Envío Digital
Central American University - UCA  
  Number 373 | Agosto 2012



The country that gave birth to the new LIBRE Party

Honduras’ next elections are already being contested. The new Liberty and Re-founding Party (LIBRE), Manuel Zelaya’s recycled Liberal Party, leads the polls with its presidential candidate Xiomara Castro de Zelaya, Zelaya’s wife. But there’s still a year and a half to go to clear up the unknowns. Meanwhile, Honduras remains submerged in an economic crisis, corruption scandals, violent agrarian conflicts and boycotted reforms. And it remains firmly in the sights of the voracious US interest in oil deposits.

Ismael Moreno, SJ

Four elements are influencing Honduras’ current dynamic: the very unstable economy; the age-old, unending and ever more acute agrarian conflict; the problematic in the educational sector; and the campaigning leading up to the political parties’ primary elections. Underlying all of that is the continuing violence, with its tragic and ongoing expression of death as a means for settling conflicts, ensuring that those who move in the subterranean corridors of impunity remain the big winners of this convulsive stage of our history.

Pressure for the tax reform

In June the finance minister failed in his effort to pressure the National Congress to approve the sixth tax package of President Lobo’s administration. The proposal remained on the waiting list of bills up for approval because the business elite screamed to the heavens their inevitable mantra that the measures will discourage investment and affect private initiative.

Economists from the Social Forum on the Foreign Debt (FOSDEH) point out that the tax measures are an International Monetary Fund (IMF) condition for signing a new agreement with Honduras that would make it eligible to receive new loans from the international financing institutions. They explain that the reform’s objective is to expand the budget by 6.2 billion lempiras (some US$320 million) to cover the costly campaigns of the 16 currents of the 4 political parties that will participate in November’s primary elections, as well as the subsidies for electricity, liquid gas and urban bus and taxi fares.

According to the Finance Ministry, the government has already spent the entire 2012 budget (equivalent to some US$7.5 billion, which is nearly half the estimated $16 billion gross domestic product): 55.1% was spent by the central government and 44.9% by the decentralized entities. Three ministries alone reportedly consumed 1,500 lempiras more than their entire year’s budget just in the first half of the year, while the National Congress spent 99.12% of its annual budget in the same period. The Finance Ministry is requesting approval of 6.2 billion additional lempiras to respond to current spending needs. Moreover, as a new agreement with the IMF has yet to be signed—the previous one ended in March—the international institutions will not disburse a pending 2.6 billion lempiras, which means that the Finance Ministry must collect 8.8 billion to cover this year’s budgetary needs.

The tax reform is between
a rock and a hard place

Finance minister Tito Guillén, a man loyal to former President Rafael Callejas, said the proposed measures are to battle tax evasion, those who don’t pay their income tax and importers who are not registered in the Executive Income Division. In early June, when the tax measure was causing sparks in the business sector, the government circulated a list of hundreds of business owners who had declared losses in their companies to avoid paying taxes but refused to provide information about their imports and exports.

To approve a new agreement with Honduras, the IMF is setting three conditions: this tax reform, a new sliding exchange rate scale for the national currency that slides faster than the current one and a reduction in public spending. One of the reasons for insisting on a more accelerated devaluation of the national currency is that the IMF is the guarantor of Honduras’ debt with the international financing institutions and is therefore interested in presenting that debt as manageable. The devaluation reduces the dollars and permits the debt to be presented in lower figures, although internally the cost of the devaluation affects all of society.

Those who understand economics say that the essence of the tax reform is to apply a 1% tax on the gross income of individuals and businesses that systematically present false losses, given that the IMF’s main concern is tax evasion by an important sector of the business class. The business elite’s confrontation with the IMF is triggered by the voraciousness of Honduras’ big business: the more they acquire and concentrate, the more they want, with no self-restraint in employing openly criminal actions such as tax evasion and false reporting of nonexistent losses in their income and investments. It must be remembered that in the eight public administrations Honduras has had since 1982, business interests have gotten the National Congress to approve 65 decrees granting them tax exonerations.

A full 35% of the country’s general budget is financed by external contributions, which is why the IMF supervises public spending every quarter based on agreements signed with the government. The IMF is avoiding long-term agreements due to its lack of confidence in the Honduran government’s administration.

On the eve of a new accord with the IMF depending on these three conditions, the government finds itself between the rock of the IMF’s pressure and the hard place of domestic pressure. If the government continues responding to the economic demands of the social sectors, the IMF will deny it resources, but if it accepts the IMF’s conditions, subjecting itself to the devaluations and increasing inflation in the calamitous situation the country is in, it will seriously fan the flames of unrest.

Corruption scandal

The economic decisions remained trapped in the maelstrom of corruption the country is experiencing. On the last day of July the finance minister’s wife was captured while traveling from the capital to her residence in San Pedro Sula carrying 1.15 million lempiras. The sum seems to have come from shrimp businesses in the southern part of the country. According to the charge filed by a journalist from Choluteca, the State had rented out for 500,000 lempiras six shrimp farms that then generated 40 million lempiras in earnings. As a token of their gratitude, the beneficiaries of the rental gave the finance minister 3.2 million lempiras. Such under-the-table gifts are never issued through the banks but in
cash to avoid leaving a paper trail. Guillén justified the money by claiming it was a loan to buy dollars for their businesses. Next he said the money and the vehicle his wife was riding in belonged to a Honduran development foundation created by Congress president Juan Orlando Hernández, a candidate for one of the National Party currents, who is backed by President Lobo. This new case reveals the corruption of current top government officials, even spattering the President himself.

Pressure for land

The current land conflicts are the result of the unbridled concentration of land in the hands of national and foreign agro-exporters and their firm determination not to take a single step toward minimum consensus that would require renouncing any of the many advantages the neoliberal model has provided them over the past two decades.

Barely three months ago, Nicaragua’s affluent Pellas family acquired 90% of the Chumbagua sugar company’s roughly 10,000 hectares of cane fields in the Santa Barbara Valleys in western Honduras, owned by the Rosenthal family of Honduras for 40 years. The only pact Honduran elites will accept is an economic and political one involving national capital in cahoots with foreign capital.

On June 5, the Unified Peasant Movement of the Aguán Right Margin (MUCA-MD) signed an agreement regarding financial conditions for purchasing from the powerful Miguel Facussé farms in Aguán on which more than 1,900 peasant families had settled. The agreement anticipated the purchase of four farms (La Aurora, La Concepción, La Lempira and La Confianza) totaling 2,429 hectares that have been in the MUCA-MD’s possession since April 2010.

The MUCA-MD agreed to pay around US$16.8 million to the state-owned Honduran Bank for Production and Housing over a 15-year period with a 6% interest rate and 3-year grace period. The government also granted a 32-hectare area for the construction of housing and a sovereign fiduciary guarantee so the operation could be conducted. The signing by the MUCA-MD complements a broader agreement involving the Left Margin (MUCA-MI) and Authentic Aguán Peasant Vindication Movement (MARCA). In total, the 32 peasant businesses that make up these organizations and represent nearly 3,500 families settled on eight farms will acquire some 4,600 hectares at a total cost that exceeds US$32 million.

According to peasant leaders, the government will now have to comply with all the points included in the agreements of April 2010, shortly after President Porfirio Lobo Sosa’s administration got underway. The agreements anticipate turning over to the MUCA a total of 11,000 hectares of land, as well as education, health and housing programs, among other things.

Conflict over
unfulfilled agreements

During the event held in the presidential building, Lobo not only publicly pledged to comply with these points, but admitted that an error had been committed in Honduras 20 years earlier by promoting an agrarian counter-reform that now must be corrected if there is any hope of resolving the national agrarian conflict. “We hope our decision brings a little peace to the areas of the Lower Aguán,” one of the peasant leaders told Lobo that same day. But he warned that “the conflict hasn’t been resolved because Honduras’ agrarian problem has deep structural causes and needs comprehensive solutions that go beyond our region.”

Together with those agreements, the peasant organizations are demanding repeal of the Agricultural Modernization Law approved in 1992, and approval of the bill on Comprehensive Agrarian Transformation presented in 2011 to the National Congress. In addition, they emphasized that all murders of peasants and the innumerable violations of human rights that have been terrorizing peasant families in recent years need to be investigated in depth.

A month after the signing by the MUCA-MD, the government and Facussé, peasant Word of God delegate Gregorio Sánchez was kidnapped by private guards of agribusiness owners. On July 6 his body was discovered partially buried on one of Facussé’s farms with signs of torture. Days later other bodies appeared and a group of grassroots leaders was machine-gunned during a national offensive by the business elite, which claims that Aguán has become an anarchic area in which criminals and the Left are creating chaos, passing themselves off as peasants.

There are many conflicting interests in Aguán, including those of the agro-industrialists, politicians-turned-estate owners, drug traffickers and the peasant groups. Armed groups are sprinkled through all sectors, including some of the peasant groups themselves to a lesser degree, especially those subjected to extortion or threats.

President Lobo opted for a military response in the area three months after taking office, but no positive results have been seen. The militarization of the area has significantly strengthened the private guards of the powerful agro-industrialists and put the peasant groups in a very disadvantageous situation. Today there are more deaths, an environment of anxiety and a number of agreements that have not remotely pacified the area.

Lobbying the United States

In late July, a government delegation went to Washington to request backing for its plan to “pacify” the zone by defining it as a state of territorial exception—basically a state of siege in a specific area. This involves circumventing legislation to give the army and police a free hand to repress at will the peasant organizations they have accused of having weapons and a plan to destabilize the area. “There is no land problem in Aguán, just a security problem, which is how we’re going to deal with it,” declared Lobo while his delegation was off lobbying the US government, but the decision to impose a state of exception was shelved, at least for the moment.

Washington is concerned about what’s happening in Honduras, particularly in the Aguán area. Both the State Department and progressive members of Congress are expressing this concern and share a belief that the State Department and the US Embassy in Tegucigalpa have erred in their policy toward Honduras by strengthening relations with and support for longstanding allies who have given clear signs of not respecting democracy as the US administration understands it.

In a US congressional human rights commission hearing, Honduras was requested to testify regarding violations of human rights, particularly that of freedom of expression. This left it very clear just how concerned Washington is about Honduras’ chaotic reality, which seems to have escaped the control of US foreign policy.

Oil ambitions

The voices in Washington expressing this worry about Honduras aren’t echoing the traditional discourse in defense of democracy and against drug trafficking. Although those issues continue to appear publicly, the concern has other geo-strategic interests, linked to the petroleum potential that appears to exist in the country’s Caribbean region.

They go so far as to state that the US government has protected that territory for several decades due to its high quality oil reserves, comparable to those of the Middle East. The instability and presence of groups that put “peace” at risk in the area are threatening those interests. Avoiding the loss of those reserves explains the current worry perceived in the State Department about Honduras, particularly the Aguán Valley area.

On May 11, in a joint operation by the Honduran army and the US Drug Enforcement Agency (DEA), several Miskitu peasants were machine-gunned and killed in their handmade boats off Honduras’ Caribbean coast. The incident was originally reported as a confrontation between drug traffickers and the army, but independent investigations proved that the DEA officers opened fire and the victims had nothing to do with criminal bands, much less drug trafficking cartels. The Honduran army decided to cover the DEA’s back and take the heat for what had happened.

The event revealed that the DEA sees the territory and waters of what is known as the Honduran Mosquitia as its property. Official publicity has sown the idea in the rest of the country that Honduras’ Miskitus are drug traffickers and this coastal area is a drug corridor, a perception that this killing will only strengthen. That prejudice is also fed by the idea Honduran politicians are currently promoting of converting Aguan and the Mosquitia into security areas. A “pacification” plan for eastern Honduras, arguing the need to firmly and decisively promote the struggle against drug trafficking, is a perfect fit.

More conflicts over land

At least two agrarian conflicts in Sula Valley will continue to provoke social and political pressure. One involves the Compañía Azucarera de Honduras, S.A. (CAHSA). According to the National Agrarian Institute (INA) and peasant organizations, this sugar company owns some 4,500 hectares, while the law only permits it a land ceiling of 250. Thirteen peasant groups organized to create the Peasant Movement of San Manuel (MOCSAM), initially supported by INA Minister Director César Ham, for the purpose of recovering those lands, which back in 1990 belonged to peasant cooperatives and were sold to CAHSA at very low prices through the Agricultural Modernization Law.

Without the INA director’s endorsement but backed by sectors linked to Manuel Zelaya’s LIBRE party, the peasants decided to take over the lands on April 17. Violent evictions by the police followed, accompanied by growing acts of sadism. The 1,500 people who had taken over those lands near the city of El Progreso were brutally beaten on August 1 and 2 and the 150 hectares of maize and beans they had planted were destroyed by CAHSA machinery.

The other conflict involves another sugar company, Azucarera del Norte, S.A. (AZUNOSA), which has a higher land ceiling that exceeds 4,000 hectares. INA has already presented a suit to get those excessive lands back, but the peasant organizations, some of which are linked to the INA director and others to the nascent LIBRE and other independent parties, are anxious to take them over.

The INA director has expressed interest in seeing the recovery of lands from these sugar companies benefit peasant groups loyal to the Democratic Unification Party. In late July, over 1,000 people in peasant groups not linked to him occupied the AZUNOSA lands, inflaming passions. The agitation of the agrarian conflict has now extended to almost all the national territory.

Conflict in education

President Lobo’s decision in February to name Marlon Escoto as minister of education provoked unrest among sectors who felt their interests threatened. Given that Escoto comes from non-government origins, his appointment not only produced sparks, but has destabilized the main actors who have traditionally run education: the politicians and the teachers’ unions.

He began by untying some knots that generate corruption. He thus targeted the Honduran Teachers’ Social Security Institute (IMPREMAH), from which some 6 billion lempiras have been stolen just in the last four years, at least 500 million of them by teachers’ leaders. He looked into the management of posts, especially the “ghost” ones and the thousands of supernumerary employees, in which the teacher’s leaders are implicated, along with the departmental and municipal directors. He also went after the politicians responsible for appointing and placing the 18 departmental directors for clientelist reasons, firing 14 who were not appointed by competition, as the law establishes, but by their party affiliation.

Pressure on a minister

It’s the first time a public official has pulled the rug out from under teachers’ leaders, although it’s still not clear what awaits him if he continues frontally attacking such actions and dynamics of unquestionable corruption and political manipulation.

The first sign of his future came quickly. Escoto hadn’t finished announcing the firings when the Supreme Court of Justice ruled that the ministerial decision violated the law and obliged him to reinstate those fired. It was one of the fastest decisions the country’s highest legal entity has ever made, leaving the minister who made them looking ridiculous, in an uncomfortable position without any backing.

But undaunted, Escoto announced his next step: he will set in motion his proposal for an educational model that supersedes the interests of both politicians and union leaders. He will also attempt to ensure that this educational model becomes public policy to prevent it being immediately yanked by the next administration. In today’s unstable political environment it remains to be seen if those who control policy and the State’s institutionality, including the teachers’ leaders, will let the minister take this step or will see to it that he is dismissed, as is already being rumored in the corridors of power and the media.

LIBRE: Zelaya’s new party

In an event in the western departmental capital of Santa Barbara on July 1, overthrown President Manuel Zelaya Rosales introduced his 27-year-old daughter Xiomara Hortensia Zelaya, known as La Pichu, to tens of thousands of followers from all corners of the national territory. She in turn officially announced the presidential candidate of his new LIBRE Party: her mother and the former President’s wife, Xiomara Castro de Zelaya.

The young woman showered her mother with praise as the President Honduran history needs. Once she accepted her candidacy, Xiomara Castro launched what will surely be the campaign’s official catch-phrase, “Let’s go, people!” then presented her husband as a candidate for the National Congress.

Those present agreed that it was the most massive and enthusiastic political gathering they had witnessed in many years. A lot of those who participated in the launching of Xiomara Castro de Zelaya’s candidacy highlighted the fact that it had been pulled off with the help of a very large number of grassroots volunteers and their own contributions. But that isn’t quite true, because there’s evident influence of the Liberals who aligned with Zelaya during his government, stayed with him after the National Popular Resistance Front was formed and are now supporting his LIBRE Party.

Most of the Liberals are grouped in four of the five currents that make up LIBRE. The sectors that come from the Honduran Left are largely concentrated in the fifth: the Grassroots Re-founding Force (FRP). One of the four “Liberal” currents seems to have the most influence: the one that goes by the name June 28. It reportedly mobilized the largest number of people for the launching of the LIBRE candidate and has the greatest capacity to place candidates for elected posts.

Who will run in the elections?

Given the Electoral Tribunal’s refusal to register Xiomara Castro de Zelaya as the consensus candidate of several LIBRE currents (Liberty and Re-founding), the nascent party’s leadership has organized national mobilizations to pressure it to register the LIBRE form with her as the only candidate for the presidency.

Various opinion polls, from CID Gallop to the national and independent ones, place her as the favorite to win the elections if they were held this year. With still more than a year to go before the general elections, however, all political pundits are first looking to the primary elections of the currents of the four parties that have filed their forms for that electoral race: the Liberal Party, the National Party, the LIBRE Party and the Grassroots Electoral Broad Front in Resistance Party (FAPER), headed by the president of the Human Rights Defense Committee (CODEH), which split from the ranks of the Resistance.

In addition to these four parties that will participate in primary elections, five others have registered to participate in next year’s general elections without a primary process: the Christian Democrats, the Party of Innovation and Unity, the Democratic Unification Party and the nascent Anti-Corruption Party (PAC) of well-known and controversial sport commentator Salvador Nasralla.

For the first time in Honduras

Zelaya’s wife heads the list of preferences in the opinion polls, and is always followed by Nasralla as runner-up. For the first time, the two most powerful electoral machines in the country—the National and the Liberal parties—appear below the groups that emerged after the coup d’état.

It is still too early to be able to specify dominant tendencies. A year plus is a very long time in Honduras and many things could happen. The hypothesis to follow in coming months is linked to the alliances the LIBRE Party will establish with other currents and political parties. Zelaya himself claimed that LIBRE already has a membership that is 70% Liberals, which would mean it’s recycling the strength that the Liberal Party, particularly its dominant current, had before the coup.

Will there be a change?
If LIBRE opens itself up to alliances with other Liberal currents, such as that of businessman Yani Rosenthal, it would ratify it as a fundamentally Liberal party—with everything that means about political traditionalism—that has “generously” opened its doors to minority sectors of the traditional Left. If that happens, LIBRE would start structuring itself as a moderate reformist party with major influence from leaders of the old political guard who will impose themselves over the other moderate leftist leaders who manage to find room in this tent.

There is still a long row to hoe. The traditional political parties have lost their way in the labyrinth their leaders designed over the past three decades and are going round in well-trodden circles. If they can astutely insert their methods into the emerging political proposals and convert LIBRE and the PAC into new political instruments so as to conserve their impunity and continue sucking at the State’s tit—the only things they’ve learned to do to perfection so far—nothing will have changed in a country that so urgently needs changes. 

Ismael Moreno, sj, is the envío correspondent in Honduras.

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