Identifier
Created
Classification
Origin
03GUATEMALA2853
2003-11-06 21:34:00
CONFIDENTIAL
Embassy Guatemala
Cable title:  

GUATEMALA DOWNSIZES ITS MILITARY, INCLUDING THE

Tags:  MCAP MOPS PGOV PINR GT 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
C O N F I D E N T I A L SECTION 01 OF 02 GUATEMALA 002853 

SIPDIS

E.O. 12958: DECL: 10/26/2013
TAGS: MCAP MOPS PGOV PINR GT
SUBJECT: GUATEMALA DOWNSIZES ITS MILITARY, INCLUDING THE
NOTORIOUS EMP


Classified By: Robert E. Copley for reasons 1.5 (b) and (d).

C O N F I D E N T I A L SECTION 01 OF 02 GUATEMALA 002853

SIPDIS

E.O. 12958: DECL: 10/26/2013
TAGS: MCAP MOPS PGOV PINR GT
SUBJECT: GUATEMALA DOWNSIZES ITS MILITARY, INCLUDING THE
NOTORIOUS EMP


Classified By: Robert E. Copley for reasons 1.5 (b) and (d).


1. (C) Summary: The first of three voluntary force
reductions, phased over the next three years, commenced on
October 29, and involved 1648 Defense Ministry employees
including 198 career officers, 100 assimilated officers, 600
non-commissioned officers (NCO's) and 750 civilians. This
first phase cost $25 million, reduced the military by about 6
percent and included the final 564 members of the EMP,
accounting for most of the discharged civilians. Among the
non-EMP retirees, criteria for selection-out were well
considered but appear to have been poorly enforced--setting a
costly precedent for future phases and leaving the rank
structure still top-heavy. End Summary.


2. (C) The military sought up to $150 million from the
proceeds of the sale of Eurobonds for the purpose of
downsizing. As of September, the Finance Ministry has only
approved a $25 million budget transfer to cover the first
phase of military retirement bonuses, severance pay, and
make-up contributions to the pension fund. Note: the pension
fund recently lost $22 million in an ongoing financial
scandal.


3. (C) The first-round cuts of military personnel were
targeted at senior NCO's and at the ranks of Major through
Colonel, where the Army has the majority of its excess
officers. Priority for bonuses was given to officers who
have remained on active duty despite physical handicaps
related to injuries sustained in the internal conflict.
Bonuses were not to be used for officers within 1.5 years of
mandatory retirement, which occurs at 33 years of service.
Remaining funds were intended to retire officers with
disciplinary problems. Prioritized lists of servicemembers
to be retired were drawn up from a large number of positive
responses to the call for voluntary retirement.


4. (C) Unfortunately, the criteria do not appear to have been
strictly enforced. General Carlos Radford Bonilla, who
should not have qualified because he is less than a year from
mandatory retirement, is taking the early retirement package.
A number of officers in quasi-retired "disponible" status

have also managed to get their names on the list. Very few
Colonels have volunteered, but as many as half of all NCOs
have. An Air Force Officer told us that 83 of the 160
Airmen, including all the mechanics, had requested early
retirement. One of the three Colonels at the military zone
in Mazatenango (where only one is needed) told us that half
of the NCO's there had signed up for the package but that
none of the Colonels had. According to the criteria,
officers who have received scholarships from the military to
train as lawyers, accountants, and doctors were ineligible
for the early retirement package. However, the military only
seems to be holding the line on keeping its pilots. All of
the other career officers who requested early retirement were
granted it.


5. (C) Using his personal situation as an example, one
Colonel explained why he thought few officers with less than
25 years of service would find the early retirement package
attractive. Leaving now, at his current 22 years of service,
would result in a payout of about $19,000 and a pension of
under $900 per month. After 25 years, officers automatically
qualify for a severance package upon retirement of 10 months
wages (about Q120,000 or $15,000 for a Colonel). Accepting
early retirement, in his view, is only worth $4,000 (the
difference between $19,000 now or $15,000 in three years),
guarantees a low pension, and means never becoming a General.
Like many Colonels, this one believes the next government
will follow President Portillo's example and fire all the
Generals upon taking office, thus freeing up slots for
promotion.


6. (C) Although some officers seem to be applying a "bird in
the hand" rationale, there is no sense of concern in the
upper ranks that this may be a unique opportunity. One
General, who reaches 33 years of service in February of 2004
told us he plans to take advantage of phase 2 in May--even
though he will already be retired. Under current law,
military retirements become effective only in January and
June of each year and the General is confident that the new
government will find the money for continued downsizing. It
is unclear whether this first round will become effective
immediately on October 29, due to the large number of EMP
civilians being retired, or whether it will actually take
effect in January with the retirees in "disponible" status
until then. At the retirement ceremony, several officers
wondered when they would actually get their checks.


7. (C) Comment. The military has reduced its forces on two
previous occasions since the end of the internal conflict in

1996. Although it was poorly managed, this latest effort was
still a positive effort by the military to reduce its overall
cost structure. Also, the Portillo Administration deserves
some credit for finally keeping its promise to disband the
EMP. The first phase of the current round amounted to a
reduction of about 6 percent of the force. The remaining
force of around 27,000 personnel includes about 3,000 mostly
low-level civilians. Because it is unlikely that the full
$150 million originally sought for downsizing will ever be
available, it was crucial that this first phase of voluntary
retirement be handled properly. Unfortunately, most hard
decisions were avoided. Allowing Generals and officers close
to retirement or already in "disponible" status to take
advantage of the package set expensive precedents and
encouraged many to wait. On the bright side, reducing the
force by 6 percent should allow the GOG to reduce the defense
budget, freeing up resources for the underfunded social
sector.
HAMILTON