Pérez Takes Guatemalan Presidency as Investors Back ‘Iron Fist’

Eric Sabo
Bloomberg
January 14, 2012

Former Guatemalan army general Otto Pérez Molina swears in as president today, vowing to crack down on drug gangs and bolster the judiciary, a policy that may lead to a resumption of U.S. military aid after 34 years.

His pledge to wield an “iron-fist” against drug cartels has resonated with local business leaders and helped send bond yields to their lowest level in seventh months.

The former head of military intelligence will now need to reassure the U.S. congress that an army he helped command during a 36-year civil war has reformed, said Eric Farnsworth, vice president of the Council of the Americas in Washington. In its 1999 findings, a United Nations-sponsored commission said that witness accounts showed the government committed genocide during that war that left 200,000 dead in a country of 13.3 million.

“Any future aid would have strict conditions,” Farnsworth said in a phone interview. “You can’t just give a blank check, the scars of human rights abuses just go too deep.”

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