GUATEMALA SEEKS TO AVERT FUNDS CUTOFF

GUATEMALA CITY - Guatemala is hoping to avoid a cutoff of U.S. foreign aid
with the anticipated censure by U.S. authorities over shipments of cocaine
that have soared since President Alfonso Portillo took office three years
ago. Top Stories

The tiny Central American nation, which only recently emerged from a long
civil war, received about $53 million in foreign aid from the United States
last year, including $3.5 million tied to the war on drugs.

Lately, however, U.S. officials here and in Washington have harshly
criticized the current government's record on narcotics interdiction.

Officials here, as well as U.S. officials in Washington, expect the Bush
administration to include Guatemala among the list of countries that
"failed demonstrably to make substantial efforts" to combat narcotics
trafficking. The commonly used terminology in the U.S. law is "decertified."

But they also expect that Washington will invoke a clause that allows it to
waive sanctions for national security reasons.

While a national security exemption by Washington wouldn't save Guatemala
from a stiff dose of shame, it would allow the flow of foreign aid to
continue and prevent the United States from using its veto of loans from
the World Bank and other international-lending institutions.

Guatemala doesn't produce cocaine and produces an insignificant amount of
opium, which is used to make heroin.

But this nation has become a major trans-shipment point for drugs coming
from South America en route to the United States.

"Drug interdiction has dropped significantly even though intelligence tells
us that the same amount of drugs are arriving in Guatemala," said a U.S.
Embassy official, who asked not to be named. "The primary problem is the
corruption within the anti-narcotics police."

The embassy official declined to comment on whether Guatemala will be
decertified, but sources here say it is a done deal with an announcement
expected shortly.

"The U.S. government has been making a case in Guatemala for the past six
months. There is no question that Guatemala is in the State Department's
eye and it is very likely that they will decertify.

"My impression is that that is definitely the case," said Manuel Orozco,
the Central America project director for the private Inter- American
Dialogue in Washington.

Gabriel Aguilera, Guatemala's vice minister of foreign relations, said that
the Guatemalan government has been making efforts to prevent and combat
drug trafficking within the country's territory, with some big successes.

But he also said "the problem is so great that the government hasn't yet
achieved a control of the criminal organizations that are behind these
illegal activities."

U.S. authorities believe that the decline reflects far more than
inefficient police work. In 1998 Guatemalan authorities seized 10 tons of
cocaine and 11 tons in 1999.

After Mr. Portillo became president in 2000, drug seizures plunged to about
2 tons per year despite a doubling of both the staff and budget for the
nation's narcotics police.

In Washington last October, Otto Reich, who was undersecretary of state for
the Western Hemisphere, told Congress that drug traffickers have "have very
close ties to the highest levels of government" in Guatemala.