134. DOS Guidelines for Policy and Operations: Guatemala, February 19631

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TABLE OF CONTENTS
I. BASIC APPROACH
II. BACKGROUND
III. OBJECTIVES
IV. LINES OF ACTION
POLITICAL
ECONOMIC
EDUCATIONAL, INFORMATIONAL and CULTURAL
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GUIDELINES OF UNITED STATES POLICY AND OPERATIONS TOWARD GUATEMALA

I. BASIC APPROACH

Guatemala knew three centuries of harsh grandeur as headquarters of the Spanish Capitancy General until independence in 1821. It suffered dictators, several bearing the 19th Century “liberal” label, from 1821 to 1944. Since that time, ferment rather than growth has character[Typeset Page 328]ized the political scene. Indians, Ladinos2 and Euro-Americans make up its people, in that order, with little sympathetic rapport between the segments. Economic development beginning in the late 19th Century centered principally around the coffee lands owned in great part, until World War II, by energetic German planters and merchants, and the banana plantations of the United Fruit Company. Economic growth and political upheavals since 1944 have created an emerging middle group, composed of new entrepreneurs and their employees, [Facsimile Page 4] men in the professions, and civil servants, which favor movement toward a more modern economic and political system.

The wealthy landowning and business elements, numerically few and not organized to exercise direct political power, strongly influence legislation and government actions touching their interests through sporadic pressure group organizations and by dealing individually with politicians and bureaucrats. Political life takes place before a largely inert, apathetic disillusioned public, and consists mainly of maneuver among a few politicians for personal advantage.

The numerous political parties are mostly paper organizations, none of them having any historical continuity. The army is the ultimate arbiter of power. Its officers have a vested interest in safeguarding their status in society, which for most of them represents an advance from relatively modest origins. They are not sympathetic to communism or extreme leftism, tend otherwise to be politically neuter, with the leaders cautiously watching for the opportune time to use their power to shape political events to suit them.

The present administration has not exercised leadership in setting targets or means of encouraging any meaningful national [Facsimile Page 5] effort at combined political and economic growth. Despite the surface indications of well-entrenched power, political unrest and social ferment is strong and increasing and if the desire for basic change is unduly thwarted it will undoubtedly lead to further upheaval in Guatemala.

We seek to use our total influence, comprising our economic aid and all other aspects of our presence in Guatemala, to induce action on a range of development programs with pre-conditions which will give a widening segment of the Guatemalan population a sense of confidence in combined political-economic growth, and faith in the ability of the country’s governmental machinery to move toward satisfaction of democratic aspirations.

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II. BACKGROUND

Recalling its earlier role as the seat of Spanish power in Central America, literate Guatemalans desire that their country exercise leadership among its small neighbors. This aspiration has been frustrated in part by Guatemala’s own economic, social and political weaknesses.

Economically, the country is tied to the prosperity of its export crops—coffee, bananas and cotton. Socially, the population is divided on class and racial lines, with the lower class being comprised principally of the Indian segment, which in recent years has begun to require more attention in the field of economic development as it moves into the money economy.

Politically, the country is in a transition period with control by the moneyed class of sectors on which they depended for power—rural labor and personal influence in ministries—being loosened but not yet broken. The politico-socio structure which would support development toward moderately representative government since 1944 has suffered alternate over-encouragement, artificial organization and restructuring in such rapid succession that the base for stable party organization today is still weak.

The social and political revolution beginning in 1944 [Facsimile Page 7] manifested the aspirations of urban civilian groups. In its wake, political organization was established from the top down, and at the community level in varying degrees replaced, conflicted with, or operated parallel to the cofradia or sodality organization which had characterized Indian villages. These discontinuous changes, reflected in urban centers by a proliferation of labor unions and other quasi-political associations, were not understood by leaders or members. Personalism, caudillismo and caciquismo (“bossism”) still dominate the political atmosphere today.

In 1944, the last of the 19th Century type dictators who had ruled Guatemala for most of the time since independence from Spain in 1821 was overthrown and Juan Jose Arevalo emerged to institute the first real social and economic changes the country had experienced.

The politically conscious segment of the population plunged for the first time into the exhilarating experiences of freely organizing and choosing among political groups, enjoying freedom of speech and press, forming labor unions and using their power against entrenched wealth, and demanding and getting from their government some of the social welfare benefits which they were learning to identify with advancement of their nation.

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When Arevalo turned over power in 1951 to an elected successor, Jacobo Arbenz, it was the first time in Guatemalan history an elected President had served his full term. Arbenz was elected by a leftist coalition that had wide popular appeal. His administration, however, [Typeset Page 330] came quickly under the effective control of a small group of well organized Communists. His excesses brought on the successful counter-revolution of Colonel Castillo Armas in 1954. In its zeal to obliterate every vestige of communism, the Castillo Armas regime allowed some worthwhile liberal social changes to founder in the shambles which Arbenz left behind.

The Guatemalan labor movement, in particular, still is affected by its resentment of the repressive tactics used by Castillo Armas to correct the excesses of the Communists during the Arbenz regime. However, by the time of his assassination in July 1957, Castillo Armas had begun to get some of his moderate forward-looking programs under way. His death was a blow to Guatemalan political development, not only because of the chaos of the nine months interim before Ydígoras Fuentes finally took office in March 1958, but because he had set on positive goals and had the understanding leadership to carry the people into a combined economic and political growth for the first time in Guatemalan history.

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The liberationist (MDN) regime of Castillo Armas was replaced by the conservative Redencion administration of General Miguel Ydigoras Fuentes, a military officer who had grown up under the last dictator Ubico and had been his Director General of Public Roads. The ill-defined social and economic objectives to which he gives lip service are more nearly those of his liberal leftist opposition than his erstwhile conservative supporters. In many ways he is still an enigma. In an apparent atmosphere of political freedom, he has been politically shrewd in dividing, fractioning and playing off any individuals or groups who give indication of leadership competitive to his own. He has not demonstrated the same political acumen in cultivating support for necessary economic measures (such as congressional ratification of a badly needed highway loan agreement) in a Congress where his party presumably controlled a coalition majority.

He has been in the forefront of Latin American presidents in the anti-Castro campaign and in proclaiming the dangers of Castro communism to Guatemala. At the same time, he has consistently refused to take measures to control or even give proper surveillance to Communist activities within Guatemala. He has allowed Communists to infiltrate major [Facsimile Page 10] unions but has so far avoided major disruptive labor agitation by keeping key Communist union leaders on his payroll. Although his administration has managed a minimum amount of rural development apart from that financed by the AID program, he has capitalized on the opening ceremony of every schoolhouse and distribution of land title to enhance his image as the Cacique whom Indians will respect.

He cannot comprehend cooperative effort toward certain objectives; he deals in quids pro quo. In his mind, the United States owes [Typeset Page 331] him assistance for his international stance against Castro. The Charter of Punta del Este is for the others who have been less cooperative than he. His government is highly personalized but ineffective. Just as many Guatemalans link the United States with the successful overthrow of Arbenz and blame us for the relapses that followed under Castillo Armas, they hold us responsible for the lack of progress under Ydigoras.

During his administration (which ends in March 1964), Ydigoras has weathered demonstrations by students, teachers, labor groups, one serious revolt attempt in the Army (November 1960), another abortive attempt by Air Force elements (November 1962), and periodic small-scale guerrilla activity in rural areas. In March-April 1962, he was brought almost to the brink of [Facsimile Page 11] overthrow when the use of excessive violence in dealing with student demonstrations served to fan the fires of resentment that had smouldered since December 1961 when alleged widespread election frauds had created an issue. At the same time, unplanned coincidence of guerrilla activity near Puerto Barrios led by the November 1960 army dissidents kept the military off balance. Throughout these trials he has managed to remain in power because of support by the military.

During the April disturbances, responsible military elements reportedly maneuvered seriously with an opposition coalition. Well-to-do businessmen who have remained outside the political arena, except to manipulate on behalf of their private transactions, were constrained to begin a participation as a private enterprise group that may keep them in the political scene.

The military forces are identified with the preservation of the constitutional process insofar as the threat of a coup by leftists is concerned. While unified in this ideal, the higher ranking officers tend to think in caudillo terms of personalized military leadership, and the younger officers give indications of having been influenced by the desire for social progress. Another strain on military unity has been [Facsimile Page 12] the lack of promotional opportunities for younger officers because of the already overcrowded higher ranks (of 801 officers, 357 are full colonels).

Many Guatemalans demand the renewal of the fundamental social revolution as it was promised in the 1944 movement under Juan Jose Arevalo, before the Communists took over and aborted it. From his exile in Mexico, Arevalo has announced his availability for re-election to the presidency for the term beginning in 1964, and there is wide belief in Guatemala that he can win. Hopelessly obsessed with a psychopathic hatred of the United States and blind to his own role in betraying the 1944 movement to the Communists, Arevalo’s ambition and latent strength pose a danger to the peaceful evolution of Guatemala. There is ample ground to believe that Arevalo’s return to power would repre [Typeset Page 332] sent a significant gain for the Communist/Castroite cause. Nevertheless, there is a cloud of doubt over Ydigoras’ attitude toward, and relations with, Arevalo. There are traces of evidence that in his spiteful determination to thwart the presidential aims of an overt and apparently untainted leftist-liberal party in Guatemala (Revolutionary Party—Partido Revolucionario—PR), Ydigoras is engaged in [Facsimile Page 13] covert collusion to build up Arevalo.

Guatemalan Communists number some 1200 hard-core members in their “Guatemalan Labor Party” (Partido Guatemalteco de Trabajo—PGT), with about 2500 sympathizers elsewhere, particularly in the United Revolutionary Party (Partido Unido Revolucionaro—PUR). They have infiltrated both student and labor groups. However, as was demonstrated in the April disturbances, they are organized to exploit quickly and effectively minor breakdowns of public order or issues over which public emotions can be aroused.

Economically, the short term prospects for substantial progress in Guatemala are not encouraging. The very sharp reduction in coffee export earnings, the marked decline in both foreign and domestic private investment, and the critical fiscal situation of the government with the resultant drastic cuts in public investment, have all contributed to producing the economic stagnation that has endured since early 1960. Ydigoras certainly cannot be blamed for all the economic ills that now beset Guatemala, but the political unrest and upheavel of which he has been the central target have certainly compounded the effects of the other economic developments. The Gross National Product (1961: $678 million) on a per [Facsimile Page 14] capita basis has declined since 1960, whereas in the 50’s Guatemala had enjoyed an average annual per capita GNP increase of 4.9 per cent. The imposition of exchange controls in October 1962 because of declining reserves would indicate the economic situation continues its deterioration. Constructive leadership by the government which would restore confidence and give a sense of direction would go a long way in putting the economy into forward motion.

The creeping discrepancy between actual revenues and minimum necessities for ever-expanding expenditure requirements is the single most critical economic problem of the moment in Guatemala. It can only be solved by creating new sources of revenue or more effective enforcement of existing measures. It has been difficult for Ydigoras to muster sufficient political support for additional revenues partially because he himself does not understand the long term problems involved. Limited fiscal resources have led to temporizing, with available funds applied where they will reap the most immediate political advantage. This failure to deal with basic fiscal problems has been cited as an example of his essential failure as a leader.

From January to April of 1962, Ydigoras carried on an [Facsimile Page 15] intensive agitation campaign against the United Kingdom over Belize, threaten[Typeset Page 333]ing rupture of relations, confiscation of British interests, etc. As a result, informal tripartite talks were held in April between United Kingdom, Guatemala and British Honduran representatives. The resultant arrangements decided upon for improved economic cooperation have lightened pressure by the Guatemalans for the time being.

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III. OBJECTIVES

Within the framework of the primary U.S. objectives outlined in the Latin American Guidelines, the following are specific objectives for Guatemala:

A. Short Term

1. Initiation by Ydigoras of actions or programs in which U.S. support can be identified with obvious long-term advantages for social and economic development in Guatemala, rather than merely with the personal prestige of Ydigoras.

2. The election of a successor to Ydigoras who from a broad political base will promote needed economic and social development in Guatemala, and favor a close and friendly relationship with the United States.

3. Strengthened capability of military and police forces to penetrate and control subversive activities of Castro-Communists.

B. Longer Term

1. The adoption of fiscal and other legislative and administrative reforms in order to provide a sounder basis for planning and implementing development under the Alliance for Progress.

2. Improvement of the capabilities of the military and police forces to maintain public order and internal security [Facsimile Page 17] and contribute to development within a constitutional democracy.

3. Moderation of Guatemalan claims to Belize (British Honduras) and the reduction of Anglo-Guatemalan friction over this issue to the extent this can be accomplished without direct United States involvement.

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IV. LINES OF ACTION

Political

1. Mindful of the threat which highly personalized government represents to the continuity of stable, democratic government, seek to convince both Ydigoras and his opposition that for the common good, they should concentrate their efforts on building political organizations which will participate in elections, rather than depend on coups or counter coups.

2. Encourage groups and associations of prominent and influential Guatemalans (such as the National Independent Union—UNI), who [Typeset Page 334] have a larger economic stake in political stability and social order, to contribute both their personal capacities and their financial resources in working with the government to promote both short and long term social and economic goals. This could have a decisive influence in reinforcing the line of action set forth in 1 above.

3. Encourage greater delegation of authority and responsibility within the administration in order to dilute further the effect of personalism on the development of orderly democratic development.

4. Encourage activation of programs such as community [Facsimile Page 19] development in order to instill techniques and institutions which will permit the predominant Indian population to assimilate into the mainstream of Guatemalan life with a minimum of friction and frustration.

5. Encourage the Guatemalan Government to cooperate in the orderly and peaceful transition of British Honduras to independent status, when its economic viability has become more assured, and to induce the latter to integrate economically with the rest of Central America.

Economic

6. Seek to secure basic improvements in all phases of public administration, but with most urgent priority on fiscal reforms which will increase revenues, distribute tax burdens more justly, diminish evasion, reduce expenditures and systematize fiscal planning and control. Continue, in this connection, the informal joint United States-Guatemalan steering group on the Alliance for Progress, created at our Embassy’s initiative.

7. Persuade the Government of Guatemala and the private sector to develop jointly a broad plan for a self-sustaining rate of growth. Essential elements of a plan meriting our support would be (a) diversification of agriculture including [Facsimile Page 20] expansion of the livestock and dairy industry, (b) development of agricultural processing industries and light and medium manufacturers, (c) study and development of power, communications and transport resources, and (d) eventual integration into the national economy of the large Indian population.

8. Encourage the Government of Guatemala and private organizations to plan jointly with regional, national and private Central American entities to strengthen the Central American Common Market and regional economic development.

Educational, Informational and Cultural

9. Encourage the Government of Guatemala and university leaders to cooperate with the Central American Superior Council of University Rectors or other regional educational organizations which will provide better regional use of funds invested in higher education.

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10. Encourage part-time or evening class enrollment in the University of junior officers of the Embassy, USAID and our Military Mission, where they could not only exert some individual influence but more importantly acquire information on student movements and reactions and assist in spotting potential candidates for student exchange grants. Close liaison with American students and teachers at the University would serve similar purposes.

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11. Within reasonable limits continue the successful USIA- and AID-assisted experiments in the use of television as an informational and educational media which has both intrinsic and demonstrational value.

Labor

12. Encourage the progressive relaxation by the government of the restrictions and controls on moderate, democratically oriented trade union elements, and increase our own assistance for training and orientation of carefully selected trade unionists.

Military and Police

13. Make available to the Government of Guatemala, on a grant basis if necessary, the minimum military and police equipment and training needed to assist in the maintenance of public order and internal security.

14. Support a civic-action military program by providing personnel and suitable equipment.

15. In order to implement the provisions of NSAM 140,3 applicable to Guatemala, encourage the continued friendly relationship between the Guatemalan and United States military [Facsimile Page 22] establishments, the use by Guatemala of United States military material, the generation of greater understanding and acceptance of United States military doctrine, and expanded exchange programs between Guatemalan and United States military personnel.

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V. CONTINGENCIES

Contingencies which would frustrate United States policies include:

1. Coup by “outs” or assassination of Ydigoras: If either contingency should occur, it could be followed by a period of chaos and uncertainty, particularly if Ydigoras were assassinated. Should Communists or radical leftists appear to be moving into a position of control over the new government, the military would probably react with force of arms.

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2. A 1963 election victory by an anti-American leftist. If leftist, anti-American Juan Jose Arevalo, or someone of his stripe or under his influence, should win the 1963 elections, the new government (taking office March 1, 1964) would probably adopt policies and programs inimical to the interests of the United States.

  1. Secret. 23 pp. DOS, S/P Files: Lot 67 D 396.
  2. A Ladino is a person of Indian or mixed Indian blood who has left traditional Indian community life and assimilated himself into the money economy and the social modes of the towns and urban centers. Three-fifths of the population is still pure Indian in blood, and 95% have some Indian blood.
  3. NSAM 140: Subject: Participation of U.S. and Latin American Armed Forces in the Attainment of Common Objectives in Latin America.