the mesoamerica project, the energy policy of the guatemalan government and the extractive industry...

8/8/2019 The Mesoamerica Project, the energy policy of the Guatemalan Government and the extractive industry and their li

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THE MESOAMERICA PROJECT AND THE ENERGY POLICY OF THE

GUATEMALAN GOVERNMENT, AND THEIR LINK TO HUMAN RIGHTS

ABUSES

By Christopher Moye


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ContextIn 1954 the Social Democratic elected Guatemalan Government promised land reform to millions of poverty stricken rfarmers. The strategy was to buy land from wealthy land owners like the multinational United Fruit Company, in order to tequitably redistribute it to those in need. This policy resulted in an American backed coup, whose commercial interests and communist sentiments were respectively threatened and sparked by this land redistribution, eloquently described in StepKinzer and Stephen Schlesingers book Bitter Fruit1, thus ushering in an era dominated by military dictatorships and intearmed struggle - the guerillas on one side, the military/oligarchy on the other, with the indigenous communities trapped inmiddle. As a result, more than 200,000 civilians, predominantly indigenous, were killed by the military, pointing to one ofworst cases of Genocide in Central and Latin American history2. Then, after 36 years of internal conflict, both sides signed

Peace Accords in 1996, putting an end to the Cold War logic that had dominated political discourse during that time. The PeAccords did not stipulate that military officers were to be brought to justice, with many of the higher strata then entering intocivil political arena through the formation of political parties, including the General Rios Montt, famous for his scorched ea

policy of 19823. The failure to properly implement the Peace Accords was continued by the policies of successive governmeall of which ushered in the era of privatization, seen most flagrantly under the leadership of the 1996 President Alvaro Arzuhis United Nations report, Roman Krznaric claims that as a result Guatemala suffered. Firstly income disparities increased1989 the poorest 20% of the population received 2.7% of national income, a figure which fell to 1.7% by 2002. In contras1989 the richest 20% of the population received 62.7% of national income, increasing to 64.0% in 2002. 4 Rates of povfailed to improve: In 2000 56% of the population (some 6.4m people) lived in poverty, with around 16% living in e xtrpoverty. The situation worsened in relation to 1996, with extreme poverty rising to 22% in 2002.5 Currently, an estim2% of the population own 72% of agricultural land, which is used mostly for plantations of sugar, coffee, bananas and rubbeaddition to cattle ranches. Their properties average around 200 hectares in size (although some exceed 900 hectares)

dominate fertile regions such as the Southern Coast.

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Krznaric continues: More recent estimates are based on surveyparticular regions but suggest that land inequalities have further increased. For instance, in 1979 22% of rural heads of housewere landless, while in 1998 this figure was estimated to have risen to 33%. In the early 1990s around half of agricultural l(belonging mostly to large landowners) was thought to be unused or uncultivated. The indigenous population face particproblems of land access. World Bank analysis demonstrated that individuals in rural areas in the lowest income rangesowners of the smallest parcels, but within each income range, the indigenous have the greatest probability of having the lland.7 Finally, in 2007 Guatemala voted in the Social Democrat Alvaro Colom in opposition to the rightwing military candiOtto Perez Molina. It was seen as a vital day for the indigenous population, whose rural support had ensured Colom his victColom had acknowledged the historic oppression they had suffered and had promised to address their economic, social cultural needs with a new social democratic paradigm of economic development not seen since 1954.8 Since then, aggressagainst human rights defenders have soared9, crime figures have risen to unprecedented levels (some 6300 Guatemalans wmurdered in 2008, as many as in Mexico, a country with nine times the population) 10, impunity has worsened11 and there

been a proliferation of mining permits for the exploitation of resources found on indigenous ground (see Annex) as well aincrease in grants for the construction of hydroelectric plants12; many of these potentially affecting the land of indigencommunities who rely on subsistence agriculture for survival. In addition, military bases have been placed in these stratlocations to safeguard them, indicating the extent to which the current government distrusts and fears local commuopposition to the planned projects and harping back to an earlier age of military dominance.13 In this sense history is repeaitself, adapting to a modern context, where Guatemala is analogous to a Coliseum constructed over the bodies of million

Kinzer, Stephen; Schlesinger, Stephen; Bitter Fruit; The Story of the American Backed Coup in Guatemala,ttp://www.hup.harvard.edu/catalog/SCHBIR.html, 1982.

United Nations Refugee Agency,http://www.unhcr.org/refworld/country,,MARP,,GTM,4562d94e2,469f3a874a,0.html, 2003.Aaronovitch, David; The terrible legacy of the Reagan years, The Guardian, June 8, 2004.United Nations Systems in Guatemala (2003) Guatemala: Una Agenda Para El Desarrollo Humano (Guatemala City). Human Development

Report, 229, 2003,United Nations Systems in Guatemala 2003, 228.World Bank (2003) Poverty in Guatemala, Report No. 24221-GU, February 20, 2003, World Bank (Washington).Krznaric, Roman; The Limits on Pro-Poor Agricultural Trade in Guatemala: Land, Labor and Political Power; United Nations Development

Program, Human Development Report, page 5, 2005.BBC news,http://news.bbc.co.uk/1/hi/world/americas/7081312.stm, November 2007Organization for the Protection of Human Rights Defenders (UDEFEGUA), http://udefegua.org/

0 International Crisis Group, on evidence to the House Committee on Foreign Affairs Subcommittee on the Western Hemisphere., Washington,DC,En cach,9 June 2009

1 International Crisis Group, on evidence to the House Committee on Foreign Affairs Subcommittee on the Western Hemisphere., Washington,DC,En cach,9 June 2009

2 Solano, Luis: El negocio de la electricidad: transformacin de la matriz energtica y sus impactos,El ObservadorNo 16, diciembre 2008nero 2009, pagina 33.3 Centre de Estudios de Guatemala (CEG),http://www.ceg.org.gt/fotos/Situacionseguridadjusticianov09.pdf, page 19, 2009
http://www.hup.harvard.edu/catalog/SCHBIR.htmlhttp://www.hup.harvard.edu/catalog/SCHBIR.htmlhttp://www.unhcr.org/refworld/country,,MARP,,GTM,4562d94e2,469f3a874a,0.htmlhttp://www.unhcr.org/refworld/country,,MARP,,GTM,4562d94e2,469f3a874a,0.htmlhttp://www.unhcr.org/refworld/country,,MARP,,GTM,4562d94e2,469f3a874a,0.htmlhttp://news.bbc.co.uk/1/hi/world/americas/7081312.stmhttp://news.bbc.co.uk/1/hi/world/americas/7081312.stmhttp://news.bbc.co.uk/1/hi/world/americas/7081312.stmhttp://udefegua.org/http://udefegua.org/http://udefegua.org/http://209.85.129.132/search?q=cache:KBnWrf1AZvgJ:www.crisisgroup.org/home/index.cfm%3Fid%3D6175%2520+some+6300+Guatemalans+were+murdered+in+2008,+as+many+as+in+Mexico,+a+country+with+nine+times+the+population+crisis&cd=1&hl=es&ct=clnk&client=firefox-ahttp://209.85.129.132/search?q=cache:KBnWrf1AZvgJ:www.crisisgroup.org/home/index.cfm%3Fid%3D6175%2520+some+6300+Guatemalans+were+murdered+in+2008,+as+many+as+in+Mexico,+a+country+with+nine+times+the+population+crisis&cd=1&hl=es&ct=clnk&client=firefox-ahttp://209.85.129.132/search?q=cache:KBnWrf1AZvgJ:www.crisisgroup.org/home/index.cfm%3Fid%3D6175%2520+some+6300+Guatemalans+were+murdered+in+2008,+as+many+as+in+Mexico,+a+country+with+nine+times+the+population+crisis&cd=1&hl=es&ct=clnk&client=firefox-ahttp://209.85.129.132/search?q=cache:KBnWrf1AZvgJ:www.crisisgroup.org/home/index.cfm%3Fid%3D6175%2520+some+6300+Guatemalans+were+murdered+in+2008,+as+many+as+in+Mexico,+a+country+with+nine+times+the+population+crisis&cd=1&hl=es&ct=clnk&client=firefox-ahttp://209.85.129.132/search?q=cache:KBnWrf1AZvgJ:www.crisisgroup.org/home/index.cfm%3Fid%3D6175%2520+some+6300+Guatemalans+were+murdered+in+2008,+as+many+as+in+Mexico,+a+country+with+nine+times+the+population+crisis&cd=1&hl=es&ct=clnk&client=firefox-ahttp://209.85.129.132/search?q=cache:KBnWrf1AZvgJ:www.crisisgroup.org/home/index.cfm%3Fid%3D6175%2520+some+6300+Guatemalans+were+murdered+in+2008,+as+many+as+in+Mexico,+a+country+with+nine+times+the+population+crisis&cd=1&hl=es&ct=clnk&client=firefox-ahttp://www.ceg.org.gt/fotos/Situacionseguridadjusticianov09.pdfhttp://www.ceg.org.gt/fotos/Situacionseguridadjusticianov09.pdfhttp://www.ceg.org.gt/fotos/Situacionseguridadjusticianov09.pdfhttp://www.ceg.org.gt/fotos/Situacionseguridadjusticianov09.pdfhttp://209.85.129.132/search?q=cache:KBnWrf1AZvgJ:www.crisisgroup.org/home/index.cfm%3Fid%3D6175%2520+some+6300+Guatemalans+were+murdered+in+2008,+as+many+as+in+Mexico,+a+country+with+nine+times+the+population+crisis&cd=1&hl=es&ct=clnk&client=firefox-ahttp://209.85.129.132/search?q=cache:KBnWrf1AZvgJ:www.crisisgroup.org/home/index.cfm%3Fid%3D6175%2520+some+6300+Guatemalans+were+murdered+in+2008,+as+many+as+in+Mexico,+a+country+with+nine+times+the+population+crisis&cd=1&hl=es&ct=clnk&client=firefox-ahttp://udefegua.org/http://news.bbc.co.uk/1/hi/world/americas/7081312.stmhttp://www.unhcr.org/refworld/country,,MARP,,GTM,4562d94e2,469f3a874a,0.htmlhttp://www.hup.harvard.edu/catalog/SCHBIR.html


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indigenous peoples and then used as a ring within which different forms of imposed power - economic, military, oligarchic,political - compete for supremacy. The architecture of this metaphorical Coliseum refers to the legacy of western influeproviding the backdrop to the gladiatorial struggles that these different forms of imposed power play out between themselvesagainst others, creating complicated internal divisions from which to direct the external struggle. The article seeks to answfundamental question through the prism of a specific development project: have the aforementioned sectors of imposed pobeen radically altered relative to the power of indigenous communities so that these have succeeded in diminishing the authof its competitors, or does the new, supposedly benevolent, economic paradigm of the current Government genuinely reflecinterests of indigenous communities?

Introduction

The development project referred to above is the Xalal project; a business venture promoted by a confluence of internatioand national interests (both political and economic) and by the Guatemalan Government through the regional MesoameProject agreement. It has as its aim the construction of a hydroelectric plant in between the Guatemalan Departments (like staof Quich and Alta Verapaz, thus responding to the energy needs that those same interests define as crucial for the developmof Central America. The article begins by describing the type of development promoted by international financial institutithrough the regional Mesoamerica Project in Central America, and how this relates to the regional energy sector developmpromoted by the Guatemalan Government as well as what mechanisms of indigenous participation are involved in this Projecthen seeks to demonstrate how this international financial investment is being used primarily to attract multinational compafrom the extractive sector and from the energy sector, through partnerships with the elite wealthy sector of Guatemala, wincentives provided by the Mesoamerica Project, and all at the expense of local communities whose interests are considered as a by-product of this convergence of economic power. Subsequently, the article focuses on the Xalal Hydroelectric Pro(XHP) as a specific example of this convergence of economic power, as incentivized by the Mesoamerica Project, and how

has failed to incorporate the effective participation of civil society in such an initiative, despite mechanisms of participation bput in place. The article concludes with an analysis of how this development, suffused with neo-liberal ideology and promfrom above, comes into conflict with indigenous conceptions of development promoted from the grassroots level, demonstrating that a profound debate on what sort of development should be had in Guatemala was never concluded tosatisfaction of those likely to be directly affected by such development: namely the indigenous population. While 1954 displayed the power of American commercial and governmental interests over Guatemala, 2010 demonstrates the extent to wthe influence of external power has proliferated and diversified to include other commercial and political interests, whilst enacting the same principle that underlined the power struggles of the past: that those with economic, political and milipower can secure their interests at whatever cost to those who do not have such power, and who are only marginally includethe decisions that influence the direction that that power will take.

DEVELOPMENT FROM ABOVE

The Mesoamerica Project and its international backersThe Mesoamerica Project is an agreement signed by the Central American countries, Colombia and Mexico with the aimcreating joint infrastructure projects, schemes of regional integration and other ventures across a range of economically acareas in order to entice foreign investment as a means to attain globally competitive development. The Mesoamerica Prodefines its concept of development through its Mission and Vision statements Mission: to contribute toward sustaineconomic growth and to the preservation of the environment and of the natural resources of the region, coordinating accumulating efforts between the Mexican government and the Central American countries in a climate of respect sovereignty, while its vision for 2011 and 2015 is the successful increase of the productive and competitive capacities opeople and economic organizations, as well as figuring in global markets with a collection of products and service

respectively. The implementation of these ends is done through the structural organization of the Mesoamerica Project, whiccomposed of the Summit of Heads of State, the Executive Committee, the Directing Committee and the National Offices. Executive Committee is comprised of eight committee members designated by each President to pro mote and coordinate

work of the Project in their respective countries. Each of the committee members has been assigned the responsibility of leaone initiative15 whose development is deemed crucial for the enticement of foreign investment to that area, as seen below:

BelizeClimate ChangeColombiaTourismCosta RicaTransport

14 Proyecto Mesoamrica,http://www.proyectomesoamerica.org/, 2009.15

Proyecto Mesoamrica, Organigrama del Proyecto Mesoamrica, http://www.proyectomesoamerica.org/main-pages/organigrama.htm, 2009
http://www.proyectomesoamerica.org/http://www.proyectomesoamerica.org/http://www.proyectomesoamerica.org/http://www.proyectomesoamerica.org/main-pages/organigrama.htmhttp://www.proyectomesoamerica.org/main-pages/organigrama.htmhttp://www.proyectomesoamerica.org/main-pages/organigrama.htmhttp://www.proyectomesoamerica.org/main-pages/organigrama.htmhttp://www.proyectomesoamerica.org/


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El SalvadorIntegration of the Telecommunication ServicesGuatemalaEnergyHondurasFacilitation of Commercial Exchange and CompetitionMxicoHuman DevelopmentNicaraguaSustainable DevelopmentPanamPrevention and Mitigation of Natural Disasters16

The financing of each initiative, detailed in the graph provided below, gives some indication of the development priorities the Project Mesoamerica wants to promote through the enticement of foreign investment:

Plan Puebla Panam: Recipe for Development or Disaster17

Notice how Transport, Energy and Trade Facilitation are prioritized over Human and Sustainable Development, a point I sreturn to later. The investment and financing for each of these initiatives comes from a diversity of sources. According to a sdone by InterAction, an international NGO composed of 180 member organizations worldwide, the Mesoamerica Projefinanced by regional and international interests, with a substantial portion of its funds coming from the member countries 21% from the Inter-American Development Bank (IDB)18, which makes it the single largest investor of the Project, w

another sizeable portion comes from the private sector, meaning that investment interests that do not represent the voters ofregion exceed the financial input of Central American governments, who in theory represent their voters, as one can see below

16 Proyecto Mesoamrica, Organigrama del Proyecto Mesoamrica, http://www.proyectomesoamerica.org/main-pages/organigrama.htm, 200917 OpCit, McElhinny, page 518 McElhinny, Vince and Nickinson, Seth; InterAction; "Plan Puebla Panam: Recipe for Development or Disaster? http://bic.caudillweb.com/en/Project.ResourcePlan Puebla Panama: Recipe for Development or Disaster, 2005, page 1719 Ibid, McElhinny, page 16
http://www.proyectomesoamerica.org/main-pages/organigrama.htmhttp://www.proyectomesoamerica.org/main-pages/organigrama.htmhttp://www.proyectomesoamerica.org/main-pages/organigrama.htmhttp://bic.caudillweb.com/en/Project.Resources.16.aspxhttp://bic.caudillweb.com/en/Project.Resources.16.aspxhttp://bic.caudillweb.com/proxy/Document.9840.aspxhttp://bic.caudillweb.com/proxy/Document.9840.aspxhttp://bic.caudillweb.com/proxy/Document.9840.aspxhttp://bic.caudillweb.com/en/Project.Resources.16.aspxhttp://www.proyectomesoamerica.org/main-pages/organigrama.htm


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The power of representative democracy at the Mesoamerica bargaining table is thus inferior to any possible union of privateforeign interest, compromising the decisions that can be made in representation of ordinary voting Guatemalans and emphasithe interests of those who hold investment capital. The fact that the IDB is the single largest investor is also significant, gthat the borrowers who finance the IDB are the member states of the European Union, the USA, Canada, Japan, Israel, CroSwitzerland, China and South Korea. The USA has the largest single voting power within the IDB, with 30% of the vote2

accordance with the size of its investment, as well as holding a veto power in the Board of Governors over all decisions relate to capital increases and Funds of Special Operations (FSOs), due to the 75% majority required to pass such resolutioIn addition, according to a study done by the Political Science Department of Nevada University, the USA also hsubstantially more influence in the IDBs Boardof Executive Directors than its voting weight suggests22 and is thus ab

dictate IDB policy on major issues and lending to particular countries.

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The fact that the World Bank (WB) is a contributthe Mesoamerica Project also adds weight to the influence of the USA on how funds are used for development in the region,to the fact that the USA holds 16% of the vote over WB constitutional issues24 when an 85% majority is required to pass chanto that constitution, allowing the US to influence the philosophy that underpins the use of WB funds. This provides us with sindication as to what sectors have more power on the bargaining table of the Mesoamerica Project, in turn allowing us to beunderstand why certain initiatives are prioritized over others. Thus international governmental interests, and in particularUSA, allied with international financial institutions and private investment interests (whose names have not been disclosed byMesoamerica Project) have considerable say over the type of development promoted by the Mesoamerica Project, implyinideological premise that is shared between these political and economic interests and from which development in the CenAmerican region springs. What is this ideology?

Neo-liberalism, the Central American Free Trade Agreement and the Mesoamerica ProjectInterAction defines this political affiliation between member states of the Mesoamerica Project and the international interests

help fund it as a neo-liberal reform agenda,25whilst David Harvey, a New York University Professor, in his work A BHistory of Neo-liberalism defines this philosophy as the doctrine that market exchange is an ethic in itself, capable of actina guide for all human action, whose implementation has depended upon a reconstitution of state powers such that privatizafinance, and market processes are emphasized while state interventions in the economy are minimized and the obligationthe state to provide for the welfare of its ci tizens are diminished.26 The link between this definition of neo-liberal philosoand the Mesoamerica Project is then further explored by InterAction when analyzing proof that the Project is a function ofU.S.-Central America Free Trade Agreement (CAFTA): Many of the proposed investments share a common parlance withtrade liberalization discourse, which refers to them as trade facilitation or more recently, as competitiveness enhancing. Indthere is an intimate complementarity between the PPP (Mesoamerica Project) and Free Trade Agreement agendas. Specificain both cases the ultimate goal is to lower the barriers to the free flow of goods and services within and through Mesoamericsome cases, PPP initiatives that entail policy reforms advance important concessions in trade liberalization that would otherhave to be negotiated at the formal bargaining table (i.e. intellectual property rules, deregulation, privatization, and the Singa

issues).27 This link is strengthened by the fact that in the 48th point of the statute Declaration of the 10th Summit of the TuVillahermosa, Mexico, Dialogue and Agreement Mechanism of the Mesoamerica Project, a specific reference is made toCAFTA agreement, where the signatories confirm the importance of the CAFTA agreement on the region, for which instructed that the Ministers in charge of foreign trade follow up the fulfillment of the established agreements and the optiadministration of those same instruments with the purpose of maximizing its use.28 Remember, as seen in the above graph, Human and Sustainable Development are placed below Transport, Energy and Trade Facilitation needs, thus acceding toafore defined neo-liberal philosophy that prioritizes finance and market processes above state oriented welfare programanother indication of how the dominant private interests that fund the project set the agenda. Four years after the ratificatioGuatemala of DR-CAFTA, the impact on the economy of the country has been ambiguous, particularly for the rural secAccording to a study by the Coordinator of NGOs and Cooperatives (CONGCOOP) in Guatemala the trade deficit with the Ureached a negative balance of 406 million dollars in 2006, and, more generally, the treaty has caused imports to grow at

20 Inter-American Development Bank (IDB),http://www.iadb.org/aboutus/IV/go_voting.cfm?language=English, 200921 Strand, Jonathan, R; Department of Political Science University of Nevada, Las Vegas; Measuring voting power in an international institution:the United States and the Inter-American Development Bank, http://www.springerlink.com/content/m9lb3fbbpcjfr3nr/fulltext.pdf, 2003, page 22.22 Ibid, Strand, page 21.23 Ibid, Strand, page 21.24 Wade, Robert ;Review of International Political Economy 9 (2): 215243; "U.S. hegemony and the World Bank: the fight over people andideas".. doi:10.1080/09692290110126092 , (2002).25 Op. Cit, McElhinny, page 49.26 Harvey, David; A Brief History of Neo-liberalism; Oxford University Press, USA, 2005, description.27 Op. Cit, McElhinny, page 8.28 Proyecto Mesoamrica,Declaracin de la X Cumbre del Mecanismo de Dilogo y Concertacin de Tuxtla, Villahermosa, Mxico, 28 de Junio2008, 2008.
http://www.iadb.org/aboutus/IV/go_voting.cfm?language=Englishhttp://www.iadb.org/aboutus/IV/go_voting.cfm?language=Englishhttp://www.iadb.org/aboutus/IV/go_voting.cfm?language=Englishhttp://www.springerlink.com/content/m9lb3fbbpcjfr3nr/fulltext.pdfhttp://www.springerlink.com/content/m9lb3fbbpcjfr3nr/fulltext.pdfhttp://www.springerlink.com/content/m9lb3fbbpcjfr3nr/fulltext.pdfhttp://en.wikipedia.org/wiki/Digital_object_identifierhttp://en.wikipedia.org/wiki/Digital_object_identifierhttp://dx.doi.org/10.1080%2F09692290110126092http://dx.doi.org/10.1080%2F09692290110126092http://dx.doi.org/10.1080%2F09692290110126092http://portal2.sre.gob.mx/ppp/dmdocuments/Declaracion_Villahermosa.pdfhttp://portal2.sre.gob.mx/ppp/dmdocuments/Declaracion_Villahermosa.pdfhttp://portal2.sre.gob.mx/ppp/dmdocuments/Declaracion_Villahermosa.pdfhttp://portal2.sre.gob.mx/ppp/dmdocuments/Declaracion_Villahermosa.pdfhttp://portal2.sre.gob.mx/ppp/dmdocuments/Declaracion_Villahermosa.pdfhttp://portal2.sre.gob.mx/ppp/dmdocuments/Declaracion_Villahermosa.pdfhttp://dx.doi.org/10.1080%2F09692290110126092http://en.wikipedia.org/wiki/Digital_object_identifierhttp://www.springerlink.com/content/m9lb3fbbpcjfr3nr/fulltext.pdfhttp://www.iadb.org/aboutus/IV/go_voting.cfm?language=English


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expense of exports. The country also lost food security as a result of the liberalization of tariffs for staple grains, imposed by CAFTA and the conventions of the World Trade Organization. According to the calculations of the Institute of Agrarian Rural Studies (IDEAR referenced in the report), in the last year 90% and 70% of the national consumption of rice and mrespectively, came from imports, while almost 100% of wheat flour is now imported from overseas. These crops wtraditionally grown within Guatemala largely by indigenous subsistence farmers, who now struggle to make a living becausefall in sales, leading to poverty and destitution and to an increasing lack of resources that they can use to respond to emergenThis fact can be confirmed by the recent report of the National Coordinator for the Reduction of Disasters (CONRED), wcalculated that 2628 families in the Department of Chiquimula for example, had lost 762,729 Quetzales worth of white maiza consequence of drought (around $95,000)29, accounting for a 50% reduction in the ordinary production of that crop30

resulting in 43% of children under the age of five affected by malnutrition31

. Sales of staple food lead subistence farmers to a surplus of capital, enabling them to react to crisis, and this growing importation of staple food has affected precisely ability. Paradoxically, the surge in the importation of staple foods in Guatemala has not led to significantly lower pricesconsumers, as confirmed by the UN's World Food Programme's analysis of staple food prices of 2009 and covering five yewhere they state that only Colombia, Guatemala, Haiti, Nicaragua and Peru are still experiencing prices above their long t

averages.32 Thus the argument that trade liberalisation would lead to a decrease in prices, increasing consumption of stfoods and decreasing poverty is not borne out by the evidence, and without financial reserves to help them in times of crsubsistence farmers, predominantly indigenous, will suffer more33. Faced with this, CONGCOOP considers it essential that bfoodstuffs should be considered as public necessities, not subject to the fluctuations of the market, in order to avoid vulnerabto the impact of the world financial crisis and to avoid the further endangerment of the populations right to food. 34 The factsuch considerations were not properly evaluated in the negotiations is a measure of the attitudes that prevail with regard toindigenous communities in Guatemala. Using DR-CAFTA as a model of development for the Mesoamerica Project thus exp

the scope and implementation of the neo-liberal principles defined abovewith serious repercussions for poor Guatemalans.

Labor standards and DR-CAFTA: a pre-cursor to the likely effects of the Mesoamerica ProjectIn addition to the aforementioned negative economic effects, this continued neo-liberal agenda has potentially gconsequences for Guatemalan workers, because we have already seen the penalties incurred by the Guatemalan labor force duDR-CAFTAs shunning of established trade rules usually mediated through the World Trade Organization. An example ofcan be demonstrated by the omission of the Generalized System of Preferences (GPS) in the DR-CAFTA agreemsummarized in a report by the US Labor Education in the Americas Project: Under GSP, duty -free trade benefits providecountries are conditioned on countries taking steps to improve internationally-recognized worker rights. Failure to take stepsthe potential to threaten trade benefits for exporters. Under CAFTA, countries are only required to enforce their current lalaws. Failure to do so can lead only to a fine against the violating government, a fine which is then returned to the governmeimprove enforcement.35 The fears that labor rights would not be met under the CAFTA agreement have since materialized

the influential Council on Hemispheric Affairs has pointed out:

Nothing gained on trade, agriculture loses out, whilst idirectly contributing to the daily strife facing Central American workers by promoting an economic arrangement that dependlow wages and poor labor standards, without ensuring reliable protections for workers rights whilst also creating a race to

bottom, with countries all over the world striving to offer the cheapest labor force, and the least protections against corpoexploitation of workers, communities, and the environment.36 All of this is confirmed in detail by the report of the InternatiLabor Organizations mission to Guatemala in February 2009, where they signaled their concern regarding the general lac

independence of the judiciary and of government bodies when dealing with labor issues, as well as the appalling record on lrights of the Guatemalan Government37. And indeed the civil society groups who have suffered the most persecution over thefive years in Guatemala have been trade unionists. According to a report posted by Peace Brigades International: Duringpast five years trade unions have experienced constant persecution and acts of violence. More than forty union workers w

29 National Coordinator for the Reduction of Disasters (CONRED), Communities of the dry corridor, Guatemala, 2009.30 El Peridico,Inseguridad Alimentaria , Guatemala, 01.09.2009.31 Syria Draught Response, Response, Food Security & Acute Malnutrition Appeal, March 2010.http://redhum.org/emergencias2.php?emergencia=32132 United Nations World Food Programme, Trends in Staple Food Prices in Selected Vulnerable Countries, Issue No 5, October 200933 United Nations Office of the High Commissioner for Human Rights (OHCHR) Baja Verapaz, Chiquimula, Izabal, Jalapa, Jutiapa, El Progreso,South of El Quich and Zacapa make up the dry corridor (OHCHR), Report of the OHCHR office for Guatemala, 2009.34 Ozaeta, Juan Pablo; REPORTE TRIMESTRAL Cuatro aos de ratificacin del TLC-CAUSA, frente a un modelo econmico colapsado;Coordinadora de ONGs y Cooperativas (CONGCOOP);http://www.congcoop.org.gt/design/content-upload/REPORTE%20CAFTA.pdf35 US Labor Education in the Americas Project, Worker Rights Under the New Guatemalan Government,http://www.usleap.org/files/USLEAPReportback2008.pdf, August 2008, page 2.36 Council on Hemispheric Affairs,Dealing with a Bad Deal: Two Years of DR-CAFTA in Central America,http://www.coha.org/dealing-with-a-bad-deal-two-years-of-dr-cafta-in-central-america/, Nov 2008.37 International Trade Union Conference,http://www.ituc-csi.org/guatemala-a-dysfunctional-labour.html, 2009.
http://redhum.org/emergencias2.php?emergencia=321http://redhum.org/emergencias2.php?emergencia=321http://www.congcoop.org.gt/design/content-upload/REPORTE%20CAFTA.pdfhttp://www.congcoop.org.gt/design/content-upload/REPORTE%20CAFTA.pdfhttp://www.congcoop.org.gt/design/content-upload/REPORTE%20CAFTA.pdfhttp://www.usleap.org/files/USLEAPReportback2008.pdfhttp://www.usleap.org/files/USLEAPReportback2008.pdfhttp://www.coha.org/dealing-with-a-bad-deal-two-years-of-dr-cafta-in-central-america/http://www.coha.org/dealing-with-a-bad-deal-two-years-of-dr-cafta-in-central-america/http://www.coha.org/dealing-with-a-bad-deal-two-years-of-dr-cafta-in-central-america/http://www.coha.org/dealing-with-a-bad-deal-two-years-of-dr-cafta-in-central-america/http://www.ituc-csi.org/guatemala-a-dysfunctional-labour.htmlhttp://www.ituc-csi.org/guatemala-a-dysfunctional-labour.htmlhttp://www.ituc-csi.org/guatemala-a-dysfunctional-labour.htmlhttp://www.ituc-csi.org/guatemala-a-dysfunctional-labour.htmlhttp://www.coha.org/dealing-with-a-bad-deal-two-years-of-dr-cafta-in-central-america/http://www.coha.org/dealing-with-a-bad-deal-two-years-of-dr-cafta-in-central-america/http://www.usleap.org/files/USLEAPReportback2008.pdfhttp://www.congcoop.org.gt/design/content-upload/REPORTE%20CAFTA.pdfhttp://redhum.org/emergencias2.php?emergencia=321


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killed between 2005 and 2010 in Guatemala. According to statistics from the Interior Ministry, theNational Civilian Policethe Guatemalan Indigenous and Campesino Trade Union Movement (MSICG), 2009 was the worst year with 16 union memkilled. During the same period (2005-2010), 132 union members suffered threats and attacks, with themajority (76 cases) taking place in 2009. According to the Committee for Trade Union Freedom, 93% of the workers killed were in conflict ducomplaints they had made relating to labor rights or access to natural resources. The same source indicates thatnine of everworkers killed were members of MSICG. As a result of the violence experienced in recent years, nearly 200 union membercurrently in exile.38 The International Trade Union Confederation has also written a report on labor rights in Guatemala in wthey claim that the country has one of the worst records in the world relative to this issue 39. All of the above is happening the direct knowledge of the United States, whose Trade Representative, Ambassador Ron Kirk, has announced that the US

file a case against Guatemala for labor rights violations40

.We will see if this complaint leads to improved labor standards.Mesoamerica Project, suffused with the same neo-liberal ideology that drove DR-CAFTA, thus potentially bypasses and furcomplicates the ability to lobby for greater labor rights due to the various mechanisms that powerful economic agents can nuse to trade in the region freed of established ethical codes. These problems occur in a country that has a 10.4% tax to Gratio41, where the UK, for example, has a 37.3% ratio42, acceding to the neo-liberal idea of a reduced state whose only functioto incentivize investment and to subsidize economic growth for powerful economic agents without properly taking into accthe social problems derived from the implementation of such a strategy, and highlighting the extent to which neo-liberal ideo(as defined above) has trodden over alternative conceptions of development (indigenous subsistence farming) and of how itdefined the Guatemalan political and economic landscape. There is good reason for this: according to the US State DepartmeGuatemalan 2009 Investment Climate Statement the major Guatemalan incentive program, the Law for the Promotion Development of Export Activities and Drawback, is aimed mainly at "maquiladoras" mostly garment manufacturingassembly operations - in which over half of production inputs/components are imported and the completed products are expo

Investors in this sector are granted a 10-year exemption from both income taxes and the Solidarity Tax, Guatemalas tempoalternative minimum tax. Additional incentives include an exemption of duties and value-added taxes on imported machinand a one-year suspension (extendable to a second year) of the same duties and taxes on imports of production inputs packing material. Taxes are waived when the goods are re-exported. The waiver for customs duties, value added tax and inctax was scheduled to expire on December 31, 2007, with a phase out period of two years. However, in July 2007, the Wadopted a decision that allows the WTO Subsidies Committee to continue to grant annual extensions of the transition perioexport subsidies to Guatemala and other countries until the end of 2013, with a final phase out period of two years. 43 It sethat if Guatemala is to be investor friendly and competitive, low tax receipts are seen to be a necessity, never mind the extewhich this contributes toward the harsh poverty figures alluded to above. In sum, it is through the aforementioned responsibilthat the Mesoamerica Project thus influences development in the signatory countries, always underpinned by the influencinternational private and state orientated investments and all bound by a common, neo-liberal philosophy, diverging only withe confines that this philosophy allows, the implementation of which has thus far not helped resolve the major social

economic problems referred to earlier on and which the majority of Guatemalans face on a daily basis. How can civil socinfluence the development proposals that stem from the interests surrounding the Mesoamerica Project so as to improve tbargaining power, as well as their quality of life, and so as to protect them from possible future harmful effects?

Mechanisms of civil society participation in the development promoted by the international interests and by Mesoamerica ProjectOne of the functions of the Executive Committee of the Mesoame rica Project is to establish the pertinent alliances withprivate sector, academics and civil society, in accordance with its objectives .44 The participation of civil society inMesoamerica Project is assured through a Consulting Council that should be composed of the interested entities ofConsulting Council of the Central American Integration System (CC SICA) and by all those organizations that the ExecuCommittee feels should participate in the Council.45 The CC SICA was initially formed from the signatory countries ofCentral American Integration System (SICA), another regional institution set up to facilitate coordination between mem

38 Peace Brigades International Guatemala, Monthly Information Package, April 2010,http://www.pbi-guatemala.org/fileadmin/user_files/projects/guatemala/files/english/MIP_No._79.pdf, pages 1-2.39 International Trade Union Confederation, Annual Survey of violations of trade union rights, 2009, http://survey09.ituc-csi.org/survey.php?IDContinent=2&IDCountry=GTM&Lang=EN40 Legal Brief, US files labour rights case against Guatemala,Tue 03 August 2010,www.legalbrief.co.za/article.php?story=2010080308485943741 U.S. Department of State, Background Note: Guatemala, http://www.state.gov/r/pa/ei/bgn/2045.htm42 Adam, Stuart; Browne, James; A Survey of UK tax System; Institute for Fiscal Studies,http://www.ifs.org.uk/bns/bn09.pdf, April 2009, page 343 US State Department, 2009 Investment Climate StatementGuatemala,http://www.state.gov/e/eeb/rls/othr/ics/2009/117436.htm, Feb 200944 ProyectoMesoamrica, Funciones y Estructura del Proyecto Mesoamrica,http://portal2.sre.gob.mx/mesoamerica/index.php?option=com_content&task=view&id=6&Itemid=20, 200945 Proyecto Mesoamrica, VI CUMBRE DEL MECANISMO DE DIALGO Y CONCERTACIN DE TUXTLA,ACTA QUE INSTITUCIONALIZA ELMECANISMO DEL PLAN PUEBLA - PANAM, GRUPO TCNICO INTERINSTITUCIONAL DEL PLAN PUEBLAPANAM, 25-03-04, Decimo Sexta pagina
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states, and has now been transposed onto the Mesoamerica Project.46 It is composed of various sectors of civil society fromsignatory countries of the Mesoamerica Project here listed: Organizations of Producers and Services, Organizations of the LSector, Chambers of Commerce, Academic Sectors, Community Organizations and Organizations of the Decentralized SeThe indigenous communities of Central America, for example, are represented within the sector denoted as CommuOrganizations through the membership of the Indigenous Council of Central America (CICA) in the CC SICA. Each sectorits own representatives within what are called national chapters. The national chapter of community organizations ofGuatemalan CC SICA, for example, is comprised of 32 representatives from civil society, including well known natiindigenous movements like Waqib Kej and national unions like the Central Workers Union of Guatemala (CGTG).47 In ordparticipate in the CC SICA and therefore in the discussions of the Mesoamerica Project, civil society must fulfill the follow

criteria:Be an organization of Central American origin or from another country incorporated into the SICA, with active membershipwith regional projection and composition as well as having its own statute.Have ends that do not contradict the objectives, purposes and principles of the SICA.Be of a regional Central American character; a demand which must be fulfilled by having entities that belong to at least member states of the SICA, as well as being authorized to represent such entities.Have a recognized trajectory and represent a significant number of national entities associated with the sector within whicoperates its regional functions, and that it represents a substantial number of individuals. Have a regional office and an assembly or other organ within which the decisions are made.Be authorized to make regional proposals on behalf of its members through authorized regional representatives. Each institumust designate as a liaison, a legally entitled representative who must be of Central American nationality and who must hasubstitute.48

Needless to say that according to these criteria local communitarian social movements directly affected by a MesoameProject initiative would have to forge significant regional alliances in order to influence policy, and even then these efforts wonly be of a consulting character in other words no executive power is given to such bodies. In Articles 11a and 11b ofConsulting Statute of the CC SICA for example, its purposes are designated as functions of counseling and recommendatbefore the bodies of Central American integration, like the Mesoamerica Project.49 In addition, Article 11h obligates theSICA to communicate and consult constantly with all grassroots movements and maintain information systems of all society organizations50 but beyond this aim no executive authority is granted. The role of civil society is thus reduced to tha passive observer who may comment or complain, but who cannot influence the course of events, unless the ExecuCommittee approves. An example of how civil society can influence the Executive Committee of the Mesoamerica Project isexample of the aforementioned Indigenous Council of Central America (CICA), whom, according to SICA information, mproposals to the Executive Committee of the Mesoamerica Project to include a group of governmental experts in matters oindigenous nature, so that they can act as advisors to the signatory countries of the Mesoamerica Project with regarindigenous participation.51 Supposedly this was how the Counseling Group for Indigenous Participation (GAPIE) was setwhich has as one of its objectives to count on the participation of the members of the indigenous population and of ethcommunities in the design, implementation, follow up and evaluation of the Development Plan of the Mesoamerican Projectone of the least funded areas (see graph above). According to InterAction however, the creation of GAPIE was promoted bysignatory governments of the Mesoamerica Project, and not by CICA itself, eventually leading to the pulling out of CICA fthe Projects mechanisms of participation in protest at the creation of this competitive entity.53 Further complicating matInterAction highlights that CICA itself had been criticized by indigenous groups in Mexico, Honduras and Costa Rica forbeing representative of the indigenous population in Central America and of being co-opted54 by the World Bank and the IThus civil society participation in the Mesoamerica Project has significant limitations in as far as there are questions relatin

46 Sistema de la Integracin Centroamericana, Estructura Organizativa del Comit Consultivo del Sistema de la Integracin Centroamericana,http://www.sica.int/ccsica/n_org_ccsica.aspx, 2009.47 Sistema de la Integracin Centroamericana, Comit Consultivo del Sistema de la Integracin Centroamericana,Memoria del Taller para la Constitucin del CapGuatemala del CC-SICA, http://www.sica.int/busqueda/Centro%20de%20Documentaci%C3%B3n.aspx?IDItem=19802&IdCat=32&IdEnt=63&Idm=1&IdmStyle=1, 2 Septiembre del 2005, pagina 18.48 Sistema de la Integracin Centroamericana (SICA), Comit Consultivo del Sistema de la Integracin Centroamericanahttp://www.sica.int/ccsica/miembros_ccsica.aspx?IdEnt=63, 2009.49 Sistema de la Integracin Centroamericana, Comit Consultivo del Sistema de la Integracin Centroamericana, Estatuto Consultivo del CC-SICA, 31-08-07.50 Sistema de la Integracin Centroamericana, Comit Consultivo del Sistema de la Integracin Centroamericana, Estatuto Consultivo del CC-SICA, 31-08-07.51 Plan Pueblo Panam, Antecedentes del Grupo Asesor para la Participacin Indgena y tnica (GAPIE),http://www.rree.gob.sv/sitio/sitiowebrree.nsf/pages/sppp_gapie, 200452 Plan Pueblo Panam, Portal Oficial del Grupo Asesor para la Participacin Indgena y tnica (GAPIE),http://www.proyectomesoamerica.org/gapie/index.htm, 2053 Op. Cit, McElhinny, page 32.54 Op. Cit, McElhinny, page 32.
http://www.sica.int/ccsica/n_org_ccsica.aspxhttp://www.sica.int/ccsica/n_org_ccsica.aspxhttp://www.sica.int/busqueda/Centro%20de%20Documentaci%C3%B3n.aspx?IDItem=19802&IdCat=32&IdEnt=63&Idm=1&IdmStyle=1http://www.sica.int/busqueda/Centro%20de%20Documentaci%C3%B3n.aspx?IDItem=19802&IdCat=32&IdEnt=63&Idm=1&IdmStyle=1http://www.sica.int/busqueda/Centro%20de%20Documentaci%C3%B3n.aspx?IDItem=19802&IdCat=32&IdEnt=63&Idm=1&IdmStyle=1http://www.sica.int/busqueda/Centro%20de%20Documentaci%C3%B3n.aspx?IDItem=19802&IdCat=32&IdEnt=63&Idm=1&IdmStyle=1http://www.sica.int/ccsica/miembros_ccsica.aspx?IdEnt=63http://www.sica.int/ccsica/miembros_ccsica.aspx?IdEnt=63http://www.rree.gob.sv/sitio/sitiowebrree.nsf/pages/sppp_gapiehttp://www.rree.gob.sv/sitio/sitiowebrree.nsf/pages/sppp_gapiehttp://www.proyectomesoamerica.org/gapie/index.htmhttp://www.proyectomesoamerica.org/gapie/index.htmhttp://www.proyectomesoamerica.org/gapie/index.htmhttp://www.proyectomesoamerica.org/gapie/index.htmhttp://www.rree.gob.sv/sitio/sitiowebrree.nsf/pages/sppp_gapiehttp://www.sica.int/ccsica/miembros_ccsica.aspx?IdEnt=63http://www.sica.int/busqueda/Centro%20de%20Documentaci%C3%B3n.aspx?IDItem=19802&IdCat=32&IdEnt=63&Idm=1&IdmStyle=1http://www.sica.int/busqueda/Centro%20de%20Documentaci%C3%B3n.aspx?IDItem=19802&IdCat=32&IdEnt=63&Idm=1&IdmStyle=1http://www.sica.int/busqueda/Centro%20de%20Documentaci%C3%B3n.aspx?IDItem=19802&IdCat=32&IdEnt=63&Idm=1&IdmStyle=1http://www.sica.int/ccsica/n_org_ccsica.aspx


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its limited representative status. Nevertheless it is through these complex bureaucratic instruments that the Mesoamerica Proattempts to guarantee the participation of civil society in the development that the Project defines as its Mission and Visionconclusion it is important to note that the primary aim of the Mesoamerica Project, through all its initiatives and through all omechanisms of participation is to improve the quality of life of the inhabitants of the region55 and the current GuatemGovernment has signed up to this aim. How does this international development project specifically influence the developmof Guatemala, and do the aforementioned mechanisms of participation properly influence this development? This article now focus on the energy initiative of the Mesoamerica Project, which the Guatemalan Government is in charge of, and will to demonstrate how this initiative is a function of the extractive industries and other commercial interests through the exampwhat is called the Northern Transversal Strip project also funded by the Mesoamerica Project. It will follow this analysi

focusing in more detail on one of the projects that complements the Project Mesoamerica energy initiative, namely the XaHydroelectric Project (XHP), in order to demonstrate how the mechanisms of participation failed to incorporate the desires oindigenous communities who are threatened with displacement should this project go ahead, and whose conceptiondevelopment differs radically to that of the neo-liberal conception currently dominating development doctrine in the region.

The Guatemalan Government and its obligations to the Mesoamerica ProjectSome historical context is necessary before embarking on an explanation of the obligations that the Guatemalan Governmholds to the Mesoamerica Project relative to the energy market. The neo-liberal ideology and its domination of Guatempolitical discourse after the collapse of Cold War politics, as argued above, can be amply demonstrated through the recent hisof the electricity market in Guatemala. In 1996, with the passage of the General Law of Electricity under the then PresiAlvaro Arzu, Guatemala substantially reduced the role of the state in the provision of electricity, in which the two state ent

then charged with generating and distributing electricity, the National Institute for Electricity (INDE) and the GuatemElectricity Company (EEGSA), were privatized and their tasks given over to the market, resulting in the Spanish giant UFenosa gaining rights to the distribution of electricity for up to fifty years extending over 80% of the country a vimonopoly. The privatization of EEGSA resulted in the selling off of its thermoelectric plants to the American ConstellaPower Development group in 1997, followed by the acquisition of its Guatemalan subsidiary by another American compcalled Duke Energy in 2001. In addition, EEGSA, in 1998, then sold its shares on the international market, which was boughby a consortium of American, Spanish and Portuguese interests, under the name Distribuidora Elctrica Centroamericana. intention of creating a competitive energy market based on thriving competition and reduced prices thus resulted, between 1and 2001, in a hike of electricity prices of 85% for the average consumer, and of 62% between 2001 and 2006, in turn leadinthe introduction of a social tariff and a solidarity tariff for poor consumers who use less than 100 and 50 kwh per mrespectively and who could not otherwise afford the prices. The state subsidy is paid directly to the generators and distributoelectricity, who in turn pass it on to the specific consumers a measure which ensures that the companies maintain suffic

profit, since otherwise its consumer base and thus its profit margins would be depleted

56

. All of this is substantially detailethe journalist Luis Solanos excellent analysis of the history of the electricity marke t in Guatemala, from which I have borroheavily (see previous footnote). Thus the market, and the possibilities always existent in market dynamics - whemonopolization occurs with subsequent price increases (as seen by the dominance of multinational companies in this sector the notable example of Union Fenosa in the electricity distribution market) - becomes the sole determinant of electrprovision, while the role of the state is left to that of regulation and intervention when market distortion (such as excessivhigh prices) takes place, in order to primarily ensure that the social effects are not too extreme. The high cost ofimplementation of this type of energy market relates not only to money, but to severe human rights abuses. The Unit forDefense of Human Rights Defenders of Guatemala have reported the death of two members (Evelinda Ramirez Reyes Octavio Roblero) of a social movement called FRENA a resistance movement in the Department of San Marcos who aspecifically in objection to the absurdly high costs of electricity (as distributed by Union Fenosa) which were blighting the abof the poor to pay their bills. Both of the victims were violently gunned down57. Amid this violent conflict the GuatemGovernment acknowledges that the price of electricity is too high58, but the acknowledgement focuses on the effects of hprices on possible investment opportunities, rather than highlighting its effect on the poor. This is highlighted by the reactioelectricity prices on the part of Guatemalan investment interests and textile industry experts, through the commissioning report in which they claim that in an efficient electricity market the hourly price of kilowatts should be $0.068 un

55 Proyecto Mesoamrica, Qu es el Proyecto Mesoamrica?,http://www.proyectomesoamerica.org/, 200956 Solano, Luis; El negocio de electricidad: transformacin de la matriz energtica y sus impactos; El Observador No 16, Dicie mbre 2008Enero2009, paginas 20-25.57 Friends ofthe Earth International, Justice for the assassinated Union Fenosa activists, http://www.foei.org/en/get-involved/take-action/justice-for-union-fenosa-activists, Feb 17th 2010.58 Ministerio de Energa y Minas. Comunicado de prensa, 25 de mayo de 2008.
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international standards; however in a failed market such as the current one this price has reached $0.1503 withoutinclusion of taxes or tariffs.59 It was in response to this problem that the energy initiative of the Mesoamerica Project unveiled.

According to the web page of the Mesoamerica Project one of the aims of the energy initiative is the creation of a RegioElectricity Market60 in order to promote the exchange of electricity between the signatory countries, thus creating competiprice efficiency. It is hoped that this will lead to the increased global commercial competitiveness of the region by incentiviforeign investment, the likes of which have thus far avoided large investments in Guatemala due to the limitation in its electrsupply and its concomitant high cost. The projects that are included in the energy initiative are:

The Central American Project for the Creation of an Interconnected Electricity System (SIEPAC). Mxico-Guatemala Interconnection Project Guatemala-Belize Interconnection Project Rural Electricity and Energy Area Area for the Promotion of Renewable Energy and for the use of Biocombustibles61

SIEPAC (see the Annex for a map) for example, which has been financed in the order of 90% by the IDB 62, has, as one oaims, the design, engineering and construction of a transmission line of 1, 790 Km of 230Kv that passes through the CenAmerican region and which will count on the secure supply of electricity of up to 300MW 63for the creation of a RegiElectricity Market and for the promotion of private investment in large electricity generators oriented toward the regiomarket, with modern technology fed by more efficient and cheaper fuels.64 As we have seen the Guatemalan Government assigned the responsibility of leading this energy initiative, and it implements this initiative at the national level throughEnergy and Mining Ministry, which must ensure, in accordance with its obligations, the fulfillment of the legal requirem

and international treaties signed and ratified by Guatemala in all matters relating to energy.65 The energy policy implementethe current Guatemalan Government has thus far carried on the energy initiative of the Mesoamerica Project, of creatinRegional Electricity Market, as seen in the published intention of the Energy and Mining Ministry of converting the countrya producer and exporter of energy for the neighboring countries, attracting investment, generating employment and changinggeneration of electricity in the country.66 Note also, the importance of IDB finance in this project. In conclusion, the creatiothis electricity infrastructure as part of the neo-liberal Mesoamerica Project is how the State of Guatemala thus acts as a promof private investment for the creation of a commercially competitive electricity sector with affordable regional energy priWhat sectors of the energy market does the Guatemalan Government want to attract through these incentives and what isprimary purpose of this initiative?

The usefulness of hydroelectric plants as a manner of fulfilling Guatemalan obligations to the Mesoamerica ProjectThe purpose of creating the aforementioned infrastructure, thus fulfilling Guatemalas obligation to the Mesoamerica Proj

stems partially from the utility of constructing hydroelectric plants in a country that has 38 hydrographic sources67 of waterich supply. The possibilities involved in this market thus offer major hydroelectric companies the chance of handsome proOf the 1,811 Mega Watts (MW) of electricity generated by Guatemala over the 2009-2010 stationary period, 34% was generspecifically by hydroelectricity68. According to the Spanish firm Union Fenosa, one of the largest electricity distributorGuatemala and holding distribution monopoly rights for up to 50 years, the country has the potential of generating 10MW69 of electricity through hydroelectric plants, thus demonstrating its enormous potential as an exporter. In addition, SeVelasquez of the National Commission of Energy and Electricity (CNEE), one of the government bodies in charge of approall new electricity generating projects, declared that Guatemala requires an annual increment of 125MW in order to responnational demand, which he projects will reach an annual peak of 3,125MW in 202070. Up to the date in which this article

59 elPeridico Altos costos de electricidad ahuyentan a inversionistas, 22 de enero 2008. 60 Proyecto Mesoamrica, Energa, http://www.proyectomesoamerica.org/61 Proyecto Mesoamrica,Iniciativa Energetica Mesoamericnana,http://www.proyectomesoamerica.org/documentos/SIEPACesp.pdf62 Banco Interamericano de Desarrollo, Avanza Mesoamrica,29-07-09

http://www.iadb.org/news/detail.cfm?language=Spanish&id=553463 Proyecto Mesoamrica, Energa, El Sistema de Interconexin Elctrica para Amrica Central (SIEPAC),http://www.proyectomesoamerica.org/, 2009.64 Proyecto Mesoamrica,Iniciativa Energetica Mesoamericnana,http://www.proyectomesoamerica.org/documentos/SIEPACesp.pdf.65 Ministerio de Energa y Minas, Administracin Funcional de la Direccin General, Funciones Generales

de Energa,http://www.mem.gob.gt/Portal/Documents/ImgLinks/2008-10/814/ESTRUCTURA%20Y%20FUNCIONES%20-%20DGE.pdf, 2008.66 Ministerio de Energa y Minas, Direccin General de Energa, Electricidad, Gua del Inversionista del Ministerio de Energa y Mhttp://www.mem.gob.gt/Portal/Documents/ImgLinks/2009-12/1361/Gu%C3%ADa%20del%20Inversionista.pdf, 2009, pagina 6.67 Ministerio de Energa y Minas, Direccin General de Energa, Electricidad, Gua del Inversionista del Ministerio de Energa y Mhttp://www.mem.gob.gt/Portal/Documents/ImgLinks/2009-12/1361/Gu%C3%ADa%20del%20Inversionista.pdf, 2009, pagina 24.68 Ministerio de Energa y Minas, Estadsticas del Subsector Elctrico,http://www.mem.gob.gt/Portal/Home.aspx?secid=42, 200969 Solano, Luis: El negocio de la electricidad: transformacin de la matriz energtica y sus impactos, El ObservadorNo 16, diciembre 2008enero 2009, pagina 70 Rosenberg, Mica; Reuters, Guatemalan coffee farms aim to sell electricity,http://www.reuters.com/article/idUSN2425054420070725, 25-07-07
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written the CNEE has already approved 37 new hydroelectric projects and 2 new geothermic projects, all of which will genean extra 1,681MW of electricity and which willenter into the national grid over a period ranging from 2009 to 2017.71 Iftakes the sum of electricity generated over the 2009-2010 stationary period (1,811MW) and adds it to the expected electrgenerated from the 37 new approved hydroelectric plants and from the 2 geothermic sources (1,681MW), one can see thatCNEE expects Guatemala to produce 3,492MW of electricity for the 2017 year, 367MW extra in comparison to the projenational demand for 2020. If one also considers that the CNEE will probably approve many more electricity generating projover the next decade, its not hard to see that the electricity exportation capacity of Guatemala is already being tapped int o, fulfilling Guatemalas obligations to the Mesoamerica Projectof creating a Regional Electricity Market.72 In fact, Guatemalready exports more electricity than it imports, with 131.9 million kWh of electricity exported in 2007 and 8.11 million kW

imported in the same year, thus proving that the Guatemalan Governments energy policy is not one that merely respondnational demand, but to regional demand.

The purpose of promoting the construction of hydroelectric plants in GuatemalaThis increase in hydroelectric electricity may sound good from an environmental perspective if it was genuinely the intentiothe Guatemalan Government to reduce its carbon emissions through these projects, yet this does not appear to be so eainferred from the facts. Guatemala has publicly announced its decision to increase its production of petroleum from 14barrels a day to 80,000 barrels a day by 2011 for example74. Undoubtedly some of this will be exported; but one can also seea large amount will be used to provide for the energy requirements of emerging industries, demonstrated by the fact that frommoment the Colom Government came into power it increased the number of mining permits, thus increasing its potential caroutput due to the associated energy costs this industry requires. Take a look, in the Annex section of this report, at the gra

provided by the Energy and Mining Ministry for the permits issued from 2003 to 2007, compared to the number of minpermits the Colom Government considered for approval in 200975. Almost 400 petitions for exploration and exploitation wmade that year. This coincides with a marked increase in global demand for metals and minerals, where for example, the priccopper in 2001 was $0.71 per pound, rising to $4 per pound in 2008 76, and where the price of gold rose from $250 per poun2001 to $1000 per pound in 200877. In other words the various hydroelectric projects and the expanding oil extraction targetsare being planned are primarily being done, it seems, to provide electricity for the extraction and exportation of natural resouto feed increased global demand and exploit high prices, or for the exportation of electricity, not to provide the indigenpopulation with the development they crave or to reduce carbon emissions. This also answers the question of what Guatemfeels will drive demand for more electricity in the future, so that energy supply will meet the figures stipulated above byCNEE for 2020. Further proof that the Guatemalan Governments aim does not include a primary concern fo r its environmmay be demonstrated by a paper that the World Bank commissioned entitled the Extractive Industries Review 78, where claimed that mining does not meet the very requisites that the World Bank itself stipulates as important for reducing povertycarbon emissions. Nonetheless the former head of the World Bank Paul Wolfowitz chose to ignore this advice and continsupporting the mining industry in those regions79, thereby incentivizing harmful development. In Guatemala only one ton of is emitted per person, compared to the US where 20.6 tons of C02 are emitted per person 80. Currently, 50% of carbon emissin Guatemala stems from deforestation, which the aforementioned industries perpetuate, (73,000 hectares of land are losGuatemala every year); 44% stems from the burning of combustible fuels for transport and electricity (which the mining indualso contributes to), while 6% of carbon emissions is generated by industry.81 And in economic terms the benefits for the staGuatemala derived from mining are minimal. The Mining Law for example, passed in 1997 at the urging of the World Banrequires companies to pay the Government only 1% of the price of mining products in taxes83, while Rosa Maria de Frmember of the Congressional Commission of Energy and Mines, gave the example of the Canadian mining company Goldc

71 El Periodico, Aumenta inters por los proyectos hidroelctrico,http://www.elperiodico.com.gt/es/20090817/economia/11057117-08-0972 Proyecto Mesoamrica, Iniciativa Energetica Mesoamericnana, http://www.proyectomesoamerica.org/documentos/SIEPACesp.pdf.73 Cemtral Intelligence Agency (CIA), The World Fact Book, Central America and the Carribean, Guatemala,https://www.cia.gov/library/publications/the-world-factbook/geos/gt.html, 200974 Solano, Luis: La transnacionalizacin de la industria extractiva,El ObservadorNo 19, Junio Julio 2009, pagina 2975 Ministerio de Energa y Minas,http://www.mem.gob.gt/Portal/Home.aspx?tabid=225y el Anuario Estadstico Minero de 2007.76 Mo* Paper, CATAPA, Alle goud? Mijnbouw, ecologie en mensen rechten. Nmero 23, 2008.77 www.goldprice.com78 Extractive Industries Review: The future role of the World Bank Group in Extractive Industries. Draft report dated August 21, 2003.79 Mo* Paper, CATAPA, Alle goud? Mijnbouw, ecologie en mensen rechten. Nmero 23, 2008.80 Bentez, Ins; La eterna primavera en peligro, Inter Press Service,http://ipsnoticias.net/nota.asp?idnews=86788, 200781 Bentez, Ins; La eterna primavera en peligro, Inter Press Service,http://ipsnoticias.net/nota.asp?idnews=86788, 200782 Amuchastegui, Maria; Guatemala: Mining misery; CorpWatch;http://www.corpwatch.org/article.php?id=14452, 200783 Ministerio de Energia y Minas, Ley de Mineria Decreto Numero 48-97,http://www.mem.gob.gt/Portal/MEMDocuments/DGM/Ley/ley%20de%20mineria%20y%20su%20reglamento.pdf
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Inc. and the taxes it pays of around 18%, whilst elsewhere in the continent the same company is obliged to pay far higher r(between 42% and 64% in countries such as Canada, the US, Mexico and Argentina) thereby demonstrating that the econobenefits of attracting mining companies do not extend to Guatemalan tax-payers in the way they do to other tax-payers elsewthrough accumulated state revenue. It is not hard to see therefore, how the expansion of the aforementioned industries is likely to increase Guatemalas output of C02, both in the transport and in the industrial sector, thereby threatening native foand biodiversity due to the environmental problems associated with the aforementioned industries and leading to mineconomic benefits for Guatemalans. The fact that such expansion is happening regardless of the environmental, social economic problems it perpetuates may be further demonstrated by taking a brief look at a major infrastructure transport procalled the Northern Transversal Strip (FTN). This project is also the most potentially profitable hydroelectric generating are

Guatemala as well as one of the most resources rich areas in addition to housing countless indigenous communities who livpoverty.

The Northern Transversal Strip (FTN) and its link to hydroelectric projects and to the Mesoamerica ProjectThe FTN project refers to the construction of a 362 kilometer long highway across the North of Guatemala in order to linkwestern and eastern coasts so as to facilitate the transportation of extracted resources for the purposes of exportation. Accordto a report commissioned by the Copenhagen Initiative for Mexico and Central America (CIFCA) called Xalal ProjeDevelopment for all?, the FTN is a government development project in the north of the country that in its first inception

1970, aimed at exploiting the natural resources of the region, namely petrol, minerals, hydrographic sources, wood and oindustrial projects. The interests of transnational firms thus coincided with the interests of the Guatemalan oligarchy,84 duthe internal armed conflict. The project never got off the ground back then but has recently been re-introduced into the natiodevelopment plan and approved by Congress, with a loan of $201 million from the Central American Bank for EconoIntegration85 as part of the Mesoamerica Projects investment program86, brining in with it a confluence of economic po

interested in the region. The Israeli company Solel Boneh International (SBI), for example, was the only company to take pathe bidding process and was subsequently awarded the contract to build the highway, largely, it seems, due to its histrelationship with Guatemalan Government officials. SBI arrived in the country during the counterinsurgency of the 1980

which Israel played a crucial role in the training of the Guatemalan military, as well as in providing military arms, transpequipment and advice to the military on a plan of colonization in the very region of the Northern Strip87. Between 1997 and 2SBI was the principal beneficiary of millionaire contracts issued by the Ministry of Communication, Infrastructure and Hou(MCIV), amid allegations of corruption and bribery of public officials88 and indeed amid accusations that the former VPresident of the MCIV, one Berta Lilia del Valle, previously worked for SBI. 89 The same allegations have arisen regardingNorthern Strip bidding process, where the independent congressmen Rosa Marie Frade and Nineth Montenegro objected tofact that the bidding process was not opened up to include other companies beyond SBI 90. In the region over which the FTbeing built there are possible areas of petroleum extraction, with new contracts being sought; there are various large and smhydroelectric projects; there are sugar cane and African palm plantations proliferating across the area within regions like Ch

and Polochic (area 1 on the map) for the production of biofuels, and there are mining projects being planned in areas like Iza(area 11), Alta Verapaz (area 1) and Huehuetenango (area 10) all seeking to benefit from the construction of this highwabrief look at the companies interested in investing in the area and their strategies for doing so is illuminating:

84 Reemstsma, Kerstin; Briones, Soledad; Ibero, Marta: Proyecto Xalal, Desarrollo para todos? elaborado por la Iniciativa de Copenhague para CentroamMxico, nov. 2008, pagina 10.85 Central America Data, http://en.centralamericadata.com/en/article/home/Guatemala_Approves_Loan_for_Traversal_Highway, Tuesday, August11, 200986 Project Mesoamerica,http://www.proyectomesoamerica.org/boletin/externo/boletin012009.htm, December 2008 Bulletin.87 Cheryl A. Rubenberg .Israel and Guatemala: Arms, Advice and Counterinsurgency.MERIP Middle East Report, No. 140, Terrorism andIntervention. (May - Jun., 1986), pp. 16-22 y 43-44.88 Grupo de Apoyo Mutuo, Comunicado de prensa, 27 de marzo de 2007.89 Grupo de Apoyo Mutuo, Comunicado de prensa, 27 de marzo de 2007.90 elPeriodico, Congreso aprueba prstamo para financiar la Franja Transversal, August 11th 2009,http://www.elperiodico.com.gt/es/20090811/pais/110007/
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Map of the FTN project (the areas 11, 1, 7 and 10 being the areas in which the extractive industry is interested)

The American Louis Berger Group, one of the four largest construction firms in the world and involved in the reconstrucprocess in Iraq, is in charge of administering the construction of the FTN project91. According to the American NGO CorpWthis group has been the subject of strong criticism for pocketing millions, and leaving behind a people increasingly frustrand angry with the results, in Afghanistan.92 In addition, other oil transnationals like Perenco and Petrolatina En(subsidiary of British firm Taghmen Energy), who have links to the family of the former President Oscar Berger93, are kee

invest in the area given the FTN project. We also have the mining companies Nichromet, Skye Resources, CompGuatemalteca de Nquel (subsidiary of the Canadian mining company HudBay Minerals 94) and BHP Billiton, all vyingpossible opportunities. Some of these companies already have a history with Guatemala. Perenco, for example, is an indepenoil & gas company with operations in 16 countries across the globe95. According to their website: wherever we operate, eeffort is made to improve the quality of life while preserving traditional cultures.96 Not, however, according to several somovements in Peten (northern region of Guatemala area 5 on the map), who issued a press release on the 15 th of April 2where they claim that the company bribed various State officials into supporting Perenco in their attempts to expand extraction of petroleum from a protected area, and where various threats have been issued against leaders of those somovements for opposing this project97. And indeed the Congressman of the region, Manuel Baldizon, as well as the Energy Mining Ministry and various Mayors from the municipalities of the region have supported and signed a contract with Perencwhich they renew existing petroleum extraction contracts (contract 2-85) which allows for the possible expansion of petrolextraction into what is called the Parque Nacional Laguna del Tigre, a protected area, even though this contravenes the Law

Protected Areas passed in 1989.98 The parties involved claim that the Law of Protected Areas is not retroactive, and sincecurrent contract allowing Perenco to extract petroleum from the region was signed in 1985, this does not apply to them. BothEnvironment Ministry (MARN) and the National Council for Protected Areas (CONAP) came out against the renewal ofcontract, with the matter eventually referred to the President, who was given the opportunity of deciding whether or not he wgive the go ahead always under the looming threat that Perenco issued of leaving the country should the contract noextended.99 The President, citing the abiding poverty existent in the country and the need for economic growth to deal withproblem, subsequently approved the contract extension, while an environmental NGO by the name of CALAS then presenteappeal to the Constitutional Court, which to date has not been declared on100. The balance between environmental concerns

91 Solano, Luis: La Franja Transversal del Norte: Neocolonizacin en marcha,El ObservadorNo 6, junio 2007, pagina 9,El Observador 692 CorpWatch, Contractors in Afghanistan are making big money for bad work , October 6th, 2006http://www.corpwatch.org/article.php?id=1351893 Solano, Luis: La Franja Transversal del Norte: Neocolonizacin en marcha, El ObservadorNo 6, junio 2007, pagina 9,El Observador 694 Comment: Hudbay is one of the most polluting companies operating on Canadian soil:http://www.minesandcommunities.org/article.php?a=9526&highlight=ngos95 Perenco,http://www.perenco.com/about-us/company-overview.html96 Ibid Perenco97 Asociacin Oxlaj, Fundacin ProPetn, Pastoral Social del Vicariato, Apostlico de Petn, Frente Petenero contra las Represas, Parroquia de LaLibertad, Consejo Nacional de Desplazados de Guatemala, Asociacin de Campesinos de La LibertadACLIP-, COMUNICAD...doc98 Solano, Luis: Sobre la ampliacin del contrato a Perenco, El Observador Enfoque no 6, 30 de Abril 2010, http://dgroups.org/?btxnpvmv, page5.99 Solano, Luis: Sobre la ampliacin del contrato a Perenco, El Observador Enfoque no 6, 30 de Abril 2010, http://dgroups.org/?btxnpvmv, page5.100 Prensa Latina, Agencia Informativa Latinoamericana, Presentan amparo contra extensin de contrato petrolero en Guatemala,http://www.prensa-latina.cu/index.php?option=com_content&task=view&id=208327&Itemid=1, 24th July 2010.
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economic concerns is thus clear, with the pendulum swinging in favour of the former we shall see whether or notPresidents justification holds in relation to poverty. In November 2006 and January 2007 forced evictions took p lace in Iz(area 11 on the yellow map) on lands that the mining firm Skye Resources claimed as its own, but which also overlapped wthe collective rights claimed by the local indigenous population. Skye Resources has repeatedly stated that the company carout extensive consultation activities101; however, indigenous residents insist that no consultation ever took place.102 In the sarea, security guards paid by the mining company Compaa Guatemalteca del Nquel, HudBay Minerals subsidiary companGuatemala, have been accused of killing a man by the name of Adolfo Ich, after locals had gathered to resist a possible foeviction from their mineral rich lands HudBay Minerals deny these occurrences had anything to do with them.103 BHP Bilis exploring for nickel in the Izabal region (area 11 on the map), and in particular within a lake which has been designated

protected area. The Association of Friends of Lake Izabal (ASALI), a local social movement, has campaigned on behalf of 1fisherman and their families who rely on the lake for