GUATEMALA CITY'S ZONE 18, THE OTHER SIDE OF THE

UNCLAS GUATEMALA 001468 SIPDIS SENSITIVE E.O. 12958: N/A TAGS: ECON SOCI ELAB ENRG PGOV GT SUBJECT: GUATEMALA CITY'S ZONE 18, THE OTHER SIDE OF THE TRACKS REF: GUATEMALA 775 ¶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 -------------- -------------- Q -------------- -------------- ¶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 Comment.) 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.) Comment -------------- ¶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. McFarland