A contentious new law on “development promotion” that quickly passed the Honduran congress last month has provoked alarm in communities already trying to halt projects that could roll over indigenous rights and damage the environment. The “Ley de Promoción del Desarrollo y Reconversión de la Deuda Pública” (Development Promotion and Public Debt Restructuring Act) – passed under unusual and controversial congressional rules - will facilitate the sale of various public and natural resources for development purposes.
Legislators promoting the bill cited Honduras’ fiscal woes, saying revenue generated through the sale of concessions and of public assets would help the government pay off its debt. A new report [PDF] from the Congressional Research Service notes:
Honduras suffered an economic contraction of 2.4% in 2009 as a result of the combined impact of the global financial crisis and domestic political crisis. Although the economy has partially recovered, with estimated growth of 3.3% in 2012, the Honduran government continues to face serious fiscal challenges. The central government’s deficit has been growing in recent years. As it has struggled to obtain financing for the budget, public employees and contractors occasionally have gone unpaid and basic government services have been interrupted. Honduras also continues to face significant social disparities, with over two-thirds of the population living in poverty.
The CRS report goes on to state that “President Lobo also inherited a weak economy with high levels of poverty and inequality.” But as we described in a November 2009 report, “poverty and inequality decreased significantly during the Zelaya administration, with rapid growth of more than 6 percent during the first two years,” and “Some expansionary monetary policy was used to counter-act the global downturn in 2008.” This was interrupted by the coup – the “domestic political crisis” referred to by CRS -- to which we noted the Honduran economy was “especially vulnerable,” as well as to the global economic downturn.
If the Honduran government now has a fiscal deficit problem, that would seem to be the result of policies of the post-coup governments and their response to the global recession. As we also noted in November 2009:
The Zelaya administration reduced the fiscal deficit, as a percent of GDP, from 3.35 in 2005 to 2.34 in 2008. In 2006 and 2007, the deficit was held at 1.12 and 2.9 percent of GDP, respectively.
In contrast, the fiscal deficit was 4.62 percent of GDP in 2011 and 6.06 percent in 2012.
Our 2009 report added, “It is also worth noticing the important decrease in public debt, as a percent of GDP…” Using revised ECLAC numbers, we can see this went from nearly 45 percent in 2005 down to 18.3 and 19.1 percent in 2007 and 2008, respectively. Following the coup, the public debt has steadily increased year after year, reaching 29.2 percent of GDP last year.
Some observers both inside Honduras and out see the new legislative move as being perhaps at least partly motivated by politics as the November elections draw closer, and polls continue to show LIBRE party candidate and former first lady Xiomara Castro de Zelaya with a lead over her opponents. The idea that Lobo government-allied legislators may be trying to accomplish some big goals while they still can is given credence by remarks such as this one from National Congress Secretary Chang Castillo:
[W]e are not handing over the country to foreign interests; what we are doing is to make national assets serve as collateral to alleviate the financial crisis that plagues this government and that will overwhelm the next government even more, regardless of which party it comes from. We now only have six months in office to hand over power and we do notknow who will win because we don’t have a crystal ball to know who will win. [Emphasis added.]
The law could have far-reaching implications for several areas of the country where local communities have opposed new development projects. Its passage came just a week following the shooting death of Tomás García in Río Blanco, where members of the indigenous Lenca community are opposing the construction of a series of new hydro-power dams by the Honduran company DESA and the Chinese SINOHYDRO.
As Rick Kearns reported in Indian Country Today, Honduran soldiers fired on García, a leader of the Civic Council of Popular and Indigenous Organizations (COPINH), “in front of the contested Agua Zarca hydroelectric project headquarters in the town of Achotal,” killing him. They also shot his 17-year-old son, Alan, who was seriously injured. (Observers from School of the Americas Watch documented Alan’s injuries and Tomás García’s funeral in this photo essay, and provided their own account of the events here.) The incident was denounced by Amnesty International, which issued an alert expressing “grave concerns for the safety of protesters” in the area.
Tomas García’s murder follows an escalation of harassment against COPINH General Coordinator Berta Caceres. Caceres was recently hauled before a judge on bogus weapon charges, which were subsequently provisionally dismissed. COPINH and its supporters note that there was significant local and international outrage to this persecution against Caceres, but even so, the prosecutor has appealed the dismissal, and COPINH and its supporters remain greatly concerned that the authorities may continue to go after Caceres and other leaders of the movement.
Another area where a local community is concerned about the impact of resource exploitation is Nueva Esperanza in the department of Atlántida. According to the Honduras Accompaniment Project, “armed men have been…terrorizing the villagers and threatening those who refuse to sell their land to the mining company [Minerales Victoria].” In an incident that alarmed human rights organizations (and which was also condemned by Amnesty International [PDF]), on July 25 two foreign human rights observers, Daniel Langmeier, a Swiss national, and Orlane Vidal, from France, were abducted by armed men who forced them into a truck. The men warned “not to come back to the community because something bad might happen to us,” Vidal recounted in an interview with Honduras Laboral that was translated by Clayton Conn and posted on Upside Down World.
Caceres, Langmeier, and Vidal recounted their recent experiences – along with other rights activists, political party members and others – in a recent press conference organized by the Committee of the Detained and Disappeared in Honduras, which is summarized here (in Spanish).