BERGER PUBLICLY ANNOUNCES DEEP MILITARY CUTS

UNCLAS GUATEMALA 000821

SIPDIS

SENSITIVE

E.O. 12958: N/A
TAGS: PREL MOPS GT
SUBJECT: BERGER PUBLICLY ANNOUNCES DEEP MILITARY CUTS

REF: A. GUATEMALA 548

B. GUATEMALA 771


1. (U) In a public ceremony at the National Palace on April
1, President Berger formally announced a reduction in troop
levels, to be implemented by June 30, from 27,214 to 15,500
(about 43%) and a 30% reduction in the military's budget for
2004 (the budget cut for 2004 was even deeper if intra-budget
transfers that plussed up the Defense budget beyond
Congressionally approved levels are taken into account).
Beginning in 2005, the military budget will be capped at
0.33% of GDP, or exactly half the limit set by the 1996 Peace
Accords. The announcement, jointly made by Security
Commissioner Otto Perez Molina, the Minister of Defense, and
President Berger, was consistent with political agreements
reported reftels and contained no surprises.


2. (SBU) Comment: Vice President Stein and Presidential
Advisor Eduardo Gonzales told the Ambassador that a March 30
4-hour session with 60 senior officers to explain the
decision was tense, but had ultimately gone well. Military
leaders have expressed concern to us as well that the
drawdown will not be accompanied, as the GOG is promising, by
real modernization. Perez Molina's participation in the
ceremony was significant after earlier indications he might
distance himself from the reductions. At the Ambassador's
suggestion, the GOG will be briefing the diplomatic corps in
greater detail early next week.
HAMILTON