Guatemala’s private sector has hired former New York mayor Rudy Giuliani to come up with a security plan to fight crime and violence, which is generating both skepticism and optimism in the Central American country.

Guatemala is among the top 30 countries worldwide when it comes to violence containment spending, according to the Institute for Economics and Peace. Guatemala reportedly spends $7.1 billion each year, equal to 8.7 percent of the country’s GDP, or $470 for each Guatemalan, placing Guatemala in 28th place (in terms of a country’s violence-containment spending as a percentage of their GDP).

This is the second part of an article which originally appeared in Plaza Publica and was translated, edited, and reprinted with permission. See Spanish original here. See part one of InSight Crime’s translation here. 

Government costs correspond to just 1.9 percent of the GDP (0.23 percent distributed to military forces; 1.01 percent to public security; 0.27 percent to the penitentiary system; and 0.48 percent to the justice system). The rest represents industrial sector costs (3 percent) and personal costs (3.5 percent).

There are more people working in private security than there are police in Guatemala.

According to these statistics, spending on the armed forces and public security (1.24 percent of Guatemala’s GDP) is lower than the amount the industrial or business sector spends on private security, which is 1.77 percent. In addition, there are more people working in private security than there are police. An estimate by the Interior Ministry indicates that there are 45,000 registered security guards (in addition to those who are unregistered or who work in illegal businesses), while the PNC has 31,686 police. The current budget of the Interior Ministry is equal to 6.6 percent of the total budget of the federal government. The Ministry of Defense budget is 3 percent.

In Latin America, Honduras, El Salvador, Venezuela, Colombia, and Mexico spend more than Guatemala, in relation to their respective GDPs, to contain violence. But Guatemala’s homicide rate — the fourth-highest in Latin America, according to a 2013 UN study — exceeds that of Colombia and Mexico.

In one study, the private sector’s economic development think-tank, Fundesa, found that Guatemalan municipalities with the highest levels of economic development have lower rates of poverty, but a larger number of homicides if they lack citizen security strategies. As a result, insecurity limits economic growth. Nevertheless, Emerson Rodriguez, an analyst at the Learning Institute for Sustainable Development (IEPADES), says this is also a question of proportionality, as the more developed municipalities — which may have higher crime rates — also have more people living there. 

Last year, half of Guatemala’s homicides were concentrated in six municipalities that have at least 200,000 residents, according to official statistics. These included Guatemala City, Mixco, and Villa Nueva. In addition, the capital of Guatemala, Guatemala City, appears as the seventh most dangerous city in the world, with 68 homicides per 100,000 inhabitants, behind cities in Mexico, Brazil, Venezuela, and Honduras, according to a 2013 study by the Citizen Council on Public Security and Penal Justice.

Reducing Poverty

Up until last year, there was an almost parallel reduction in Guatemala’s homicide and poverty rate, according to Fundesa. In 2011, the poverty rate reached 53 percent, meaning that one out of every two people in the country was living on $1,200 per year. If this trend should continue, Fundesa estimates that the poverty rate would drop to 45 percent in 2021, and could eventually drop to as low as 35 percent, according to the report. However, Rodriguez believes that less poverty will not necessarily lead to less violence. “There are departments where there is more poverty and no violence, but analysts continue trying to find a relation between the two,” he said.

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“They can bring ten Giulianis, but it won’t work… especially if the complex question of the indigenous population is not understood.”

Nor is a Guatemalan sociologist, Hector Rosada, convinced that what worked in New York could work in Guatemala. “In order for this plan to work, it has to be done in a part of Guatemala, a part controlled by the elite, where there are no disparities in development,” he explains. “Where there is extreme and generational poverty, there is a segment of the population excluded from the capitalist system. They can bring ten Giulianis, but it won’t work… especially if the complex question of the indigenous population is not understood.” The indigenous are among the poorest in Guatemala.

According to Rosada, business leaders see the legitimate indigenous reaction towards aggression from non-indigenous people as a generic opposition to development. “With that vision, [the private sector] wants to form the country, bringing in a ‘gringo’ with a very North American view of North America as a model,” he said.

SEE ALSO: Guatemala News and Profiles

Nevertheless, Fundesa proposed the government elaborate a strategy for each sector, based on the challenges facing each municipality in terms of insecurity, poverty, malnutrition, and other factors. It also called on local authorities to support the process via the Departmental, Municipal, and Communal Councils on Development (Codedes, Comudes, and Cocodes), as well as creating an agenda for human development, as a mechanism for crime prevention.

The Strategy and the Obstacles

Rodriguez fears implementing New York’s “zero tolerance” crime policy in Guatemala would increase the number of arrests and would worsen overcrowding in prisons.

Zapata stated that one of the objectives is “the generation of reliable indicators which can be used to inform decisions,” in order to avoid differences in homicide statistics provided by the National Police, the Attorney General’s Office (known as the Public Ministry), and the National Institute of Forensic Sciences (Inacif), among others. For example, knowing that 42 percent of autopsies are conducted on victims of gunshot wounds, or that 28 percent of crimes occur in June or July, can help authorities to more effectively focus their efforts. Rodriguez said that this process has already begun, and involves a technical committee and an agreement with international backing.

“The first thing to do is establish priorities when there are a lot of things to attend to,” Giuliani said [during Guatemala’s annual national business conference]. “For example, if the majority of extortion cases are linked to the prisons, improving the penitentiary system has to be a priority.”

This is still a work in progress. One source from the National Police’s anti-extortion unit said that 90 percent of extortions are linked to the prisons. This figure is unsurprising, given that the overpopulation in the prison system reduces control over the inmates, or renders it impossible.

Guatemala’s 22 prisons have the capacity to house 6,000 men, but there are 16,000 male inmates (half of which have received convictions). Similarly, there are 1,620 female prisoners (42 percent of which have received convictions) for only 408 spots. In addition, each one of the 1,580 guards per shift is responsible, on average, for 11 inmates. The recommended average is five inmates for each guard. Rodriguez fears implementing New York’s “zero tolerance” crime policy in Guatemala would increase the number of arrests and would worsen overcrowding in prisons. The Woodrow Wilson Center noted the same problem in Mexico’s capital, one year after the implementation of Giuliani’s strategy there.

SEE ALSO: Coverage of Security Policy

One month before Giuliani talked about Guatemala’s penitentiary system, a scandal erupted involving the then-director of the prison system, Edgar Camargo. He was an alleged accomplice in a network of influence-peddling and bribery involving inmate transfers, which included former captain Byron Lima Oliva (who since 2001 has been serving a sentence for complicity in the death of Bishop Juan Gerardi in 1998). The Camargo and Lima case demonstrated that the control of the prisons was in the hands of mafias made up of inmates and corrupt officials.

Giuliani also said that combating corruption and improving accountability are necessary in order to reduce violence, but that increasing security must come first, along with continuing social programs that offer access to health and education, as well as social mobility. “The social programs reduce criminalization and prevent the loss of a generation,” the former New York mayor said.

It remains to be seen how the government will take on specific issues such as drug and arms trafficking by applying Giuliani’s strategy.

But Rodriguez noted that the government is running out of time. “The big question is when are they going to begin with the social programs?” he asked. “The ideal is there be parallel advances in security and the social programs.” According to Fundesa, the private and public sector coalition formed in November 13 and backed by Fundesa — known as the Coalition for Citizen Security — will handle a long-term evaluation program, one that lasts longer than each presidential term.

Nevertheless, it remains to be seen how the government will take on specific issues such as drug and arms trafficking by applying Giuliani’s strategy. The initial Fundesa proposal does not elaborate on this. The designers of the plan must also consider that if they ban all street vendors from working by traffic stops, they will be forced to offer alternative jobs for those who earn income in the informal economy so that they do not turn to crime as a source of income.

Another Fundesa report, citing official statistics, reveals that “the average age of joining a gang is 12 years old, and abandonment by family members is the principal cause.” This statistic correlates with information from the National Police and testimonies from ex-gang members. The report also indicates that, according to Veronica Galicia, the head of a juvenile court, the continuation of specialized programs would permit “the re-socialization of up to 70 percent of youths who commit some type of crime.” Fundesa noted that “the socialization of youth, of anyone who is incarcerated, is one the most forgotten elements of the analysis on citizen security, even though it is a crucial part of avoiding criminal recidivism.”

A Proposal

In the short-term, the new Fundesa plan is to try to recuperate public spaces by reducing risks through the installation of security cameras, lights, and a police watch. In the long-term, the plan would focus on violence prevention and human development, and raising awareness of how crime negatively impacts quality of life in a society.

In 2008, a major business association, known as CACIF, appeared to have started down this path when met with a government body that handled social development, led by the former first lady, Sandra Torres. CACIF wanted to find out what social services were provided to Guatemala’s 45 poorest municipalities, in order to design a public-private partnership to help these communities.

CACIF said that it would support social programs in order to improve the economy of the local communities. Nevertheless, Guatemala’s 2013 fiscal reform [which raised taxes on the wealthy] damaged the CACIF-government relationship, and the project eventually unraveled.

The long-term plan that Fundesa is now proposing has various key elements, such as crime prevention, peaceful resolution to conflicts (a particular challenge given recent protests), research, effective police responses, results-based strategies, modernization of the judicial system, rehabilitation and reintegration, among others. It also proposes that the courts rely on abbreviated procedures to decongest the justice system, and to focus on cases that don’t require lengthy treatment.

Who Will Foot the Bill?

There are no signs that Guatemala will fire government employees or reduce other public expenses the way Giuliani did in New York.

As mayor of New York, Giuliani relied on fiscal exemptions and fiscal discipline that allowed the city to generate funds that reduced insecurity. Fundesa’s Executive Director Juan Carlos Zapata noted that these factors are key in order for a long-term plan to succeed in Guatemala. However, there are no signs that Guatemala will fire government employees or reduce other public expenses the way Giuliani did in New York. 

Zapata said that the necessary funds can come from a reduction in contraband, which robs the Treasury of roughly $800,000 each year, and by combating the informal economy, since a large portion of the population doesn’t pay taxes.

“The discussion has been that we need to work in a public-private alliance, to accompany efforts by the Attorney General’s Office, in creating and strengthening a prosecutor’s office specifically against contraband, with the support of the CICIG,” Zapata said.

Rodriguez argued that job growth doesn’t depend just on less contraband and informal economic activity. “There is going to have to be a strong injection of capital and I don’t think businesses are willing to support that,” Rodriguez said. “They have not reacted positively when there are talks of security taxes.” Zapata did not respond to the question of whether or not the private sector would be willing to pay higher taxes, or a specific security tax.

According to Rosada, the sociologist, the tax issue has been a problem in Guatemala since colonial times. “Those who pay taxes are the poor, and certain middle-class sectors, because the rich don’t pay taxes,” he said. “They have exemptions and subsidies. So, we have two tax systems, when there should only be one. The elite make a good argument: ‘what we pay gets robbed’ and this is true. So why don’t we try to not support the shameless individuals who are governing the country?”  

Data compiled by Fundesa indicates that, although the government spends the equivalent to 1.9 percent of the country’s GDP (compared to 3 percent from the private sector and 3.54 percent in personal costs) on violence containment, these resources could make a difference if they went towards crime prevention. For example, Fundesa proposes that if Guatemala’s homicide rate were reduced 14 percent, the GDP could grow an additional 1 percent each year (according to 2011 World Bank statistics). This small increase would provide more resources for social investment.

The reorientation of spending on violence containment costs would produce greater family incomes and a GDP estimated at $632 in disposable income per capita between 2012 and 2016, according to figures from the World Bank and Fundesa estimates (at current prices).

Extortion is another issue. The Interior Ministry knows that extortion costs transportation businesses $48,000 per year. Zapata noted that there are also reported cases of extortion affecting large businesses. The Interior Ministry affirmed that some families in residential areas pay another $2,600 every year to extortion groups.

“They would have to take out the poor segment of the population for it to work, or bring businesses from outside Guatemala to teach businesses here how to function.”

Fundesa reasoned that “criminal activity and corruption affect the country’s economic well-being, because combating violence costs more than preventing it,” and that a lower number of extortion cases would result in a greater amount of resources for businesses to generate employment.

According to Rosada, this logic presumes there are overflowing profits from businesses in Guatemala. “This is a myth,” he said. “The problem is that the businesses believe that what worked with Giuliani in the US will work here, in order to avoid problems of poverty in Guatemala. But they would have to take out the poor segment of the population for it to work, or bring businesses from outside Guatemala to teach businesses here how to function. Here, there is no unified vision of the country.”

The Time Frames

Giuliani admitted that not everything can be resolved right away. The time frame to achieve results varies; it can be from two, to three, and even up to five years, the former mayor said. “At times it is quick; other times, not so much.” But according to Rosada, what Giuliani and Fundesa are proposing requires a level of political stability that does not exist in Guatemala. It took the country 18 years to return to the homicide rate it had when it signed the peace agreement in 1996, which was 34 murders per 100,000 inhabitants. The cost was the loss of 84,000 lives (according to information from the Interior Ministry), a higher figure than the one projected during the peace agreement.

Nevertheless, Fundesa talks of obtaining results in seven years. If the plan is adapted by the government, it would run through three presidents: the current administration up until 2015, the president who serves from 2016 to 2020, and the first year of the following presidency. In order to achieve this, Zapata said that a close relationship between civil society, the international community, and the press is necessary. The Coalition for Citizen Security, which according to Fundesa began working in December, was created for this purpose.

Rosada, Mack, and Rodriguez see this project as a suit that comes in only one size, difficult to adapt to the particulars of each department in Guatemala. Fundesa and the government hope the plan could be successful in adapting to various circumstances. A plan in which, finally, someone does what has to be done.

*This is the second part of an article which originally appeared in Plaza Publica and was translated and reprinted with permission. See Spanish original here.  See the first part of InSight Crime’s translation here