2008-11-26 07:13:00
Embassy Guatemala
Cable title:  


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DE RUEHGT #1468/01 3310713
R 260713Z NOV 08


E.O. 12958: N/A




E.O. 12958: N/A


1. (SBU) Introduction: On November 18, Poloffs toured
Guatemala City's high crime district of Zone 18 to examine
political and economic issues in a part of the capital less
frequented by Embassy staff. As part of the visit officers
toured a local market, met with local community leaders,
visited the local police precinct, and met with an AMCIT
businessman operating a maquila in the area. Residents of
Zone 18 are worried about insecurity, and most expressed
growing concern regarding inflation, a lack of economic
opportunity, and a drop in remittances. While the maquila
industry in Zone 18 is struggling, there is a large amount of
upper-middle class residential construction generating some
employment in Zone 18. End Introduction.

Local Market Feels Global Economic Squeeze

2. (SBU) The local market servicing Zone 18 residents of
Colonia Maya and the surrounding neighborhoods continues to
do brisk businesses, but local merchants complain about a
drop in sales and increased costs. The market, which
occupies one block of a major street in Colonia Maya, was
started in 1990 with 10 vendors, and now includes 162 stalls
offering products ranging from meat and produce to clothing
and cooking ware. The total cost to market sellers of
operating a stall is approximately $2 (U.S.) a day, of which
$.60 (U.S.) is paid to the municipal government. The
municipal employee in charge of the market stated that his
area of responsibility was the collection of stall rents and
verification that stalls sold only items they were authorized
to sell. As he made these statements while standing in front
of a stall selling only pirated CDs, Poloff asked him if he
had authorized the sale of pirated CDs. He grew nervous and
stated that enforcing copyright laws was the responsibility
of the national police.

3. (SBU) All vendors questioned stated that sales have been
down in recent months, with the owner of a stall selling
clothing complaining that sales were down 60 percent in the
last three months. All vendors also stated that the price of
goods had increased, with chicken increasing 37 percent since

2007. Most blame the price increases on increases in fuel
prices and animal feed, and complained that even though fuel
prices have fallen recently the prices for consumer goods
have remained high. Other vendors blamed the U.S economic
slowdown for the local market's problems, saying that falling
remittances from the U.S. diminished consumers' purchasing
power. One member of the market's leadership council who is
a chicken vendor stated that this was the worst economic
period he had ever seen, but looking on the bright side he
added that his children have been eating more chicken since
sales have been so slow.

4. (SBU) Vendors stated that crime in the area was high, but
thanks to the four Municipal Police assigned to protect the
market during working hours there had been no incidents in
recent months. In private one of the local leaders told
Poloff that members of the local gang had recently demanded
that vendors begin paying a combined $700 (U.S.) per month
"tax," and that the leadership council was attempting to
negotiate a lower monthly payment. He stated that he had
informed the National Police of the extortion, but did not
expect them to investigate the case. He said that he
believes they will soon have to begin paying the gang.

Police Doing What They Can With Limited Resources
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5. (SBU) Poloffs toured the El Limon Police Substation in
Zone 18 which provides security for over 200,000 residents.
The officer in charge of the substation, Custodio Boteo,
stated that he had 20 National Civilian Police (PNC) officers
and two trucks assigned to his substation. He added that
this gave him at most six officers per shift to patrol his
area of responsibility. According to Boteo, every time his
men arrested someone he had to dispatch two officers and one
vehicle to the nearest courthouse. He stated that the
booking and arraignment process takes an average of 12 hours,
which further reduces the number of police he has to provide
security to the local population. Boteo informed Poloffs
that he had worked in El Limon for over four years, and that
the secret to his success is that he has good relations with
community leaders. A testament to Boteo's local popularity
is that two years ago he was transferred to another position,
but returned to El Limon after local community leaders and
citizens petitioned PNC headquarters for his return. By all
accounts Boteo is working well with the local population to
improve security, but due to a lack of resources and an

overly cumbersome judicial system he has had limited results.

6. (SBU) Boteo stated that insecurity was a major problem in
El Limon, with the biggest problem being gang related
extortion of bus drivers and local businesses. He added that
most of the leadership of the local gang was already in
prison, but that the ever-growing number of underage gang
members continued to frustrate efforts to combat extortion.
When asked how the local situation could be improved he
offered a list of concrete and well-reasoned changes to
improve local security. He stated that if officials at the
Zone 18 Prison would ensure that cell phone inhibitors
already in place at the prison were always turned on, then
gang leaders would immediately be cut off from both their
support networks and those they are seeking to extort. He
also said passage of the pending arms and ammunition law,
with its much more stringent penalties for carrying
unregistered weapons, would provide his men with a tool to
take criminals off the streets. Lastly, he said Guatemala
needed to change the way it dealt with underage criminals,
suggesting the need to create youth detention centers that
would remove children involved in gangs from the influence of
older gang members, and provide them education and
counseling. When prompted about the need for more resources
he added that he could use at least double the number of
agents currently assigned to El Limon. (Comment: Poloffs
were surprised by Boteo's concrete and non-resource related
ideas on how to improve local security. The fact that a
local PNC leader is working well with community leaders and
examining the problem of local security with an eye toward
addressing the underlying problems, as opposed to simply
requesting more resources, offers hope for improving security
in Zone 18. End Comment.)

Gentrification in Notorious Zone 18

7. (SBU) Poloffs met with Estaurdo Zapeta, an indigenous
leader and local radio talk show host who lives in Zone 18,
to discuss recent changes in the area. Zapeta lives in one
of several gated communities in Zone 18 that offer middle
class lifestyles surrounded by low income housing. Zapeta
stated that while Zone 18 had historically been one of the
worst parts of the capital, recent development projects in
the area, coupled with worsening of security in most of the
other parts of the city, had made Zone 18 comparatively safer
then other areas. He stressed that the major problem now
preventing further development was the negative (and in his
mind undeserved) reputation the area had in the rest of
Guatemala. To underscore this point he met with Poloffs in a
new U.S.-style shopping complex and pointed to a nearby gated
condo community as proof that Zone 18 was changing for the
better. He acknowledged that one of the catalysts of this
change was the ability of those moving to Zone 18 to afford
private security, stating that his own private complex of 102
houses had a force of six armed private guards 24-hours a
day, for which each resident pays $50 (U.S.) a month. Zapeta
acknowledged that private security was beyond the reach of
the average resident of Zone 18, but stated that many of the
poorer local communities were seeking to close off their
neighborhoods in emulation of the up-scale private enclaves.

8. (SBU) Zapeta was positive on the future of Zone 18,
stating that several planned shopping centers and housing
complexes would help to continue the transformation of Zone
18 from a low income area to a middle class zone. Zapeta
Q18 from a low income area to a middle class zone. Zapeta
acknowledged that the majority of the current residents of
Zone 18 could not afford to live in the new housing projects
or shop in the western style shopping complexes, but he
insisted that the increased employment opportunities these
developments would bring to the area would improve the living
standards of local residents. (Comment: While there is
obviously a great deal of new development in parts of Zone 18
focused on housing and shopping for the middle class, it is
not clear if these gentrification programs will in the end
help the local residents or simply displace them. End

Maquilas in Trouble

9. (SBU) While new shopping centers and upscale housing
complexes provide increased employment opportunities for
local residents, the maquila industry in Zone 18 is in
decline. Poloffs met with AMCIT maquila owner Teddy Lee, who
painted a dim picture of the future for an industry that has
for years provided many of the jobs in Zone 18. He claimed
that there used to be over 500 maquilas in Guatemala and now
there are well under 200. Lee stated that his maquila
employs 350 Zone 18 residents, and has been in operation for

seven years, but he doubted that he would be in business thistime next year. He acknowledged that insecurity ws a
problem, and that several maquilas have been targeted for
extortion by gang members, but stated that this is a
secondary concern when compared to economic factors.

10. (SBU) Lee said that in the last seven years local wages
have continued to increase while the exchange rate has
remained steady or worsened, which has slowly decreased the
sector's competitiveness. He stated that recent U.S.
economic problems have greatly exacerbated his company's
problems. In the last three months he has seen a 30 percent
decrease in new orders from the U.S. along with several
cancellations. He has had to take smaller orders to keep
operating at 100 percent capacity, which has further hurt his
bottom line. As December approaches, Lee has heard that up
to five foreign owners of maquilas are considering leaving
the country to avoid paying the end of year bonus equivalent
to one-month salary to each employee mandated by Guatemalan
law. (Note: It is not uncommon for foreign owners of maquilas
in financial trouble to close the business and leave the
country without paying back wages and bonuses. End Note.)

Public Transport Focal Point of Insecurity

11. (SBU) Insecurity is a hot button issue across Guatemala,
but how people define insecurity changes from area to area.
In more affluent neighborhoods kidnappings, home invasions,
and carjackings are the topics of conversation while in areas
like Zone 18 the focal point is invariably the extortion and
murder of public bus drivers. Nearly every person questioned
in Zone 18 mentioned extortion on public transportation or
the murder of bus drivers as a major concern. Zapeta stated
that this was due to the fact that few Zone 18 residents
owned cars, and most needed to take some form of mass transit
to jobs and markets. The most common form of violence against
the mass transit system is that gangs regularly target bus
drivers who refuse to pay extortion. So far this year 110
bus drivers have been murdered in Guatemala, including a
23-year old bus driver who was killed the day after Poloffs'
trip only a few blocks from the area visited.

12. (SBU) Local residents claim that in addition to these
high-profile killings, robbing of passengers happens daily in
Zone 18. Boteo acknowledged that robbery of bus passengers
was a common occurrence in the area, but that few victims
report the crimes to police. He stated that he does
investigate the killings of bus drivers that occur in his
area, but that unless the criminal is caught in the act the
odds of a successful prosecution are slim. He added that
most of the gang members who actually kill bus drivers are
around 15 years of age, and thus can not be effectively
prosecuted even if they are caught. (Comment: Local
newspapers have taken to updating the running total of bus
drivers killed as a means of highlighting security problems,
but what is more troubling than the high number of bus
drivers killed is that so far this year only one person has
been detained for murdering a bus driver. End Comment.)

13. (SBU) Boteo stated that typically gangs use 15-year old
members or pregnant women to approach bus drivers with
extortion demands, but also co-opt bus drivers into extortion
schemes. Often gangs will recruit a bus driver to collect
the gang's "tax" from other drivers, allowing that bus driver
to keep a percentage of the profits. He stated that the
Qto keep a percentage of the profits. He stated that the
current rate of extortion is around $13 (U.S.) per bus per
day. He added that as most buses must transit several zones,
bus drivers are often forced to pay daily protection money to
several different gangs to operate safely. (For more on
Guatemala's growing problem with extortion of the public
transit sector see reftel.)


14. (SBU) While the general concerns of Zone 18 residents
mirror those of the more affluent sectors of the capital, how
those concerns are defined varies. The overriding concern
with kidnapping and robbery in higher income areas is
replaced by extortion of mass transit in lower income areas,
and economic concerns are defined by the local increase in
the cost of chicken and produce. What was surprising was
that even though the residents of Zone 18 view their concerns
and problems in local terms, they are finely attuned to how
events on the national and international level affect their
standard of living. When asked why business has slowed,
street vendors with little or no apparent education discussed
how the U.S. economic downturn had translated into less
chicken purchased in a Zone 18 market stall. It is unclear

if ongoing development in the area will improve the lot of
Zone 18 residents, or if continued maquila closures coupled
with gentrification will mean a continued loss of jobs and
housing. It is clear that local residents are watching the
Colom administration closely and hoping for positive change.