Guatemala and 22 other countries were graded on their counternarcotics performances last year. It was the first time that Guatemala had received a failing grade, unlike Myanmar and Haiti, which also were singled out for poor performances, as they were a year ago.
Pervasive corruption was a principal reason for Guatemala's poor rating. "Police stole twice the quantity of drugs they officially seized," said Paul Simon, the State Department's top counternarcotics official.
Under law, Bush can impose economic sanctions against countries that do not measure up on counterdrug policy. Bush waived sanctions on national security grounds for both Guatemala and Haiti.
"These two countries will receive assistance, notwithstanding their counternarcotics performance," White House press secretary Ari Fleischer said.
Simon said an aid cut for Guatemala would only lead to a further deterioration of drug-fighting institutions. He said aid to Haiti will be continued primarily on humanitarian grounds.
Sanctions were continued against Myanmar, also known as Burma. This was symbolic because that country has not received U.S. foreign aid for years.
Simon said Myanmar took some useful steps but added that large-scale poppy cultivation and opium production continued, as did trafficking in methamphetamine.
He said Haiti remains a major transshipment point for drugs, primarily cocaine, moving from South America to the U.S. market. He described Haiti's counterdrug commitment as very weak.
In a memo to Secretary of State Colin Powell, Bush also decried an increase in illegal synthetic drugs entering the United States, especially Ecstasy from Europe. He said the Netherlands is a major clandestine production center for Ecstasy.
The president said Canada has become a primary source of pseudoephedrine and is an increasing source of high-potency marijuana. He expressed hope that Canada will do more to combat the trade, particularly in the regulation of precursor chemicals.
The countries whose 2002 counternarcotics performances were evaluated were Afghanistan, the Bahamas, Bolivia, Brazil, Myanmar, China, Colombia, Dominican Republic, Ecuador, Guatemala, Haiti, India, Jamaica, Laos, Mexico, Nigeria, Pakistan, Panama, Paraguay, Peru, Thailand, Venezuela and Vietnam.
Rep. Cass Ballenger, R-N.C., chairman of the House International Relations subcommittee on the Western Hemisphere, welcomed Bush's decision on Guatemala.
Ballenger said Bush recognized Guatemala's failure to cooperate fully with U.S. counternarcotics efforts. "Regrettably, the Guatemalan government deserves to be decertified," he said.
In Guatemala City, Foreign Minister Edgar Gutierrez criticized Bush's decision. It could create "a bad atmosphere for business, investments and the development of the financial and banking system," Gutierrez said.
Simon made clear the administration's dissatisfaction with Guatemala in testimony last fall.
"Widespread corruption, high turnover of law enforcement personnel and a lack of resources have plagued counternarcotics efforts in Guatemala during the last three years," Simon testified.
He said that since President Alfonso Portillo took office in January 2000, "there have been four ministers of government, four directors of the national civilian police, and nine different directors of the government's anti-narcotics unit.
"This constant upheaval makes long-range planning for operations and investigations nearly impossible and working relationships very difficult," he said.