Retired general assumes presidency in Guatemala

Retired general Otto Perez was sworn in Saturday as president of Guatemala, promising to restore order in a country awash in drug-related violence and near the brink of bankruptcy.

Saying a course correction was urgently needed, Perez, 61, vowed to use his four-year term to fight corruption and impunity, put public finances on a sounder footing and restore public respect for authority.

"The change has begun, the change has arrived," he said. "Today we begin a new mandate with many problems and enormous challenges for the whole of society, but with very good prospects."

But Perez acknowledged the depth of problems facing the Central American country, where half of the 14.3-million-strong population lives in poverty, calling it "a nation very near moral and economic bankruptcy."

"Public institutions have to be rescued from the disorder and corruption that infests them. Our priority consists in strengthening institutions. Nobody is above the law," he said.

Perez replaced social democrat Alvaro Colom, taking the oath of office in a ceremony at a sports complex south of the capital attended by presidents of neighboring Latin American countries and other dignitaries.

Some 2,000 police, backed by the military, took up positions around the capital, and bomb squads and elite units were stationed at the site of the swearing-in ceremony.

A veteran of a bloody war against leftist insurgents, Perez is the first military man to rule Guatemala since the armed forces handed over power to civilians 25 years ago.

In a chilling reminder of the challenges facing Perez, a recently re-elected member of Guatemala's congress, Valentin Leal, was gunned down in the historic center of Guatemala City on Friday by assassins on motorbikes.

Guatemala has on average 18 murders a day, six times the world average, and has seen large swaths of its territory penetrated by drug cartels using Guatemala as a transit point on their smuggling routes out of South America.

Los Zetas, a Mexican drug gang notorious for its violence, is believed to be particularly active here, with officials blaming it for 40 percent of the killings in the country.

Perez campaigned on a promise to confront the cartels head on, deploying the Guatemalan military against them, much as Mexico's President Felipe Calderon has in his country, with mixed success.

"We are going to use elite army units so that they help Guatemalans achieve the security we deserve, waging a frontal battle against the drug trafficking cartels," he said before his inauguration.

He has vowed to show results in his first six months in office, and to cut in half the murder rate -- currently one of the world's highest at 38 per 100,000 inhabitants -- by the end of his term.

Perez planned to meet Calderon and Colombia's President Juan Manuel Santos on the sidelines of his inauguration, and said he was happy they were attending "because both countries have been emblems of the fight against terrorism."

Human rights groups say, however, that Perez must also strengthen the rule of law in Guatemala, where the United Nations set up a special commission in 2006 to investigate serious crimes because the security forces had been so deeply penetrated by crime groups.

Perez has had to defend his own record as a military commander during a 1960-1996 civil war that was notable for massacres of Indian villagers during brutal counter-insurgency campaigns in the country's highlands.

Perez, who represented the military in negotiating a peace accord that ended the conflict in 1996, has denied accusations that rights abuses took place under his command in El Quiche.

In his inaugural speech, he called for national reconciliation to heal the wounds of that conflict.

On the economic front, Perez vowed to make "profound, structural and not cosmetic changes," blaming the country's fiscal disarray on populist programs and mismanagement by his predecessor.

He has said he will sharply increase taxes but Perez must deal with a divided one-chamber Congress where his Patriotic Party has only 54 of 158 seats. Colom's National Unity of Hope party has 47 seats.

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