a private U.S. firm in FY 2000.

In 1998, P.L. 480 Title II cooperating sponsors CARE, Catholic Relief Services (CRS), and SHARE, provided health care assistance to 204,000 mothers and children. In early 1999, Save the Children Foundation will begin Title II activities that will benefit an additional 28,000 people. The devastation brought on by Hurricane Mitch in October 1998 resulted in the need for additional food resources. USAID and the cooperating sponsors responded quickly and delivered an additional 645 metric tons of food to support 169,000 people affected by the disaster.

It is anticipated that the Ministry of Agriculture will focus a great deal of attention in 1999 and 2000 on Hurricane Mitch reconstruction activities. USAID will provide technical assistance to small farmers and expand seed production and help finance small scale agricultural infrastructure in the areas affected by Hurricane Mitch. Additional Hurricane Mitch related assistance will be needed.

Possible Adjustments to Plans: Hurricane Mitch assistance needs have been identified by USAID and MAGA. USAID estimates that additional resources are needed in the agriculture sector to purchase seeds and agriculture equipment, restructure loans, and rehabilitate cropland. Additional funding is also needed for rehabilitation and reconstruction of basic infrastructure including roads, bridges, and water supply systems; and to develop a microenterprise lending program for reconstruction through local NGO microenterprise organizations.

Other Donor Programs: The Guatemalan Government established a credit trust fund for small farmers based on the design of successful models supported by USAID. USAID assisted in the design of the International Fund for Agriculture Development (IFAD) and the Guatemalan National Land Fund both of which provide rural credit at the community level. The IDB is funding a major sector loan for community development ($50 million) and actively supports USAID's income and food security objective. USAID provides approximately 20% of all donor contributions that currently support Guatemala rural household income and food security activities.

Principal Contractors, Grantees or Agencies: Current implementing organizations supporting this SO are: Cooperative Housing Foundation (CHF), Canadian Center for Studies and International Cooperation (CECI), CARE, Conservation International, Rodale Institute, Tropical Agricultural Center for Research and Education (CATIE), Boston Institute for Developing Economies (BIDE), National Coffee Association (ANACAFE), Agricultural Development Consultants Inc., Catholic Relief Services (CRS), SHARE, Feed the Children, and Save the Children (early 1999).

Selected Performance Measures

		Baseline	Target (2000)	Target (2002)
Small farmers in target areas with secure land titles		0 (1997)	5,300	10,000
Small farmers use sustainable agricultural practices		0 (1997)	11,500	25,000
Microentrepreneurs assisted to meet financial/technical needs		0 (1997)	17,400	30,000
Increased public/private investment in the focus areas		0 (1998)	$4 million	$6 million
Reduced percent of children under the age of five years who are malnourished in food aid program	Share CARE CRS	37%(1997) 52.1% 63.%	27% 38% 45.9%	21.6 30.6 35.1

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ACTIVITY DATA SHEET

PROGRAM: Guatemala
TITLE AND NUMBER: Improved Natural Resources Management and Conservation of Biodiversity, 520-S005
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $4,000,000 DA
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2000

Summary: The Guatemalan Maya Biosphere Reserve (MBR) forms the core of the largest tract of intact tropical forests remaining in Meso-America and is one of the most important regions in the world in terms of biological diversity. The 1.5 million hectare reserve has thin fragile soils in which farmers practice slash and burn agriculture which adds to environmental degradation. In 1992, Government of Guatemala (GOG) analysis of deforestation found that if existing trends continued unabated, by 2010 the MBR would be destroyed by the advancing agricultural frontier.

The purpose of the strategic objective is to stabilize the agricultural frontier, conserve the MBR, and promote a more sustainable development path for the region focusing on tourism, forestry and other income alternatives for marginalized populations. USAID assists the GOG and Guatemalan civil society organizations to improve management and protection of its national park system by focusing on priority units within the MBR. Direct beneficiaries include the population living in and around the MBR (approximately 87,000 in 1998) and national constituencies interested in parks, tourism, conservation, forestry and environmental quality. Indirect beneficiaries are national and international in scope, including future generations.

Key Results: (1) People adopt more sustainable, environmentally sound practices as a result of the dissemination of "best management practices" for sustainable agriculture, timber and non-timber forest products, ecotourism and other enterprises; 2) Policies affecting the environment are improved and applied by defining a policy reform agenda, building environmental constituencies, strengthening the capacity of local stakeholders and organizations to identify and analyze policy constraints, and by implementing corrective measures, such as forest management concessions; and, 3) More responsive institutions and increased local participation in decision-making related to natural resource management through the promotion of greater private, municipal, and community participation in the administration of parks and forest reserves.

Performance and Prospects: Accomplishments met or surpassed targets for 1998. Significant advances related to park management were made: deforestation rates fell significantly in key units of the MBR; non-USAID funding for counterpart organizations increased significantly; 26 agreements were signed to facilitate community participation in natural resource management and conservation; 400 land titling deeds were granted to 1000 families; and, 55% of the target population adopted one or more of the sustainable practices promoted by the program.

The biggest challenges continue to be related to human settlements within the MBR. In 1998, approximately 300 families, located in the core zones of the MBR, were voluntarily relocated to other areas where they can legalize their property rights. On the policy front, efforts focus on improved enforcement and application of laws and regulations concerning petroleum exploration, settlement and infrastructure within protected areas. In 1999, USAID will continue to support a more comprehensive community, municipal, and private sector participation in park planning, zoning, and management. This will help make natural reserves and parks more responsive to local needs. Also, a concerted effort will be made to ensure inclusion of women in income-generating activities, credit, and organizational assistance.

Possible Adjustments to Plans: Independent consultants are currently reviewing the existing program strategy and results to date to identify lessons learned and alternatives for consideration in a new environmental framework agreement with the Government of Guatemala. The existing SO will be extended to approximately June 2001 to permit adequate time for a transition to new implementation arrangements under the new SO. The program is expected to continue its focus on natural resource management and conservation of biodiversity in priority areas without major adjustments to the approved strategy.

Other Donor Programs: USAID has coordinated and collaborated with many other donors working in the area, such as: the European Union, German Technical Cooperation, Inter-American Development Bank, Canadian Center for Studies and International Cooperation (CECI), World Bank, Global Environmental Fund (GEF), Government of Japan, MacArthur Foundation, and U.S. agencies (Fish and Wildlife Service and Forest Service). Implementing partners contribute significant matching funds toward program costs.

Principal Contractors, Grantees or Agencies include: Implementing organizations include: the Government of Guatemala's National Environmental Commission, the National Council for Protected Areas, CARE International, Center for Tropical Agriculture Investigations and Studies, Department of Energy/Oak Ridge National Laboratories, Conservation International, The Nature Conservancy, Rodale, and local NGO partners.

Selected Performance Measures:

	Baseline (1997)	Target (2000)
% of target population adopting improved ag. practices	35	70
Hectares of threatened forest lands conserved	520,000	670,000
Hectares officially protected	1,946,000	2,150,000 1
Hectares under contract/concession for sustainable forest management	30,000	150,000
Sustainable productive enterprises established in communities	6	30
1 Not including buffer zones

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ACTIVITY DATA SHEET

PROGRAM: Guatemala
TITLE AND NUMBER: Support the Implementation of the Peace Accords, 520-SP01
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 2000: $25,000,000 ESF
INITIAL OBLIGATION: FY 1997 ESTIMATED COMPLETION DATE: FY 2003

Summary: The signing of the historic Peace Accords on December 29, 1996 signaled the end of 36 years of civil war and the beginning of a new and more democratic phase for Guatemala. The Peace Accords serve as a framework for the political, economic, and social development of the country. The principal goal of the Peace special objective (SpO) is to provide direct support to the Government, private sector and civil society of Guatemala for the timely implementation of the principal commitments made in the Peace Accords. The beneficiaries of this program are the entire Guatemalan nation which has expressed its desire for peace and development through the negotiation and implementation of the Peace Accords. In particular, ex-combatants, refugees, displaced persons and other war-affected populations in the formerly conflictive and resettlement zones will most directly benefit from the full implementation of the Peace Accords.

Key Results: Results necessary to achieve the Peace special objective track the four major areas of the Peace Accords. USAID provided early and crucial assistance for the successful demobilization and reinsertion of ex-combatants through activities that increased participants' access to health services, formal and non-formal training, skills development, productive land and credit. Other contributions for advancing national reconciliation include activities assisting victims of human rights violations in 40 of the most war affected communities. Human capacity development is being achieved through basic literacy programs, certification of bilingual teachers in exconflictive areas, and university scholarships for indigenous leaders. Sustainable productive investment in ex-conflictive areas is being achieved by addressing land-related issues, infrastructural development, as well as the strengthening of microenterprises, productive agricultural and financial services. State institutions modernized and strengthened is achieved through justice sector reforms, strengthening the national legislature, and improving tax administration.

Performance and Prospects: The consolidation of peace is a precondition to the successful achievement of each of USAID's five strategic objectives for sustainable development. During FYs 1997/98, significant ESF resources were used to assist the Government of Guatemala to meet immediate short-term requirements generated by the Accords, such as support for demobilization camps, the Peace Secretariat, and a number of peace commissions. During the latter part of the strategic planning period, however, ESF resources will be increasingly used to intensify activities that are not only essential to Peace Accords implementation but that are also closely tied to other strategic objectives. The strategic objectives for Democracy, Education, and Income include activities that link them to the Peace SpO, and a full description of the results, performance measures, and targets for these activities are included within the strategic objectives and not repeated in the Peace SpO.

The consensus of the Consultative Group (CG) meeting in Brussels in October 1998 was that Guatemala had made real progress in implementing the Accords and initiating major structural changes. With the congressional passage of the constitutional reforms and an emerging consensus on the need for a fiscal pact, peace has become a national project that promises to carry the process beyond the present Arzu administration. FY 1997 ESF funds constituted the first major donor support to the GOG peace program and U.S. assistance has continued to be critical to the transition. USAID assistance has played a leading role among donors in supporting the Guatemalan Government's implementation of the Accords by: (a) helping design a comprehensive plan for overhauling the tax administration, crucial to the GOG's ability to finance implementation of its commitments in the Accords; (b) capitalizing the Land Fund, a market-based financing mechanism for land purchases and titling, and a key element of the GOG's effort to address one of the most fundamental sources of conflict; (c) institutionalizing the GOG's capacity to manage the complex array of commitments and resources supporting the implementation of the Accords, through the Secretariat for Peace (SEPAZ); (d) funding the crucial work of the Historical Clarification ("Truth") Commission, and leveraging other donor and GOG contributions to support this process; (e) improving human rights guarantees through justice reforms, strengthening relations between municipal governments and citizen groups, and supporting the modernization of the national legislature to achieve higher quality laws; (f) providing university fellowships to Mayan leaders; (g) training and certification of teachers in rural ex-conflictive areas; and (h) initiating a major activity for increasing literacy among rural and mostly indigenous youth and women. USAID's program includes a cash grant component which generates within the GOG the local currency to respond to immediate, high priority needs, including the work of SEPAZ and the Commissions mandated by the Accords, land titling, Mayan scholarship funds with Guatemalan universities, and provide assistance to survivors of human rights abuses, e.g., war widows and orphans. USAID has taken the lead in designing an effort to support national reconciliation and enlist the GOG and other donor support to respond to needs in ex-conflictive areas with a high potential for violence through local, small-scale infrastructure, and productive activities.

Possible Adjustments to Plans: Although the GOG has strengthened its efforts to increase tax revenue, fiscal revenues are short of Peace Accord targets, thus limiting the GOG's ability to finance peace and adequately invest in the social sectors. On the eve of the CG meeting in Brussels in October 1998, the GOG and Peace Monitoring Commission reached consensus for new fiscal measures and a revised time frame for reaching associated targets, though resistance to these measures continues.

Other Donor Programs: The GOG has estimated the cost of financing Peace Accord commitments to be approximately $2.3 billion and recognizes that a significant portion of the funding must be generated internally. External pledges of $1.9 billion were made in 1997 and reconfirmed in 1998. Major donors include the IDB, the World Bank, the United Nations, the European Union, Japan, Spain, and the Nordic countries. The United States continues to be the largest bilateral donor, having pledged $260 million or 14% of the total $1.9 billion in donor pledges in support of the Peace Accords over the four-year period 1997-2000.

Principal Contractors, Grantees or Agencies: Entities from all three branches of the Guatemalan Government (Legislative, Judicial, and Executive) are implementing USAID-financed activities, in addition to United Nations agencies, the International Organization for Migration (IOM), the University of Texas, and local universities. International, U.S., and local NGOs (CARE, Conservation International, Rodale Institute, Centro Maya, Cooperative Housing Foundation, and the Canadian Center for Studies and International Cooperation) are implementing activities in conjunction with local governments and community organizations.

Selected Performance Measures:

	Baseline	Target (2000)	Target (2002)
Social sector investment as % of GDP	2.51% (1995)	3.78%	N/A
Tax revenue as % of GDP	7.6% (1995)	11.5%	12.0
Cumulative number of recommendations from Peace Commissions supported *	0 (1997)	6-12
# of people benefitting from completed land transactions	0 (1997)	19,000	29,000
# of beneficiaries benefitting from community infrastructure supported with USAID Special Development Fund Resources *	45,000(1997)	180,000
* Funding for these activities ends in 2000.

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