Honduran "Dream" Becomes a Nightmare for the Poor

Via NY Transfer News * All the News That Doesn't Fit

PL Weekend Feature Edition, Jan 6-7, 2001

HONDURAN "DREAM" BECOMES A NIGHTMARE FOR THE POOR 

by Raul Garcia Alvarez

Central America Editorial staff, Prensa Latina

Havana -- The Honduran dream of walking down the path of development will
not become reality until the country solves the debt they have had for over
100 years.

The journalist Faustino Ordonez Baca of the Honduran newspaper La Prensa
points out that Honduras carries the burden of the debt from the 20th
century and part of the previous one, into the beginning of the year 2001,
with no hope of paying it off it in the near future.

The national debt, both public and private, surpasses 4.5 billion dollars,
he noted. At present, 40 percent of the general budget is destined to pay
the corresponding quota of the debt capital and interest.

According to experts, if the debt is not honored, creditors will fail to
grant new loans, which are mostly destined to paying off other debts.  It is
a vicious circle with a sensitive central point: poverty.

During the '70s the debt reached its highest point.  In 1973 it was 130
million dollars which rose during the following seven years to $1.1 billion.

An economic analysis of the period reveals that the country launched
industrialization through multi-million dollar loans from abroad and the
participation of private capital. The project, which was launched with
forecasts of a bonanza for the country, actually led to begging,
unemployment and debts, according to Ordonez.

The bankruptcy of the state-owned National Investment Corporation, CONADI,
which promoted industrial development with foreign loans that were later
granted to private companies, cost the nation about 350 million dollars.
Financial resources of up to 150 million dollars which went to local
entrepreneurs were lost when they refused to repay their loans.

The president of the Honduran Private Business Council (COHEP), Juliette
Handal, acknowledges that there was a "brutal waste" in the projects,
carried out and promoted by foreign companies and approved by corrupt
civilian and military officials, and that this is the real reason behind the
present bankruptcy.

During the government of Roberto Suazo Cordova (1982 - 1986) several cases
of corruption were publicly revealed that directly affected the most
marginal sectors of society.

Previous scandals had occurred in the country, where millionaire fortunes
found their way to the pockets of government and military officials.

During the presidency of Rafael Leonardo Callejas (1990 - 1994) misuse of
the Fund for Petroleum Stabilization was notorious, a case that is still
awaiting trial by the courts. During this period the foreign debt increased
to 700 million dollars, in short-term, high-interest-rate loans from
financial institutions.

Carlos Flores Facusse, who became president in January of 1998, gave hope to
the poorest and oppressed class, which represents 80 percent of the almost
seven million inhabitants. At first he refused impositions by institutions
such as the World Bank (WB) and the International Monetary Fund (IMF) to
find a "joint" solution to the internal crisis and the foreign debt with
private and state business.

But in the almost three years he has been in power, very little has been
done to help the poor; Flores has maintained the neo-liberal patterns of his
predecessor and ratified his alliance with the international financial
sectors and the measures dictated by the United States for Central America.

An internal crisis that was serious when he assumed power reached a boiling
point with the tragedy of hurricane Mitch towards the end of 1998, a natural
disaster that left 10,000 dead or missing, an estimated loss of seven
billion dollars with serious damage to up to 70 percent of the local
infrastructure.

The blow this Honduras suffered was so intense that specialists called it
the "tragedy of the century" and, to date, neither local and international
strategies, nor support and collaboration have been able to compensate for
the losses.

Nearly 70 percent of Honduran children show signs of malnutrition; there is
a shortage of public schools and teachers and the number of children who
must work instead of attending school is the highest in the region. Of every
100 families, 80 are on the borderline of poverty and 49 are reduced to
begging.  Infantile mortality is 43 for every thousand born.

The dependence on the United States market and the conditions imposed by the
WB and the IMF are responsible for the increase of the foreign debt,
analysts claim.

And the people of Honduras, who have been waiting for development for over a
century, still wait. LV/RGA/AVP/RA

(c) 2001 Prensa Latina, NY Transfer News. All rights reserved.

 
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