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FY 1997 Development Assistance: $25,965,000
FY 1997 P.L. 480 Title II: $10,927,000
Introduction.
Guatemala's largely rural, Indian population lives under some of the most difficult conditions found in the region. Located less than 1,000 miles from our border, U.S. interests continue to be focused on supporting the peace process and strengthening the country's fledgling democracy, both of which require alleviating the gross inequities in income distribution and government services. Guatemala also offers significant untapped economic opportunity for U.S. businesses. Two-way trade between the United States and Guatemala increased to just over $3 billion in 1995 (up from $2.6 billion in 1994), directly benefiting numerous U.S. firms. By encouraging sustainable economic growth with equity, USAID programs help to create viable livelihood options for Guatemala's poor majority and thus help to reduce the flow of economic refugees to the United States. They also encourage expanded two-way trade.
The Development Challenge.
Guatemala is the largest Central American country in terms of both population (10 million) and economic activity (1995 gross domestic product GDP, of $14.3 billion in current dollars). However, distribution of land, income, and other assets is highly skewed toward a small share of the Spanish-speaking population. An estimated 75% of Guatemalans live in poverty. Guatemala's Indian populace (of roughly 5 million) are isolated socially, economically, and politically, due to geographic, language and discriminatory barriers. The country's social indicators are among the worst in the Hemisphere, and the national averages mask even sharper inequalities between social groups and regions. For example, overall adult literacy is estimated at 48%, but literacy among Mayan women in some areas is as low as 10%. Some 6.4 million Guatemalans lack access to basic health services, and 3.7 million do not have access to potable water. Infant, child, and maternal mortality rates are among the highest in all Latin America. These indicators reflect persistent underinvestment in social services and basic rural infrastructure by Guatemala's government, and past practices of political exclusion of the indigenous population.
Peace, political inclusion and poverty reduction are, as emphasized by Guatemala's new President, the three major challenges facing the nation. Though increased participation in the most recent electoral process and the beginnings of growth of a vigorous civil society are healthy signs, much work remains to achieve a lasting peace and political stability. Macroeconomic reform has led to stabilization of the economy and growth of non-traditional exports in the agricultural and light manufacturing sectors. Yet despite ten consecutive years of positive GDP growth rates, real per capita income in 1995 has yet to recoup losses sustained during the 1980s. Population growth remains very high (estimated at 2.9% annually) and the country continues to suffer a major fiscal crisis, despite efforts of two successive administrations to increase tax revenues. Further reform is urgently needed to provide the resources for basic education and skills training programs, along with other social and infrastructure investment. Sustainable improvements in income and living conditions also will depend on stemming current rates of depletion of the natural resource base and increased pollution of air and water.
The requirements for addressing these multiple challenges, in addition to financing the costs associated with implementing the U.N.-moderated peace process, far exceed Guatemala's current domestic reserves and revenue-
generating capacity. The peace process, which was revived in early 1994, has resulted in the signing of four agreements on human rights, resettlement issues, the establishment of a historical clarification commission and the rights of the indigenous. There are currently two additional substantive agreements that must be negotiated and a series of operational agreements that must be completed prior to the final peace settlement. The cost to fully implement these peace agreements is enormous. Donor funding is an essential complement to domestic financing, although it is not expected to cover even a quarter of the estimated costs of financing the peace accords already signed, let alone future accords, especially related to land. Thus, Guatemala is not considered a candidate for graduation from U.S. economic assistance in the near term.
Other Donors.
Official Development Assistance data show that in 1994, the international donor community provided almost $225 million in economic assistance to Guatemala. The United States is the largest bilateral donor, providing approximately 24% of total official foreign aid. No other bilateral donor singly provided more than 8% of the assistance received in 1994. Economic assistance to Guatemala administered by USAID totaled $37.3 million in FY 1994 and $32.9 million in FY 1995. Other major contributors include Japan, Germany, the Inter-American Development Bank, the World Bank, the United Nations (UN) agencies, and the European Economic Union.
FY 1997 Program.
The range of development activities supported by USAID have been continually refined and reduced to focus on three principal areas: democratic development, broad-based economic growth and poverty reduction, and sustainable natural resource management. Geographically, programs are almost exclusively targeted on the departments comprising Guatemala's belt of extreme poverty, which is largely indigenous, and the areas most affected by the 35 year conflict. Program initiatives are structured support implementation of the Peace Accords.
A final peace accord, stronger democratic institutions, and greater equity are clearly linked to U.S. hemispheric interests. Greater economic prosperity will make the 10 million Guatemalans a stronger market for U.S. products, as well as deter illegal migration and use of Guatemala as a major transit point for narcotics trafficking. The proposed mix of Development Assistance (DA) and P.L. 480 Title II resources complemented by $8,000,000 of Economic Support Funds provided through the LAC Regional program will enable the United States to achieve its highest priority objectives and help address the root causes of Guatemala's longstanding armed conflict, among them, the persistent and widespread poverty. Reductions in the level of DA funding would force scaling back of efforts to advance equitable economic growth. Without ESF, USAID will have to retreat on its support to the implementation of the Peace Accords in the areas of justice sector reform, displaced persons, support for the United Nations Verification Mission to Guatemala (MINUGUA), and the implementation of a final ceasefire agreement.
Agency Goal: Building Democracy
The constitutional transfer of power to a popularly elected president in early 1996 was a milestone in Guatemala's transition to a more stable democracy. The task facing the new government is that of consolidating the gains achieved to date and strengthening the institutions upon which the long term viability of democracy depends. Early actions by the Arzu government toward assuring full civilian control of government, and especially actions taken to remove corrupt officials in the security forces, bode well for the future of the fragile democratic process. USAID will actively support this process.
USAID's support during 1994 and 1995 was instrumental to the start-up of the reformed criminal judicial process. Through our funding, newly-created training schools within the Supreme Court and the National Prosecutors office provided training and technical assistance to 300 prosecutors, legal defenders, judges and magistrates. Even in the face of the historic reform's many detractors and rising levels of crime, over 100 oral trials have been held to date and improved prosecutorial skills have demonstrated that modern criminal procedures can be applied fairly and efficiently in Guatemala.
Consolidation and deepening of these gains, and combatting impunity, remain as major challenges for 1997 and the rest of the decade.
The 1995 elections were a tribute to the professionalism and impartiality that characterize Guatemala's Supreme Electoral Tribunal, a recipient of USAID training assistance focusing on enhanced civic participation nationwide. While voter turn-out was low (46% for the first round, 37% for the second round), it is doubtful that participation would have been even this high without USAID and other donor funding for get-out-the-vote campaigns in rural areas. As a result, the tribunal has now fundamentally changed the function of its 300 municipal representatives toward promoting citizen voter participation in the electoral process.
The National Congress elected in late 1994 following the "purge" of corrupt representatives, benefited from USAID-
funded technical assistance for a viable committee system and a more professionally managed legislative process. That assistance is already serving the new, politically more diverse Congress elected in late 1995, as representatives face the added challenge of the multiple legislative obligations to implement the ambitious requirements of the peace accords signed to date.
Agency Goal: Stabilizing World Population Growth and Protecting Human Health
At the current rate of 2.9% growth per year, Guatemala's population is expected to double in about 20 years, making the task of achieving self-sustaining economic and social development even more daunting than at present. USAID's strategy for this sector emphasizes the delivery of culturally sensitive, high quality, maternal-child health (MCH) services, especially in poor and formerly conflictive areas. Working through the Ministry of Health and several U.S. and local nongovernmental organizations (NGO), the program focuses on promoting appropriate family household practices as well as improving the quality of services provided by voluntary community health workers, nurses and physicians. Our goal is to improve overall health indicators, especially infant and maternal mortality, reduce overall fertility levels and improve the quality and availability of basic services to rural populations.
Due to sustained USAID and other donor support between 1987 and 1995, the infant mortality rates have dropped from 74 to 51 (per 1,000 live births) and child mortality rates from 109 to 68 (per thousand). The total fertility rate decreased from 5.4 to 5.1, and the contraceptive prevalence rate increased from 23% to 31% during this same period. The woefully low vaccination coverage of only 5% in 1985 has now increased to 42% in 1995 -- still a far cry from the 80% target. Almost one-fourth of acute diarrheal diseases in children under five are treated with oral rehydration therapy. USAID's program to reduce maternal mortality is now fully operational in four departments (states) with critical need. This successful program is being replicated by another donor in four additional departments. The USAID program to reduce childhood deaths from pneumonia is focused on eight departments where the need is greatest.
Agency Goal: Protecting the Environment
The number of people living in extreme poverty in Guatemala is growing, due in part to the rapid degradation of the natural resource base from which 80% of the population derive income. USAID programs are designed to promote more sustainable income-generating practices, support policy reform to provide greater incentives for sustainable land use and conservation of biodiversity, and to strengthen key institutions to play more effective and sustainable roles in support of environmentally sound management of natural resources.
USAID has been the lead donor in this field in Guatemala over the past decade and has been successful in linking conservation and development through the biosphere concept. Specifically, within the Maya Biosphere Reserve, USAID estimates that the deforestation of over 4,000 km2 of natural forest cover has been saved from conversion to unsustainable uses. Additionally, throughout the country, over 12,000 families have adopted more sustainable land use practices and income strategies, including small-farmer coffee production and processing, improved hillside agriculture, agroforestry, ecotourism and environmentally-sound related enterprises. USAID activities have had a significant impact to date on increasing the understanding of the vital link between management of the naturalresource base and the economic well-being of the most affected poor in Guatemala.
Agency Goal: Encouraging Broad-based Economic Growth
In a country where race and gender discrimination have been endemic for centuries, promoting increased equity and broad-based economic growth is an ambitious goal. USAID's strategy is two-fold: expanding access and opportunity for the poor through basic education, and increasing trade and improving labor relations as a means for creating more job opportunities.
While USAID-supported pilot interventions in primary education are too recently initiated to show statistically significant improvement in the national rates of continuation, repetition, and enrollment for girls, there has been a 14% increase in the number of Mayan students enrolled in primary school between 1992 and 1995. Additionally, USAID-
financed activities are showing a positive effect on teacher effectiveness, most notably among teachers in the one-
room school program. These schools are also providing practical skills in the operation of a democracy through activities such as school government, while the Girls' Education program has had further positive impact on the participation of Mayan girls in the classroom. The use of a management information system for personnel administration by the Ministry of Education has reduced the time to complete teacher appointments from 8 months to 3 months, thereby improving the efficiency of the system. The low level of Government of Guatemala (GOG) resources invested in primary education (1.3% of GDP in 1995), relative to most of its Latin American neighbors and Guatemala's needs, is a major obstacle to expansion of the innovative pilot activities which have shown measurable impact on the quality of primary education in pilot communities in Guatemala. Deep-seated cultural biases can only be changed gradually through patient dialogue, and by the force of logic by using the continuing successes to prove that economic and social benefits result from educational equity.
As noted earlier, Guatemala's economy has stabilized and for the past four years has shown significant growth in trade and employment in the export sector. Guatemala's total merchandise trade with the United States increased 5% in 1994 to $2.6 billion, and rose 14% to just over $3 billion in 1995. However, serious obstacles remain to further gains in trade. High dependency on import duties for fiscal revenues impedes Guatemala's ability to pursue further trade liberalization measures and, if not resolved, will become a major obstacle to Guatemala's further integration to hemispheric and world markets. Also, further gains in assembly industry exports, which grew 22% in 1995, are seriously threatened due to the lack of U.S. legislation providing North American Free Trade Agreement (NAFTA) parity for Caribbean Basin Initiative countries. Guatemala also remains under Generalized System of Preferences (GSP) review, and the new administration is under considerable pressure to demonstrate further concrete progress on worker rights issues or face withdrawal of GSP preferences. USAID-supported measures taken by the Ministry of Labor, such as training for labor inspectors, have contributed to Guatemala's continued eligibility for GSP trade preferences. At the same time,
innovative training approaches to bargaining provided by the U.S. Department of Labor are in ever increasing demand.
Agency Goal: Providing Humanitarian Assistance
P.L. 480 Title II
By directing P.L. 480 Title II resources to the achievement of specific results under strategic objectives, USAID expects a more effective and efficient use of food aid resources to achieve improved access, utilization and availability of food for Guatemala's most needy populations. Over half of P.L. 480 Title II resources in FY 1997 will be dedicated to MCH programs impacting on some 280,000 rural poor mothers, and children under the age of three. Food assistance supports increased food production through promotion of sustainable agricultural practices and innovative, rotating, small loan funds for farmers. Food for work activities have proven to be a superb vehicle for fomenting community organizations and providing Guatemalan with an authentic democratic experience, while providing supplementary food rations to poor families in exchange for their work. In each of these areas, P.L. 480 Title II resources are integrated with Development Assistance resources to achieve greater results.
Special Objective: Implementation of the Interim Peace Accords
The United States has been a principal player in all donor coordination efforts surrounding the Guatemalan peace process. As a result of the signing of the human rights and uprooted populations accords in 1994, and subsequently the Indigenous Rights accord in 1995, a Peace Fund using Economic Support Funds (ESF) was created and used to initiate income generation and agricultural production in formerly conflictive areas and to support institutional strengthening by the United Nations Verification Mission for Guatemala (MINUGUA) for the judicial system and human rights ombudsman.
Given U.S. national and foreign policy interests in Guatemala, it is critical that we continue to be a major player in the peace process. We have thus requested that $8 million in ESF be provided through the LAC Regional program in FY 1997 to support the final peace settlement. Specifically, USAID will support expanded efforts in the reform of the justice system (including professionalization of the civilian security forces) and additional assistance to displaced and returnee populations in income generation and land access, and monitoring mechanisms established in the final cease-fire agreement.
| Encouraging Economic Growth |
Stabilizing Population Growth and Protecting Human Health |
Protecting the Environment | Building Democracy | Providing Humanitarian Assistance | Total | |
| USAID Strategic Objectives | ||||||
|
1. More Effective and Participatory Democracy Dev. Assistance P.L. 480 Title II |
|
$2,000,000 |
$1,500,000 |
$2,000,000 |
||
|
2. Better Health for Rural Women and Children Dev. Assistance P.L. 480 Title II |
|
$14,230,000 |
$5,735,000 |
$14,230,000 |
||
|
3. Sust. Natural Resource Management & Conservation of Biodiversity Dev. Assistance P.L. 480 Title II |
$3,440,000 |
|
$3,500,000 |
$635,000 |
$6,940,000 |
|
|
4. Increased Guatemalan Partici- pation in Global Markets Dev. Assistance |
$200,000 |
|
$200,000 |
|||
|
5. Better Educated Children in Rural Areas Dev. Assistance |
$2,595,000 |
$2,595,000 |
||||
| Special Objective | ||||||
|
1. Implementation of Interim Peace Accords ESF* P.L. 480 Title II |
|
|
|
$3,087,000 |
$3,087,000 |
|
|
Total Dev. Assistance P.L. 480 Title II |
$6,235,000
|
$14,230,000 |
$3,500,000 |
$2,000,000 |
$10,927,000 |
$25,965,000 $10,927,000 |
USAID Mission Director: William Stacy Rhodes
PROGRAM: GUATEMALA
TITLE AND NUMBER: More Effective and Participatory Democracy, 520-SO01
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $2,000,000 DA; $1,500,000 P.L. 480 Title II
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2000
Purpose: To strengthen democratic stability by promoting more responsive criminal justice and broader, more diverse participation in the political process.
Background: The constitutional transfer of power to a popularly elected president in early 1996 was a milestone in Guatemala's transition to a more stable democracy, coming in the wake of a publicly mandated purging of the Congress and changes in leadership of the judicial system. The major constraints facing the new government as it seeks to strengthen representative democracy include: weak and inefficient government institutions, particularly the judiciary; low levels of public support and tolerance for basic democratic values such as free expression and respect for human rights; and a nascent movement of civil society organizations to provide channels for citizen participation. Early actions by the current government toward consolidation of civilian control of government, specifically those oriented toward removing corrupt officials in the security forces, bode well for the future of democratic reform. This program encompasses the Judicial Sector Reform Support project, the Democratic Institutions project (supporting the Congress, Human Rights Ombudsman, and Civil Society and Civic Education activities), and the final year of the Guatemala Peace Scholarship project.
USAID Role and Achievements to Date: USAID continues to be the major donor in the sector of democratic development, although "leading edge" programs such as support for citizen advocacy have now been replicated by other donors. USAID's greatest emphasis continues to be on improving the fairness and responsiveness of the judicial system. U.S. support for training and technical assistance to the newly-created National Prosecutors Office and judges and public defenders has enabled the judicial system to carry out over 100 oral trials, demonstrating that modern criminal procedure can be applied in Guatemala. As a result, the debate has advanced from the issue of whether to maintain the new procedural law to how to best implement its sweeping changes over the short term.
The elections of 1995 were a tribute to the professionalism and impartiality that exist among the staff and delegates of Guatemala's Supreme Electoral Tribunal, an institution which has for many years received USAID training assistance. While voter turn-out was low (46% for the first round, 37% for the second round), it is doubtful that participation would have been even this high without USAID and other donor assistance for get-out-the-vote campaigns. The National Congress has also benefited enormously from USAID-funded technical assistance for a viable committee system and a more professionally managed legislative process.
Description: USAID's program will continue to focus on the complementary objectives of creating a more responsive criminal justice system, deepening the culture of respect for human rights, and broader, more diverse participation in the political process. USAID support for the implementation of the new criminal procedure code will focus increasingly on the sustainability of the training and professional development programs required to ensure application of the new procedures. Particular emphasis will be given to development of a stronger prosecutorial function and civilian-directed criminal investigation. In the area of human rights, institutional strengthening support provided to the Human Rights Ombudsman to improve investigation and follow-up will be complemented by efforts to strengthen nongovernmental organizations' (NGO's) advocacy for judicial reform. A "stocktaking" of
ongoing donor programs to strengthen civil society and create opportunities and channels for citizen participation is currently underway, and will provide the basis for future programming in this area.
Host Country and other Donors: The United Nations Verification Mission to Guatemala (MINUGUA) is actively engaged in institutional strengthening and human rights verification. Additionally, the Government of Guatemala invests in USAID-supported initiatives at a level of some 25%, such as through provision of key personnel and investment in computers and other infrastructure. Nonetheless, the U.S. has been and remains the single most important player in the justice sector reform effort underway in Guatemala.
Beneficiaries: USAID activities in the democracy sector are targeted at historically disenfranchised populations, especially the poor rural, indigenous majority. The nature of democratic development, however, yields benefits for the entire Guatemalan population as well.
Principal Contractors, Grantees, or Agencies: USAID implements activities through grants to the Judicial Branch, the Public Ministry, the San Carlos University Law School, the Office of the Human Rights Ombudsman's, and the National Congress. Activities are also implemented through two private U.S. firms, Development Associates and DPK Consulting, and through a variety of U.S. PVOs, including America's Development Foundation and Covenant House International. NGO activity is through the Maternal Child Health Support Program, the Association of Social Research and Investigation, and the Interamerican Institute for Human Rights Center for Electoral Assistance and Promotion (IIDH/CAPEL).
Major Results Indicators:1/
Baseline (1993) Target (1997)
Positive ratings in DIMS on the Democratic
Liberties Index (gauges opposition to the
suppression of democratic liberties and
support for right to participate and/or dissent) 55% 59%
Public Confidence in key democratic institutions
and processes 40% 42-44%
PROGRAM: GUATEMALA
TITLE AND NUMBER: Better Health for Rural Women and Children, 520-SO02
STATUS: New
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $14,230,000 DA; $5,735,000 P.L. 480 Title II
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2000
Purpose: To reduce high levels of infant, child and maternal mortality by increasing the access, coverage and quality of services, especially in remote rural areas, thus contributing to sustainable development.
Background: Mortality rates of women, infants and children in Guatemala are the highest in Central America. The fertility rate (5.1) is also the highest in the region, and for the indigenous groups, it is one of the highest rates in the world (5.9). The key constraints to reducing mortality and fertility include limited access to basic services by more than half the population, low government investment in the social sectors, and the government's lack of leadership in establishing a mandate for primary, preventive health services. This program includes the final year of the ten-year child survival and four reproductive health projects, as well as the first year of the new family and community health strategy.
USAID Role and Achievements to Date: USAID's support includes four key interventions to save children's lives: immunizations, promotion of oral rehydration therapy, improved management of pneumonia, and birth spacing. Between 1987 and 1995, USAID activities contributed to reducing infant mortality by 30% from 74 deaths per 1,000 live births to 51; child mortality has dropped by almost 40% from 109 deaths of children under five per 1,000 live births to 68 during this period. USAID also supports an integrated women's health program designed to reduce maternal mortality through voluntary family planning services and improved management of obstetric complications. The USAID program also has contributed to a reduction in the total fertility rate from 5.6 to 5.2 between 1987 and 1995.
Description: Of the total funding requested for population and health, $6.707,000 is planned for population activities and $7,523,000 is planned for health activities. USAID's program focuses on strengthening and linking three critical levels of care. At the household level, the program provides information and counseling to women about reproductive health and the prevention of childhood illness. This program also teaches women to recognize symptoms (such as pneumonia) that require medical attention. At the community level, the program helps traditional birth attendants and health promoters learn to provide essential services for women and children including temporary family planning methods, prenatal care, prevention of dehydration from diarrheal disease, and referring clients to formal health services. At the facility level, USAID trains health workers in the clinical management of obstetric complications and childhood illnesses as well as family planning counseling and services. USAID has supported the Government of Guatemala's (GOG's) efforts to decentralize the Ministry of Health by establishing information systems and providing management training at lower levels of the health system. USAID also has supported the development of an urban social marketing program for family planning. This program is expected to be self-financed (except for commodities) by the end of 1996.
Host Country and Other Donors: USAID, the United Nations Children's Fund (UNICEF), the Pan American Health Organization (PAHO) and the European Union provide coordinated support in Guatemala for the national immunization program; the GOG provides all vaccines and syringes for this program. Likewise, this same group of donors works in coordination to support the national diarrheal disease control program; the GOG procures almost all of its oral rehydration salts (ORS) from the local ORS production facility that was developed with USAID assistance. USAID and the European Union are working with the GOG to expand USAID's successful pilot program to reduce maternal mortality.
Although USAID is the lead donor in supporting reproductive health, the GOG contribution to the national program has increased steadily for the past four years.
Beneficiaries: The USAID integrated maternal child health (MCH) program focuses on children under five years and women of child-bearing age. Through 1995, USAID's programs were in national scope; however, beginning in 1996, USAID will support targets areas that have been seriously affected by civil war areas where health indicators are far worse than the national average. The majority of the USAID beneficiaries live in rural communities and speak one of Guatemala's 23 indigenous languages.
Principal Contractors, Grantees, or Agencies: USAID implements activities through private U.S. firms (Management Sciences for Health, Clapp and Mayne, The Futures Group, John Snow, and Access to Voluntary and Safe Contraception), through U.S. NGOs (The Population Council and J.H. Piego) and through a local NGO (Association for Family Welfare).
Major Results Indicators:
Baseline Target
Infant Mortality per 1,000 live births 51 (1995) 43 (2000)
Child Mortality per 1,000 live births 68 (1995) 60 (2000)
Contraceptive Prevalence Rate 31% (1995) 35% (2000)
Total Fertility Rate 5.1 (1995) 4.8 (2000)
Immunization Coverage (percent of children
fully immunized by age one) 42% (1995) 80% (2000)
Use of oral rehydration therapy in project areas 22% (1995) 40% (2000)
PROGRAM: GUATEMALA
TITLE AND NUMBER: Sustainable Natural Resource Management and Conservation of Biodiversity in Priority Areas, 520-SO03
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $6,940,000 DA; $635,000 P.L. 480 Title II
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2000
Purpose: To conserve biological resources of international importance by providing sustainable income alternatives to marginalized populations and by improving the management and protection of these natural resources.
Background: Poverty has been identified as a root cause of Guatemala's civil unrest. The number of people living in extreme poverty is growing due to the rapid degradation of the natural resource base from which 80% of Guatemalans derive income. The cycle of poverty and resource degradation grows, feeding upon itself with the support of an inadequate policy regime, weak public and private institutions to address natural resource management issues, and weaknesses in other key sectors such as education and justice. For example, although two-thirds of Guatemala's climate, soils, and topography are best suited for forest-based production, only about one-third of the country--its most marginal lands--retain forests, and 8% of these are being cleared by landless poor for subsistence farming in a manner which is unsustainable. This program encompasses the final year of the Small Farmer Coffee and the Community Natural Resources Management projects and the continuation of the Maya Biosphere project.
USAID Role and Achievements to Date: USAID has been the lead donor supporting environmentally sound management in Guatemala since 1988 through activities such as small farmer production and watershed management projects, the tropical forest action plan, the establishment of a legal framework for a national system of protected areas, and support for linking conservation and development through the "biosphere" concept. Since 1989, USAID has supported the establishment of two formal biospheres in Guatemala, and the expansion of legally declared multiple-use zones from 320 km2 to 8,365 km2 in 1995. Over 12,000 families (72,000 people) have adopted more sustainable land-use practices and income strategies, including small-farmer coffee production and processing, improved hillside agriculture, agro-forestry, forestry and tourism-related enterprises. For the Maya Biosphere project, figures for 1995 show that 55% of the target population (13,660 individuals) have adopted more sustainable farming practices. In the Maya Biosphere Reserve alone,1.5 million hectares have been brought under improved management and over 4,000 km2 have been saved from unsustainable slash and burn agriculture or other destructive uses.
Description: Initiatives focus on developing a broad-based local constituency for environmentally sound management of natural resources, promoting increased local participation in management of resources, improving the policy framework and demonstrating and disseminating more sustainable income-generating practices. Public and private institutions are strengthened to improve the administration of legally established protected areas and to develop and promote environmentally sound enterprises (eco-tourism and related services, agro-forestry and forestry systems). The program is testing and demonstrating the environmental, social and financial sustainability of approaches, is extending best management practices into new areas, and continues to improve people's welfare while effectively counteracting historic deforestation trends.
Host Country and Other Donors: Counterpart contributions include over $3.1 million from the host country and $3.5 million from local and international nongovernmental organizations (NGOs). USAID urges other donors to require environmental impact analysis in all projects which they plan to fund. USAID is working closely with the Inter-American Development Bank on its design of a $50 million sustainable development investment project which will include a component to support law enforcement in the Peten, while the World Bank and the Germany aid agency will address policy reform issues.
USAID and the United Nations Development Program work closely on a $7.5 million project using USAID's micro-watershed management work as a model. Similarly, coordination continues with United Nations High Comission on Refugees and several donors to encourage concentration on mid- to long-term sustainable solutions to resource management and socioeconomic issues facing resettled and displaced populations.
Beneficiaries: Marginalized families living in and around the Maya Biosphere (35,000 people approximately, of whom 25% are indigenous Mayan K'ekchi) are the immediate beneficiaries. However, the conservation of natural resources and biological diversity benefits the entire country.
Principal Contractors, Grantees, or Agencies: USAID will implement this program through U.S. NGOs (CARE, The Nature Conservancy, Conservation International, The Peregrine Fund, and Rodel Institute), and through local NGOs (ProPeten, Maya Center, Wildlife Rescue and Conservation Association, and the National Coffee Association).
Major Results Indicators:
Baseline Target
People adopting more sustainable land use
practices; % of total population (35,000)
in target area 0% (1990) 558% (1999)
Km2 of natural habitat saved from conversion
to agriculture, compared to trends. 0 (1991) 670,000 (1997)
Selected institutions increase income from
non-USAID sources ($US). 80,000 (1990) 1,000,000 (1997)
Policy regime reflects increased incentives for
sustainable development and conservation (annual
assessment based on 26-point policy agenda) No (1990) Yes (1997)
PROGRAM: GUATEMALA
TITLE AND NUMBER: Increased Trade and Improved Labor Relations, 520-SO04
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $ 200,000 DA
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 1998
Purpose: To promote the growth of the Guatemalan economy and U.S. economy opportunity through increased two-
way trade and to expand participation of the Guatemalan labor force in the benefits of growth.
Background: Sustained higher rates of economic growth are essential to increase employment and incomes if Guatemala's high poverty rates are to be reduced. Guatemala has made notable progress toward improving its macroeconomic policy framework. This has contributed to rates of real economic growth averaging nearly 4% since 1992. However, with Guatemala's rapid population growth, per capita income has grown by an average annual rate of only 1% over the last four years, which is far below the 3%-4% growth required to register sufficient progress toward combatting poverty.
To achieve 6%-7% annual real gross domestic product (GDP) growth rates, Guatemala must consolidate and deepen its economic policy reforms. In particular, macroeconomic stability must be maintained, and further structural adjustment measures are needed -- primarily deregulation, privatization, de-monopolization, trade liberalization, modernization of the state, and integrated financial management -- to improve economic efficiency and permit the achievement of sustained economic growth over the medium term.
To take advantage of increased trading opportunities resulting from economic globalization and recent hemispheric integration initiatives such as North American Free Trade Agreement (NAFTA) and the Free Trade Area of the Americas, Guatemala must improve its trade policies both to achieve greater access to new markets and to enhance its competitiveness once expanded access is attained. Moreover, strengthened protection of workers rights and improved labor relations also will help Guatemala maintain access to hemispheric markets while contributing toward the development of a stronger work force required to compete in the global market place. While a faster growing economy that raises the demand for the productive use of labor will result in the greatest benefits for workers, improved labor policies also will help enhance workers' participation in the benefits of economic growth. This programs include the final year of the Trade and Labor Relations Development project and support for special studies.
USAID Role and Achievements to Date: USAID is relying on the International Monetary Fund and the World Bank to take the leadership roles in supporting Guatemala's efforts to maintain macro stability and to pursue further structural adjustment measures. Limited USAID-funded technical assistance help Guatemala upgrade its tax system and improve its public utility regulatory framework. USAID's major emphasis is on helping Guatemala strengthen its trade policy regime and improve labor relations through grants to both public and private sector institutions. In 1995, Guatemala made further improvements in its trade policy regime, including ratification of its World Trade Organization (WTO) accession agreement. Guatemala's total merchandise trade with the United States increased 5% in 1994 to $2.6 billion and rose 14% to just over $3 billion in 1995 as a result of improvements in trade policy. Guatemala's exports (mostly non-traditional) to the rest of Central America also increased, at an astounding 61% growth. USAID-
supported measures taken by the Ministry of Labor to improve protection of workers rights contributed to Guatemala's continued eligibility for General System of Preferences (GSP) trade preferences.
Description: USAID
supports Guatemalan efforts to upgrade trade policies and to improve labor relations through a number of activities with public and private sector key institutions. USAID assists the Ministry of Economy in meeting commitments made under the Summit of the Americas, including implementation of Guatemala's World Trade Organization accession agreement, strengthening of intellectual property rights protection, encouraging the de-monopolization of key public utilities, and further dismantling of tariff and non-tariff trade barriers to both intra- and extra-regional trade. Through cooperation with the Guild of Non-Traditional Product Exporters, USAID also supports increased production of non-
traditional exports to extra-regional markets, including primarily agricultural products grown by tens of thousands of small farmers.
In the area of labor relations, USAID helps to strengthen the protection of workers rights and improve labor-
management relations. USAID supports the Labor Ministry's modernization and decentralization program, which will extend Ministry services to the more remote areas of Guatemala. Training is also being provided to labor inspectors on Guatemala's new labor code, which will soon be available in the major Mayan languages through USAID financing for translation. USAID is also working with the Guatemalan Entrepreneurial Chamber to increase the awareness among private sector leaders of the importance of improved labor relations and to build support for better trade policies required to accelerate Guatemala's participation in the hemispheric economy.
Finally, building on the achievements of a prior USAID project, and responding to revived interest on the part of the new Guatemalan Administration, USAID is providing additional support to the Finance Ministry in implementing tax reform measures.
Host Country and Other Donors: In addition to coordination with the World Bank and International Monetary Fund on macroeconomic and structural adjustment issues, USAID collaborates closely with the Inter-American Development Bank (IDB) on the design of a revised investment sector loan program and a newly proposed modernization of the state program. USAID works with the United Nations Development Program (UNDP) and the IDB (through the Multilateral Investment Fund) to encourage complementary support for additional labor relations activities with the Ministry of Labor and the nongovernmental (NGO) sector. USAID is collaborating with the European Economic Community, the German aid agency, Purdue University, and several local NGOs in development of activities related to nontraditional export development and agricultural scientific research. Despite GOG fiscal problems and budget pressures, the Ministries of Labor and Economy contribute adequate resources to support program activities under this strategic objective. In addition, the private Guild of Exporters currently bears approximately 70% of costs related to programs promoting nontraditional exports.
Beneficiaries: Guatemala's expanding trade is contributing to greater employment opportunities and higher incomes for workers. Also, stronger protection of worker rights and improved labor-management relations enhance workers' participation in the benefits of increased trade.
Principal Contractors, Grantees, or Agencies: USAID implements activities under this strategic objective primarily through two cooperative agreements with private sector organizations including the Guild of Exporters and the Guatemalan Entrepreneurial Chamber, through grants and the use of host country-owned local currency with the Ministries of Labor and Economy, and through the Bank of Guatemala.
Major Results Indicators:
Baseline Target (Year 1998)
Increase in export earnings $1,298,000 (1991) $1,498,000
Number of Labor disputes attended by labor
inspectors that are resolved through
conciliation 2,884 (1991) 3,500
Legislative reforms required for negotiation of
a free trade agreement passed 0 (1991) 5
Non-traditional agriculture exports increased $97.2 M (1991) $197.4 M
Light manufacturing exports increased $67.6 M (1991) $127 M
PROGRAM: GUATEMALA
TITLE AND NUMBER: Improve Quality, Efficiency and Equity of Primary Education Services in Guatemala, 520-
SO05
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1997: $2,595,000 DA
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2000
Purpose: To improve the classroom environment and efficiency in the allocation and use of resources, and to increase equity in primary education, thus contributing to the achievement of broad-based economic growth.
Background: The Guatemalan public education system is highly centralized and extremely inefficient, particularly at the primary school level. National enrollment deficits range from 30% to 40%, and are even higher in areas of extreme poverty. Repetition and dropout rates are very high in the first three primary grades. Only half of students enrolled in first grade eventually graduate from sixth grade at the national level. Moreover, as one of the most inefficient systems in Central America, an average of 10.6 years of instruction is required to produce one sixth grade graduate. Access and coverage are constrained by a chronic lack of resources. The Government of Guatemala's (GOG's) budget for education, as a percentage of gross domestic product, has decreased in the last two years and is the lowest in Latin America, including Haiti. As a result, the sustainability and expansion of the pilot activities which show promising signs of improving quality, efficiency and equity of primary schooling remains a major challenge. This program includes the last year of the Basic Education Strengthening project and a new rural primary education strategy.
USAID Role and Achievements to Date: USAID support includes several community-based, active-learning interventions, bilingual education services for Mayan students, a girl's education program, management information systems and management services and training, and achievement testing. While national repetition rates have remained unchanged over the life of the interventions, third grade completion rates have increased from 48.7% in 1992 to 57% in 1995, and in sixth grade from 28.5% in 1992 to an estimated 35% in 1995. Participating teachers understand and are applying the new active-learning, bilingual and girls' program methodologies developed with USAID support. Language achievement in the one-room, active-learning pilot schools has increased significantly, surpassing program targets. Enrollment of Mayan students increased by an estimated 14% in 1995.
Description: Of the total funding requested for population and health, $xxx is planned for population activities and $xxx is planned for health activities. USAID's program is focused on three major areas: improvements in quality, through classroom services designed to improve learning; improved efficiency through decentralized management and greater community participation in the education of their children; and increased equity of educational policies and practices. Community-level classroom interventions include an alternative curriculum for one-room and multigrade rural schools, expanded and strengthened bilingual education services and materials, and a program aimed at keeping girls in school and increasing girls' active classroom participation -- all designed to make the education system more responsive to the needs of rural, predominantly Mayan families. Educational management systems and services include a regionalized management information system (MIS) and regional- and departmental-level training and technical assistance aimed at modernizing and decentralizing educational administration and improving the effectiveness of decision-making. Program policy actions are intended to intensify awareness of the importance of education to sustainable development and to increase Guatemala's investment in education.
Host Country and Other Donors: Several donors have funded USAID innovations in primary education. UNICEF supports bilingual active-learning rural school programs modeled on the USAID project's one-room schools. The German Technical Cooperation Agency provides assistance to the Ministry of Education in bilingual teacher training. The World Bank third education project (1997-2002), currently in the design stage, will expand all current USAID pilot activities on a national level. With USAID-funded technical assistance, Guatemala's Social Investment Fund currently supports community-based schools in more than 1,200 communities that lack
education services. Unfortunately, due to resource constraints, the Government of Guatemala's counterpart contributions to education remain insufficient.
Beneficiaries: The direct beneficiaries are children -- both boys and girls -- five to fourteen years of age living in the rural areas of Guatemala; parents; teachers; central, regional, and departmental Ministry of Education officials and personnel. USAID-funded activities currently reach about 30% of the total rural and indigenous population.
Principal Contractors, Grantees, or Agencies: USAID implements activities through a contract with a U.S. firm (Academy of Educational Development), grants to a local NGO (Sugar Industry Foundation), and through the Ministry of Education.
Major National Results Indicators:
Baseline Target2/
Repetition Rates (grades 1-3) 20.5% (1991) 18% (1998)3/
Completion Rates (3rd grade) 47.4% (1991) 58.0% (1998) Completion Rates (6th grade) 27.8% (1991) 39.0% (1998)