Bernardo Arévalo, president-elect of Guatemala, published on December 13 the letter he sent to the Guatemalan president Alejandro Giammattei in which he asks him to veto decree 18-2023 of the Congress of the Republic with which the 2024 budget was approved, as he considers that it contains serious violations of the legal framework and irregularities that will affect public management, social welfare and economic performance next year.
The letter addressed to Giammattei is dated December 7, 2023 and received at the General Secretariat of the Presidency on 8 December.
Arévalo details four points for which he considers that President Giammattei should veto decree 18-2023 of the Congress of the Republic, Law on the General Budget of Income and Exit of the State for fiscal year 2024.
Does the budget approved by Congress affect us as a country. That’s why I sent a letter to President
In point 1 of the letter, Arévalo points to multiple illegalities. The changes incorporated both in the opinion issued by the Public Finance and Currency Commission and through amendments presented during the plenary session allowed the inclusion of provisions that contravene several ordinary laws, mainly the Law of the Executive Agency (LOE), the Organic Budget Law (LOP), the Organic Law on the Superintendency of Tax Administration (LOSAT), the Organic Law of the Bank of Guatemala and the Law on State Procurement (LCE), among others, points out the letter of Arévalo.
It notes that a number of provisions undermine the authority, competence and leadership that ministers have throughout the Republic for the affairs of their own and the public policies corresponding to their substantive functions.
It also mentions that it harms the legal power to exercise the administration of financial resources by establishing a set of standards without technical justification for works or services to be met, specific reprogramming and a series of prohibitions that in no way respond to institutional planning or are in line with annual and multi-year operational plans or strategic plans.
He added that the rules imposed constituted an abuse of the legislative power to modify the budget submitted by the Executive Agency.
It notes in particular articles 56 and 69 of the decree adopted and notes that they violate the mandate assigned to article 35 of the LOE to the Ministry of Public Finance to comply with and enforce all matters relating to the State ' s land legal regime, including the exercise of the function of programming, negotiating, registering, controlling and managing public indebtedness.
The letter mentions that article 114 of the Decree adopted drastically cuts the budgetary allocation of the Superintendency of Tax Administration (SAT), which violates the provisions of article 33 (a) of the LOSAT, which sets out the percentage of the total number of internal taxes and foreign trade collected to be transferred to the SAT.
This article limits the progress and continuity in the plans to strengthen the collection capacity of the State that even his Government has supported in order to have the resources for the provision of goods and services indispensable to the population,” Arévalo tells Giammattei in the letter.
It also noted that article 122 of the approved decree contravened provisions of the LOP, by introducing the obligation to pay illicit public debt, through the prioritization and protection of the financing of projects carried out under the protection of states of emergency, the validity of which ended several months ago.
He adds that deadlines are also set for the return of unexecuted resources, other than those expressly provided for by the LOP. The inclusion of various unwarranted works, through extensive tables and listings that were not incorporated into the original project prepared by the Executive Agency, contravenes the spirit of the LCE, as it limits competence and business favourable to the interests of the State in terms of public procurement.
Questionable assignments
Point 2 of the letter speaks of budget allocations which it describes as questionable, opaque and induced by corruption.
The Decree contains provisions that prioritize questionable allocations of expenditure and public investment: (a) Article 118 contains an unprecedented number of non-governmental organizations – with an allocated amount of Q5, 191.63 million selected without clear and transparent criteria, reads the document.
It is also noted that a large number of these organizations have been shown to have no experience, are unknown or have obvious links with political actors.
He also points out that there are unplanned investment projects and without technical justification to understand why they are prioritized over similar projects that communities are demanding throughout the national territory.
It is very serious that some of these projects are not even registered in the National Public Investment System (SNIP); (c) Articles 117, 122 and 129 refer to investment projects for past fiscal years, including dredging, which are impossible to control and therefore constitute pockets of corruption, as well as investment projects carried out through states of emergency, which encourage the acquisition of illegal public debt, reads.
Reduction to social investment
Point 3 of the letter addresses what Arévalo considers an arbitrary reduction of social investments with a negative impact on social welfare and economic growth.
He points out that by including rules to guide and prioritize public spending in favour of non-governmental organizations and investment projects – questionable and opaque – it helps to reduce budgetary ceilings for ministries such as Health, Education, Social Development and the Interior, which are essential for the production of public goods and services that guarantee rights and promote social welfare, citizen security and economic growth.
In the context of the urgent obligation of the public authority to improve the quality and coverage of health, education, protection and social assistance, as well as the security services in the country, these unjustified cuts in budgetary allocations limit the fulfilment of the constitutional duties of the State, as well as the commitments contained in the Peace Accords and in the international commitments of which Guatemala is a signatory, such as the 2030 Agenda for Development, Arévalo mentions Giammattei.
Threat
Point 4 of the letter mentions what the president-elect considers to be a threat to the timely payment of public debt and the financing of public investment with significant impact on the country risk rating.
The provisions that oblige the Executive, through the Ministry of Public Finance, to obtain prior authorization from the Congress of the Republic to issue, negotiate and place the Treasury Bonds up to an amount equal to the maturities that occur during the fiscal year 2024, i.e. to execute the revolving (over) of the public debt (articles 56 and 69), constitute a threat that could affect the timely payment of the public debt service, unnecessarily compromising the rating of the country risk and defunds of relevant public investment and social expenditure.the document.
It states that these articles cause a significant deterioration of the business and investment climate, which will have a negative impact on the country’s macroeconomic stability, as well as on the creation of more and better jobs.
According to all the above, which is in addition to the criteria and concerns expressed by multiple voices of Guatemalan society, including civil organizations, indigenous authorities, business associations, trade unions, academic entities, think tanks, among others, there are sufficient elements for the veto of Decree 18-2023, Law on the General Budget of Income and Exceeds of the State for the Fiscal Year Two Twenty-four, on the basis of article 178 of the Constitution of the Republic, thus fulfilling its status as guarantor of the Constitution and its duty to ensurethe interests of each and every one of the inhabitants of the Republic, concludes the letter.
Adoption of the budget
On November 30, the ruling alliance in Congress won the approval of the national budget at its third reading and final drafting, despite warnings and requests from the elected government, which asked not to approve the budget because it would complicate the implementation of resources in 2024.
With 115 votes in favour, the plenary of Congress approved Decree 18-2023, which gives life to the national budget for the coming year, counting on an amount of Q124 thousand 879 million.
This article has been translated from the original which first appeared in Prensa Libre