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Zoellick Presser with the Associated Press

Press Availability with the Associated Press

Robert B. Zoellick, Deputy Secretary of State
Koramsa Plant
Guatemala City, Guatemala
October 3, 2005

JUAN CARLOS LLORCA, AP: What do you expect from your upcoming trip to Nicaragua?

DEPUTY SECRETARY ZOELLICK: In Nicaragua I'm going to be meeting people -- from the President and the Cabinet and members of Congress to the various parties, the business community, and some of the potential candidates. And the clear message that I want to send is that there is an opportunity with CAFTA, with the Millennium Challenge Account, with debt forgiveness, to really move into a take off phase for development. But that opportunity can only be seized if some of the forces in Nicaragua don't undermine its democracy and its development. Those forces are related to the corruption of Aleman on the right and the non-democratic movement of Ortega to the left.

So I want to be very clear to people in Nicaragua that we support their aspirations for democracy that you see in the Movimiento movement and that I hope that some of the leaders, particularly those in the Liberal Party, decide to support the preservation of democracy and take the opportunity for development. I'm also going to be emphasizing that we strongly support the efforts of the OAS, the Organization of American States, to try to make sure that there is not a creeping coup against the elected democracy of President Bolaños.

JUAN CARLOS LLORCA: Regarding your visit to Guatemala, what would you say were your most important successes during your trip to Guatemala?

DEPUTY SECRETARY ZOELLICK: I wanted to come, in part, to thank some of the people in the Government who we worked very closely with to pass CAFTA. I wanted to start a more in-depth dialogue about how we use CAFTA as part of a larger development strategy. That can involve some aid from the U.S., and it involves opportunities for business investment, and it involves learning more about operations like this to see what we can do to enhance their likelihood for success in our marketplace. But it also involves learning what the Government is doing in some of the areas like internal security with some of the gang issues and the criminal issues because those undermine the environment. So, today's stop was really a chance to meet different people in the Congress, the executive branch, and I'll meet some people in the business community, and hear what they have to say and make sure they know that we want to work closely with them after CAFTA is passed to make this a broader success.

JUAN CARLOS LLORCA: During the press conference you said that CAFTA is the cornerstone for a larger structure. How do you envision that structure in the near and the medium term future?

DEPUTY SECRETARY ZOELLICK: Well, I mentioned some of it. In other words, how you connect some of the development aid, not only bilaterally, but from Inter-American Development Bank loans, the World Bank loans. My colleague, the Secretary of Commerce, Carlos Gutierrez, is coming down to talk about the investment climate. This [the Koramsa plant] is a facility that obviously is successful because it has good integration with suppliers in the U.S. and its retail customers. So the more people learn about those opportunities and what is here, the more you have a chance for people to attract investment and create jobs. Also there are the issues that I mentioned about trying to strengthen legal structures. When I am talking about the structures, I am saying each of those have to be, sort of girders of the building, of the structure. The Free Trade Agreement offers an opening and an opportunity but it will be more effective if it is buttressed by those other elements.

JUAN CARLOS LLORCA: The Guatemalan Government asked for more aid.

DEPUTY SECRETARY ZOELLICK: He's good, eh? He keeps getting in his questions. [laughter]

JUAN CARLOS LLORCA: The Guatemalan government

DEPUTY SECRETARY ZOELLICK: They should train the Reuters reporters that way [laughter]. The senior Reuters reporters know that I'm speaking about trainees [laughter, crosstalk].

JUAN CARLOS LLORCA: The Guatemalan Government asked for more aid. They were saying that Guatemala has the lowest per capita levels of assistance. They were asking for extending the Maya Jaguar plan to fight against drug trafficking. They were asking also for Guatemala to be included in the Millennium Challenge Account. What would Guatemala have to do to see that those requirements are met?

DEPUTY SECRETARY ZOELLICK: First, Guatemala gets about $40 million in aid already. Second, I mentioned that under CAFTA there will be about another $40 million a year spent for all the CAFTA countries focused simply on improving labor and environmental conditions. What I suggested to the NGO groups, to the Congress and to the Executive is that we want to have a dialogue about how best to devote those resources. Third, there is an additional $10 million a year for three years, starting in 2007, to help bridge Guatemala to the Millennium Challenge Account funds. The Millennium Challenge Account is the reason Guatemala was not a candidate before was because its per capita income was slightly higher than that of Honduras and Nicaragua. It will be eligible in 2006, but it has to meet objective criteria, that deal with corruption, accountability, democracy and others. And that is actually where one should see those criteria, not as a disadvantage, but as an incentive to try to do the things, for example, to counter corruption which will make it a better investment climate.

So, in terms of Millennium Challenge Account eligibility, we have to look at external standards, these objective standards, there's external reviewers, but we can try to work with Guatemala so it can upgrade their performance in the areas in which it is short. In a number of areas like trade, I think it will do well. In macro-economic policy it will do well; in democracy I hope it will do well, investing in people, one will have to see, because these are done as a medium in comparison with other countries. The Berger administration has done good work on corruption, went after some members of the prior government, but it has to be sustained and strengthened more generally. So that was part of my discussion with the members of the legislature, too -- how they could back that. But again, remember it is not all Government assistance. I mean, you got 15,000 people employed here at this factory through private capital, and the private capital exists because they have a market they can sell to. So that is another part of trade.

Released on October 14, 2005


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