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through a program of professional training and institutional reform, making them less susceptible to control by corrupt or patronage-oriented local authorities, or 2) sell them to the private sector via concession contracts. In the case of INDE, it is also necessary to avoid manipulation with shortsighted political ends. This can be achieved by: ♦
♦ ♦
Granting INDE greater autonomy by amending its charter to give INDE private-enterprise status (regarding employment law, taxes and accounting, and environmental compliance); give INDE managers the same latitude as private-sector managers; and de-politicize the appointment of managers (e.g., through a board of directors with staggered, long-term mandates of more than four years to avoid coincidence with political cycles, and with possibility of reappointment). Auctioning off contracts to control INDE production, thereby splitting INDE “virtually” rather than in terms of asset ownership. Placing dispatch of INDE plants under AMM, using a clearly specified, transparent calculation of value of lost load and dispatch program, like SDDP.
Finally, with regard to obstacles to the development of hydroelectric and other renewable energy projects, the government is already drafting a Renewables Law that provides tax incentives for such projects.
Macroeconomic and Political Measures Macroeconomic suggestions for maintaining stability and political suggestions for improving governance must come from various sources, including the press, political parties, research centers, and international agencies. At the sectoral level, what can be mentioned is that it is necessary to insist that investment in electricity depend largely on the country’s general investment climate, which, in turn, depends on the macroeconomic and political conditions of the day. Finally, 2002 and 2003 are difficult years for the electricity sector because of general elections held during this period. If difficult decisions are not made today, it will be nearly impossible to approve them during the pre-campaign and campaign months. Moreover, given Guatemala’s
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