Guatemalans finally draw the line as tax scandal paves way for change
|
Version 0 of 1. Many people in Guatemala are well aware that the tax scandal and allegations of corruption swirling around some of the country’s politicians – the former president, more than a dozen ministers and deputy ministers, and a number of government officials – are just the tip of the iceberg. Below the surface lie endemic poverty, extreme inequality and gross injustice, Guatemala’s most intractable problems for as long as people can remember. What is new, however, is the sheer number of people that have taken to the streets in recent weeks in peaceful protest. Related: Claudia Paz y Paz ousting puts spotlight on Guatemalan justice system | Nina Lakhani The former president Otto Pérez Molina will stand trial in December together with Roxana Baldetti, the former vice-president, over their alleged involvement in La Línea or “the line”, the name given to a scam in which importers paid bribes to avoid customs duty. The scam is said to have resulted in the loss of tens of millions of dollars of tax revenue, money that could have been invested in education and health. Across Latin America, power dynamics have resulted in huge inequality, with elite groups controlling how much tax is collected and how it is spent. This has led to underfunded public services and high levels of corruption. Guatemala is a particularly glaring example. The country is the most populous in Central America, but the amount of tax collected is particularly low – just 10% of GDP – thanks largely to generous exemptions and tax breaks for businesses and wealthy individuals. With social spending at a level among the lowest in the region, Guatemala has the fourth highest rate of chronic undernutrition in the world: among children under five, it stands at 49.8% according to the World Food Programme. Just over half the population (53%) live in poverty, 13% in extreme poverty. Guatemala’s big problem, of which the alleged corruption at the top is just one symptom, is its political, social and economic system. Structural change is needed, involving major reforms such as increased transparency within the state and changes to the electoral system so that money is not the sole determinant of who wins office and large segments of the population, such as women, young people and indigenous groups, are properly represented. Related: Murder in Guatemala: 'I won't allow my daughter to become another statistic' The mass protests that took place nationwide between April and September, when the president finally resigned, show that people have had enough, and there are indications that politicians, or some of them at least, are listening. Why else, people ask, would Guatemala’s Congress, with the blessing of Pérez Molina’s own party, have stripped him of legal immunity to enable his arrest? The outpouring of dissent is the result of years of work by survivors of abuse, their lawyers and civil society organisations. They have pushed for truth and justice. Equally, the International Commission against Impunity in Guatemala (Cicig), a UN-sponsored agency that has supported investigations by the attorney general’s office into illicit criminal groups and organised crime, has shown that its work is finally bearing fruit. It was Cicig that made public the allegations against Pérez Molina and Baldetti. In the past, Cicig has been less than effective and its existence has come under threat, but its investigative work and technical assistance to Guatemala’s criminal justice system shows that corruption and impunity need no longer be impenetrable problems. At the same time, the work of other organisations investigating the links between Guatemala’s economic and political elites has started to resonate in society. They include the Central American Institute for Fiscal Studies (Icefi), a thinktank that has a particular interest in taxation. Icefi wants the tax system overhauled, and its proposals – which demand transparency and accountability in government spending – as well as its plans on how to deal with the aftermath of the La Línea scandal, show there is an abundance of technical knowledge and capability within the country. The institute has managed to win the respect of Guatemala’s Chamber of Commerce, which now accepts that the corrupt system is not working for anyone – including the business community. At Congcoop, an umbrella body of NGOs and cooperatives, Alejandro Aguirre outlined the choice that Guatemala faces. “We are at a crucial political moment for this country, where there are two options: to continue in the same way, tackling corruption perhaps, but still maintaining the status quo. Or we can make fundamental structural changes to the system to deepen democracy so that the state represents the majority,” he said. “Should ‘rebellion’ prevail, we have the chance to create a better country. This is a struggle for power.” A Guatemala that is egalitarian, accountable, democratic, just and representative of its people is a prize worth pursuing. It would be a mistake for the incoming government to expect an easy ride. With street protests, an emboldened civil society and the courts likely in the months ahead to hear damaging allegations about the behaviour of leading members of the political elite, change is in the air. |