Honduras Confronts Its Future: Contending Perspectives on Critical Issues 9781685859046

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Honduras Confronts Its Future

Honduras Confronts Its Future

Contending Perspectives on Critical Issues edited by Mark B. Rosenberg Philip L. Shepherd

LynneRienner Publishers, Ine • Boulder, Colorado

Published in the United States of America in 1986 by Lynne Rienner Publishers, Inc. 948 North Street, Boulder, Colorado 80302 © 1986 by Lynne Rienner Publishers, Inc. All rights reserved

Library of Congress Cataloging-in-Publication Data Honduras confronts its future. Essays first presented at "Honduras: An International Dialogue", in Miami, Fla., December 1984. Bibliography: p. Includes index. 1. Honduras—Politics and government—19822. Civil rights—Honduras. 3. Honduras—Economic conditions—19184. Agriculture and s t a t e Honduras. 5. Honduras—Foreign relations. I. Rosenberg, Mark B. II. Shepherd, Philip L. F1508.H65 1986 972.83'05 86-6423 ISBN 0-931477-45-X

Distributed outside of North and South America and Japan by Frances Pinter (Publishers) Ltd, 25 Floral Street, London WC2E 9DS England UK ISBN 0-86187-593-1 Printed and bound in the United States of America

Contents

List of Illustrations Foreword Preface

vii

Gregory B. Wolfe

ix

Mark B. Rosenberg and Philip L. Shepherd

Honduras: An Introduction

xi

Mark B. Rosenberg

1

Part 1 Problems of Democracy 1

The Politics of Democracy in Honduras

Guillermo Molina

2

The Limits of Democracy in Honduras

3

A Deliberative Government to Consolidate Democracy Manuel Acosta

Edgardo Sevilla

23 37 43

Part 2 Human Rights and Social Justice 4

Human Rights in Honduras: The Central American Context

Carlos Roberto Reina

57

5

The Human Rights Crisis in Honduras

Ramon Custodio

65

6

The Special Situation of Human Rights in Honduras Rodolfo Pastor

75

7

Enhancing the Instruments for Human Rights Protection in Honduras Guillermo Perez

83

Part 3 Economic Development and Productivity 8

General Characteristics of the Honduran Economy

9

The Poverty of Progress in Honduras

10 The Model in Crisis

Efrain Diaz

v

Raul Moncarz

Paul Vinelli

97 111 121

Vi

CONTENTS

Part 4 Agricultural Policy and Prospects 11

Honduras: Agricultural Policy and Perspectives

12 Recent Evolution of Honduran Agrarian Policy

Mario Ponce

129

Ubodoro Arriaga

153

13 Agrarian Development and Peasant Realities Antonio Julin Mendez 14

161

Myths and Realities: Agricultural Policy or Agrarian Reform? Fernando Lardizabal

167

Part 5 Foreign Policy and National Security 15 The Foreign Policy and National Security of Honduras Ernesto Paz

181

16 Critical Aspects of Honduras's National Security 17 The Armed Forces and National Security

Carlos Lopez

Manuel Suarez

18 Recent Developments in Honduran Foreign Policy and National Security Victor Meza

211 213 217

Part 6 Conclusion 19

Honduras Confronts Its Future: Some Closing, but Hardly Final Thoughts Philip L. Shepherd

229

Contributors

257

Index

259

Illustrations TABLES 0.1

Social and Economic Indicators

0.2

U.S. Assistance to Honduras

14

5.1, Part 1 Political Assasinations, A

69

5.1, Part 2 Nonpolitical Assasinations, A

69

5.1, Part 3 Nonpolitical Assasinations, B

70

5.1, Part 4

70

Political Assasinations, B

2

5.2, Part 1 Permanent Disappearances

71

5.2, Part 2 Temporary Disappearances

71

5.3

72

Attempts Against Personal Dignity

11.1

Banking System

147

11.2

Commercial Banks

148

11.3

Development Banks

149

12.1

GDP and Inflation

156

14.1

Agricultural Land Usage

168

14.2

Pasture Land Usage

169

14.3

Agrarian Reform Beneficiary Groups

171

14.4

Grains Output

173

14.5

Cereal Output

173

FIGURE 11.1

Source of Calories

134 vii

Foreword Honduras today is the hard center of an otherwise soft region. Despite its historic, chronic poverty, Honduras is perhaps the single country on the Central American isthmus with the human and material resources, and the social mobility, to withstand the double-headed disruptions that global bipolarity and internal divisions have exerted for the past thirty years or more in the neighbor states of El Salvador, Guatemala, Nicaragua, and perhaps even Costa Rica. Nevertheless, it is a region that is politically and economically vulnerable to both internal malaise and to external infection. The Pan American World Airways guide describes Honduras as "one of the most mountainous, beautiful and fascinating countries in Central America, with forests, fine beaches, coffee and cotton plantations, tobacco and, of course, bananas. The remains of the Mayan civilization at Copan show that Honduras was highly developed at the time the Vikings were only tentatively beginning to sail out of the sight of land." Now, Honduras indeed is all that and much more. I have had a thirty-year love affair with Honduras. I learned Spanish there while I lived and worked as an "Asesor Personal" to the then Chief of State, Don Julio Lozano. Don Julio was one of the most patient teachers and understanding friends that I have ever had. He, his immediate predecessor, the constitutional giant Juan Manuel Galvez, and the still earlier strong man Tiburcio Carias, each gave me unforgettable learning experiences in applied politics and in economic development. Each of them saw clearly what their foreign advisors only dimly perceived: that imported theory and unmodified applications of it are poor substitutes for local knowledge pragmatically applied. They knew the importance of keeping in close touch with the people who work the land, harvest the crops, and conduct the business of their country. They also knew the importance of time and of timing to progress. And they understood that the progression of progress itself is probably less related to how the International Monetary Fund, the U.S. Embassy, or even the World Bank felt about its scheduling than how the customs, traditions, and the institutions of Honduras and of Hondurans both mold and adapt to progress. I may be mistaken, ix

X

FOREWORD

but some recent indications from conversations we read about between the current Honduran government and the United States suggest that an effort is being made to help the U.S. government be reminded of this truth. As a veteran student of an earlier generation of Honduran sabios, I urge this generation of foreign students in Honduras to heed their host counsel soberly. This book grew out of a meeting on Honduras, held in Miami, Florida, in November 1984, hosted by Florida International University. I sincerely hope that the meeting itself and the book that it produced will contribute to helping restore and deepen the cause that prompted Francisco Morazan to place public education, industry, and commerce at the base of his pursuit of Central American unity. For him these were not mere dreams. They were essential ingredients of strength and were indispensable for the countries over which he presided. I suspect they are no less important to Honduras's survival today and to Central America's health, as well. Gregory B. Wolfe President Florida International University

Preface Recent conflict in Central America has done for the region what years of authoritarianism, poverty, and human rights violations could not: placed it squarely on the agenda of critical U.S. foreign policy concerns. The region's poorest and weakest country, Honduras, has emerged as a key actor in U.S. Central American policy. Indeed, the role played by Honduras has become the subject of intense public attention and concern, particularly as the potential for a war between Honduras and its revolutionary neighbor, Nicaragua, increases. The essays in this book are the result of a conference, "Honduras: An International Dialogue," held in Miami, Florida, in November 1984. Sponsored by Florida International University, the Dialogue brought together scholars studying Honduras to exchange ideas with policymakers and leaders from most sectors of Honduran life. Included in this group were one of the country's former presidents, two senior colonels in the armed forces, including the chairman of the Honduran Joint Chiefs of Staff, three Cabinet ministers, the leader of the country's largest peasant union, and the head of the country's private sector. The book is divided into five sections: democracy, human rights and social justice, economic development, agricultural policy, and foreign policy and national security. These topics were selected because of their inclusiveness, each addressing a critical problem confronting modern Honduras. Each section includes a detailed analytical study followed by commentaries. The Introduction provides a larger historical context for understanding the five central issues discussed in the book. The concluding chapter addresses a range of issues and concerns that will need greater research during the coming years if specialists and others are to deepen their understanding of Honduras. This book and the conference that preceded it would not have been possible without the firm commitment of Florida International University's International Affairs Center, which provided the initial funding to support the endeavor. Subsequent grants from the Ford and Rockefeller Foundations, as well as United Brands, Chase Bank International (Miami Branch), and Alxi

xii

PREFACE

coa, were also instrumental. General Oswaldo Lopez Arellano provided invaluable assistance through TAN/SAHSA Airlines. Without his support, the Dialogue would have had much less significant participation from key Honduran specialists. The U.S. Information Service of the U.S. Embassy in Tegucigalpa also provided travel grants for a number of Honduran participants. The task of organizing the Dialogue and attending to its many details fell to Dr. Elizabeth Lowe, a program coordinator in the International Affairs Center and now managing editor of Caribbean Review. Dr. Lowe was ably assisted by Linda Johnson of the Division of Continuing Education. Raul Moncarz, Jim Morris, K. William Leffland, Lowell Gudmundson, A. Douglas Kincaid, Adolfo Leyva, Cresencio Arcos, Ann Henderson, Guillermo Molina Chocano, Leo Valladares, Roberto Galvez Barnes, and Manuel Gamero provided many suggestions and ideas. Marcella Noriega de Leyva did a skillful job in transcribing and editing many of the papers. Leonel de la Cuesta and Ted Schmidt coordinated the translation and editing of the manuscripts for this book, and Betty Shepherd and Rosalie Rosenberg provided unlimited supplies of patience and at times invaluable translating and editing assistance. Teresita Marrill, Vilma Caula, Ana Pirez, Graciela Perez, Michelle Lamarre, Virginia Johnson, Carmen Figueredo, Irene Young, Raul Perez. Sofia Lopez. Julia Hirst, and Cristina Suarez assisted with all the innumerable details from the start to finish of the project. This book represents our efforts, through the University, to link academically Honduras's critical issues with its current personalities. We know that the latter will change over time, but the former probably will not. Therein lies the test of the utility of this work. We are confident that it will contribute significantly to the permanent body of research and commentary on Honduras. We hope that any errors of commission or omission associated with it will not detract from its uniqueness. Mark B. Rosenberg Philip L. Shepherd

Honduras: An Introduction Mark B. Rosenberg

Situated directly in the middle of the Central American isthmus, Honduras has become a focal point in the continuing Central American conflict. Its proximity to three countries in revolutionary struggle has given it a geopolitical importance to U. S. policymakers that tends to obscure other important dimensions of the country's identity. These dimensions include the country's recent efforts to establish a democratic political system, its grinding poverty and severe economic problems, and its festering conflict with neighboring El Salvador over a long-unresolved border dispute. It has been argued that the country is today at a "crossroads" in terms of confronting its basic problems.1 This may be true, for with a population of 4 million that will double by the end of the century, the country is far behind most others in Latin America on standard indices of social and economic development (see Table 0.1). BACKGROUND A number of important themes have repeated themselves throughout Honduran history: the search for an enduring political order, the struggle to develop and expand an economy plagued by extreme human and material resource shortages, and the effort to establish an independent regional role relatively free of external intervention. One author has recently noted that Honduras is a country of many extremes.2 Such was the country's poverty that it presented few attractions to Spanish colonizers, who first arrived in 1502 on Columbus's fourth and last voyage to the Americas. There were no significant deposits of gold or silver as were present in other locations throughout the Americas and only scattered concentrations of native Indian groups that could be subject to forced labor. Nonetheless, the Spanish conquest of the country was difficult and at times bloody. It was out of one of the battles between Spaniards and indige1

2

INTRODUCTION

Table 0.1 Selected Social and Economic Indicators for Central America in the Late 1970s

Honduras

Costa Rica

El Salvador

Guatemala

Nicaragua

C.A.

L.A.& Carib.

Crude birth rate (per 1000)

47

28

39

41

45

41

32

Crude death rate (per 1000)

12

5

9

12

13

11

9

Life expectancy at birth (years)

57

70

63

57

55

60

65

Infant mortality rate (per 1000)

103

38

108

77

122

91

_

Adult Literacy*

57

88

62

46

57

58

80

Relative Per Capita Income (1980)

68

214

77

106

76

100

* Percentage of population 15 years of age and older Adapted from John Weeks, The Economies of Central America (New York: Holmes & Meier, 1985), pp. 46-48.

nous groups that Lempira, an Indian cacique (chief), emerged as a national hero. The Honduran currency was subsequently named after the martyred indian.5 The colonial Honduran economy suffered from a shortage of both human and material resources and the country came to be subordinated to Guatemala, which emerged as the Captaincy General of the region in the late 1500s. Silver periodically served as a source of economic dynamism, and Tegucigalpa, the country's capital, was founded as the result of a silver strike. However, the economy tended to depend on cattle ranching. And while the population generally was concentrated in the TegucigalpaComayagua area, as late as 150 years after the Spanish conquest many villages were outside of "effective Spanish control."4 The lack of effective control throughout Honduras posed challenges to colonial administration, particularly when Dutch and British corsairs attacked the underpopulated and swampy Caribbean coast of Honduras in the sixteenth and seventeenth centuries. British conflict with Spain in Europe spilled over into the new world, where the British were determined to break Spanish dominance over Central and South America. In particular, British efforts to establish colonies on the Honduran North Coast received the support of Sambo and Miskito indigenous groups, who preferred to resist Spanish rule. British interest in the Caribbean coast of Central America was also

INTRODUCTION

3

influenced by the growing demand for mahogany wood, used in England for furniture production, and by their belief that the Caribbean was a vital sea transport area. 5 By the early 1800s, the entire continent was locked in a growing conflict with Spain over independence. This engendered widespread discussion about Central America's future governance and spurred hopes that some broader political agreement could be fostered by the increasingly competitive national elite groups that had formed in each country of the region. Following independence in 1821, the regional debate catalyzed conflict between Tegucigalpa and Comayagua in Honduras, which was reinforced by an emerging political conflict between Liberals and Conservatives. The former argued for a separation of church and state and for local autonomy, while the latter were prochurch and favored the maintenance of close relations with Spain. The regional dispute over governance took many forms. By 1823, the United Provinces of Central America were established, largely because of the tireless efforts of Honduran statesman and national hero, the Liberal Francisco Morazan, whose statue now dominates Tegucigalpa's Central Park. His hopes to see a unified Central America were resisted by a congeries of Conservatives throughout the isthmus, led by the Guatemalan dictator, Rafael Carrera. Morazan's inability to keep the regional pact together resulted in its dissolution in 1838 and Morazan's eventual execution in Costa Rica in 1844, following an abortive attempt to reestablish the union. 6 Morazan's failure at the regional level was compounded by Honduran inability to establish a political formula that was agreeable to all. Between 1824 and 1876, the country had a reported 82 presidents and an estimated 170 civil wars. Constitutions tended to have an average life span of eleven and one-half years. 7 The profound instability in Honduras was complemented by the country's inability to find a profitable commodity to link it with the emerging international capitalist economy. Major impediments to economic expansion during this period (and even in the present) were the rough geographic terrain, which lacked even rudimentary road networks, the high costs of transportation, and the absence of internally generated investment capital. 8 During the 1850s and 1860s Central America became once more an internationally disputed zone of influence. The California gold rush and the general economic expansion in North America fueled competition between the United States and Great Britain for control over the area. Honduras became a source of dispute when the country's president, Juan Lindo, became embroiled in a dispute with British consul Frederick Chatfield after Lindo sided with the United States in a dispute over British-U. S. control in the area. At the time, Lindo was also coming under pressure from Guatemala to cede to British interests. However, the epitome of this struggle over the isthmus came with the occupation of Nicaragua by the U. S. southern adventurer William Walker, who hoped to establish a slave republic in that country. Walker was

4

INTRODUCTION

subsequently executed in Honduras in 1860. The U. S.-British competition in the region and the presence of Walker served to distract, if momentarily, Hondurans from the continuing dilemma of constructing a viable political order. THE MODERN ERA The 1870s brought important transformations to Central American life. Throughout the region, Liberals reasserted their model of political economy and promoted more active state involvement in the growth and development of their countries. The visionary Guatemalan leader Justo Rufino Barrios was a leading proponent of change. Barrios promoted policies favoring the emergence of export agriculture, especially in coffee and bananas. Although the former had been first introduced in Costa Rica as early as the 1830s, it was in Guatemala and El Salvador that the local elite aggressively changed laws and promoted export agriculture, to the detriment of the local indigenous populations.' In Honduras, Marco Aurelio Soto and Ramon Rosa, allies of Barrios, initiated the country's modern era by promoting the consolidation of the state machinery and implementing economic policies designed to modernize the country. 10 Under Soto's leadership, commercial, civil, and penal codes and obligatory state education were established and church holdings were secularized. A uniform currency was created and a law authorizing the expropriation of communal holdings to promote the planting of coffee, sugar cane, and cocoa was implemented. However, unlike in Guatemala, El Salvador, and Costa Rica, where local entrepreneurs moved quickly to take advantage of new economic opportunities, in Honduras a major effort was made to attract foreign investment. Investment concessions were established, first for mining and then banana exploitation." These concessions brought the New York and Rosario Mining Company in the early 1880s. President Soto himself was a major local stockholder in the company and one of the primary beneficiaries of the concessions that he promulgated. Further efforts to attract foreign investment through generous concessions resulted in the establishment on the North Coast of three foreign-owned and highly competitive banana companies in the early 1900s.' 2 These companies became the country's most significant economic actors and had a catalytic impact on the growth and development of La Ceiba, Puerto Cortes, and Trujillo, important port cities in the North Coast area. The emergence of the banana enclave attracted migrants from within the country and from as far away as the Middle East. "Arabes" arriving during the early 1900s would subsequently come to play a leading role in the country's industrialization efforts. Other migrants included thousands of Salvadorans seeking jobs on the banana plantations. Their presence in the country would promote a simmering hostility between Honduras and El Salvador, culminating in the 1969

INTRODUCTION

5

border war between the two countries. The influence of the banana companies in Honduras was profound. In addition to promoting migration and urbanization, their very presence also retarded the emergence of an independent entrepreneurial class in the country. The companies became deeply involved in national political life, encouraging influence-peddling by unscrupulous politicians while making direct payoffs to legislators, presidents, and military officials. For example, President Miguel Davila gave important rail concessions to a New Orleans-based banana company owned by the Vacaro brothers. This angered the powerful owner of the Cuyamel Fruit Company, Samuel Zemurray, who subsequently encouraged and influenced Davila's ouster in 1911." Banana-company intrigue continued throughout the century and became a key issue during the mid-1970s, causing the ouster of President Lopez Arellano. 14 Because Honduras failed to develop a locally owned and controlled agro-export industry similar to those developed in other Central American countries with coffee, cotton, and sugar, the foreign-owned banana companies have remained the dominant source of economic dynamism, even after recent efforts to industrialize. For this reason, Honduras has often been regarded as the "quintessential banana republic."' 5 The early 1900s witnessed a dramatic growth in the U. S. presence throughout the Caribbean and Central American area. Key to this presence was the U. S. occupation of Cuba and the subsequent efforts to build the Panama Canal. The growing U. S. presence overlapped with heightened regional unrest. Conflict between Liberal President Jose Santos Zelaya of Nicaragua and Conservative President Manuel Bonilla of Honduras resulted in the latter's ouster in 1907. Suspicious of Zelaya, the U. S. Navy had intervened to protect the Honduran, but to no avail.16 Bonilla's successor, the Liberal Miguel Davila, was also not trusted by Zelaya, who encouraged El Salvador to topple him from power. To prevent further conflict in the area, Mexico and the United States sponsored the Central American Peace Conference in 1907. A subsequent treaty established a Central American Court of Justice and committed the countries to the permanent neutrality of Honduras in any future Central American conflict. Another provision committed the signatories to deny recognition to regional governments that seized power through unconstitutional means. The spirit of the treaty was short-lived. The United States itself sponsored Zelaya's ouster in 1909, leading to further instability, periodic U. S. occupations, and ultimately the Somoza dictatorship in the mid-1930s. From 1908 to 1932, Liberals and Conservatives alternated in power. The presidency of Liberal Rafael Lopez Gutierrez (1920-24) was notable for its profound mismanagement, nepotism, and corruption." During this period there were an estimated twenty-one revolts. Indecisive national elections were held in 1923. As on other occasions in the country's political history, one of the major parties could not decide on a candidate, thereby allowing the

6

INTRODUCTION

other party's candidate to emerge with a plurality of votes. In this instance, the Liberal party split over the candidacy of Policarpo Bonilla and Juan Angel Arias, and a former Liberal, Tiburcio Carias Andino, won a plurality of votes. When the Congress could not decide on a winner, Lopez attempted to prolong his rule, thereby plunging the country into a bloody conflict. The Civil War of 1924 saw a Conservative alliance form to oust a recalcitrant Lopez. What military force could not do, the forces of nature did, as the obstinate president died of illness while still in office in 1924. Instability was such, however, that 200 U. S. Marines were temporarily placed in Tegucigalpa at the behest of the U. S. ambassador. The crisis of 1923-24 cast attention on the need for a new constitution, which was put together by a Constituent Assembly in 1924. Modifications of the Constitution of 1894 gave the Congress quasi-parliamentary powers by allowing it to censure the president's ministers and force their resignation following a vote of lack of confidence. Debate over presidential tenure was inconclusive, some delegates favoring four years and others six. The fouryear tenure remained in effect. This same issue would generate uncertainty during the presidency of Roberto Suazo Cordova (1982-1986), when he attempted to prolong his rule for another two years. Finally, the new constitution stated that the president's most important duty was the management of the general administration of the country. 18 The promulgation of the new constitution gave Honduran political life a temporary respite from fractious politicians. However, when General Carias again won in the 1932 elections, Liberal party dissidents sponsored an illfated uprising to impede his ascension to power. Joined by Liberal president Vicente Mejia Colindres, who was opposed to his party's actions, Carias subdued the revolt and took power on February 1, 1933.19 The presidency of Tiburcio Carias Andino gave the National party its definitive organizational impulse. The "Cariato," as it is known in Honduras, lasted from 1933 to 1949 and epitomized the essence of strong-man, personalist rule. During his tenure as president, Carias relentlessly persecuted Liberals and drove Liberal leader, Angel Zuniga Huete, into exile in Mexico. 20 He "squeezed" the press so that only one newspaper was left in the country, and he maintained tight control of the entire government apparatus, including the Supreme Court as well as the Congress. The president quashed the nascent parliamentarism established through the 1924 Constitution and "reestablished the old lines of authority running from the Casa Presidencial to the Congress." 2 ' It was the latter that reformed the constitution twice so that Carias could extend his rule beyond the original four-year term. 22 The caudillo's ability to prolong his rule was due in part to the strong support that he enjoyed from the United Fruit Company. One unsympathetic biography of Carias even suggests that the banana company's headquarters, La Lima, was the real capital of Honduras during this period. 2 ' But Carias

INTRODUCTION

7

had another important resource: he knew how to appeal to the peasantry, the bulk of Honduran voters. W h i l e he himself was of lower-middle-class extraction, Carias's wardrobe was replete with clothes worn by the rural poor, thick leather belts and cheap rough cut boots. H e knew how to change his language in accordance with his audience and spoke the archaic Spanish of the rural peasantry with ease. 24 T h e Cariato could e n d u r e for so long because the Liberal party was in disarray. Its primary source of financing, the Cuyamel Fruit Company, had been absorbed by the United Fruit Company in 1929, as a response to the world e c o n o m i c depression. Unsympathetic dictatorships in neighboring countries deprived the Liberals of their traditional staging sites. Indeed, shortly before Carias took power in 1933, the Liberal's most capable military chieftain, General Justo U m a n a , was executed in Guatemala, probably at the orders of that country's dictator, Jorge Ubico. And the Liberals' abortive attempt to stop Carias f r o m taking power damaged the party among the popular sectors. Finally, Carias's often heavy-handed methods and willingness to imprison, exile, and even m u r d e r his antagonists left the Liberals without any solid base for opposition.

THE UNEASY TRANSITION FROM DICTATORSHIP TO DEMOCRACY Just as dictators in Guatemala and El Salvador eventually were displaced by democratic movements, so in Honduras Carias could not withstand the inevitable pressure for a political opening. Unable to promote more continuismo, he chose his minister of war, Juan Manuel Galvez, as presidential candidate for the 1948 elections. For the first time in years, Liberals campaigned openly for their candidate, Angel Zuniga Huete. Just days before the election, however, apparently sanctioned campaign violence forced the Liberals to withdraw and Galvez had an easy victory. In office Galvez sponsored a modest liberalization, releasing political prisoners and encouraging political exiles to return to Honduras. T h e National party president was also confronted with a series of labor strikes in 1954, largely promoted by dissident banana-plantation workers. T h e most serious of these strikes lasted 69 days and resulted in the mobilization of 2 5 , 0 0 0 workers, w h o had little previous union organization. Basic demands focused on traditional bread-and-butter needs: higher salaries, better working conditions, and legal recognition of the right to organize unions." For the first time, the country's economic powers were confronted by a serious popular movement. Even while Galvez allowed Honduras to be used as a training base for the overthrow of the Guatemalan president, Jacobo Arbenz, w h o was believed to be behind the strikes, the Honduran leader did not violently repress striking workers. This would have been inopportune,

8

INTRODUCTION

given the on-going presidential campaign of the 1954 elections.26 Instead. Galvez, aided by the American Institute of Free Labor Development (AIFLD), pressured the United Fruit Company to recognize a "free and democratic" labor organization which was also anti-communist. The fruit company's ultimate agreement to recognize the legitimate rights of labor to organize was a key step in the subsequent but quite tardy passage of a labor code (1959). But the 1954 strike also ushered in a new era in Honduran politics with organized labor as a significant political force. The 1954 elections, as so many earlier ones, proved to be more divisive than unifying. Carias split the Nationals by demanding to be their presidential candidate; this division allowed reformist Liberal party candidate Ramon Villeda Morales to win a plurality of the votes. The Congress was asked to declare a winner because Villeda did not have a majority of the votes. The Congress, however, could not make a decision, thereby allowing Galvez's vice president, Julio Lozano, to be declared president. Lozano was an inept manager. But worse, his heavy-handed tactics forcing many Liberals into exile, his pretensions to continue in power, and growing opposition from students at the national university resulted in his ouster by a military junta in 1956. This followed fraudulent elections in which he allegedly won 90 per cent of the popular vote.27 While the military indicated that its only objective was to return the country to constitutional rule, its entry into Honduran politics was a portent of future political dynamics. Despite the almost continual fratricidal political conflict since independence, no professionally organized military had been developed in Honduras prior to the mid-1950s. Indeed, while Carias had promoted the creation of an air force, one of the first in Latin America, this effort was more a function of the lack of roads and difficult terrain than a clear military tactic. Keeping its promise, the military left power after nineteen months and turned the government over to a Constitutional Assembly, similar to those held in 1894, 1906, 1924, and 1936. In exchange, the Assembly wrote an article into the new Constitution of 1957 giving the military autonomy from direct presidential control. 28 With the naming of Ramon Villeda Morales as president, a Liberal had finally returned to the presidency for the first time since the years immediately preceding the Cariato. The reform-oriented president quickly moved to establish social security, a labor code, and an agrarian reform law. He brought Honduras into the newly formed Central American Common Market, and even though there were a number of efforts to destabilize his government, he was able to manage increasingly strident demands from both the left and the right. However, his efforts to establish an independent police force in the face of growing hostility from the armed forces and the prospect of his successor being the antimilitarist Liberal Modesto Rodas ultimately caused his downfall.

INTRODUCTION

9

Days before the 1963 elections, Villeda was deposed by the armed forces. Citing communist infiltration, the existence of the civil guard, and the divisive, antimilitary campaigning of Rodas, they were led by Oswaldo Lopez Arellano, an air force colonel from the National party who had participated in the first military junta. Lopez was elected president two years later in a much disputed election where widespread fraud was alleged to have occurred in the rural provinces of Olancho, Choluteca, Comayagua, La Paz, and Colon. Lopez's election cemented the primacy of the National party leader Ricardo Zuniga as the most powerful civilian politician in the country; it was the latter who really ran the government on a day-to-day basis. Lopez's tenure as president was notable for its lack of attention to the growing social problems of the country. One labor strike at the Rio Lindo Textile Company was brutally put down, while another in late 1968 witnessed an unusual coalition between labor and progressive business leaders from the country's industrial center, San Pedro Sula. This coalition put the military and civilian political figures from both parties on notice that important economic and social problems could not be ignored interminably. Indeed, the Catholic Church had begun progressive education programs over the radio in the early 1960s. 2 ' By the latter part of the decade, a militant peasant organization, the National Union of Peasants (UNC), had emerged to rival the less energetic but larger, AIFLD-affiliated National Association of Honduran Peasants (ANACH). 3 0 The growing specter of labor mobilization was abruptly interrupted with the eruption of hostilities in mid-1969 between Honduras and its traditional enemy, El Salvador." While the proximate cause of the conflict, which claimed an estimated 2,000 lives in seventy-two hours, could be traced to a disputed soccer match between the two countries, there were other more serious reasons for the war: the limited industrial base and weak economy of Honduras caused the country immediate disadvantages in its trade relations with other Central American Common Market countries. These disadvantages tended to accentuate Honduras's role as an agro-exporter and reinforce its dependency on manufactured imports, especially from El Salvador. 32 The lack of balanced regional economic growth was complemented by the growing land-tenure problems in Honduras, particularly as agroexporting activities increased. 33 The growing demand for land, coupled with the presence of an estimated 200,000 Salvadoran immigrants, created intense pressure. Even the National Federation of Farmers and Cattlemen (FENAGH) publicly called attention to the presence of "strangers" on rural Honduran property. 34 Rising popular resentment resulted in the harsh treatment of Salvadorans and thousands began returning to their native country. Finally, these two issues were exacerbated by a third. After two centuries, both countries still were still debating control over a common border area, the product of a disputed land transfer in 1770. Despite repeated at-

10

INTRODUCTION

tempts to settle the boundary dispute, no resolution had ever been found. War broke out on July 14, 1969, when El Salvador invaded Honduras. T h e three-day conflict lasted long enough to illustrate the ineptness of both militaries. Following a cease-fire sponsored by the Organization of American States, there was a growing realization in Honduras that serious changes would have to be m a d e if the country were to defend itself in the future. 1 5 Indeed, the nationalism generated by the conflict fixed an important lesson in the minds of the country's elite: that there could be national unity in H o n d u ras and that problems could be resolved. President Lopez Arellano was embarrassed by the strong movement for national unity and by the inadequate military response to the invasion. Public discussion ensued about a return to civilian rule, but neither the Liberal nor National parties could agree about how power should be divided. Increasingly frustrated with the same political impasse that had characterized earlier political debates, and aware of the growing rural mobilization over the continuing demand for land, President Lopez, the Honduran Workers' Confederation ( C T H ) , and the Honduran Private Enterprise Council ( C O H E P ) presented the National and Liberal parties with a "Political Plan for National Unity." This plan called for a government committed to internal reforms and to the resolution of the country's economic and social problems. Subsequently modified, the agreement divided the spoils of power between the two parties in accordance with a predetermined mathematical formula. 1 6 Just as the Nationals in 1954 and the Liberals in 1957 could not decide on candidates, so it was again with the Liberals in 1971. Modesto Rodas, whose presidential aspirations were interrupted with the military intervention of 1963, would not support the candidacy of the more progressive Jorge Bueso Arias. Rodas's obstructionism gave the National party candidate, respected jurist Ramon Cruz, a narrow and unexpected victory. His inability to transcend partisanship and follow the terms of the earlier pact, the continuing popular disillusionment with party politics, and the growing labor mobilization inevitably undermined his authority. W h e n organized labor threatened a hunger march on the capital in late 1972, Lopez Arellano and the military seized power in a bloodless coup, which seemed to be welcomed by most sectors of the country. 17

THE MILITARY IN POWER In comparative perspective, the decade of the 1970s was critical in Central American history. During this period, the Sandinista National Liberation Front ( F S L N ) gathered organizational m o m e n t u m and eventually toppled the long-standing Somoza dictatorship in Nicaragua. In El Salvador, popular mobilization and a deteriorating political situation led to the ouster of the military government there and the initiation of a significant reform effort. In Guatemala, the civil war between the guerrillas, the government, and other

INTRODUCTION

11

rightist forces continued. Progressive, reform-oriented political leaders in that country were assassinated, leaving little room for moderate political life. The military occupied the presidency of Honduras f r o m late 1972 to early 1982. During this period, there were three distinct phases: military reform ( 1 9 7 2 - 1 9 7 5 ) , growing military conservatism ( 1 9 7 5 - 1 9 7 8 ) , and military conservatism and the return to civilian rule ( 1 9 7 8 - 1 9 8 2 ) . Despite Lopez Arellano's earlier record as a conservative, if not repressive, military ruler, the government he headed in late 1972 was clearly reform oriented. Lopez Arellano jettisoned his political cronies in the National party and put together a progressive cabinet to guide his government's reform efforts. In its very earliest days in power, the government promulgated Decree No. 8, which made private lands available to the peasantry for a period of two years. This reform had decided support f r o m the U. S. embassy and its Agency for International Development. Further reforms created a centralized agency for the administration of the country's vital forest preserves, and a semiautonomous state development agency which would provide state guarantees to promote private investment. 1 8 T h e reforms were designed to create a base of popular support for the government while mediating the growing pressures f r o m rural peasant associations. However, the country's landed interests, led by F E N A G H , quickly turned on their old ally and pressured the government to roll back its reforms. Lopez was also under immense pressure f r o m the armed forces, particularly younger military officers w h o were tiring of his control over both the military and the state apparatus. In response, Lopez attempted to open military decision-making by creating a collegial military decision-making body, later to be known as the Superior Council of the A r m e d Forces ( C O N SUFFAA). T h e Council c a m e to be a forum for the discussion and resolution of problems of concern to the military. It was composed of old-line colonels with little formal military training and the more progressive, professionally trained younger officers, w h o resented their superiors' lack of sophistication. By early 1975, the country's reform experiment was in serious trouble. Unexpected economic difficulties occasioned by the tripling of world oil prices in 1973, costly damages to North Coast banana production during Hurricane Fifi in 1974, rising private-sector discontent with the expanding role of the public sector, and open hostility to the reform efforts f r o m neighboring governments, all seriously undermined Lopez's authority. In early 1975, he was replaced as chief of the Honduran a r m e d forces by the conservative Juan Melgar Castro. Then, following a Wall Street Journal article which suggested that the president was bribed by United Fruit to lower a banana tax, Lopez was removed by his military comrades as chief of state." His ouster left the government's c o m m i t m e n t to reform in doubt and signalled the entry of C O N S U F F A A into a greater decision-making role. Now wary of allowing too much power to be concentrated in the hands of one officer, the military council named Melgar as chief of state and another

12

INTRODUCTION

colonel, Policarpo Paz, as chief of the armed forces. Melgar's tenure lasted three years. While he did continue the land reform for a short period, there was increased repression during his rule. 40 He did take some significant measures to open political dialogue, creating a unique National Advisory Council (CONASE) to advise him on the preparation of a new electoral law for the 1980 Constituent Assembly elections. CONASE brought together a congeries of the society's old and new political interests, including two minor political parties, the Innovation and Unity party (PINU) and the Christian Democratic party (PDCH). However, both the National and Liberal parties as well as the C O H E P decided not to participate. C O N A S E played a significant role in constructively channeling political pressure during the Melgar years and illustrated the general willingness among Hondurans to sustain political dialogue and discussion among a broad-based group of competitive actors. President Melgar was deposed in 1978 by the military council. He had refused their demands to make a number of cabinet changes and he was not cooperative in the efforts of several officers to enrich themselves through corruption and payoffs. 41 Moreover, the president's popularity was on the rise and he was openly cultivating a political base outside of the armed forces. This constituted a threat not only to the military but to National party leader Ricardo Zuniga, whose presidential aspirations could be interrupted if the Nationalist Melgar formally declared himself a presidential candidate. 42 From 1978 to 1982, the country was ruled by Policarpo Paz Garcia, an army officer possessing few strong ideas on any subject. During his governance, the country experienced rampant corruption, 43 increased public-sector spending, and the transition to democratic rule. This transition was given added impetus by the Nicaraguan Revolution in 1979 and subsequent U. S. pressure to return to democratic elections and civilian rule. The United States also played an important role in a Honduran-Salvadoran peace treaty signed in October 1980. While the agreement formally ended the 1969 war, it left for later the final adjudication of the disputed territory. 44 Despite Paz's close ties with the National party and fears of government-sponsored fraud, the Constituent Assembly elections in 1980 gave the Liberal party a convincing victory. 45 Between 1980 and 1981, yet another constitution was written and presidential elections were held in November 1981. The Liberal party convincingly won those elections and their candidate, Roberto Suazo Cordova, assumed the Honduran presidency in early 1982. For the first time since 1972, the country had a civilian ruler who was popularly elected.

THE RETURN TO DEMOCRACY The 1980 and 1981 elections in Honduras demonstrated the popular repudiation of the military and a clear preference for democratic politics. By early 1982, however, the regional political and economic situation was chaotic.

INTRODUCTION

13

Growing opposition to Sandinista governance, civil wars in El Salvador and Guatemala, profound economic decline in Costa Rica and throughout the region, and growing U. S. and international attention to Central America gave the region a semblance of the turmoil of the early 1900s. The convulsive regional situation could not but affect the policies that Suazo's government would take. Suazo's political style has complemented political turmoil throughout the region. 46 During his four years of governance, he has shown little interest or capability in addressing Honduras's pressing political and economic problems and has preferred to concentrate on perceived external threats emanating from Nicaragua. Indeed, despite the clear popular repudiation of the military, Suazo's first important decision was to designate a hard-line military commander as his chief of the armed forces. General Gustavo Alvarez became the architect of Honduras's role as a base of operations for the Nicaraguan and U. S. counterrevolutionary efforts and for the creation of a semipermanent U. S. military presence in the country.47 The president has shown little respect for democratic institutions. He has ignored or manipulated the unicameral National Congress. The Supreme Court and National Electoral Tribunal have been directly manipulated to ensure that his loyalists were in control. He has allowed his own party to divide into at least five tendencies and he has promoted division and infighting in the National party. Like many presidents before him, the country's chief executive has promoted extreme partisanship and even encouraged the notion that the internal political situation was so unstable that he should continue as president for at least two more years. 48 The country also experienced a significant deterioration in human rights during this period. 49 While human rights abuses are commonplace elsewhere in Central America, there have been few instances in Honduras of prolonged and systematic rights violations. Even the usually reticent Catholic Church has made a number of public statements regarding the deteriorating civil rights climate in the country.50 Many of the excesses occurring under the Suazo government were attributed to the policies of General Alvarez;51 yet following his ouster by fellow officers in 1984, these abuses continued. 52 The growing human rights problem in the country can partly be explained by the conflicts generated by the presence of at least 30,000 refugees from all three neighboring countries. 53 However, disappearances and political murders fall directly into the strategy for the development of a national security state, which was one of Alvarez's grand designs. While such a development might be expected in a militarily governed country, Suazo had few enemies upon coming to power and enjoyed an unusually high level of public support. Traditionally the weakest in Central America, the Honduran economy needed serious attention in 1982 when the newly elected government took office. 54 However, faced with declining indicators in almost every sector of

14

INTRODUCTION Table 0.2 U.S. Economic and Military Assistance to Honduras Fiscal Years 1980-85 (millions of dollars)

Economic Military Total

FY 80

FY 81

FY 82

FY 83

FY 84

FY 85

50.70

36.10

78.10

102.70

168.70

139.00

4.00

8.90

31.30

37.30

77.50

62.50

54.70

45.00

109.40

140.00

246.20

201.50

Note: Economic Assistance includes development assistance, emergency support funds and Public Law 480. Source: Honduras Update, Volume 3, Numbers 2-3 (November-December 1984), p. 6 (from Department of State figures).

the economy, the government had few good alternatives. As the Honduran economy declined, the country came under intense pressure from the International Monetary Fund, private international banks, and the U. S. Agency for International Development to devalue its currency. Despite this pressure, the government was able to resist.55 This did not stop the rise in unemployment and underemployment, which by 1984 had reached an estimated 21 per cent and 60 per cent, respectively, of the country's economically active population.56 The government has been able to do very little to resolve the country's economic problems. One of the strategies followed has been to seek increased foreign economic aid. When the Kissinger Commission visited the country in 1983, Honduras asked for 10 billion dollars. While U. S. aid has fallen far short of this figure, significant increases in economic and military assistance (see Table 0.2) to the country made the U. S. presence one of the only growth poles of the Honduran economy.57 Another strategy followed by the government has been to reexamine regional possibilities and to begin negotiations with Guatemala, Costa Rica, and El Salvador over the reestablishment of the ill-fated Central American Common Market. However, this strategy suffers built-in limitations, given Honduras's traditional balance-of-trade deficits with regional trading partners. By late 1984, the major economic question confronting the country was just how long economic austerity could be imposed and what its political and socioeconomic costs would be. One of the most critical areas of the economy continued to be agriculture. Two issues were particularly important: production and land reform. With regard to the former, low world market prices in the early 1980s for the country's main exports, coupled with mismanagement of the lumber industry, posed serious impediments to expanded output. While the government pursued an aggressive land titling program in several provinces, pressure continued to build for a serious land redistribution program. However, the Suazo

INTRODUCTION

15

government showed little interest in the complicated questions and political issues that could be raised by land distribution. 58 Pressure for land was mitigated by the continuing foreign-policy crisis. Upon coming to power, the government announced that it would pursue an internationalization of peace in Central America. 59 However, it became increasingly tied to the U. S. effort to destabilize and topple the Sandinistas from power. President Suazo, General Alvarez, and U. S. Ambassador to Honduras John Negroponte came to form a powerful foreign-policy troika. In this arrangement, each player was accorded a special domain of influence. President Suazo was free to promote his unique brand of partisanship, the General could establish a national-security state and modernize the armed forces with new equipment and training, and the U. S. ambassador could make the country safe for the anti-Sandinista Nicaraguans. 60 As a result, in recent years Honduras has become much more tightly allied to the United States. Semipermanent American military bases were established throughout the country and thousands of U. S. troops were periodically deployed during joint military manuevers with the Honduran armed forces. Anti-Sandinista missions were directed from the country, which also became an important staging center for U. S. surveillance of guerrillas in El Salvador.61 U. S. policy was dealt a serious blow with the unexpected ouster of Alvarez by his own officers in late March, 1984.62 However it was precisely on the question of relations with El Salvador and the traditional border delimitation issue that the Suazo government was especially open to criticism. The peace treaty of 1980 between the two countries left the actual delimitation for further adjudication. Despite Honduran willingness to allow Salvadoran troops to be trained at a U. S. Center for Regional Military Training in Honduras, the Salvadorans showed little disposition to come to terms on the border issue. This Salvadoran obstinacy embarrassed Suazo, and generated growing nationalistic pressures throughout the country, particularly within the foreign-policy establishment. 63 While this tension could give the Hondurans greater leverage in their negotiations with the United States to increase military and economic assistance, it complicated U. S. efforts to form a regional anti-Sandinista bloc. By late 1984, there were fears that Honduras was becoming militarized and that the significant U. S. presence was promoting political polarization. These fears were enhanced by growing Honduran frustration over U. S. reluctance to provide higher levels of military and economic aid.64 Moreover, doubts were growing about the wisdom of a close association with the United States, given the general perception in Latin America that the United States was not a reliable ally. Despite the Honduran and U. S. rhetorical commitment to the Contadora peace talks on Central America, there have been no significant breakthroughs toward regional peace during the Suazo presidency. By late 1984, the country was experiencing intense uncertainty over a

16

INTRODUCTION

range of issues: the fate of democracy and the incessantly bickering parties; the continuing problems with human rights violations, disappearances and arbitrary government treatment; the faltering economy and the pressure for devaluation; declining agricultural income and the persistent demands for land reform; and the uncertain regional situation and the country's deep involvement in U. S. efforts to undermine the Sandinista government.

CONCLUSION Honduras' experience with democracy since 1982 has only served to caricaturize three persistent issues reappearing throughout Honduran history: the search for an enduring political order, the struggle to establish and expand upon a weak economy, and the effort to establish an independent regional role free of external intervention. While these themes are not unique to Honduras, what is important about the Honduran response is that it has been characteristically moderate in nature. Honduran moderation is such that political extremes have usually been avoided: compromise and/or cooptation is a preferred mechanism for conflict resolution. While the economy is seriously deficient in meeting basic needs, Hondurans themselves have only periodically mobilized to question the extant economic system. Though the country historically has been utilized geopolitically by neighboring states, recent negotiations with the United States over bilateral relationships suggest that Honduras is gaining greater sophistication in manipulating its location to its advantage. The key to Honduran moderation is the willingness of most contending political and economic forces to discuss critical issues among themselves. As political fractiousness continues and the economy barely meets people's daily needs, this moderation may help Honduras avoid the praetorianism of neighboring states in Central America. While the regional situation is convulsive and the U. S. presence is growing, this is not the first time that Honduras has found itself in a complex regional conflict. Just as it has survived other conflicts, so will it most certainly survive the current regional uncertainty. Yet this may not be enough. The fate of new generations now being born throughout the Central American isthmus is inextricably linked to the progress that Hondurans and other Central Americans make in resolving their basic problems.

NOTES 1. Mario Posas, "Honduras at the Crossroads," Latin American Perspectives 7, nos. 2-3 (Spring and Summer 1980): 45-46; and Mechthild Minkner, ed., Hondu-

INTRODUCTION

17

ras en la encrucijada (Bonn and Hamburg: Fundación Friedrich Naumann, Instituto de Estudios Iberoamericanos, 1983). 2. Mary W. Helms, "The Society and its Environment," in Honduras: A Country Study, ed. James D. Rudolph (Washington: American University, 1983), p. 55. 3. Longino Becerra, Evolución histórica de Honduras: Colección Proceres No. 2 (Tegucigalpa: Editorial Baktun, 1982), p. 55. 4. Richard L. Millett, "Historical Setting," in Honduras: A Country Study, ed. James D. Rudolph (Washington: American University, 1983), pp. 10-11. 5. Becerra, Evolución histórica, pp. 117-119. 6. Angel Zuniga Huete, Morazan (Tegucigalpa: Ed. Universitaria, 1982). 7. Polly Harrison and Orlando Hernandez A., Social and Institutional Profile: Honduras (Washington: Agency for International Development, 1983), pp. 38-39. 8. Mario Posas and Rafael del Cid, La construcción del sector público en Honduras (San José: EDUCA, 1981), p. 11. 9. Ciro F. S. Cardoso and Hector Perez Brignoli, Historia económica de América Latina: Vol. 2: Economías de exportación y desarrollo capitalista (Barcelona: Editorial Crítica, 1979), pp. 105-167. 10. Guillermo Molina Chocano, Estado liberal y desarrollo capitalista en Honduras, 2nd ed. (Tegucigalpa: Editorial Universitaria, 1982). 11. Edmundo Valades, Los contratos del diablo (Mexico: Ed. Asociados, 1975). 12. Thomas L. Karnes, Tropical Enterprise: Standard Fruit and Steamship Company in Latin America (Baton Rouge: Louisiana State University Press, 1978); and Frank Ellis, Las transnacionales de banano en Centro America (San José: EDUCA, 1983). 13. Millett, "Historical Setting," p. 21. 14. See Wall Street Journal, 9, 11, and 14 April 1975. 15. Thomas P. Anderson, Politics in Central America (New York: Praeger Publishers, 1982), p. 109. 16. Lester D. Langley, The Banana Wars: An Inner History of American Empire, 1900-1934 (Lexington: University Press of Kentucky, 1983), pp. 58-59. 17. Posas and del Cid, La construcción, pp. 54-55. 18. William S. Stokes, Honduras: An Area Study in Government (Madison: University of Wisconsin Press, 1950), pp. 94-95. 19. Becerra, Evolución histórica, p. 142. 20. Carlos A. Contreras, Entre el marasmo: análisis de la crisis del Partido Uberai de Honduras, 1933-1970 (Tegucigalpa: Editorial HISA, 1970), p. 57. 21. Stokes, Honduras, p. 291. 22. James A. Morris, Honduras: Caudillo Politics and Military Rulers (Boulder: Westview Press, 1984), p. 9. 23. Filander Diaz Chavez, Carias: el último caudillo frutero (Tegucigalpa: Editorial Guaymuras, 1982), p. 91. 24. Ibid., p. 75. 25. Victor Meza, Historia del movimiento obrero hondureno (Tegucigalpa: Ed. Guaymuras, 1980), pp. 75-98; and Mario Posas, Lucha ideológica y organización sindical en Honduras (1954-1965) (Tegucigalpa: Editorial Guaymuras, 1980), pp. 5 10.

18

INTRODUCTION

26. Posas and del Cid, La construcción, pp. 8 - 9 . 27. Becerra, Evolución histórica, p. 161. 28. Ibid., p. 168; James A. Morris, "Government and Politics," in Honduras: A Country Study, ed. James D. Rudolph (Washington: American University, 1983), p. 178. 29. Robert A. White, "Structural Factors in Rural Development: The Church and Peasant in Honduras" (Ph. D. dissertation, Cornell University, Ithaca, NY, 1974), pp. 234-270; and Pablo Richard and Guillermo Melendez, "La iglesia de los pobres en Honduras," in La iglesia de los pobres en Centro America, ed. Pablo Richard and Guillermo Melendez (San José: Departamento Ecuménico de Investigaciones, 1982), pp. 301-332. 30. Rafael del Cid, "Approximación al estudio de las clases sociales en el agro hondureño," Economía política, May-October 1976, pp. 35-60. 31. Thomas P. Anderson, The War of the Dispossessed: Honduras and El Salvador, 1969 (Lincoln: University of Nebraska Press, 1981). 32. Edelberte) Torres Rivas, "La integración económica centroamericana y su impacto regional," Revista Mexicana de Sociología 37, no. 3 (1975): 631-654. 33. See William H. Durham, Scarcity and Survival in Central America: Ecological Origins of the Soccer War (Stanford: Stanford University Press, 1979), pp. 102126; 159-176. 34. Becerra, Evolución histórica, p. 168. 35. Leticia Salomon, Militarismo y reformismo en Honduras (Tegucigalpa: Editorial Guaymuras, 1982); and Steve C. Ropp, "National Security," in Honduras: A Country Study, ed. James D. Rudolph (Washington: American University, 1983), pp. 207-248. 36. James A. Morris, "The Honduran Plan Político de Unidad Nacional, 197172: Its Origins and Demise," Occasional paper (El Paso: University of Texas at El Paso, 1975). 37. Ibid., p. 42. 38. Juan Arancibia, Honduras: un estado nacional? (Tegucigalpa: Editorial Guaymuras, 1984), pp. 75-86. 39. "United Brands Paid Bribe of $ 1.25m. to Honduran Official," Wall Street Journal, 9 April 1975. 40. See White, "Structural Factors," pp. 119-121. 41. "La plasmaferesis: amenaza para Honduras," Tiempo (Honduras) 29 August 1978, p. 6. 42. "Política y políticos," Tiempo, 12 August 1978, p. 6. 43. "OSOS versus corrupción" (Internal memorandum allegedly from a group of military officers). 44. Carlos Lopez Contreras, Las negociaciones de paz: mi punto de vista (Tegucigalpa: Imprenta Lithopress, 1984). 45. Arturo Fernandez, "Partidos políticos y elecciones en Honduras, 1980" (Tegucigalpa: Editorial Guaymuras, 1981). 46. Mark B. Rosenberg, "Honduran Scorecard: Military and Democrats in Central America," Caribbean Review 12, no. 1 (1983): 12-15, 39-42. 47. Lynda Schuster, "Honduras is Becoming a New Battleground for Central America," Wall Street Journal, 28 September 1982; and Philip E. Wheaton, Inside

INTRODUCTION

Honduras: 1982).

Regional

Counterinsurgency

Base

(Washington:

EPICA Task

19

Force,

48. See Mark B. Rosenberg, " T h e Current Situation and U. S. Policy," Hearings before the House Subcommittee on Inter-American Affairs, 6 February 1985. 49. Lucila Funes de Torres, Honduras: tro de Documentación de Honduras, 1984).

Derechos

humanos

(Tegucigalpa: Cen-

50. Centro de Documentación de Honduras, " L a iglesia er. Honduras," Serie Cronologías (lanuary 1985). 51. Americas Watch, " H u m a n Rights in Honduras: Signs of the Argentine Method," An Americas Watch Report (New York: 1982). 52. Steve Lewontin, " H u m a n Rights: Round Two," Honduras Update 3, no. 5 (February 1985): 1 - 2 . 53. See Mark B. Rosenberg, " H o n d u r a s : Bastion of Stability or Q u a g m i r e ? " in Revolution and Counterrevolution in Central America and the Caribbean, ed. Donald E. Schulz and Douglas H. Graham (Boulder, Colo.: Westview Press, 1984), pp. 331 — 350. 54. Alcides Hernandez, El neoliberalismo en Honduras (Tegucigalpa: Editorial Guaymuras, 1983), pp. 8 3 - 1 3 2 . 55. Efrain Diaz Arrivillaga, " L a crisis economica en Honduras: hay realmente respuestas," Boletín Informativo Honduras, Especial 5 (November 1983); Guillermo Molina Chocano, " M o d e l o de desarrollo y pobreza crítica," Boletín Informativo Honduras, Especial 6 (December 1983). 56. "Diagnóstico del desempleo y empleo en Honduras," Boletín Informativo Honduras, Especial 8 (January 1984). 57. Mark B. Rosenberg, " H o n d u r a s : 1983-84," in latin American and Caribbean Contemporary Record, ed. Jack Hopkins (New York: Holms and Meier, 1985); Mark J. Ruhl, "Agrarian Structure and Political Stability in Honduras," Journal of Inter-American Studies and World Affairs 26 (February 1984): 3 3 - 6 8 . 58. A. Douglas Kincaid, " A Return to Agrarian R e f o r m ? " Honduras Update 3, no. 9 (June 1985): 2 - 3 . 59. Rafael del Cid et al., " E n t r e la guerra y la paz," Alcaravan, ber 1982): 2 - 9 .

no. 17 (Decem-

60. Manuel Torres Calderón, " L a influencia de Estados Unidos en la formulación de la política exterior de Honduras," Boletín Informativo Honduras, Especial 16 (March 1985); and Mark B. Rosenberg and Philip L. Shepherd, Two Approaches to an Understanding of US-Honduran Relations (Miami: Latin American and Caribbean Center, Florida International University, 1983), pp. 1 - 3 3 . 61. Gregorio Selser, Honduras: Sur, 1982).

república

alquilada

(Coyoacan, Mexico: Mex

62. Leticia Salomon, " L a doctrina de la seguridad nacional en Honduras: análisis de la caída del General Gustavo Alvarez Martinez," Boletín Informativo Honduras, Especial 11 (May 1984). 63. Colin Danby, " L o p e z Seeks a Better Deal," Honduras Update 2, no. 11 (August 1984). 64. "Visita de Suazo Cordova a U S A , " Boletín Informativo 1985).

Honduras

49 (May

Part 1

Problems of Democracy

1

The Politics of Democracy in Honduras Guillermo Molina

BACKGROUND AND ATTEMPTS AT DEMOCRATIC DEVELOPMENT Honduran society has demonstrated its inherent capacity on the one hand to absorb or at least neutralize the most "savage" aspects of social and political contradictions and tensions, and on the other, to attempt irregular and incomplete efforts at democratizing the country, not only on a formal, constitutional plane but also in regard to relative changes or modifications of its prevalent economic and social conditions. These efforts can be associated with the strong reformist tendencies present in the country during the 1950s and during the first half of the 1970s, and more recently with the return to a civilian constitutional regime (1982-1986) after almost a decade of military governments. These three historical periods mark the parameters of the country's recent political evolution and offer a context for understanding the possibilities for democratic development in Honduras. In the first instance, a civilian movement with national reformist characteristics, headed by the Liberal government of constitutional President Ramon Villeda Morales (1957-1963), was able, by means of advanced social legislation, to institutionalize the gains and conquests of workers and peasants that had resulted from the Great Strike of 1954. In the middle of a postdictatorial era, the historical cycle permitted a series of progressive movements that translated into many social battles, political and electoral mobilization, antidictatorial resistance and protests, constitutional military movements, etc. In the second case, during the period after the Honduran-Salvadoran conflict of 1969 and before the failure of the two traditional parties' experimental "Colombian style" government of national unity, the coup d'etat of December 1972 inaugurated a new but brief era of reformist militarism, whose fundamental platform was the realization of an advanced process of agrarian reform, the goal of which was to distribute 600,000 hectares

23

24

PROBLEMS OF DEMOCRACY

(1,500,000 acres) of land to a total of approximately 120,000 rural families within a period of no more than five years. The objectives of the transformation created a relatively ambitious National Development Plan, which for the first time in the country's history introduced a state-controlled and interventionist style of cross-sectional planning that tended to strengthen the state's role as the prime negotiator in development by assigning it a more active and direct participation in the national economy. The plan established clear priorities in the allocation of resources that led to the enlargement of the state's power machine, creating new promotional and developmental institutions dedicated as much to the implementation of social political measures as to the stimulation and support of private business initiatives. The agrarian redistribution policy was complemented by the so-called forest reform, which involved the state's recovery of the country's enormous wealth in timber (two-thirds of the country is covered by large expanses of forest). The forests were placed under the administration of a state corporation, the Honduran Corporation for Forestry Development (COHDEFOR), which from the start was a government-operated business of high income potential, capable of earning a significant volume of currency for the nation by controlling the commercial development and exportation of timber, thus supplying the historically weak public-finance sector with additional capital resources. To the redistribution measures of national cross-sectioning and state strengthening were added others of a social nature, (for example: the decree of obligatory unionization) that stirred up a significant degree of support and popular consensus, which translated into a notable and unusual level of political legitimacy for an unconstitutional de facto regime. Perhaps because the regime was not constitutional it was able to assume a socially and politically advanced posture in the context of a hostile Central America, led by the Somoza dictatorship. Of course the traditional internal oligarchical opposition was made vividly known and became increasingly stronger and more intolerant until it reached its goal of blocking the reformist process, and its final objective of obliterating it. In effect, the traditional landowner and farmowner sectors of the foreign banana companies, who lazily and unproductively maintained large expanses of the majority of arable land, reacted angrily and offered stubborn resistance to the agrarian reform process, notwithstanding the flexibility and limited scope of the legislation that was dictated for that purpose. The internal repercussions of the world crisis that exploded at the end of 1973 and the destruction brought on by Hurricane Fifi, which lashed through the country in 1974, greatly weakened the government's capacity to continue its reforms and created the conditions that the conservative opposition needed to cancel the reformist experiment. It received its death-blow with the Banana Bribe scandal, unleashed as a result of a revelation made by the Wall Street Journal, in which some high officials were implicated in a payoff of US

THE POLITICS OF DEMOCRACY IN HONDURAS

25

$1,250,000 from United Brands in exchange for a decrease in taxes levied against the banana companies by the Union of Banana Exporting Countries, an international organization that endeavored to increase participation of the producing countries in the profits of the transnational banana business. Instability facilitated the downfall of the reformist regime of Oswaldo Lopez Arellano in April 1975, when the high command and cabinet were replaced by a team that was more conservative and had authoritarian tendencies. The second phase of military government (1975-1978), known for its "tough" developmentalism and headed by General Juan Melgar Castro, involved the transition in the armed forces to a traditional hard-line group, which, determined to maintain the status quo, called for a purge of the progressive elements and supporters of social change in the country, complicating the confrontation between the two sectors. From that point the reformist movement began to decline and the exceptional Peruvian phenomenon gave way to the old models of a more repressive nature. The "Armed Political Party," as a local newspaper called it, found itself once again aligned with its old ally, the conservative National party, which gradually regained the important government positions. Together they launched a complete line of unpopular practices and political controls that were stricter than the representative union organizations. A disputed memorandum, apparently sent out by the Superior Council of the Armed Forces to General Melgar Castro in mid-1978, expressed many of the military high command's worries. Besides asking for a "more energetic policy for defending and maintaining public order and social peace" threatened by "communist subversion," it demanded that he clarify his position with respect to his alleged intentions to "constitutionalize" himself as president of the Republic by means of elections, since he had already requested a national electoral poll and had begun preparations for this event. It was during this era, with its bitter characteristics of serious scandal in the public's eye, that the legitimacy of the whole political regime was placed under a dark cloud of suspicion. No matter what the truth is about this document, it is certain that circumstances brought to light the existence of serious differences and struggles for power in the military high command. Confirmation came a little later with the so-called "Tegucigolpe" (play on words: Tegucigalpa being the capital and golpe signifying a coup d'etat) in August 1978. Melgar Castro was replaced by a military junta headed by the chief of the armed forces, General Policarpo Paz Garcia. This change marked a definitive decline in military reformism and in the most advanced sectors of developmentalists who had supported the capitalistic modernization project most enthusiastically after 1972, for the most part from the perspective of the expansion of the internal market and the moderation of the role of the economically concentrated owners who were part of the traditional developmental style. The final stage of the process brought the paralysis of the initial reformism's remnants, replac-

26

PROBLEMS OF DEMOCRACY

ing the redistributive guidelines of agrarian reform with a model that called for restricted and conveniently located areas of concentrated rural development and practically eliminated the mechanisms for the expropriation of land that the peasant movement demanded. At the same time, there was a rise in the tendency towards a more authoritarian policy for the treatment and control of the numerous social conflicts that were erupting everywhere in the country as a result of major deterioration in the living conditions of wage earners and peasants and were aggravated by the growing impact of the recession/inflation that had reached world crisis proportions. Within the framework of a growing rightist policy, protests from the radical opposition increased. They put forward their tough criticism in the relatively open sphere of the public media, denouncing the distortions and manipulations of the voter registration process and finally forcing the elections of April 1980, which permitted the transitory installation of the National Constituent Assembly and a provisional government. At the end of 1979, a local newspaper 1 launched an overwhelming appeal to the armed forces: "The Honduran Army should not abandon Morazan, the exemplary Central American soldier, by adopting other foreign models, even less if these be Pinochet or the missing Anastasio Somoza . . . consequently the military high command should return to Morazan, should be inspired by him, so that they cease to see the people who disagree with them politically as the principal enemy, the internal enemy as some anti-Morazan colonels call them. It is they who in reality discredit the armed forces." In reality, this analysis reflected a general view held by many of the country's social sectors, including the Catholic Church, which demanded from the military a revision of its antipopular orientation as reflected through the state. Of particular concern was the military's apparent compliancy regarding electoral fraud, and the fear of "continuism" by a conservative government. The change barely arrived in time. Confronted by harsh opposition and internal doubt, and given certain pressures and well-known international factors, the Superior Council of the Armed Forces felt obligated to promote and approve minimal electoral freedom and tried to reduce the effect of the fraudulent aspects of the suffrage mechanisms, which finally made possible the election of the present civilian government on November 29, 1981.

PRESENT CHARACTERISTICS AND THE LIMITATIONS OF THE DEMOCRATIC GAME The three historical periods present certain similarities, in terms of in some way constituting political answers to, or outlets for, the system's partial crisis or its need to reconstruct political legitimacy, which had deteriorated in the face of a general dissatisfaction with the management of public resources.

THE POLITICS OF DEMOCRACY IN HONDURAS

27

As can be seen, we are dealing with the processes of a return to constitutional civil regimes, as in the case of Villeda Morales and Suazo Cordova; or as in the contrary case of Lopez Arellano, where the breakdown of the formal juridical order led to reform efforts that were intended to democratize the country before the demands of popular mobilization. Permit me to emphasize that from an integral democratic perspective, not just political but economic and social as well, the constitution did not merely allow for the periodic exercise of suffrage rights or formal public freedoms; it also allowed for increased access by the majority to equal economic well-being, effective participation in decision-making, and true control of the exercise of legally constituted powers. Therefore, the notion of democracy should be seen as a dynamic historical concept that represents a process of socio-political construction, progressive and not unilateral, in which the actors and political subjects continue to define concrete goals in accordance with the possibilities and values that characterize a particular evolution of society. Whatever the personality that each country's democratic process acquires, we can observe that in all of Latin America the idea of the fight for democracy persists, even though its expression may be specific and, given the various situations and rhythms, in accordance with concrete (historic) conditions. Within this context, Honduras is no exception. The phenomenon that pushed it towards a return to civilian democratic constitutionality, by means of the elections of 1980 and 1981, expressed in a complex manner as much the struggles, expectations, and aspirations of the Honduran people as it did the influence of the Central American international scene, particularly after the triumph of the Sandinista Revolution in Nicaragua that disturbed the balance of power in the region and its geopolitical aspects, mainly in relation to the United States. With these considerations of democracy, it is necessary to take into account not just the formal existence of the citizens' public freedoms but also the effective fulfillment of those freedoms and of social and economic rights, in other words, the fulfillment of the social and economic components of human rights, which all modern constitutions include in their fundamental principles. I would like to emphasize that an analysis of democracy should consider both its formal dimensions and its substantive aspects, that is, the degree to which the population not only elects its leaders but has access in some measure to the control of the effective exercise of political power through participation in fundamental decisions that affect a nation-state. In this sense, it is fitting to say more of the effort to implant at the citizen level a conception of ascending political power as an alternative to traditional authoritarian, vertical power structures, even within a regime that has legally covered all of the constitutional formalities. From this viewpoint, it should be emphasized that in Honduras, in recent years, an increase and strengthening of civilian society, on a basis more

28

PROBLEMS OF DEMOCRACY

solidly conforming to the different organized interests of the country, is expressed in a multitude of institutions that channel their demands toward the state in a fluid and dynamic manner. Nevertheless, the different types of regimes that the country has endured, particularly after 1972, and particularly those that are increasingly demanding of democratization, collide with authoritarian projects coming from the upper levels of public power. Now then, within what context do we place the actual fight for democracy and the functioning of the Suazo Cordova government's constitutional civilian regime? Have the three years of Liberal government strengthened or weakened the democratic system defined above? The present situation is different from past experiences. It deals with a more profound political and economic crisis that encompasses, though in different ways, all of the Central American societies. Some authors define it as a "breaking crisis" that affects the state, the system of domination, and the entire social structure 2 where the internationalization of the political-regional conflict forms an unpublicized and extremely tense and complex situation. In the particular case of Honduras, this situation established new doubts and demands in the political system that tended to suppress the traditional channels and mechanisms of policymaking. In other words, the gravity of the crisis, as much in its internal-external dimensions as in its national-regional aspects, proved a serious challenge and threat. It pointed to inevitable changes that could surmount internal limitations that were dependent on the present models of capitalistic development and pushed towards a full process of social-political restructuring. The simple reactivation of the political constitutional game of the past would not suffice within the strict framework of formal parliamentary democracy or even within the scope of the previous incomplete reformist experiences, without significant social changes. For this reason the question of the "moderating power" of past reforms comes up, with reference to its extenuating role, or lack of it, in the explosion of political violence. This power has been totally or partially exhausted, to the extent that the phenomena of the last decade have produced an irreversible situation from which a substantive change emerges and imposes itself as the only reasonable solution. All of this came to pass despite the "optical illusion" that often generated the use of brutal force and total repression and their apparent success, as suggested by the unsuccessful authoritarianconservative project of General Alvarez Martinez, which was also accompanied by a narrow vision that saw only military solutions to the regional conflict, which was interpreted as a mere expression of East-West confrontation, in agreement with the Reagan administration's views. The so-called "electoral solution," which created enormous expectations on the Honduran political scene between 1979 and 1981 by apparently opening new possibilities for change in the political system, fundamentally represented a significant decrease in the direct presence of the armed forces and an

THE POLITICS OF DEMOCRACY IN HONDURAS

29

important recovery of legitimacy and consensus. It disappeared very quickly due to the type of orientation that the new government gave to public management. Notwithstanding the extraordinary popular backing that it obtained, expressed by 80 percent of the electorate (the highest turnout in Central American history), the new government quickly drew away from its campaign promise of change, and its trajectory of civilian social reform, antiauthoritarianism, and democratization of the Liberal party. Some called it a lack of imagination, others called it audacity, and still others an assumed "political realism," when President Suazo Cordova opted for a basically conservative plan and a foreign-policy line totally subordinated to the Reagan administration. They believed that it signified an abandonment of all desire for national recovery and an attempt to take advantage of the country's relative negotiating strength, given its strategic geopolitical location in the context of a convulsive Central America. In this sense the choice of a "hard line" official as chief of the armed forces represented the acceptance of a virtual status of "national security state," with restricted democracy. In fact it signified the installation of a dual power structure in which the president, notwithstanding repeated statements to the contrary, voluntarily3 renounced his prerogative of civil superiority, which did not originate merely from constitutional formalities but from effective popular support, expressed in successive elections as a way of rejecting the hegemonic military in many questionable ways. The president's relationship with the chief of the armed forces, General Alvarez Martinez, constituted in truth, as other analysts have pointed out, a new kind of alliance between the Liberal leader and the high official chosen by him to occupy that position, based on compromises previously agreed upon4 and only partially known at this moment. On this occasion it was the Liberal party rather than the army's traditional allies, the National party, that established this new political-military arrangement. That is how President Suazo set up his support structure, based not on the wide spectrum of sympathetic voters and favorable public view of his new government, but on three fundamental members: General Alvarez, with his ferocious controlling of the "internal enemy"; Ambassador John D. Negroponte, who generously furnished economic and military support for establishment of U. S. troops and bases in Honduras in order to "protect" the country from Sandinistas; and a small private business sector, headed by the Miguel Facusse family and the Association for Honduran Progress (APROH) directors, that took charge of the true management of the neoliberal economic policy, fundamentally inspired by the so-called "Reaganomics" directives. This type of power arrangement, instead of democratizing, concentrated decision-making at the highest level, taking into account that the National Congress (completely subordinate to the executive branch) would not exercise its duties of checks and balances, nor would the non-existent or frag-

30

PROBLEMS OF DEMOCRACY

merited opposition, w h o were divided as a result of active interference from the government. Add to this the distortion and decentralization introduced by a new and exogenous variable, the virtual occupation by the U. S. military of our national territory, which was being converted, objectively and independently of our intentions, into a platform for intervention into the internal affairs of neighboring countries. The Carter administration's positive influence in persuading the military to accept free elections to decide political succession was converted with the Reagan administration into pressure against democratization of the country and in favor of strengthening of the army, militarization of foreign policy, and denationalization of internal politics, which soon began to show the consequences of altering the equilibrium and traditional functioning of the Honduran political system and its possibilities for increased democratizations. In this context, the downfall of General Alvarez, the result of a strictly internal movement by the armed forces brought about by his excessive authoritarianism while in c o m m a n d , appears to be a product of institutional restructuring and a call for needed revision of military agreements and of the 1983 security agreement with the United States. This search for redefinition of the relationship with U. S. hegemonic power shows the extent to which military occupation of the country had become a crisis and the role that had been assigned to Honduras in relation to the conflicts of neighboring countries. T h e appearance of this feeling of national recovery, that was extended f r o m the military to other belligerent forces in the internal political arena, and vice versa, translated in concrete terms into a redemocratization of the Superior Council and reinstated participation of the unit c o m m a n d e r ' s intermediate official in the decisions of the collégial body, within a general plan of relative decentralization of power. Curiously, the exact opposite was occurring in the civilian power structure, where the principal legislative and judicial decisions were determined by Suazo or his immediate advisers. T h e same problem could be found in the workings of the National Electoral Tribunal or the two m a j o r traditional political parties, which distinguished themselves for the absence of democratic primaries in the selection of party leaders and officials. How can this strange and contradictory tendency toward democratization and authoritarianism in one or another of the component sectors of the political system be explained? It would seem that the government lagged behind the trend for change that occurred in the armed forces, w h o in turn blamed the civilian society and the present Central American situation. Certainly, the almost three years of civilian-constitutional regimes have done little to strengthen democracy, and in fact have weakened it tremendously, with respect to the republican mechanisms for citizen representation and popular participation (with the sole, partial exception of the mass c o m munication media). Poverty has increased and wealth is relatively m o r e con-

THE POLITICS OF DEMOCRACY IN HONDURAS

31

centrated, thanks to the imported inflation, unemployment, the rise in the cost of living, the loss in buying power, the virtual wage freeze in many areas and categories, the shrinking of investments, and the external strangulation, as well as the paralysis of agricultural reforms and other social measures of a redistributive character. What kind of democracy are we talking about then, in Honduras? Of a system or period of formal political games, conducted by small omnipotent groups from the traditional parties that use them as mere instruments or stepping stones for the acquisition of personal wealth, which, as the Catholic Church has claimed, is usually transferred outside the country? It is a matter then of a "protective democracy" that limits its citizens, reduces the state and democracy to a constitutional text and a legal formality without economic and social contents, and attempts to restrict and arbitrate public freedom according to its convenience in order to continue in power. After almost three years of constitutional government, the analysts concur on the basic characteristics that have contributed to undermining the legality, consistency, and operative capacity of the civilian regime, and therefore to reducing the possibility of consolidating a democratic perspective in the country in the long run. The improvisation is expressed by the fact that right after the government's first year in office they finished preparing and approving a development plan that directed the actions of the state and above all the immediate measures for confronting, with urgency, the conjunctural challenges that the crisis presented. The inexplicable lack of decision seems to express characteristics of a fearful, vacillating leadership, notwithstanding that the President concentrated the better part of the political and administrative power of the state machine, in fact controlling the three branches of government without any organized opposition from rival political forces. The compensation for the government's notorious operational failure seems to be found on the domestic plane in its eagerness to intervene in and control the workings of the popular organizations, in general with the intention of neutralizing any outbreak of protest or legitimate opposition within the recognized political game; and on the international plane in its ferocious anti-communist, particularly anti-Sandinista, campaign, which adeptly produced a "smoke screen" to hide the government's inability to manage the crisis and to effect minimum change. The world crisis and Sandinista subversion are used to explain everything that happened in the country; the type of state policies or the ability to implement them has nothing to do with it. Of course it is true that crisis imposes difficult conditions and restricts the margin of government manipulation, but it cannot be blamed for the paralysis, the absence of alternatives and the imaginative proposals, above all when the government enjoys a mobilized popular backing. Along this line, a well-known analyst 5 accurately summarized the basic characteristics of the style of government and its principal weaknesses:

32

PROBLEMS OF DEMOCRACY We are not few who believe that this government has known least how to take advantage of favorable opinion in order to push through profound transformations in Honduran society. On the contrary, it is dedicated to spinning its wheels, inventing enemies or creating fears that have seriously divided or paralyzed its best command points. This is why we are able to point out such negative results as: 1) the unnecessary strikes at independence, and complementarily to the theory of state powers, facilitating the aura of personal dictatorship in President Suazo's administration; 2) the open and unnecessary subordination to the military, wasting the opportunity to integrate a strong civilian bloc that would strengthen democracy and eliminate once and for all the threat of takeovers; 3) the dangerous strategy of weakening popular organizations, obstructing communication channels between the government and citizens, the same channels that have served in the past to drain off social discontent and facilitate the peace and tranquility that we have come to enjoy; 4) legal insecurity has been reintroduced and the state of law that we all long for has collapsed, opening the road to insecurity under the pressure of the momentary interests and stingy desires of the people in power; 5) the internal crisis in the Liberal party has deepened at an unusually rapid rate, as if they wished that the basis of power for the president and his government would not revolve around the men who voted in November 1981 but around the force of the men in uniform; 6) exaggerated sectarianism has kept the best Hondurans from serving their country, again converting public administration into a source of benefits for the most aggressive; and 7) an unnecessary conservative aura that if not corrected in time could bring a personal dictator to a political monocracy, a separation amongst Hondurans, and a loss of international prestige.

The blockade imposed on the established communication and politicalgame mechanisms has signified a retrogression in the Honduran political system, to the point that the relative "institutionalization of the social conflict" has been a distinct characteristic of its operation, providing certain channels for the expression, articulation, and at least partial solution of demands from the original popular sectors. This situation has led to the possibility of an authoritarian plan that seems to be growing gradually more concrete. This situation on the domestic plane corresponds to a foreign policy that in practice has abandoned neutrality and noninterventionist principles. Contrary to what has been reiterated in the pacifist rhetoric of the Department of State, military maneuvers with the United States and El Salvador have signified massive and continuous debarkations of marines and other U. S. troops. Honduras is virtually an occupied country, with foreign intervention similar to the times of the "Big Stick" in the early 1900s. As someone has said, it is something like a big military base, or a species of a gigantic terrestrial aircraft carrier, in the middle of the Caribbean basin. The internationalization of peace has ceded its position to the "Holy War" theory. The "hawks" celebrate this transfer of national sovereignty with jubilation. Is it because hardly anyone doubts that the heavy armament, the foreign military bases,

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33

and the strengthening of military power are the best medicine for an incipient and weak democracy? Are the foreign military occupation and the constant military maneuvers of the U. S. and Salvadoran armies and the armed groups of anti-Sandinistas adequate and favorable conditions for clean, free, and democratic elections in 1985? The deterioration of Honduras's image in the outside world has been evident and has stirred up internal malaise and even indignation in diverse opinion sectors. And the government insists that this is due to a deliberate, international "slander campaign" against the "constitutional and democratic government." An expression of this malaise was made public in the celebrated editorial in the Diario

Tiempo

newspaper, entitled " E v e r y t h i n g , in-

cluding honor, has been lost," in which the author lashed out against the regime's position of "open submission to foreign exploitation in the country." In all, the government has already perceived the consequences and the tremendous political cost that this radically subordinate posture towards Washington's political-military strategy in Central America has signified. In his last letter (July 18, 1983), the third in a series that someone classified as "epistolary enthusiasm," President Suazo Cordova practically demanded that the Reagan administration donate approximately US $400 million to help with the country's urgent economic situation, precisely emphasizing the character of compensation that is due for the political risks that Honduras has assumed in the effective implementation of U. S. strategy at a "minimal cost" to the United States: My government has decided to work strictly, as in effect it is already doing, with the International Monetary Fund in its financial program for the next three years. But its success could only be viable through budgetary aid in the form of a donation of US $150 million during our 1983 fiscal years, and US $100 million in each of the two successive years. A portion of these resources would alleviate internal necessities to cover additional costs that result from the strengthening of our internal and external security. You, Mr. President, will be informed that we have not vacillated in taking decisions to improve our economy and these actions have a high political cost. For example, the establishment of a Regional Center for Military Training signifies a high political cost, particularly to our foreign policy. And even though I realize that we are defending our own national interests, your illustrious government must recognize that fundamental strategic interests of the United States are also being protected at a very low cost to your country. But our people are beginning to ask with increasing eagerness if it is worth having our own interests so intimately allied to the United States's interests if we are receiving so little in exchange. We estimate that the budgetary aid that we have asked for would represent a relatively low cost if the political and military risks that Honduras is assuming are taken in account. [Emphasis added.]

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Unless the course of these governmental arrangements is rectified during their final year, on the domestic as well as the foreign level, it would seem that the country is headed for more frustration with regard to the possibility for peaceful change. It is worth asking if it is the last chance or if there is still time to postpone demands for change that appear inevitable. Perhaps the political system has already lost its "characteristic capacity" to reabsorb and process social conflicts and accumulated tensions. Only the recovery of the capacity for self-determination, functioning in the interest of national sovereignty, and the reactivation of a true process of socioeconomic and political democratization can reopen possibilities for authentic structural and peaceful change for the country. Lessons from other places in the region are sadly obvious.

CONCLUSION The heart of the Honduran political system has produced de tacto and constitutional-legal regimes" and both kinds have shown reformist tendencies and have made attempts at democratization in their distinct and original ways, not only on the legal-formal plane but also in reference to the economic-social redistributive processes. Perhaps these characteristics, together with the institutionalization of business owners and social conflicts, in other words the existence of established channels for demands and protests, explains the relative stability and political order in Honduras, and its lack of the systematic or generalized violence that is found in neighboring countries. In an inexplicable manner, paradoxical and precisely due to the installation of a new constitutional-legal regime, arising from a free election after an almost ten-year absence of presidential elections, a growing deterioration in the conditions necessary for a functioning democracy in Honduras can be observed. Is it worth asking if the world economic crisis and its particular domestic manifestations explain this phenomenon by themselves? Is the presence of foreign troops from the United States and other countries such a determinant in the nation's life that a foreign policy alien to vital Honduran interests, destructive and denationalized, has eliminated the possibilities for progress or a democratic consolidation in the country? Does the imposition of a national security project, currently in the process of dismantling and blockading certain access channels, and popular participation in the exercise of power, have, or did it have, such pernicious effects as to generalize a crisis of legitimacy in the political system in its entirety? The answers to these questions are naturally not easy, above all in the face of the long-awaited presidential succession process programmed to begin at the end of 1985. Some symptoms appear with particular clarity. As an experienced radio-journalism analyst recently said, a tragic political formula exists: abuse of power + incompetency = nonparticipation, referring to the civilian government's inept political management, plagued with arrogance,

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35

corruption, sectarianism, etc., and to the absence, weakness, or division of a fundamental and operative democratic opposition. Meanwhile the armed forces appear to be making a certain effort in rectifying their patriotic potential, through the reestablishment of "internal democracy" in a sui generis type institution, classified as a "Parliamentary Army." Be that as it may, serious signs of a growing crisis in credibility and in public confidence exist that are also crises of representation for the traditional political parties, which meanwhile serve as agents par excellence of the democratic game, subjected as they are to an interminable process of divisionism, apparently emanating from the highest levels of power. Ironically, the phenomena of the state's denationalization of domestic and foreign management and its partisan manipulation, among other things, are provoking a thaw and an imbalance, not sought or wanted, in the traditional political order, and therefore opening the way to new allies of representative political forces, among which are profiled new types of alliances or coalitions based on doctrinary and programmatic platforms that are more solid and serious than those based on personal ambition for wealth or social status, as the Catholic hierarchy has certainly pointed out by saying that politics is a public service, not simply a road or springboard to private benefits that frequently are not even lawful. The changes and modifications in the armed forces seem to have opened the possibility of reorienting the political process so that it would allow for the viable ascent of democratic forces. In these conditions, it would be difficult to foresee the population's acceptance of political imposition of power, or a project of continuity, which is characteristic of the Honduran political system.

NOTES 1. Diario

Tiempo,

(San Pedro Sula, Honduras), 27 D e c e m b e r 1979, p. 6.

2. See Edelberto Torres Rivas's magnificent analysis in his article: "La crisis centroamericana: ¿Cuál crisis?" Polémica

(San José, Costa Rica), no. 6 (1982).

3. This assertion is confirmed in a letter of 2 5 September 1984, which President Suazo Cordova sent to the new chief of the armed forces, General Walter Lopez, a few months after the dismissal of General Alvarez Martinez (March 31), in which he complained that the General had tried to weaken his government and sought to free himself from all blame in the actions of his old subordinate and intimate ally. Naturally the arguments in the letter did not exonerate him from the responsibility that he shared with General Alvarez during the period of the "small Swiss war" that ended on March 31 with Alvarez's ouster. 4 . Of course this pact was broken, involuntarily on both sides, with the dismissal of General Alvarez by the Superior Council of the Armed Forces (substantially altering the civilian-military balance and causing its rupture), due to the "Miami conspiracy," made public on November 1, 1984, which from that moment initiated

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PROBLEMS OF DEMOCRACY

the "persecution and punishment" of old allies, most of which belonged to the APROH. 5. See Juan Ramon Martinez's "¿Hacia la dictadura personal o el inicio de un proceso de democracia autentica?" La Tribuna, 27 January 1983. 6. For such an effect, remember in the postwar (W. W. II) period the governments of Juan Manuel Galvez and the short-lived Ramon E. Cruz government; on the other side, the de facto regimes of Lorenzo Diaz and Lopez Arellano in 1963.

2

The Limits of Democracy in Honduras Edgardo Sevilla

Democracy is presented as an ideal system in the rhetoric of all political parties or groups whose purpose is to maintain it or develop it; it is not subjected to question and thus maintains its polysemy, an almost mythical connotation, and a limited practical application. That the object of any political system is to obtain power and then maintain it is often forgotten. To obtain power, democracy is only applied in its ritualistic sense—voting. This vote, when coercion has been avoided, is generally a result of tradition. A voter is born blue (National party) or red (Liberal party), with little influence from the charismatic personalities of the candidates and even less from the merits of the government's programs. To maintain power, genuine democratic mechanisms are often forgotten because it is easier to use the state machine directly. On the other hand, democracy continues to have limitations. Some citizens continue to consider public office as a "political plundering" and proposed development schemes can become very inefficient when attempts are made to put them into practice, because in general such elements as the relationship of dependence that conditions the possibility of achieving economic and social democracy are not taken into account.

INTRODUCTION In order to place the evolution of the concept of democracy in historical perspective, it appears to me that there has not exactly been an explicit fight for democracy. Political battles and development have passed through the following polarities, among others: colony-independence, monarchyrepublic, separate state-federation, conservativism-free state, English interests-United States interests, Cuyamel Fruit Company-United Fruit

37

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PROBLEMS OF DEMOCRACY

Company. We must emphasize that confrontation has always been within the same social groups. After the "liberal revolution" triumphed, as it did before in Mexico and Guatemala, the question of w h o would be the leader or which company was to be favored, was asked. World War II, in Honduras as in neighboring countries, brought a dictatorship that resulted in limited individual liberties and social rights. After a period of transition, in 1957, the liberal government of Dr. Ramon Villeda Morales c a m e into power: social rights were increased and individual guarantees were reaffirmed by the constitution. In terms of format our constitutions have always been avant-garde; they have been more the compilation of the latest and newest ideas than they have been products of the effort to increase public participation. In general they have called forth the same attitude as the viccroys had toward the laws of the Spanish Crown, a formula of "accepting but not obeying." The force of modernization that began in 1957 continued, although with less m o m e n t u m , even after the fall of Dr. Villeda Morales's administration in October 1963. Inasmuch as it was founded on the Central American integration process, it soon began to manifest signs of crisis. Specifically resulting f r o m the American Presidents conference held in Punta del Este, Uruguay, came the Alliance for Progress program. This program oriented Latin American governments toward legalizing activities in rural areas that had been almost prohibited, such as agrarian reform and planning. Nevertheless, its proponents, who did not participate in government, continued to be suspected by the system's critics. The program was not sufficient to create conditions for democratization. T h e problems in the Central American C o m m o n Market were manifested in the war of July 1969 between El Salvador and Honduras. T h e results of that war generated a feeling of national unity a m o n g the Honduran people and led to a search for a different solution to government succession, and an integrated bipartisan government, made up of the two traditional parties, was established. I believe that, theoretically, conditions were ripe for this type of an alliance, because fundamentally the parties coincided in their economic conceptions and were confronted with a consolidation of the spirited leftist sectors, due in part to the domestic crisis and in part to the international situation. In practice, everything failed, because the strength of sectarianism within the parties that had participated in the national unity pact created conditions that permitted others to take power. What ensued will be analyzed later. For now, I only wish to call your attention to the weak internal roots of the changes.

THE CIVILIAN-MILITARY BALANCE I d o not think that the balance between civilian society and the armed forces can be spoken of with the idea of equilibrium, due to the fact that f r o m the

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time that the latter intervened and took power, for the first time in 1956, they became as Molino Chocano pointed out "the ultimate referee." One theory maintains that when the armed forces become professionalized in Latin America they begin to act as if they were a political party; this is illustrated in Honduras. Here the army is the only group that can take control all by itself whenever it wants to, although in order to keep control it needs to ally itself with other forces. Characteristics of the different governments have been determined by who the armed forces associated themselves with, or who they allowed to associate with them. In the 1957 Constitution, the armed forces were given autonomy as an institution. It has never been proven whether this was necessary, imposed by the turnover in power, due to fear and a desire to be gracious, or simply because it was the situation dominating in Guatemala, whose institutions and behavioral patterns Honduras had often copied or borrowed. In 1963, eight days before the elections, supporters of the National party broke in again, alleging that the Liberal party, which was assured of victory, was infiltrated with communists. In 1971, the Liberals, together with the other tangible powers, endorsed the national unity pact, mostly because they could not continue their direct rule, as much because of the erosion of power suffered by the army as of the regional and international situation. In December 1972, there was another coup d'etat. It must be emphasized that this coup was totally different from previous ones. The military gave the impression of being able to take power for an indefinite period of time. They spoke of a development plan, with a culmination at least fifteen years away, that included pronounced structural changes. One must remember that at this point we are copying the Peruvian style. Support from workers and peasant organizations, as well as from the business sectors, was sought. Efforts to weaken and possibly eliminate the traditional parties were made but no decision was ever made on how to create their own maintenance device. The reformist momentum stopped in early 1975 when General Oswaldo Lopez Arellano was replaced by General Juan Alberto Melgar Castro. Of this military government I will only mention the aspects that relate to the new mode of political participation proposed by advisors from the U. S. Department of State, with the intention of organizing the distribution of and participation in power by means of a cooperative scheme. Perhaps the recommendation was not clearly understood, or the desire to legitimize General Melgar by traditional processes impeded the execution of this theory. An imitation of it was put together by joint action of the chief of state's Advisory Council, which was composed of, among others, military personnel, workers' organizations, peasants, normal schools, and the new parties (e.g., Innovation and Unity party and the Christian Democratic party). The military junta that replaced General Melgar in 1978 felt obligated to allow elections in order to return the government to civilians, due to pres-

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sures from the traditional parties, the business sector, and most especially the new U. S. policies resulting from the triumph of Nicaragua's Sandinistas. In recent years the army's position has been influenced by the idea that the conflicts in this region are the result of the East/West confrontation and the doctrine of the national security state. The role of the armed forces in the future could be determined by the National Defense School, created by the current constitution, Article 289, which states: The Colegio de Defensa Nacional (National Defense School) is established as the highest center for studies for the armed forces, in charge of the training of military personnel and select civilians, so that by joint action in the political, economic, social, and military fields, they can participate in national strategic planning.

The consequences of the creation of this organization have not been analyzed or discussed by the political parties. With an extreme application of Article 289, the role of civilians could be reduced to merely executing the military's decisions.

PARTY GAMES AND T H E POSSIBILITY O F DEMOCRATIC OPPOSITION

Although there are four legally organized political parties, the majority of the citizens identify with the two traditional parties: the Liberal and the National, therefore maintaining, in the political game, the characteristics of bipartisanism. These majority parties resemble those that Maurice Duverger classified as belonging to a central committee or council. In such parties, whoever controls the central command organism dominates the party. The establishment of internal factions that would supposedly contribute to a greater popular participation has not had the anticipated effect. Participation has rather been reduced, because those who control the dominant faction control the party, which has resulted in a battle within the parties that is stronger than the one between parties. In this way, those who do not subscribe to the current orthodoxy are excluded. A negative consequence of the intraparty battles has been the inability of the parties to articulate a constructive and efficient opposition. Neither have they produced an open discussion of programmatic orientation or ideological tendencies or alternatives. There has also been an absolute loss of political expression by a large number of citizens, a situation that is aggravated by the practical difficulties of establishing new parties.

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CONCENTRATION A N D INDEPENDENCE OF PUBLIC AUTHORITIES

I believe that we have idealized and exaggerated the concept of the separation of power; not even Montesquieu expected so much from it. Article 4 of the current constitution establishes that: The form of government is republican, democratic, and representative. It consists of three branches: the legislative, the executive, and the judicial, complementary and independent with no subordination. . . .

To manage to produce a system of checks and balances is a fundamental objective of democracy, even though the actual preponderance that the executive branch has in a presidential system must be recognized. The most pronounced example of presidential power is that of Mexico. There they have reached an extreme in which the president designates his successor. Both parties have tried in different eras to imitate this model.

THE MEDIA IN THE CONSTRUCTION OF A DEMOCRACY

The communication media are an important tool in the securing of a democracy. The task should be to learn to use it with this idea in mind. People generally believe what they hear or see in the media, although where it concerns politics, they have a tendency to be more critical, adjusting the news to their own ideological position. In recent years there has been freedom of press, with the right to criticize or denounce irregularities, but the problem is to get the people to react to the news. It is said in Honduras that a scandal does not last longer than a week. In Nicaragua, Somoza permitted more freedom of press to La Prensa than the Sandinistas presently allow, but it is not for this reason that I would dare to affirm that the former was more democratic than the latter.

DEMOCRACY AND THE PRIVATE SECTOR

In reference to the role of the private sector in Honduras, it is necessary to make an objective and special study of them, because when they are judged according to the theory developed to explain the behavior of similar groups in other countries, their influence can be exaggerated. From my own observations, I consider the organized national group to be weak. There are isolated cases in which some individuals have sought direct personal benefits, but it is not true of the group as a whole. From the private sector come some of those initially responsible for corrupting military personnel. To obtain democratic development in Honduras, it would be useful to strengthen this sector, improving their organization and clarifying their role

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and interests as a group. In this fashion they would be in better condition to communicate with the other sectors and better able to understand the transformations necessary for the economic structure to respond to present demands. Such understanding could also overcome the naive attitude of some that assumes that all proposals that come from the United States or from foreign investors are good for them and for the country. The role that the Honduran Council for Private Enterprise (COHEP) played when the country returned to a constitutional regime must be recognized, because while many politicians were getting accustomed to their present situation, COHEP encouraged the revision of the traditional parties and was a determinant in assuring that they did not participate in the Advisory Council of the chief of state, which, having counted on universal support, had securely constitutionalized General Melgar's government.

FINAL W O R D S

This commentary was intended to emphasize some of the characteristics of the framework in which the country evolves and the conditions for a possible democratic development, which if they fail to justify the current circumstances can at least serve to explain some of its elements. The framework can be useful in pointing out the remaining tasks, among which the following can be mentioned: • to study and bring to light the basic elements of a democratic system and the possibilities of its application in our society; • to analyze the conditions of dependency and the viability of the present economic model; • to redefine the mechanisms for the exercise and distribution of power; • to explore the study of the relationship between the military and the civilian societies in order to determine their respective roles; • to obtain a means of organizing the parties that would assure democratic movement internally; • to sponsor the organization of diverse sectors and their participation in a comprehensive national dialogue.

3

A Deliberative Government to Consolidate Democracy Manuel Acosta

The Honduras of today, the second poorest country in Latin America after Haiti, represents a balance of strength and precarious tranquility in a disturbed Central America. It has managed to maintain a certain degree of harmonious cohabitation among its diverse sectors despite the tremendous inequalities and social injustices that exist. A certain degree of respect and understanding for the constitutional and legal institutions has prevailed, in spite of the lack of civic and political education of the great majority of the citizens. The national desire inclines towards maintaining peace and trying to construct an adequate system of government that is aware of the need for development and will preserve the individual and social liberties of its citizens.

A BRIEF EXAMINATION O F T H E C O U N T R Y ' S MOST R E C E N T ADMINISTRATIONS Doctor J u a n M a n u e l G a l v e z ' s Administration, 1 9 4 9 - 1 9 5 4 In 1949 Honduras made a peaceful transition from the dictatorship of General Tiburcio Carias to Dr. Juan Manuel Galvez's administration, enjoying liberty and a sense of brotherhood, a contrast to the violence and fear that had reigned for sixteen years. President Galvez's conciliatory, democratic and popular attitudes were sufficient to gain the people's support for his government, which respected liberty, was progressive and in favor of national harmony, permitted the return of emigrants, released political prisoners from jails, and employed Hondurans without any discrimination. It was during this period that Hondurans performed their greatest feat in history: The Great Strike of 1954, in which the workers, defying danger, paralyzed more than 6 0 percent of the country's economic activities. The

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strikers were led by the employees of the banana companies, who together with their wives and dependent children endured a three-month work stoppage without food or shelter, until the owners relented and recognized the worker's right to have a union, to collectively bargain and to strike, established acceptable working conditions, and granted the first collective wage increase. This enormous triumph for the Honduran people marked the beginning of a new political and social era in the country. The workers had given them a lesson in citizenship, national valor, and civic responsibility that was immediately incorporated into a decisive plan in the national political arena. Mostly because the success of the strike was due solely to the efforts of the working class, the political parties remained on the sidelines and the other social sectors were mere spectators. Galvez's government maintained a prudent attitude of neutrality and respect, rejecting pressures to denounce the strike movement as "illegal," "communist," or linked to Jacobo Arbenz Guzman's government in Guatemala. Apart from this noble gesture, the attitude in the country was changing. New leaders from the people were springing up, unknown workers who were leading multitudes, illiterate orators who preached reality and business sense to employers. The country had to adjust to this phenomenon, which gave tools to the workers for their fight to break the political party's monopoly over the coordination and mobilization of the masses. At this time Galvez organized the armed forces, replacing the political parties' old armed bands with a permanent, professional, and apolitical institution. While this was occurring in Honduras, Guatemala was undergoing its October Revolution and found itself compelled to break up the feudal structures that were impeding modernization and progress. The Work Code, Social Security, and a pledge to implement agrarian reform resulted. All of these measures, inspired by Dr. Juan José Arevalo, had received the complete backing of the Guatemalan people and provoked opposition from the privileged groups of the oligarchy. Alarm over "the spirit of c o m m u n i s m " arose in all of Central America and in Washington, especially because it was asserted that the October Revolution was inspired and supported by Moscow. The final chapter was written by Colonel Carlos Castillo Armas who invaded Guatemala from Honduras, with Washington's support, overthrew the government, established a cruel dictatorship, and provoked the civil war that Guatemala is still engaged in.

The Lozano Administration, 1954-1956 Three important events stand out in the government of Julio Lozano: (1) he completed labor legislation, issuing regulatory laws pertaining to different aspects of work, receiving direct advice from the International LaborOrganization, and respecting the freedom and autonomy of the workers' movement; (2) he organized a national unity government with equal participation from

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the three existing political parties—the National, Liberal, and Reformist—in order to execute the first National Development Plan; and (3) he tried to impose the continuation of his government through fraudulent elections, challenging the two traditional parties, and ended by provoking the first takeover by the newborn armed forces.

T h e Military Junta's Administration, 1 9 5 6 - 1 9 5 7

In the few months that the military were in charge of the government, their administration was characterized by a respect for individual and social guarantees and for maintaining a united national government. This permitted the rapid growth of the armed forces and made them a decisive political force in national affairs. In the administrative field, autonomy was granted to the National University and the Social Security Institute was established.

Villeda Morales's Administration 1 9 5 7 - 1 9 6 3

The military junta held free and honest elections for representatives to the National Constituent Assembly, which the Liberal party won and used to their advantage in indirectly electing Doctor Jose Ramon Villeda Morales as president of the Republic. In order to succeed in this manipulation, the Liberal party granted constitutional autonomy to the armed forces, an act that was unprecedented in Latin America, due to the fact that it put the armed forces completely outside the executive branch's control, with independent authority, their own budget, and administrative autonomy. On July 12, 1959, the bloody events that played a leading role in the unsuccessful return of Colonel Armand Velasquez allowed the Villeda administration to organize the Civil Guard to replace the old National Police, who were allegedly involved in these events. The Civil Guard became political police, repressing nationalists and leftist groups and colliding head-on with the armed forces, staging many bloody engagements throughout the country. Villeda's government codified the work laws, organized social security, and brought out an agrarian law of limited application, which captured for him the support of the majority of organized workers and peasants. At the end of this period, the candidate from the Liberal party, headed by Modesto Rodas Alvarado, was rejected by President Villeda Morales and the army. The latter considered him to be a radical and a political sectarian and involved in the creation of the Civil Guard. They also accused the Liberal party of being "infiltrated" with Communist elements. All of these motives brought about the military takeover on October 3, 1963.

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Lopez Arellano's Administration, 1963-1971 With the support of the National party, and through the Constituent Assembly in another indirect election, Colonel Oswaldo Lopez Arellano was elected president. He began a nationalist government with Liberal participation and the full backing of the armed forces. The Lopez Arellano administration was noted for completing the basic infrastructure for national integration, with a modern network of highways, streets, ports, airports, and other public works that were necessary for the country's development. He confronted the problems of Salvadoran aggression and tried to obtain a political understanding between the two traditional parties, the National and the Liberal. With the help of the workers, organized peasants, and the business sector, he forged the Political Pact of National Unity, similar to the Colombian one. He directed the formation of a strong bipartisan government, capable of successfully confronting the country's direst problems and compelling economic and social development as established in the Minimum Plan for Government, which principally consists of the following: 1. to strive for a solution to the existing problems with El Salvador, beginning with the definitive demarcation of boundaries between the two countries; 2. to coordinate all sectors with the intention of putting into immediate practice a policy for all aspects of economic and social development that would guarantee overcoming the problems the country has encountered due to lack of consumer production and exportation; 3. to establish a joint international policy to confront, and to solve, the different ongoing problems; 4. to propose the restructuring of the Central American Common Market in a way that would guarantee an equal distribution of benefits for each member; 5. to adopt an agrarian policy that would guarantee an increase in productivity, the incorporation of the peasant sector into the economic processes and the improvement and dignifying of their life through the creation of necessary facilities that would allow them access to landownership and economic, social, and technical assistance or other such needs. This Political Plan for National Unity which was inspired by the purest patriotic feelings of the majority of the Honduran people and was largely a consequence of the war with El Salvador, was immediately sabotaged by the political directors of both parties when they signed the National Agreement (Small Pact) on March 27, 1971, which polarized the government into two antagonistic camps.

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Doctor Cruz's Administration, 1971-1972 Under the political agreement entered into by the National and Liberal parties, which was imposed by the armed forces, the businessmen, and organized workers, the elections of March 28, 1971, took place and were won by a Nationalist, Doctor Ramón Ernesto Cruz, who formed his government according to the terms of the "Pact" of March 27, 1971, distributing all public offices including the positions of magistrates and judges of the judicial branch, the autonomous organizations, and on down to the last janitor. The Minimum Plan for Government was quickly forgotten and the administration fell into indecisiveness, incompetence, and corruption, and according to the Liberals "the lack of directional and managerial capability, the absence of leadership, excessive dogmatism, tolerance of corruption, and the practice of profound sectarianism have been observed in the highest level of the executive operation." (Exposé by the Liberal party on May 6, 1972). Desperate, the peasants prepared to march to Tegucigalpa and confront the government that had denied them any possibility of agrarian reform. Such a march undoubtedly would have exposed the army to a violent confrontation with thousands of workers from both the country and the city had they forcibly tried to stop the protest. This precipitated the events of December 4th in which the armed forces deposed Dr. Cruz and assumed the leadership of the nation.

General Oswaldo Lopez Arellano's Military Government, 1972-1975 The high command of the armed forces turned power over to General Lopez Arellano, so that he could form a military government that would serve the nation's need for progress and try to improve the conditions of the Honduran people. From the start, the government projected a reformist image and promoted structural changes in the country, trying to create a basis for beneficially exploiting the country's resources for the people and striving for national integration by incorporating the more marginal sectors, especially the peasants, into the production and enjoyment of the benefits to be derived from progress and modern living. Lopez Arellano took quick measures in this direction that were received with applause from the majority sectors, who without reservation gave the government their complete backing and support. The formulation of the National Development Plan (1974-1978) represented the first serious effort to resolve the fundamental problems of the Honduran people. The actions taken in the fields of forestry, agriculture, education, and health were futuristic in vision and represented truly a revolutionary change of view in Honduran society.

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General Juan Melgar Castro's Administration, 1975-1978 Even though Juan Melgar Castro tried to assure that there would be continuity in the methods and objectives of the military government, the truth is that his replacement of General Lopez Arellano as head of state signified a violent change from the reformist stance that had been the emblem of the military government. There was an immediate freeze in the agrarian reform process, and a marked deviation converted it into an agrarian colonization process. Forestry reform came to a halt and the old lumber companies were permitted to participate in the commercialization of timber. Educational reform was cancelled and health reform was separated from its basic objective, that of "the only health service" for the people. Instead, Melgar Castro made use of ample and unexpected financial resources, resulting from the rise in the price of coffee, and initiated a program of public works. He also began massive assistance to the industrial sector, opening the doors to government funds and permitting an uncontrolled rise in the national debt. Politically, he opened up the traditional parties and supported the new ones in search of a political arrangement that would allow for the constitutionalization of his regime. His proposal was rejected, producing a new schism in the heart of the armed forces and causing the fall of the Melgar Castro government. The Military Junta's Administration, 1978-1980 Now, in the era of military governments, there was little left of the objectives that inspired the movement of 1972. The government returned to the old, traditional dogma and the administration unfolded within the legal framework of the status quo. The programs that were initiated in 1972 either continued or died off little by little. The political parties, especially the National party, participated freely in the government. The economic situation had reached a crisis. In this framework, pressures from the parties and the economic sectors for a "return to constitutionality" as a means of definitely burying the progressive changes were much stronger. The military, not knowing what to do and generally discredited, called for Constituent Assembly elections to transfer power.

Provisional Government of General Policarpo Paz Garcia, 1980-1981 The Liberal party won the elections and obtained control of the Constituent Assembly, allowing them to organize a provisional government. With the approval of the National party, the new government was headed by General Policarpo Paz Garcia and had an equal number of Liberals and Nationalists

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intergrated into its cabinet and principal administrative positions. Paz Garcia's work in office was mediocre and negative because the political sectors of the government were more concerned with preparing for the next elections than with attending to public business.

Dr. Roberto Suazo Cordova's Administration, 1981 As a result of the general election, the Liberal party took complete control of the government, with high hopes among the voters for a change in the condition of poverty and humiliation into which they had fallen. Nevertheless, as Professor Molina Chocano said, "the so-called electoral solution" that created enormous expectations in the country between 1979 and 1981, by apparently opening new possibilities for change that would represent a significant displacement of the armed forces and an important recovery of legitimacy and consensus, vanished prematurely due to the kind of public management practiced by the new government.

POLITICAL FORMS OF GOVERNING The brief analysis of the different governments in power from 1949 to date has demonstrated the efforts that the Honduran people have made in their fight for development and modernization, and the forces that have opposed them, revealing as well the frailty of formal democracy in the country. Reflecting on the problems of democracy, it is worth trying to appreciate the kinds of policymaking that have developed in recent years, in order to observe their principal characteristics and distinct styles. There is no doubt that the majority of the governments have manifested a sincere desire to compel development in the country, even when the practical results have been less than satisfactory. Most of the time their actions have been of a liberal nature, concentrating on guaranteeing a mean that would permit the development of individual freedom as a principal motive for social development, but always accepting limited state participation as a secondary motive. An exception is the case of the first stage of the military government, headed by Lopez Arellano, which achieved a well-defined and working social-economic intervention by the state and which forced an acceleration of economic development and achieved, for a short time, acceptable goals for the public's well being. All of the governments have claimed to maintain a climate of respect for individual and social liberties and to make efforts to expand the social enjoyment of constitutional rights that belong to individuals and their organizations. This general commitment has not stopped them from exercising repressive, sometimes brutal, actions against the democratic progressive sectors, done arbitrarily or founded on draconian laws issued with this in mind.

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Evidence of such actions are the collective massacres at Chaparral, Laureles, Talanquera, and Lepaguare and the more than one hundred "missing persons," whose whereabouts are still under investigation. Horrible murders of workers, peasants, and students have been committed by armed bodies of the government, always inspired by the "necessity" to combat communism and subversion. The executive branch's capacity to realize their programs and projects has been extremely low, so much so that the proposed goals for the development plans in the majority of the cases were never achieved. All of which implies a tremendous waste of scarce available resources and an unjustifiable negligence in attending to the most urgent needs of the population. Only when the elections for supreme authorities have been guaranteed by the armed forces have they been free and honest and have the results been respected. The party-based governments' practices have always signified the use of violence and undemocratic practices that have generally caused a coup d'etat or other form of break in the constitutional order. The political parties have exercised very little influence in the direction and management of public administration, because the parties have always responded to the will and personal feelings of the president, the only exception being Doctor Cruz's administration. On the other hand, small economic groups and some pressure groups have exercised a marked influence, during some periods, even to the point of forcing government actions to accommodate their particular interests. In none of the constitutional governments has the separation of powers worked. Congress and the Supreme Court have always been subordinate to the executive branch, above all in the field of policymaking. The judicial branch has never been able to work with complete independence and has always been an attentive observer of the military or political sectors' instructions. Only in very rare cases has the choice of representatives, mayors, and other officials resulted from the free internal actions of the political parties, because internal democracy is absent. Nor do the workings of the party respect legal or statutory norms. In practice, the president of the Republic or the political bosses exercise a personalized dictatorship within each traditional party. The concept that public administration represents the "spoils" for the victorious party is being surmounted with the application of the civil service law and the organic laws of the decentralized organizations, even in the present administration where the purest sectarian policy was applied again at full strength. Economic and social organizations' effect on the government is generally of a self-interested nature and is exercised in a systematic and sometimes violent manner, to such an extent that they have been successful in changing the basic features of the administration, to the detriment of national objectives.

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The autonomy of the armed forces, including the police force, presents a special situation, due to the fact that civilian administrations depend on the sympathy, understanding, and civic conscience of the army's high command in order to be able to rely on the effective support of the Armed Forces Institute in maintaining order and respect for the law. On the other hand, this has been a positive factor in halting the arbitrariness and abuses of the administration's political sectors towards the political and social sectors that oppose it. The formulation and management of foreign policy has always been strongly conditioned by the U. S. government's influence. The degree of independence, or the subtle manner of enduring pressures, has depended on the personalities of those in the executive branch and the abilities of their immediate collaborative bodies. On the other hand, Honduran policy has usually coincided with that formed by regional or international institutions, with the exception of policies pertaining to Central America, where there are special interests to be protected that may be contrary to the interests of other countries in the area. The exercise of such traits as sovereignty, independence, and liberty has been a constant worry for the Honduran people, who feel that their best defense is in universal respect for international law and the regional and international organizations that humanity has created. Formal democracy has not been respected by the majority of the administrations, especially not by the party-based ones. Free elections have occurred only after a coup d'etat, when the military has been willing to peacefully and democratically hand over the power. The political parties, upon ascending to power, immediately attempt to assume perpetual control over the government, taking advantage of their powers and attempting to destroy their adversaries. The effort to convert to a "one part" government or manipulations aimed at enabling them to remain in power have always been present and have finally led to militar)' intervention. At this time, things are the same: the liberal Rodista faction exercises dictatorial control over the Liberal party and a spurious control over the National party. It has attempted to alter the electoral census in its favor and to use its power to force its own candidates in the "elections" or to assure that the present government continues. Thus the legality of the electoral process has been profoundly and definitely damaged, to such an extent that the conditions for a democratic choice by the public no longer exist. SYNTHESIS AND STYLE OF POLICYMAKING

An examination of the forms of government used by the different administrations since 1949 indicates that the Hondurans are very far from finding a convenient formula for progress and for preserving, at the same time, the enjoyment of basic freedoms. Not the civilian governments, not the military, nor even a combination of these, has been able to respond adequately to the people's aspirations, their desperate demand for decisions in all fundamental

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aspects of development policy, in order to be released from their critical poverty. Suffice it to say that they have barely attained an annual per capita income of $600, and that projections for the year 2000 bring them up to an insignificant sum of $700, with more than one and one-half million Hondurans living below the absolute poverty level, in other words, an income of $130 per year; that the deficiencies in education, health, and social assistance are frightful and are increasing; and that the unemployment level is the highest in history. This whole situation makes one think that the pure, slow, and natural development of the country's democratization process, which has now been reduced to the simple mechanics of elections, and which the current administration has already sabotaged, cannot satisfy the aspirations of a people hungry for prosperity, education, health, and work. The effects of the palliative and tranquilizing methods that have been employed until now have been exhausted and the country, without the need of outside stimulation, is at the point of violently exploding. What is urgently needed is the construction, or reconstruction, of political society, in order to work towards effectively uniting civilian society with political decisions and the state. This process is required if the country is to progress and is what the majority of the inhabitants demand. A new style of politics must be created that allows the country to take advantage of a favorable position in the international arena and that can find viable political and economic formulas to facilitate internal economic and social reorganization adequate to satisfy the people's needs. This would entail creating a political process that can produce administrations backed by the popular majority and strongly supported by the economic, social, and military sectors, in a way that will allow them to act efficiently and boldly to obtain rapid progress for the country. A government of national unity is required, one that has both the strength and the prestige to confront the national problem through the process of trial and error, which has been successfully used in other countries, assuming that there is a national consensus for accepting the political cost of errors without using them to break the sustaining ties of established social policy. One could say that a style of politics with these characteristics would at least aim to: 1. lessen political antagonism. This does not mean to overcome it, but to assure that the level of errors does not surpass certain limits and to reduce the emphasis put on such terms as "fight" or "rivalry," in order to give more value to the concept of "national deliberation"; and 2. make sure that all economic, social, political, and military sectors participate in making important decisions, in order to expand the boundaries of solidarity and responsibility in managing the nation's destiny.

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The style of government outlined is a democratic-deliberative one, oriented towards the creation of large national majorities and assuring a participatory and constitutional government, resulting from true and effective bonds between civilian, political, and administrative sectors of society, that allows for actions that benefit the people and assures harmonious cohabitation in Honduran society.

Part 2

Human Rights and Social Justice

4

Human Rights in Honduras: The Central American Context Carlos Roberto Reina

At present to speak of human rights, of their promotion, international defense, and complete observance, is to address one of the most delicate and timely of topics. Especially when focusing upon collective rights or the socalled second generation rights (i.e. economic, social, and cultural). Up until now, all international defense of human rights has been centered on civil and political rights. Even the San José Pact, or American Pact on Human Rights, establishes which rights are protected by the agreement; but economic, social, and cultural rights are mentioned only in Article 26, which establishes that: The participating states promise to adopt provisions, both at the domestic level and by international cooperation (especially economic and technical) which will achieve progressively, by legislation or other appropriate means, the full effectiveness of the rights derived from the economic, social, and educational (such as scientific and cultural) standards, as set up in the charter of the Organization of American States, reformed by the Buenos Aires Protocol, insofar as the resources are available to do so.

It must be remembered that this continental organization espouses the philosophy of the consolidation in America of a regime of individual freedom and social justice, founded upon respect for the essential rights of man. This means that the entire justification of the system that regulates political conduct in South America is based on man's search for his individual (civil and political) and collective (economic, social and cultural) rights; all this within a framework of effective, representative democracy; for without democracy there is no observance of human rights and without respect for these rights, democracy disappears.

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This chapter is centered specifically on social justice as a part of human rights. This implies the analysis of those collective rights, hardly mentioned in the San José Pact, that today are the object of a project for an additional protocol to this historic agreement. SOCIAL JUSTICE AS AN EXPRESSION OF THE OBSERVANCE OF HUMAN RIGHTS The first subject that comes to mind in a discussion of human rights is that of its conceptual unity. This is because of the very nature of those rights, which form an integral complex, unique, indivisible, multidimensional, and transideological. Any classification of this material tends to achieve a better base for its study, promotion, legalization, international protection and complete observance. But classifications should not be categorical or absolute because some rights, which for a long time may have been considered as belonging to one category, could change to another, obligated by the march of history towards a greater dignity for man. Traditionally human rights have been classified in two large groups, i.e., civil and political rights and economic, social, and cultural rights. The first group (called first-generation rights) includes those enunciated in the Declaration of the Rights and Duties of Men and Citizens, from the French Revolution of 1789, and in other documents of global importance. The others (called second-generation) chronologically appear much later, in the first decades of this century, with political upheavals like the Mexican Revolution and the Bolshevik Revolution of 1917. And at present the international organizations in charge of the promotion and defense of these rights are delineating a third generation of rights, which includes the rights to development, self-determination, peace, a halt to the arms race, greater international justice, etc. The different generations of human rights have been mentioned because I wish to touch on the subject of social justice. Not the justice imparted by jurisdictional courts as based on the celebrated thought of Ulpian, i.e., to harm no one, to each his own, and to live honestly, but rather the broader theme of a just social life, where welfare is fairly distributed and each person receives his corresponding share of the social well-being or common good in a collective life. Political and civil rights enjoy international protection that is limited to verifying whether or not an act of the state has violated any of the rights protected by treaty. Once the facts are determined the corresponding sanction or absolution is given. On the other hand, economic, social, and cultural rights are the concern of the state (essentially, although not exclusively), which has the obligation of making available to social service agencies (i.e., those of economic, social, sanitary, and cultural aid) the material means to enable these agencies to provide help. But citizens are not generally supposed to have the direct and immediate right to specifically demand of the

HUMAN RIGHTS IN HONDURAS

59

state the service itself. The state's obligation is the duty (within its financial means) to dedicate the necessary resources to satisfy these economic, social, and cultural rights. To achieve social justice in a country, the government has the imperative duty to assign, within its economic and financial possibilities, the appropriate resources to adequately satisfy the people's needs in the economic (work, salary compatible with their dignity, etc.), social (health, nutrition, housing, etc.), and cultural (education, sports, arts, etc.) sectors. But who decides the apportionment of the respective budgets? W h o establishes the priorities? W h o has the last word on necessary expenses for defense, or "national security" as it is called in some Latin American dictatorships? And finally, who will be able to tell a specific government that it cannot reduce the budgets for health, education, and agrarian reform in order to increase the "defense" budget and promote the arms race? The problem seems to be centered on these decisions, which correspond to ideological concepts and, even more, to ethical attitudes about social justice in a specific country. And if this initial problem cannot be resolved, how can it seriously be thought that the international defense of civil and political rights, which means an international tribunal that would impose sanctions on a nation that violates any of the rights protected by treaty (the San José Pact for example), could be extended to apply to economic, social, and cultural rights? Especially since there are still problems in identifying these secondgeneration rights. Another problem, even more difficult to resolve, is that in reality Latin America has protracted and frequent periods when the governments lack legitimacy and take power by surprise attacks on governmental institutions. To maintain the position they usurped, they become highly repressive and use polarization and radicalism to eliminate all traces of opposition. In these cases it is truly naive to speak of enforcing norms for true social justice, when a lawful government does not exist and not even the right to life is guaranteed. In some countries much is made of considering the essential rights of man to be economic, social, and cultural rights. But in these countries civil and political rights are not guaranteed (basically the right to life and freedom of vote). This would lead to the belief, certainly a great irony, that it is possible to assure health, education, and culture for a person whose life is not guaranteed. The fifth paragraph of the preamble to the San José Pact states: "Reiterating that, in accordance with the Universal Declaration of Human Rights, the ideal of a free human being, free from fear and misery, can only be realized when such conditions are created as to permit each person to enjoy his rights, economic, social, and cultural, as well as civil and political." Without a doubt fear, or threat to life and limb, refers to civil and political rights and the specter of misery refers to economic, social, and cultural rights. But Latin American countries are underdeveloped. They lack ade-

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HUMAN RIGHTS AND SOCIAL JUSTICE

quate education, health, nutrition, work, landownership, in fact all the things that enable the people to live in a condition of human dignity. And to this it is necessary to add that corruption, authoritarianism, excesses of power, improvisation, nepotism, and all the vices of despotic regimes do no more than turn the observance of human rights into illusions. His Holiness, Pope John Paul II, referred to this subject in his speech to the Diplomatic Corps on January 12, 1979. The Vicar of Christ said: There exists a c o m m o n good for mankind, with vital interests in play, that requires a concerted action from all governments and men of good will; human rights which must be safeguarded, problems of nutrition, health, culture, international economic cooperation, arms reduction and elimination of racism. The c o m m o n good of mankind! A Utopia that Christian thought tirelessly pursues and which consists of the incessant search for just and humane solutions while combining the good of the people with the good of the state, individual rights with the rights of the group and individual interests with general necessities.

The great moral influence that the declarations of His Holiness have, urbi et orbi, in the complex and delicate field of human rights is found in the phrase: "// there is not justice for all, there will be peace for no one." This justice for all, in its broadest sense, is social justice. The justice that permits the enjoyment and exercise not only of civil and political rights, but also of economic, social, and cultural rights, as an unmistakable sign of an authentic, social regime where everything revolves around the welfare of the people and their complete fulfillment.

HOW TO STRUCTURE PEACE IN CENTRAL AMERICA THROUGH COMPLETE OBSERVANCE OF HUMAN RIGHTS As well-known American author Robert S. Leiken points out: "In the twentieth century the U. S. has enjoyed an almost indisputable hegemony in the region and has had a monopoly on foreign intervention. The path of hegemony and intervention was almost always attenuated by the illusions of establishing 'democracy,' 'free elections' and 'an apolitical army.' But the reality in Central America has nearly always been dictatorships." 1 The dictatorships completely convinced the people that only through violent means could they be fought and overcome. And once violence broke out in order to better the terrible conditions of life and to oppose social injustice and dictatorial oppression, then the equally negative phenomenon of highly radical polarization would appear. The political center started to disappear, just as innumerable citizens disappeared for the simple reason that they were suspected of subversive acts. An ordinary telephone call was enough to make a person "suspicious." According to the defenders of the status quo, subver-

HUMAN RIGHTS IN HONDURAS

61

sives are not entitled to respect for their human rights. "To fight the devil with his own weapons is truly to turn the country into a hell," was the epitaphic comment of President Raul Alfonsin on the drama played out in Argentina. Central America has lived through this same drama. Change attitudes! Live with justice! This was the cry that surged from the throat of the Apostle of Peace when he visited Central America. But none have wished to listen. To change attitudes would mean to stop the torture, all forms of abuse, the clandestine prison and death squads, the acts of terrorism under any guise (whether it is guerrilla or paramilitary forces). A change of attitude would imply the establishment of absolutely honest and impartial elections so that the clearly established majority might decide the political will of the country. It would imply respect for the independence of the powers of state; for the faithful carrying out of the constitutional and secondary laws. It would mean military forces that would respect civil power as freely elected by the people, and the creation of a society without the repression, elitism, and profound corruption with which Central Americans have had to live in the last half century (with a few and honored exceptions). And to live with justice implies, besides a judicial power that is truly independent and abides by the legal procedures, the implantation of social justice with its economic and cultural aspects and all else that concerns the betterment of the community. To be able to seek justice, especially social justice, there must be a democratic lifestyle and, basically, freedom. This is only possible under a truly democratic regime, governments that are of the people, by the people, and for the people. "The people" is understood to mean the majority which decides and the minorities who should feel that their public rights and freedoms are guaranteed. And the people will never be against themselves; they will always seek their own welfare and dignity. However in Honduras, in Central America in general, the national good is not always the first priority. Other interests become more important and drag the country towards situations that are basically the expression of EastWest tensions rather than of local conflicts. In this respect the LiberalDemocratic Revolutionary Movement of Honduras (M-LIDER), in its analysis of the national situation on June 9, 1984, has named the following among its disagreements with the progovernment sector of the Liberal party: Total suppression of the government by the Reagan administration's policies for Central America. Said policies place Honduras on the edge of war; they convert Honduras into an operational base for foreign troops and sacrifice the legitimate interests of our small country for the strategic interests of the Reagan Administration. Even the president of Honduras is conscious of this humiliating situation when he states in a letter to President Reagan: "But our people are beginning, more vigorously each day, to ask themselves openly if it is for our own good to be so intimately linked to the U. S. interests, when we receive so little in return. We estimate that the budgetary aid asked for will represent in the long run a relatively low cost if the

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HUMAN RIGHTS AND SOCIAL JUSTICE

political and military risks Honduras is taking are kept in mind. These risks are being taken not only in our defense but also in the vital interests of your country, as you yourself have been telling the people of the United States."2

In Honduras and Central America in general (the only exception being Costa Rica), the people have lived immersed in grave crises which revolve in truly vicious circles, which I have described on other occasions: The poor economic situation, derived from an unjust international relationship, produces an endemic social crisis; this, in turn, worsens the political crisis. The only solution that occurs to many sectors is the coup d'etat, which because of its corruption, illegality, and illegitimacy sharpens the economic crisis and, therefore, the social and political problems, pulling the country down into a lamentable, vicious circle that both explains and amplifies the stagnation.5

But the people cannot live forever keening over the past. Their duty is to transform society pacifically. This is the great challenge which all must answer to immediately to be able to halt the violence that has already cost thousands of lives and that, day after day, produces more victims. Human rights, democracy, and peace are three totally complementary and interdependent concepts. Human rights, as much in their expression of civil and political rights as in the form of economic, social, and cultural rights, can only be fully attained in a democratic regime, and this is only possible when there is strict observance of those rights. Where there are no free elections there can be neither human rights nor peace. After so much spilling of blood and so much destruction in Central America, it is now time to sit down to negotiate and clearly set up the bases for a new social order, more honorable, free, and fair. Is this Utopian or can it be reality? I believe that it is quite possible to arrive at this great understanding. Of course, all the parties involved in the fight will have to yield on something to be able to find the point of equilibrium that will permit an honorable agreement. Some must understand that their former powers are something that will never return, that has been overcome; the others, in turn, must understand the realities of the world in which we live. If in the United Nations they have been forced to accept the reprehensible "right to veto" of the major powers, it is because the interests of these powers weigh heavily in today's world and cannot be ignored, unless we are looking for a worldwide conflagration that certainly would threaten the destruction of mankind. This is the great dilemma. Today, more than ever, it may be seen that a negotiated transition to peace is possible in Central America. (Spain, for example, went from a Falangist dictatorship that spanned several decades to a Social-Democratic regime without resorting to violence.) The basis of this agreement will have to be respect for human rights in all forms. This will produce democracy and thus a much desired peace will ensue. All world forces should be interested (and in reality, are) in the agreement. Which forces? The Christian-

HUMAN RIGHTS IN HONDURAS

63

Democrats, Social-Democrats, the European countries, the United States, Cuba, the Soviet Union, the Vatican, international organizations, all the nongovernmental forces, the churches, the unions, students, in short all the people who wish to help their fellow man in their time of need, in dramatic and difficult moments like those being suffered through now on the isthmus that Francisco Morazan tried to unite but that opposing forces have kept fragmented. The whole world has the duty and the need to contribute to the search for a negotiated peace in Central America.

CONCLUSIONS 1. The drama in Central America begins with the unjust death of Francisco Morazan. 2. The dictatorships' tolerance of corruption and other vices pushes the people to violence. 3. The binding of the economic interests of the international businesses in Central America with those of the United States produces an atmosphere of ill-will towards this world superpower. 4. The observance of human rights and social justice is a moral and legal duty of the state that is derived from the government's own constitutional norms. 5. All forces that espouse war in Central America must be denounced and condemned. 6. Honduras' Liberal party has the unavoidable duty to become truly democratic; if not, it runs the risk of endangering the trial democracy now being enjoyed in the country. 7. Torture, death squads, clandestine prisons and cemeteries, people disappearing and all forms of terrorism are crimes against humanity. 8. Democracy must urgently be redefined. 9. The vicious circle of crises that crush us must be stopped. 10. Honduras and the other Central American countries should defend, fundamentally, their own interests and not those of the foreign powers. 11. Change attitudes! Live in justice! These should be the people's cries to repressive governments. 12. The oligarchic-military power model has created Central America's crises. All the forces now in conflict are duty bound to negotiate peace under honorable conditions. 13. Where there is no freedom of vote there is no democracy and where there is no democracy there cannot be any respect for human rights, nor can there be peace.

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NOTES 1. Robert Leiken, ed., Central America: Anatomy of Conflict (New York: Pergamon Press, 1984), p. 5. 2. M-LIDER, "Patriótico planteamiento al pueblo hondureno del movmiento liberal democrático revolucionario," 9 June 1984. 3. Richardo Sol, ed., El reto democrático en Centroamérica: entre lo inédito y lo viable (San Jose, 1983), p. 334.

5 The Human Rights Crisis in Honduras Ramon Custodio LAWS, JUSTICE, AND OTHER STATE POWERS According to Article 1 of the Constitution of the Republic, Honduras is an Estado de Derecho (state of laws) "to insure that its inhabitants enjoy justice, liberty, culture, and economic and social well-being." This constitution, which has been in effect since January 20, 1982, declares the fundamental rights of the people, specifies individual, civil, political, social, economic, and cultural rights, and provides two constitutional guarantees, amparo (an order of restraint against imprisonment or an administrative act that infringes on one's rights) and habeas corpus. In agreement with Article 4 of this constitution, the form of government is republican, with three equal and independent branches, the executive, the legislative, and the judicial, complementary but none subordinate to the other. By constitutional arrangement, the members of the first two are elected by a free, direct, and secret vote. The third or judicial branch, on the contrary, is chosen in an indirect manner, with election of members of the Supreme Court of Justice by the National Congress, the unicameral organization of the legislative branch. The independence of the legislative branch has a dual role: first, to check and balance the executive branch and second, to appoint the judicial branch. Thus, the choice of its members depends on whether or not they surrender to the ideal conditions from which they have been conceived and the actions of its members depend on whether the "power to impart justice" is truly a power which emanates from the people, which is only possible if the magistrates and justices are independent. In the two majority parties, which represented nearly 90 percent of the electoral vote in November 1981, the representatives in Congress were chosen by their closeness to each of the presidential candidates or by their fraction within each political party. The Liberal party obtained the absolute

65

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HUMAN RIGHTS AND SOCIAL JUSTICE

majority in the executive and legislative branches, so that the executive branch immediately counted on the obedience of Liberal representatives to assure that the executive would be the instrument of primary power, exercised in a personal and absolute manner by the president of the Republic, Doctor Roberto Suazo Cordova. The present regime is another example of presidentialism, which has resulted in the unconstitutional subordination of the other branches to the totalitarian executive branch. If one considers that the members of the Supreme Court of Justice have been chosen on the basis of their political, unconditional obedience, we can see how Honduras's republican form of government has been perverted. This also explains why arbitrariness is the order of the day for both civilian and military authorities, without any interference from judges or the equivalent in the Public Ministry for their crimes against the public order. The latter organization is assumed to have been formed by the Attorney General of the Supreme Court of Justice and the state attorneys, who should be adhering to a strict application of the law but cannot because they are mere functionaries limited to signing the actions of the courts and judges in civil and criminal matters. When these criticisms are presented to the judicial branch authorities, they almost always respond with the same defense, that things would improve if there were a judicial police, exclusively for apprehensions, inasmuch as those in charge of policymaking and national security, like the Servicio de Inteligencia Militar (G-2) del Estado Mayor de las Fuerzas Armadas (FFAA) (Military Intelligence Service of the Joint Chiefs of the Armed Forces), the Fuerza de Seguridad Pública (FUSEP) (Public Security Force), and the Dirección de Investigación Nacional (DIN) (National Investigative Directorate), depend administratively on and take orders from the ministry of defense and the chief of the armed forces. The minister of defense is appointed by the president of the republic and the general commandant of the armed forces, an appointment that is always given to the candidate sent by the armed forces themselves. It is lamentable that even if there came a time for judicial police to function in Honduras, they could be converted into an even stronger weapon in the hands of an omnipotent president of the Republic with totalitarian inclinations. The ouster of General Gustavo Adolfo Alvarez Martinez on March 31, 1984, has brought to light some contradictions. Evidence suggests that Alvarez systematically applied the doctrines of the national security state. The military high command, upon gaining power, promised to conduct an investigation, the results of which have been promised on many occasions and were most recently promised for December 1984. Today, almost all of General Alvarez's former associates and subordinates, including the president of the Republic, Doctor Roberto Suazo Cordova, have been pressured into blaming Alvarez for all of the human rights violations resulting from that national security doctrine, which minimizes the individual before an omnipotent state.

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67

This accusation was expressed by Doctor Suazo Cordova himself in his letter of September 25, 1984, to the new armed forces commander, Brigadier General Walter Lopez Reyes. Spokespeople for the government and officials of the Liberal party started smear campaigns against Alvarez Martinez, exonerating Suazo Cordova from all blame. In doing so, they overlooked these fundamental issues: 1. Doctor Roberto Suazo Cordova consciously made the National Congress appoint Alvarez Martinez as chief of the armed forces in Honduras, despite his sinister record in his former position as Commandant of the Public Security Force. 2. Doctor Roberto Suazo Cordova proposed to the National Congress the premature and illegal promotion of Alvarez Martinez to the rank of general, attesting to his great virtues as a citizen and soldier, even though in doing so he was in violation of the constitutional law of the armed forces in Honduras. 3. The president, Doctor Roberto Suazo Cordova, has repeatedly denied the existence of missing persons in Honduras. These denials were echoed by a chorus of voices, which included the president of the Supreme Court of Justice, the president of the National Congress, and the head of the major Liberal factions, as well as the president of the Central Executive Council of the Liberal party and the voices of other less known people. 4. President Suazo Cordova never answered the numerous requests from the families of the missing prisoners, thus failing to fulfill a directive of Article 80 of the Constitution of the Republic, which grants to each individual or association the right to petition authorities, whether it be a question of specific or general interest, and to obtain an answer in a legal forum. The seriousness of the violation of human rights in Honduras should come as no surprise. The majority of the violations, still unpunished, happened between 1980 and November 1984. They would have never taken place if the directors of the Liberal party that governs Honduras had been loyal to the Declaration of Principles of their party, which states in Article 2 that "the Liberal party is the expression of a political system that proposes to elevate the level of spiritual and material standard of living of the Honduran people, to eradicate economic and social exploitation of its people, and to fight for the absolute respect of human rights."

JUDICIAL FRAMEWORK FOR INDIVIDUAL GUARANTEES

Article 59 of the constitution declares that the individual is the supreme objective of society and state, affirming in subsequent articles the inviolable right to dignity, personal freedom, and the right to life, as well as to equality,

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and that discrimination of any sort is punishable. Article 64 prohibits the application of laws and decrees that diminish, restrict, or distort the declarations, rights, and guarantees of the Constitution of the Republic. In accordance with the constitution, " n o one may be arrested or detained without a written order f r o m a competent a u t h o r i t y " with the exception of a crime in flagrante. T h e person arrested should be clearly informed, on the scene, of his rights and of what he is being accused before being held incommunicado for a m a x i m u m of twenty-four hours, to proceed immediately afterwards to judicial detention while investigations take place for a maximum of six days. Also no one may be held or imprisoned in any place that has not been determined by law and should not be subjected during detention to torture or cruel and degrading treatment, nor to cruel or coercive acts in order to obtain a statement. It is assumed that no authority can enter anyone's living quarters without written consent from a competent j u d g e , and only with well-justified cause between the hours of 6 p. m. and 6 a. m. Currently in Honduras these guarantees are merely illusions, because those in charge of the state's security make arrests when, why, and however they want to. An anonymous accusation f r o m the Civil Defense Committee, or anyone else, by means of a telephone call to a national network of the Center for Special Investigations is enough for them. This is how we have c o m e to institutionalize rumors in Honduras.

SPECIFIC VIOLATIONS Attempts Against Life Any attempt against life, be it for political motive or any other, is unconstitutional, because Article 66 prohibits the death penalty and Article 70 proclaims that no one can take justice into his own hands. Nonetheless, in Honduras there are many cases that constitute political assassinations; others are the simple abuse of position by authorities (see Table 5.1). This f o r m of legalized aggression against citizens who should be the objects of protection has, for the first time, been attributed to the fact that in many cases these assassinations go unpunished. An investigation of pardons in these cases is presently underway. Assassination attempts were so frequent in February 1982 that we went before the judicial branch to proclaim the existence of hidden cemeteries, a proclamation that was repeated at least four times that year and at least twice in 1984. T h e r e are not thousands as in Guatemala and El Salvador but certainly several dozen, a significant figure for a constitutional democratic government to have. Of the thirty-six political assassinations occurring in 1984 (to November) twenty-one of them were committed before M a r c h 31 and fifteen after the ouster of Alvarez Martinez (see Table 5 . 1 , Part 4). Of the nineteen persons missing in 1984 (to November) who have still not reap-

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Table 5.1 Assassinations Part 1: Political Assassinations Nationality

1980

1981

1982

1983

1984a

Total

0

1

0

0

0

1

Honduran

1

16

16

18

13

64

Nicaraguan

0

0

0

2

1

3

Guatemalan

0

0

25

12

5

21

63

Spanish

0

0

0

0

1

1

Others

0

0

1

0

0

1

Totals

1

42

29

25

36

133

Salvadoran

peared, five disappeared before March 31 and fourteen after this date (see Table 5.2, Part 1). Of the thirty-two temporary disappearances in 1984 (to November), two Hondurans disappeared before March 31 and the remaining thirty after that date (see Table 5.2, Part 2). Torture and degrading treatment are the rule for all regular or political prisoners (see Table 5.3).

Attempts against civil and political rights In Honduras, freedom of association and assembly are guaranteed provided they do not interfere with public order or accepted behavior (Art. 78). The right to freely exercise one's religion and culture are also guaranteed, with no exceptions (Art. 77). Nevertheless, under the Suazo government, attempts to limit freedom of association in order to force out true leaders were promulgated by official ad hoc directives and protected by the law. From 1981 to 1984 ten Palabra de Dios members (Catholic lay teachers) were assassinated, eight of whom worked as volunteers with Salvadoran refugees. In one case, that of a seminarian, even though he received death threats from the local authorities and published their names before his assassination, his accusation fell on deaf ears. Table 5.1 Part 2: Nonpolitical Assassinations Because of Abuse of Power in 1984 Nationality German

Number 1

Honduran

24

Totals

25

HUMAN RIGHTS AND SOCIAL JUSTICE

70

Table 5.1 Part 3: Nonpolitical Assassinations for Unknown Motives Nationality

Number

Guatemalan

1

Honduran

2

Unknown

2

Totals

5

Under this self-proclaimed constitutional and democratic government, no new union has been officially recognized and given legal status. Given their size, two worker and two peasant organizations should have been granted recognition. Between 1980 and 1983 there were 57 political prisoners, 43 of whom were Honduran, 9 Nicaraguan (already set free) and 5 Salvadoran. In 1984 alone there have been 160, all Honduran, 16 of whom were sentenced by competent trial before March 31, 1984, and 144 since the expulsion of General Alvarez Martinez. This situation is lamentable as much from the legal viewpoint as from a personal one, due to the fact that trials proceed slowly and conditions of imprisonment are far from comfortable.

ABSENCE OF SOCIAL, ECONOMIC, AND CULTURAL GUARANTEES Chapters III through IX of the Constitution of the Republic declare the rights of the family and children to work, social security, health, education, culture, Table 5.1 Part 4: Political Assassinations, January-November 1984

Nationality Honduran

Before

After

3

10

Nicaraguan

1

0

Salvadoran

17

4

Spanish Totals

0 21

1_ 15

Source: Centro de Documentación del Comité de Defensa de los Derechos Humanos de Honduras (CODEH). a

To November

b

Mainly refugees

THE HUMAN RIGHTS CRISIS IN HONDURAS

71

Table 5.2 Disappearances Part 1: Permanent Disappearances9 Nationality

1980

1981

1982

1983

1984"

Costa Rican

0

5

0

0

0

Equadorian

0

1

0

0

0

1

Guatemalan

0

1

0

1

0

2

Honduran

2

10

24

21

14

Totals 5

71

Nicaraguan

0

1

2

2

0

5

Salvadoran

0

22

0

1

5

28

Venezuelan

0

1

0

0

0

1

Unknown

0

11

0

0

0

11

Totals

2

52

26

25

19

124

and housing to be protected. It is all lyrical legislation that enunciates such things as everyone's right to health by means of dignified housing and the right to work, etc. Consideration of some statistics can give us an idea of the real importance of social justice in Honduras: • With only 37.8 inhabitants per square kilometer (22.68/sq. mi.) and 1.7 million hectares (4.25 million acres) of arable land, some 500,000 (1.25 million) belong to the large landowners (19.6 percent), with an average of 1800 hectares (4,500 acres) per farm.

Table 5.2 Part 2: Temporary Disappearances Nationality

1980

1981

1982

1983

1984"

Totals

Honduran

11

64

33

18

30

156

Nicaraguan

0

0

0

1

2

3

Salvadoran

0

3

2

0

0

5

Others

0

1

3

1

0

5

Totals

11

68

38

20

32

169

Source: Centro de Documentación del CODEH. a

Still unresolved; those held by DIN (Dirección de Investigación Nacional) are considered temporary while those being held by Military Intelligence have been kidnapped, tortured, and held in clandestine jails.

b

To November

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HUMAN RIGHTS AND SOCIAL JUSTICE

Table 5.3 Attempts Against Personal Dignity: Tortures, Cruel and Degrading Treatment Nationality

1980

1981

1982

1983

1984"

Honduran

0

48

27

53

29"

0

1

Salvadoran

0

1

United States

0

0_

Totals

0

49

a

To November

b

Two before March 31 and 27 after this date.

1

9

28

63

0 0_ 29

• Of the 350,000 families working in agriculture, a third of them do not own land and the per capita income of those workers is only 54.00 lempiras per month (US$27.00) or 90 cents per day for each family and 15 cents for each member, assuming an average of six persons per family. • Even though the distribution of land should be the last step in rational agrarian reform, the National Agrarian Institute proclaimed that in 1983 it gave title to 25,000 lots, without developing or technically exploiting them. • Minimum wage is 5.30 lempiras per day (US$2.65), while household costs run 8.00 lempiras per day (US$4.00). • The state of health is a precarious one; yet the five most common diseases (intestinal parasites, intestinal infections, anemia, undernourishment, and malaria) are preventable and could be eradicated with proper nutrition, housing, and environmental sanitation. The same can be said of the most common contagious diseases (diarrhea, influenza, malaria, and amoebiasis) of which only one (influenza) is not preventable. • Living conditions are so unhealthy that the infant mortality rate is 117 per 1,000 live births, a number that is only surpassed in Bolivia (142) and Haiti (121) in Latin America. In rural areas this mortality rate is even higher (127.6) than in the urban areas (85.2). These indices are three-fourths higher than the World Health Organization's expectations. • At least 2,880,000 people (72 percent of the population) suffer some form of malnourishment, 42 percent from a high degree of malnourishment because they consume only one-sixth of the required protein calories. It is therefore only natural that 20 percent of those recently born were below normal birth weight and that one out of every two children between the ages of five and fourteen are affected by malnutrition, which affects even more children under the age of five (75 percent).

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• Illiteracy is in the neighborhood of 47 percent and even higher in the rural areas (80 percent). Of the children who learn to read or write, 25 percent forget what they have learned, which increases the illiteracy rate (56 percent). Seventy-nine percent of all students drop out of school and 24 percent are frequently absent. Forty percent of all workers are illiterate and some 77 percent are unskilled laborers. With a total of nearly two million illiterate people, a national campaign for literacy in 1983 intended to make 100,000 (12 percent) literate. The campaign fell very short of its goals, despite its high cost (12 million lempiras or US$6 million). Social Security only covers 7.5 percent of the working population and there are more than 200,000 people unemployed and almost half a million underemployed. Even though we are a nation of illiterates, undernourished, parasitic, and economically underdeveloped people, we are a nation and we do not deserve for our destiny to be decided by any foreign power. That is why it is unacceptable and it constitutes treason under the Constitution of the Republic for anyone to hand over our sovereignty and territorial integrity to the United States of America. Those who have subjugated Honduras's interests to those of a foreign nation will stand judgment sooner or later, even though the people have already passed verdict on them. We believe that as a free, sovereign, and independent country, our people, like the other people of this region and of the world, have the right to resolve our own destiny.

CONCLUSION The principal reason for underdevelopment is an economic dependence on the exportation of cheap raw materials, a much more important political aspect than the region's East-West confrontation. Underdevelopment and the unequal distribution of wealth cause social injustice, hindering permanent peace through the lack of social and economic rights. The violation of human rights in Honduras is a function of the abuse of authority and the poor administration of justice. The inadequate administration of justice affects the individual and economic guarantees of the majority as much as it does the economic interests of the wealthy minority. History is demonstrating once again in Honduras that democracy does not consist solely of free elections. A national security doctrine has been in effect since these elections to maintain an unjust state of affairs and to intervene in other countries without due regard for popular protests. Indeed, the high level of organization in the Honduran working and peasant classes contrasts with minimal political consciousness of these same groups, in part explained by intervention in these organizations by foreign influences such as the American Institute for Free Labor Development.

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Structural change from domination to liberation is urgently needed. A simple change from one majority political party to another cannot be the democratic alternative.

6

The Special Situation of Human Rights in Honduras Rodolfo Pastor

The situation of Honduras is different from the rest of the countries in the region. In comparative terms, Hondurans are privileged as far as human rights are concerned. Salvadorans, Guatemalans, and Nicaraguans must worry too much about the basic rights of life, security, and personal integrity. Hondurans recently went through hard times in that respect (1982-83). For us, nevertheless, a focus on human rights is at least feasible because, although we frequently find ourselves in the same boat as others in the region, the majority of us Hondurans are not worried that we will be killed unjustly or that we will be prevented from expressing our ideas. But we can make demands on another level and claim the "second generation of rights." Carlos Reina (chapter 4) acknowledged the ironic cynicism of those who want to give health, education, and culture to a citizenry whose life and freedom are worthless. For that very reason it does not seem right to avoid totally the problem of the first generation of rights in Honduras, and I will return to that subject later. There are two fundamental ways in which my views coincide with those of Dr. Reina. I agree that in order for traditional rights and freedoms to have popular backing (and ultimately a guarantee of general support), it is necessary to maintain a minimal standard of living. Freedom and civil rights leave a citizenry that is miserable, chronically ill, and illiterate very vulnerable. I also agree that human rights, democracy, and peace are interdependent and complementary elements of the same equation. From that irrefutable proposition, Dr. Reina derives two theorems. The first is that our own Liberal party and the government should democratize themselves to guarantee the rights of the people and thereby protect social peace and the popular support that sustains it. The other is that our powerful ally, the United States, cannot push us into war and at the same time demand that civil rights and democracy be

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preserved. It is one or the other. Either an integrated peace with authentic democracy and governmental responsibility, or an imposed war, militaritarism, and once again irresponsibility, corruption, and closure of the political system, with the inevitable consequences of loss of legitimacy, social dissolution, tension, and violence. We can choose together. I believe that the truth of this argument is self-evident. We just have to make clear that the interrelation is not mechanical, that there can be corruption in a democracy and that " m o r e than once democratic countries have been belligerent." In the autumn of 1984, Octavio Paz said as much in his acceptance speech for the German Publishers Peace Prize. In this speech he also established the relationship between democracy and peace and explained that in the democratic regime, "an open space unfolds favorable to the discussion of public affairs, and consequently to the subject of war. . . . " Nevertheless, it is hard to understand that along with this discerning outline, the Liberal leader is trying to sell us a package, a complete series of ideological concepts, partial analyses, and private prescriptions of very doubtful philosophical and practical value. I will mention two groups of problems: one related to the way in which the author conceives and presents the social process to formulate a diagnosis of the current problem; the other related to the proposed solutions. Dr. Reina has attempted to analyze the history and sociology of the injustice that he conceives to be a product of our historical development. As a professional, I disagree with his interpretation of our historical process. I reject the idea (perhaps intended poetically) that the current Central American crisis has its beginning in the execution of General Morazan, as much because it seems doubtful per se as because it hardly helps to explain the problem. (Why not, in any case, blame the crisis on the premature death of Jose C. del Valle, who won the election over Morazan and had, through his posture and wisdom, real possibilities of unifying the isthmus?) Dr. Reina likewise makes use of the Kissinger Report to advance the hypothesis that Central America inherited the main problems from the colonial period: the latifundio, authoritarianism, and political centralism. And I believe that the thesis is unsupportable to the extent that it concerns Spanish rule. It obscures the more immediate origins of Central America's structural problems and conceals the fact that (1) the concentration of property in Central America in general, and in Honduras, in particular, was born rather during the Liberal Reform Period of the past century that destroyed the commons established by the Spanish crown for colonial peasant communities, and that (2) during the colonial period we were governed very laxly, and authoritarian centralization—in Honduras—dated from the imposition of the Tiburcio Carias dictatorship. The traditional caudillos of the past century became the dictators of the twentieth century, with the help of the banana companies and the U. S. Department of State, and imposed an order consistent with their

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interests. And we ought not forget that many Central American dictators belonged to the Liberal party. I insist on these points—seemingly academic—because I think that if we are to perfect our ideological intentions, the Liberals of today have to face the fact it was precisely our predecessors (and not the imaginary "reactionary forces"), with their dogmatism and noncritical acceptance of ideological formulas prefabricated in Europe and the United States, that set up the scenario of the current crisis. Only in this way can we understand how ideology blinds us, makes us arrogant, and makes matters worse. To prevent troubles like the current ones, we are obliged to critique Liberal history in depth, leaving aside the excuses, the pretexts, and the stupid attempt to place the blame on an "oligarchic power," that never existed or was born from the Liberal endeavor itself, and on a "clerical power," whose influence in Honduras seems very relative. For my generation of Liberals, this self-criticism is the only possible redemption from the past, and is a necessary point of departure in discussing the current problem. I also disagree with the vision of the future that Dr. Reina evokes. One of the classical liberal ideas most in need of criticism is, undoubtedly, the idea of progress that permeates the rhetoric and the reasoning of his comments. It is impossible to continue thinking of social progress in terms of a mechanical and irrepressible process. If the history of the twentieth century teaches anything, it is that retrogression as well as progress is possible, that the cloak of progress often hides monstrous customs, and that the equation for the process of change has so many unknown factors and so many unforeseeable derivatives that we cannot understand it in all its inevitable terms. Unfortunately there are no "irreversible stages." Today, the future is only what we imagine it to be. One can think about it as an evolution toward modernity; but it is equally easy to imagine a neocolonial future, a neofeudal future, a racist future, a militarist future, or something worse, if we put them all together, than any known historical reality. There is no way that we can continue looking for consolation or strength in the vain thought that the future is foreseeable and progress inevitable, and that both are on our side, just around the corner. For that is illusion, and we need to be realistic. The same mechanical evolutionary concept underlies and distorts Reina's interpretations of our present dilemma. Poverty, according to Dr. Reina's diagnosis, is the real root of discontent. Aside from its wide acceptance and popularity, the hypothesis that political violence is above all else the result of poverty is as simplistic as the conspiracy theory that attributes subversion to foreign interference (and simplicities added together do not add up to anything, nor do they provide a clear analysis). Extreme poverty inhibits any type of action; people dying of hunger have no spirit for violence. We Central Americans in general have been poor for many centuries without becoming miserable; never have we known the deadly hunger of the Africans nor the

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modern warfare of Europe. And, in reality, we Hondurans are among the people at once the most poor and the most passive of Latin America; we are certainly the poorest people of Central America and nevertheless we are very far from the violent social revolution that is afflicting our neighbors. These facts have, perhaps, a cultural causal component or other derivative. We have avoided violence because we have a certain passion for "living in peace"; we Hondurans are not disposed to kill for mere ideas or future illusions. With respect to the social causes of Central American political violence, the problem is that apart from being poor, we are in a process of growth and development. Our model of development (capitalist, neoliberal) revolutionizes the people's expectations at the same time that it polarizes society; it creates new injustices at the same time that it spreads a new consciousness and demands justice. Thus it provokes malaise and resentment that are distilled into social tension. Through these models, liberal dictators of Central America stimulated growth and economic modernity without foreseeing the accompanying social development and at the same time tried to stop the corresponding political development. The party-boss political system was unable to adapt to the new situation. It rejected popular organization and popular demands and wanted to reproduce itself in the image of the past without taking into account the changes that made adaptation necessary. Much of the problem is subjective. We have to reject the myths: the myth of the rich foreigners, blond and beardless, through whose science and technology we ourselves can find redemption and on whose ships the cargo of progress is brought to us; the myth of the ruling classes that have brought modern well-being and have, therefore, the prerogative of power; the spontaneous myth of the so-called popular leader, which only requires the masses to believe that the leader is predestined to save them and they hand him power, so that, taking on the yoke of progress and ideological reason, he can deliver us out of danger; the myth that without property we are nobody and cannot be assured sufficient wellbeing; the myth that the happiness of the people can be had just by giving each person ten manzanas of land to grow food on; the myth that the leaders can, by decree, solve all our ills. By putting aside the myths, half the problem is solved. One has to agree with Dr. Reina's critique of a North American policy that ties its national interest to the interests of transnational corporations, because this policy, recommended by the Kissinger Commission and embodied in the Caribbean Basin initiative, cannot solve our problems. It would reinforce our dependence and accentuate the factors creating proletarianization and social dissolution. In the final analysis, this policy is also based on myth. In any case we need a model of economic development of slow implementation, one that gives us time to adapt physically and socially to the changes, cushioning the destabilizing shock of modernity.

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Therefore, it is necessary to be rational, and to open our social and political models, and to adjust our expectations of well-being in proportion to the resources available. We must mediate legally between the interests and demands of opposing sectors and stop exploitation and accumulation, as well as demagoguery and spurious personal ambition, through regulation. The tragedy is that while the prescription of the powerful—perhaps effective for an affluent industrial society—portends nothing more for us than the worsening of the current troubles, the goal of the opposition is to gain political advantage, stirring up spirits and hot heads with simplistic rhetoric that is irresponsible and conceited. Only from the center can the situation be mediated and stabilized. But we must not lash out at each other on the right or the radical left. Almost all of us want to provide welfare and justice to our people. The problem here is one of idealism and of definition. Social capitalism is a wild fantasy. What is this thing called "social justice"? What is the "equitable form of distributing well-being"? (Certainly not the North American one: the distribution of income is as unequal in the United States as in Honduras; the only difference is that in the United States the "little" of the many is usually more than the "much" of the few "privileged" in Honduras.) What share of the common good belongs to each person? What is "the wage compatible with human dignity"? That which assures the highest level of employment or that which achieves optimal remuneration for efficient workers? Because we must realize that there are indeed contradictions between them, and as the well-known technical argument states, perhaps it is worse not to have work than to be underpaid. And finally, what specific role does the government play in reaching these goals? Presenting too many ideals results in creating for ourselves a semantic, a linguistic problem. The discussion gets out of hand. It becomes ambiguous. It is blurred to a point beyond any demand or entreaty. By using terms and concepts of this nature a lot of seriousness is lost. It would be irresponsible on our part to offer something we could not effectively provide, and we are obliged to say how we intend to comply with our promises. To do otherwise would leave us open to accusations of being ingenuous, of being everything from power hungry to demagogic. Worse still we could do a lot of damage. Many measures intended to embody a program of "social justice" result in nothing more than inefficient bureaucratic meddling in the economy; others end up in undoubtedly counterproductive distortions that can adversely affect employment in an attempt to maintain wages, etc. Dr. Reina has then a reasonable response to these questions, one that again takes us to the area of coincidence. To be clear, there is social justice where the government, within its limitations, manages to satisfy the requirements of the people for social services, social security, and education. Notice that he deals with a problem of allowances and priorities, and ends his argu-

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ment by indicating that, in order to keep peace and safeguard national security, it is more pressing to provide medical and educational services than to buy arms and train soldiers. Like most things human, then, social justice is relative, a matter of intention and proportion. Dr. Reina is correct: indeed in rich countries it could be convenient, but in a country like Honduras, with an infant mortality rate of between 70 and 90 per thousand, and 70 percent illiteracy, the reduction of a budget aimed at improving these conditions is a crime of lessa humanitis, as much as political assassination is. There remains still the problem of determining the model that could best serve the purpose of providing the people with these necessary social services. The Cuban model has been very efficient in that sense; during the past twenty-five years, infant mortality was reduced by 67 percent in Cuba, the same as in Costa Rica. But in Cuba, the improvement in the secondgeneration rights has obviously been achieved at a cost of sacrificing basic freedoms. And in Costa Rica, the excessive burden of the service sector finally weighed down the economy with the highest external debt of the Central American isthmus. We are still lacking a political economic model in which state services do not provoke problems in the economy or demand unacceptable sacrifices in the political sphere. In this area the creativity of the academician and the political thinker still leaves much to be desired. I also agree with Dr. Reina's analysis of our immediate historical past. I essentially agree with his analysis of the common denominators of Central Americans and of our national differences and idiosyncracies. I share his explanation of why we are a peaceful people, as well as his vision of the risks of the present peace and of what must be done to preserve it. Finally, I agree with his perception that the fate of the current Central American situation is one of negotiation and understanding. Negotiation seems the only rational and reasonable way, the easiest for everyone. And we can see that negotiation works everywhere. At the risk of falling into provincial political thinking, I will dare to say that in Honduras there will also have to be negotiation, and that Honduras will have to negotiate with its neighbors. I have diverged somewhat from the specific theme of basic human rights, and I would like to return to that theme. To my understanding the concern for human rights in Honduras has to be approached by reinstating the rights of individuals to life, security, physical integrity, and civil freedom. The rule of law—of legality as a basic principle—must be extended to all relations between civil society and the state, and to the relations between the sectors and individuals of civil society subject to state arbitration. If we can assure these basic elements, people will be able to effectively demand other rights. But if we misunderstand the problems created by the arbitrariness of power, and by the incompetence of the judiciary, and force the state vis-à-vis civil society to bring about a paternalistic welfare system, we will create only a philanthropic monster that cannot be prevented from devouring us. Only rule by law can assure us of our lives and property. Only strict

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legality allows one to calculate the risks and profits capable of mobilizing capital as a productive resource; only that offers workers the hope of reclaiming their rights. Without laws there can be no social harmony or economic prosperity, or thriving culture, or political progress. Without laws there are no rights. In Honduras, however, the law does not have the required force because the judiciary is in fact under the executive, j u d g e s are poorly paid and consequently corrupt, and there is no civic culture. Many judges and police officials laugh at the law as much as d o the lawbreakers, or think of themselves as the law personified. Many businessmen, military officers, and government or party officials, including leaders of the left, are—it seems— convinced that they are above the law, beyond its reach, and they place the convenience of their own interests above basic legal principles. Many workers and peasants feel that they—because of their condition—are beyond the grasp of the law and exempt f r o m obeying it; "starvation knows no law." Democratic rule is, in principle, the body of rules by which we agree to live together, the definition of power that the people give to the state to apply these rules vis-à-vis the rights that we keep individually or for our organization. T h e law has to be just to inspire authority and to claim obedience. (For this reason judges and executives of the law need to be wise and virtuous men.) But above all there has to be a citizens' commitment to obey the law or change it, and to d e m a n d that it be obeyed. And that can only happen in an open political climate, under a regime supported by a citizens' consensus and based in the law.

7

Enhancing the Instruments for Human Rights Protection in Honduras Guillermo Perez

We fee! that it is important to approach the topic of human rights from the judicial viewpoint, because it is the legal norm that materializes the law and presents it to human beings for observance. For man's attitude vis-à-vis the legal precept determines the respect that can be attributed to the legal body. Therefore, we shall present a broad profile of what Honduran positive law provides in terms of the human rights in force, and then analyze those factors within its judicial system that hinder their more thorough fulfillment. We intentionally avoid in this discussion the problem of whether or not the norm is abided by, taking as a departure point the conviction that the norm is genuine, general, and abstract, and that it is man himself, he who creates it, who may abide by the norm or violate it. The analysis of these two possibilities we leave to politicians and scholars. Indeed, respect for the laws of a state is based, among other factors, in the respect there may be for its judicial system. Hence, the importance attached to the training of legal professionals, public managers, and judges, which is a first priority among the tasks of a country's universities.

HONDURAN POSITIVE LAW Internal Law In order to be able to analyze the laws in a state, it is necessary first to understand the role of legislative intent in terms of creating them. Thus, the significance of having at least the most elementary rights chartered in the Constitution of the Republic and so-called secondary laws. In the specific case of human rights, the doctrine consecrates as more than fundamental the

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rights to life and freedom, since all other rights are related to or stem from these. Below, we cite the more significant human rights upheld by Honduran laws. The Constitution of the Republic of Honduras, implemented on January 20, 1982, proposes in Article 59 that "the human person is the supreme end of society and of the state." The right to life and liberty is consecrated not only by the fundamental norm but also by the complementary laws of the country. The constitution, in Title IV, established the "constitutional guarantees" as a unified package of means and resources to assure all citizens the full enjoyment of their public and private rights. In Articles 182, 183, 184, 185, and 186, it establishes the following guarantees: 2.1.1. 2.1.2. 2.1.3. 2.1.8.

Habeas Corpus and Personal Exhibition Guarantee; Sanctuary Recourse; Declaration of Unconstitutionality; Revision Recourse.

Habeas Corpus These Latin words literally mean "you may have the body." This term originated in famous British law enacted by Parliament in 1679: Every injured person, or any other in the name of this person, has this right in the following cases: 1. When the person may be, illegally, imprisoned, detained or, in any way, inhibited in the enjoyment of his individual freedom, and 2. When in his legal detention or imprisonment, there may be torture, harassment, humiliation, coercion or illegal exaction applied to the prisoner or detainee, as well as any undue restriction or discomfort for his individual safety vis-à-vis order in the prison itself.

This recourse is substantiated, in keeping with established procedures, in the Sanctuary Law promulgated by President Tiburcio Carias Andino on April 15, 1936, with the purpose of safeguarding the right to life, liberty, and safety of those people who are victims of an aggression or injury to their rights. Article 2 of the Sanctuary Law establishes that "when the protection of sanctuary applies to acts against persons or their freedom then they shall have recourse to habeas corpus or personal exhibition." Article 11 states that "the Personal Exhibition Recourse may be interposed by the plaintiff, or any other person in his behalf, without requiring power, written, verbal, or by telegram," and Article 13 that "whomever petitions the exhibition shall express whatever facts cause it, wherever the plaintiff may be located, if known, and the authorities, official, public servant or person who might be the culprit." The Court or Tribunal, upon admitting the petition's merit, shall order the exhibition and shall name an Executor Judge who will immediately pro-

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ceed to fulfill the exhibition order. The Executor Judge shall notify the official or authority in question of the Court's or Tribunal's decree and shall require of him to deliver the person together with the report or file on the case. Later, the Executor Judge shall inform the judicial authority of the fulfillment of his charge. This authority will, in turn, approve or disapprove the job done. In the process of fulfilling his responsibilities, the Executor Judge is broadly entitled to order all the measures necessary to protect the detained person. In the event that the Executor Judge may decide that the detention is illegal, he shall order the immediate release of the plaintiff; should the opposite be the case, he shall order that the case follow its course. The authority or public official against whom the exhibition decree is made shall immediately obey, under the risk of a fine of between 25 to 50 lempiras and a punishment of disobedience of at least two years and one day's imprisonment, with a maximum of three years (according to reforms of 29 April 1982). The Executor Judge can order this process by telegraph or telephone if necessary, and it shall be urgently transmitted, free of charge, in keeping with the law. The Sanctuary

Guarantee

Sanctuary is a right of the plaintiff and it applies in the following cases: 1. So he may be maintained in or restored to enjoyment of the rights and guarantees established by the constitution. 2. So it may be stated, in specific instances, that a law, resolution, act, or deed of authority does not oblige the person, or misconstrue any of the recognized rights in the constitution. Declaration of Unconstitutionality The Supreme Court of Justice is the only tribunal competent to declare a law contrary to the constitutional text and therefore inapplicable. Such a declaration can be requested by any citizen who "considers himself injured in his direct, personal, legitimate interest." (Constitution, Art. 184) Judges or tribunals involved in any judicial procedure shall be able to officially petition for a declaration of unconstitutionality of a law and its inapplicability before sentencing. The Revision Recourse Under the principle that no "power or authority can influence pending cases or reopen expired trials," the Supreme Court of Justice shall have the power to review a firm sentence, pronounced in an ordinary trial in a civil matter,

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when it is proven that such resolution was reached without considering decisive documents withheld by force. Also, a review is permitted if sentencing was founded on false evidence; or if witnesses might have been accused of perjury; or if the verdict could have been reached unjustly, by virtue of bribery, violence, or any other fraudulent machination (Art. 961 of the Procedures Code). Human rights declared by the constitution of a republic are protected by the same system of separation of powers that secures the maintenance of public order and by the system of state of law (as opposed to a state of emergency). All of the foregoing declarations need, however, to be transferred from simple philosophical and moral principles to the factual, judicial field. Thus, man's political freedoms are consecrated in Articles 37 and 44 of the Constitution of the Republic, but these statements are embodied in the Electoral Law and the Law of Political Organizations, which regulate the electoral processes of the Republic (laws of 17 June 1982 of the Constitutional Assembly). The constitutional guarantee of freedom of expression has no other restrictions than those established by the Law of the News Media (Decree No. 6, Gazette No. 16,565). Freedom of association and assembly has no other limitations than those relating to civil associations, mercantile corporations, cooperatives, associative enterprises, and electoral norms. Property is regulated in the Civil Code, the Mercantile Code, the Agrarian Reform Law, the Condominium Law, the Law for the Declaration of, and Planning and Development in, Tourism Areas. Expropriations of property proposed by special laws (such as the Law of Hydrocarbons and the Law of Honduran Institute of History and Anthropology) and the empowerment of institutions (such as the National Power Co., the National Port Authority, etc.) are subject to an assessment of need or of the public interest, duly qualified by the law or by a resolution based in the law and offering a just indemnity (Art. 106). The physical freedom of movement has no other restrictions than those imposed by the Law of Municipalities and the Law of the Political System (Arts. 11, 12, 13, and 17), the Law of Population and Migration Policy (Decree No. 36, Gazette No. 20,247), the Law of the National Registry of Persons, and the traffic regulations. Telecommunications are regulated by Decree-Law 341 of the Organic Law of Honduran Telecommunications ( H O N D U T E L ) and its general regulations. In penal matters, Article 1 of the New Penal Code, which went into effect on March 14, 1985, establishes that " n o one shall be penalized for infractions not specified in a law prior to the commission of the crime," and Article 2 prescribes that " n o penalties nor security measures shall be im-

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posed other than those previously established by law." T h e s e strictly enforced n o r m s give substance to the guarantees established in Articles 9 4 and 95 of the Constitution of the Republic. Rights regarding family, marriage, maternity, and infancy are covered in the Civil Code, which will be superseded by the Family C o d e recently approved by the National Congress. T h e right to work and the legal provisions that regulate labormanagement relations are prescribed by the Labor C o d e issued by the National Congress in Decree No. 189 of May 19, 1959. T h e social security of individuals, in terms of assistance in protecting their right of economic subsistence in case of disability, is guaranteed by the H o n d u r a n Social Security Institute, which covers cases involving illness, maternity, invalidism, work accidents, job-related illness, death, and involuntary-separation payment, in accordance with the law which creates it (Decree No. 140 of the National Congress, May 19, 1959). The right to health care is a fundamental task of the state and it represented approximately 12 percent of public expenditures in fiscal year 1984, through the Ministry of Public Health and Welfare. Education " i s the essential state function for the conservation, development, and diffusion of c u l t u r e " (Art. 151). The Secretariat of Public Education (with a budget of approximately 16 percent of public expenditures) and the National Autonomous University of Honduras (6 percent) are in charge of the general programming of the nation's education at all levels, kindergarten through the university. All levels of public, formal education are essentially free of charge and the university requires payment of a symbolic fee of 9 0 lempiras per year. The Secretariat of Public Education manages educational centers, organizing, directing, and supervising their programs, which are offered without any trace of discrimination. In 1975, 4 5 percent of the population was illiterate. T h e state undertook intensive literacy campaigns. Today, only 25 out of every 100 students registered in the first grade complete the sixth grade. T h e National Autonomous University of Honduras is independent of the state and it enjoys the exclusive right to organize, direct, and develop higher and professional education (Art. 160).

Institutions for the Safeguard and Defense of Human Rights Governmental Bodies In 1983, the National Congress chairmanship created the Commission for the Defense of Constitutional Guarantees and National Security. T h e commission is coordinated by a liberal deputy, the leader of that party in Congress, together with representatives f r o m the different political parties in the country, except for the Christian Democrats, w h o have only one m e m b e r in the

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legislature. Except for some meetings with relatives of people who have disappeared, the commission has remained inactive. Nongovernmental

Bodies

The Honduran Bar Association named in 1975 the first commission integrating such a concept, the Commission for Judicial and Administrative Affairs and Human Rights. In 1978, a Bar Association commission visited the city of Trujillo in the department of Colon to learn about the situation of imprisoned peasants who belonged to the Empresa Asociativa de Isletas and to verify if due process was being observed (Revista Foro Hondureho, no. 13, pp. 14 and 20). The Honduran Bar Association has also, in many instances, interceded before the government so as to establish its stand on behalf of the defense of individual constitutional rights. Between 1980 and 1981, a group of Honduran citizens got together and organized the Committee for the Defense of H u m a n Rights in Honduras ( C O D E H ) , with the purpose of establishing claims and denouncing violations of the human rights of Honduran citizens or foreigners. The committee does not have legal standing and it works for the defense of human rights through the interposition of habeas corpus and by denouncing violations before the Inter-American Commission for H u m a n Rights, the U. N. Center for Human Rights in Geneva, and Amnesty International. Attached to COD E H , there is also the Committee of Families of the Detained and Disappeared ( C O F A D E H ) . T h e C O D E H is presently part of an association of human rights committees in Central America, based in Costa Rica, which seeks U. N. recognition as a nongovernmental body for the preservation and defense of human rights.

DIAGNOSIS OF PROBLEMS IN THE HONDURAN JUDICIAL SYSTEM " A good administrator of justice is the soundest foundation of a good governm e n t " (inscription on the main door of the New York State Court Building in downtown Manhattan). On November 1, 1983, an interinstitutional g r o u p completed a study of ways to effect a short and midterm improvement of the country's penal system and, as a joint effort, to aid in the development of legal education programs at the university level. T h e study was developed by officials f r o m the Supreme C o u r t , the state secretariat at the Interior and Justice bureaus, the O f f i c e of the General Controller of the Republic, the Bar Association, and the School of Law and Social Sciences at the National Autonomous University of H o n d u r a s , which coordinated the task. Besides being serious and solid, this study has the merit of bringing together, perhaps for the first time, all the institutions in the country that share direct or indirect responsibility for administering justice. T h e task

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force has been advised by the U. N. Latin American Institute for C r i m e Prevention and Criminal Treatment ( I L A N U D ) . T h e s e experts, in view of the analysis in question, have identified within our judicial system the following areas needing development: • Implementation of the Judicial C a r e e r Law. • Creation of a judicial school. • Establishment of post-graduate programs. • Creation of a technical agency for judicial investigation. • Strengthening of public prosecutors and defenders. • Organization of the governmental system of free legal defense. • Creation of a statistical information system. • Adoption of a new Law of Organization and Jurisdiction of Courts of Law. • Creation of a library system, the organization of archives, and an information and documentation center. • A study of the Penal Code procedures. • Organization of an Institute of Legal Medicine.

Implementation of the Judicial Career Law In Honduras, there has not been a judicial career system and the only existing benefit for those working in the justice system is retirement according to a special law, i.e., the Retirement Law for Justice Personnel. Consequently, in reality, no entrance requirements exist, there is no employee stability or promotion system, and the economic benefits are not regulated. Although to be a judge, it is necessary to have a college degree, no special judicial training is required. With the implementation of the Judicial C a r e e r Law, the fundamental principles of judicial independence can be attained and will be fully implemented, as it will give j u d g e s stability and economic solvency. Consequently, it will allow the judges' professionalization and make possible a lifelong commitment to this service.

Creation of a Judicial School There are two centers of higher education in Honduras with offerings in law. In Tegucigalpa, the School of Judicial and Social Sciences within the Na-

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tional Autonomous University of Honduras (UNAH), a state school, offers courses at the Licenciatura (Bachelor level), with five concentrations, one of which is Penal Law. In the city of San Pedro Sula, the University of San Pedro Sula, a private institution, has only recently offered courses in law. The Jose Cecilio de Valle private university in Tegucigalpa does not have a Law School. None of these universities offer, at present, graduate courses in law. A judge's judicial wisdom has to be attained through special training, which is insufficient within the regular general education of legal professionals presently offered by our schools of law. It is of paramount importance that students make the proper vocational choice that will allow them, early in their education, an opportunity to choose to follow a judicial career.

Establishment of Postgraduate Law Programs

Honduras has no postgraduate studies in law, but there is a research project at the UNAH to consider implementation of such programs. The University of San Pedro Sula does not offer, and is not planning to offer, postgraduate courses in the field. In the UNAH program, at the Licenciatura level, there is a course in Penal Law Orientation, which consists in completing five semester courses. There is only one person holding the degree of Ph. D. teaching at the postgraduate level in this field in Honduras and one other individual is presently studying in Italy under a UNAH scholarship. Professional postgraduate training will improve university education and round out the judicial training of judges. It will force the production and acquisition of books and publications relating to judicial issues for reference and teaching. Its operation in Honduras will enhance educational opportunities, which now are only available through study abroad.

The Creation of a Judicial Investigation Technical Institute

Honduras has never had a judicial investigation institution, since investigative chores have been a police responsibility, under various agencies. Initially, these duties were under the jurisdiction of the Interior and Justice ministries and later were under the Defense and Public Safety ministry. At present they are under the jurisdiction of the Public Safety Force, which is part of the armed forces of Honduras. A Judicial Investigation Technical Institute would cooperate in the implementation of justice by providing serious and scientific investigation of crimes, thus avoiding practices that the Constitution of the Republic has, for

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several years, banned, such as torture, use of shrouds {la capucha), "electrical touches," etc., which rather than contributing to an effective investigation criminally violate human rights.

Strengthening of Public Prosecutors and Defenders (the Ministerio Público) Before 1980, public prosecutors and defenders were already part of the Honduran Supreme Court, through a Magistrate-Prosecutor System. In 1906, with the enactment of the Law of Organization and Jurisdiction of Courts of Law, it was established that legal public representatives (prosecutors and defenders) should be nominated by the Supreme Court of Justice and that they should function within it, and within the Appeals Court and the Juzqados de Letras (courts of first instance). There is, together with public legal representatives, under the Supreme Court of Justice, another structure with a similar function, the Office of the Solicitor General of the Republic. Earlier, there was an Office of the Solicitor General of the Treasury, represented by the Prosecutor General of the Treasury, as proposed by the Organic Law of the Office of the Controller of the Currency. Strengthening and unifying public prosecutors and defenders will improve the struggle against crime, since their public action on behalf of the state, with availability of new resources and unity, would improve, as would the effect upon the judicial process. Lack of resources impedes follow-up action required under the Penal Code, and the present lack of unity in the system is manifested in hostility between those working under the Office of the Solicitor General and those working under the judicial power.

Organization of the Governmental System of Free Legal Defense The Code of Procedures of 1906, Book I, Title I, Chapter II, Articles 13-24, established a free legal defense system which has had little effect because defense is entrusted to any professional and not to defense lawyers employed and paid by the state. A similar type of defense is envisioned by the Criminal Procedures Code (Art. 8), which establishes legal defense by any legal professional and not by public defenders paid by the state. The significance of this project is related to the unfairness of the criminal justice system for people who cannot afford the costs of an efficient legal defense, so free legal defense becomes necessary. The duration of criminal processes of indigent defendants is greater due to the lack of an adequate defense. Most of Honduran crime comes from the low-income population.

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Creation of a Statistical Information System It is necessary to incorporate our judicial system into the computer era and its related benefits. This would improve its overall organization, including the compilation of necessary statistics.

Adoption of a New Law of Organization and Jurisdiction of Courts of Law A revision of the Law of Organization and Jurisdiction of Courts of Law, originally dated 1906, is justified by the incongruence of the laws, which produces a duplication of labor costs, a disparity of criteria, and doubts regarding competence.

The Creation of a Library System, the Organization of Archives, and an Information and Documentation Center The Honduran library system is developed and regulated by each institution independently, in keeping with its nature and needs. Thus, there are deficiencies in the availability of information and research resources, for lack of a recent, adequate bibliography. The absence of communication between libraries, at the national and international levels, is another weakness of the system.

A Study of the Penal Code Procedures Recently, the National Congress of the Republic enacted a new Code of Penal Procedures.

Organization of an Institute of Forensic Medicine The Department of Forensic Medicine, within the Judiciary, has its own bylaws, issued by agreement of the Supreme Court of Justice on January 29, 1975, and it issues the regulations of the Forensic Medicine Service. The National Autonomous University of Honduras (UNAH) Institute of Judicial Investigation has prepared a legislative proposal, now before the National Congress, for the creation of an Institute of Forensic Medicine. This institution is an essential complement to investigative tasks in criminal justice matters. It is an indispensable aid for the judge who lacks specialized knowledge in this field. Also, it will train technical and professional personnel to provide these services nationwide.

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CONCLUSIONS It is important to analyze the human rights issue from all possible angles, and especially from the political and legal viewpoint. Honduras has embodied in its various constitutions and secondary laws its concern for the respect of human rights and it is imperative to strengthen the judicial system in order to achieve effective respect for human rights. The total implementation of the recommendations of the 1983 interinstitutional study would be of vital importance in this respect. Both government and private citizens in Honduras have created institutions dedicated to the promotion, within the country, of feasible constitutional guarantees, but the systematic and repeated violation of constitutional guarantees by a state should be cause for serious concern and immediate denunciation by all those representing the country's fuerzas vivas (industry, commerce, and banking).

Part 3

Economic Development and Productivity

8

General Characteristics of the Honduran Economy Paul Vinelli HISTORICAL ANTECEDENTS

In the colonial period Honduras's role in the world economy was that of supplier of previous metals such as silver and gold and, on a lesser scale, agricultural products such as cocoa, indigo, and sarsaparilla; Europe was the principal market. In the last years of the colonial period, Honduras felt the effects of a lack of natural resources, such as water, which brought about a great crisis in the economic, public finance, and agricultural sectors. The cultivation of sugar cane, basic grains, and fodder for livestock suffered. Diminishing harvests caused a disproportionate rise in the price of such staples as corn and frijoles (dried beans). Another influential factor in Honduras's development since then has been a deficient infrastructure, especially in communications. The economic crisis sharpened because of a lack of currency. When the world price of silver and gold went up, precious metals were exported or disappeared from circulation and barter systems were introduced. Already in the colonial period, the importation of consumer goods (mainly from the Philippines and Europe) exceeded the exportation of raw goods. Honduras was considered the poorest country in the Spanish Empire. Although it had natural resources, it did not have markets to sell to, nor ports to export the products from. In the postindependence era the economic scene was still dismal. The decline of mining activity continued in the disintegrating economy. The few exports were indigo, grains, sarsaparilla, hides, and livestock, which were sent to Guatemala and El Salvador. This situation continued until the capital movements of the mining and agricultural sectors at the end of the nineteenth century. Abundant foreign investments plus the technological progress of the industrial revolution stimulated both production and commerce. Agricultural

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products for export were promoted, principally coffee and bananas. Moreover, mining activity was stimulated by awarding incentives. Important projects were begun: construction of the southern highway; establishment of the first telegraph lines; the founding of the national postal system; and the National Archives and Library. T h e importance of the mining sector at the end of the nineteenth century is shown by the fact that it made up approximately 53 percent of the total exports. At this time, too, there was a change of destination for exports, and the United States became the preferred market. The cultivation of bananas began in the last decade of the nineteenth century, as the prices were fairly attractive. Plantations extended all along the North Coast by means of government concessions, awarded in 1902 by the president, General Terencio Sierra, and ir. 1923 Honduras became the number one exporter of bananas in the world. Bananas and ores f r o m the mines were the only two important exports. Within the historical process of economic growth in Honduras, two definite phases stand out. T h e first, approximately from colonial times to World War II, was an agricultural-export model (i.e., outward growth). It was characterized by an economy based mainly on agriculture and mining, with abundant, direct, foreign investment, and, from the end of the nineteenth century, by the export of agricultural products, predominantly bananas. The second phase involved import substitution in conjunction with the conversion of national merchants to investors. This occurred in the years following World War II, with its m a j o r push taking place in the 1960s. While the agro-export sector has been the principal force behind the traditional economic model, the efforts in the last thirty years have been concentrated on the substitution of imports. T h e lack of diversification, in both export products and markets, has always lent a certain vulnerability to the economy. This p h e n o m e n o n , in turn, has caused unfavorable trade terms which have resulted in deficits in our balance of payments.

T H E D E C A D E O F THE 1950s During World War II, the European market, which absorbed most of our export products, disappeared. As a result of the war, the United States promoted the cultivation in Central America of some raw materials traditionally grown in Asia, and both rubber and manila h e m p were grown in the region with good results. However, by the middle of the 1950s these crops were declining in importance as the Asian countries recaptured the international market and new techniques produced synthetic materials. T h e basic export products, like bananas, coffee, and wood, began to encounter production and marketing problems. T h e r e was a surge of m a j o r competition in the international market f r o m the increased production of the

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African countries that exported similar products and received preferential treatment from Europe. The public sector was, at the same time, strengthened by an administrative reorganization that permitted the creation of the means for modern development. Following the International Monetary Fund's recommendations, the government decided to create the Central Bank and an Agricultural Development Bank. Moreover, other organizations came into being, such as the Ministry of Economy, the National Council on Economics, the Board of Budget Management and the Income Tax Board. The decision to suppress the country's internal network of custom houses and to transfer administration of education from the municipalities to the central government was crucial for commerce and production. But in spite of the modernization of the public sector there were social events that, combined with natural and political factors, negatively influenced production and export. The area hardest hit was agriculture. The banana plantations suffered huge losses, both because of the 1954 workers' strike against the banana companies, which stopped all activity for eight weeks, and the floods in the Sula valley, which heavily damaged the plantations. In this same year there was a decrease in mining activity because of the closure of the San Juancito and the San Andres mines. The industrial sector made up 17 percent of the Gross Domestic Product and was quite advanced technically, especially in the area of San Pedro Sula where agro-industrial businesses were developed and had overcome, in great measure, the artisan conditions under which industry labored in 1950. The balance of payments suffered from a 26 percent reduction in banana exports and a decrease in the reinvestment of profits by the banana companies. In spite of these developments in the 1950s, the banana companies accounted for more than 70 percent of foreign investments in Honduras. The effects of strikes, floods, and hurricanes were also felt in 1955, considerably reducing the volume of agricultural production both for export and internal consumption. In 1957 production had almost recuperated from the economic disturbances of the previous years. However, in this year the disequilibrium in the balance of payments increased due to the extensive infection of the banana trees with the mal de Panama (Panamanian disease). To reinforce the position of the international reserves, the government and the Central Bank of Honduras entered into two contingency pacts with the International Monetary Fund; moreover, the Central Bank of Honduras established a stabilization program, limiting the use of foreign funds exclusively for long-term loans for development. The strike of 1954 was a relatively important social event for the country because it set up the bases for the development of the union movement. From that moment on there was a cohesively organized labor force. In response to these developments the government, in 1959, promulgated labor legislation

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that gave birth to the Labor Code, which would constitute the legal framework to regulate future labor-management relations.

THE DECADE OF THE 1960s This decade's development was partially linked to the start of the process of Central American integration, conceived in the preceding decade. Besides seeking regional development, this concept maintained that the key to Central American development was industrialization, to be substituted for imports. The multilateral treaties of 1958 contemplated obtaining reciprocal benefits and balanced development and presenting a united front to achieve more influence in the international relations of the region. Central America's economic integration gave rise to the creation of various regional organizations, such as the Central American Bank of Economic Integration, the Central American Chamber of Compensation, the Interregional Organization of Agrarian Societies, etc. In spite of the fact that the integration period fostered some new industries oriented towards the Central American Common Market and substitutions for imports, the Honduran industrial process did not reach the degree of industrialization found in Guatemala, El Salvador, and Costa Rica. These nations were able to attract a larger influx of foreign investment by offering fiscal incentives (at times disproportionate). Because of a production structure much less diversified than that of its neighbors, Honduras's international trade with Central America suffered serious imbalances. In spite of the fact that for more than forty years, from 1920 to 1962, the Central American trade balance was in Honduras's favor, the trade balance in 1963 turned against Honduras. Delving into the commercial scene we see that, while Honduras exported cereals, livestock, and wood at internationally quoted prices, they were importing manufactured goods at prices inflated by the solid wall of tariffs that surrounded Central America. In the 1960s total Honduran exports to Central America reached 200 million dollars, while imports were 289 million, producing an imbalance of 89 million dollars which could only be covered with the benefits derived from exports to the rest of the world. In 1968, the last normal year in the Central American Common Market, it is calculated that Honduras obtained a two-million-dollar bonus for its exports to the area, as compared to what it would have earned by selling the products to the international market. However, Honduras paid more than 28 million dollars for Central American imports, thanks to the tariff barrier against the rest of the world. This is explained not only by our production structure for agricultural and raw materials but also because (in Honduras's case) the formation of the Gross Domestic Product has traditionally depended on essential imports from the rest of the world.

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As this situation became more and more difficult, many circumstances appeared favoring Honduras's withdrawal from the Central American Common Market. The war between Honduras and El Salvador in 1969 was the decisive factor. Commercial and diplomatic relations were broken off and, by legislative Decree no. 97, Dec. 30, 1970, Honduras left the Central American Common Market. Honduras proposed a modus operandi to allow commerce to continue among the Central American countries; because this plan was never put into operation commercial relations became bilateral commercial treaties based on reciprocity. The policies developed by the five Central American countries in the 1960s were oriented towards industrialization programs to substitute for imports, with emphasis on local production of consumer goods. The existence of a market was presumed, hoping that, in time, increased demand and the possibility of saving steps in goods production would lead to the creation of intermediate-goods industries. What really happened was quite different and the results were truly discouraging. Part of the reason for the failure was that the various tariffs greatly protected final-product industries while those of intermediate-goods and capital assets received little protection. It must be noted that the Central American integration treaty basically circumscribed a regional Common Market. Neither the free movement of the people nor capital investment trade prospered under the treaty. T H E D E C A D E OF THE 1970s The first five years of this decade were characterized by strong state intervention in the economy, beginning in 1972 with the National Plan of Development (1973-78) put into effect by the reformist military government of General Oswaldo Lopez Arellano. Part of the government's policy was to make the agrarian reform program its fundamental task. To this end, great quantities of resources were invested in the agrarian sector, principally in the lowlands of the Aguan river, where co-ops for growing bananas and African palms were encouraged. At this time the autonomous, state-owned businesses appeared, such as: (1) the National Investment Corporation (CONADI), the organization in charge of promoting (by means of direct investment, credits, or endorsements) private, public, or combined industrial projects, principally in the sugar, hotel, cement, food, and textile areas; (2) the Honduran Corporation for Forest Development (COHDEFOR), its objective being the nationalization of forest resources (whether at the timber or lumber stage) that were in the hands of private investors; and, (3) the Honduran Banana Corporation (COHBANA), whose aim was to give more support to the banana growers, independent or co-op. Moreover, the state-created stores, through the National Bank of Economic Development (BANASUPRO), were to supply the

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people with basic goods, thus reinforcing the measures designed to control the supply and price levels of the most essential consumer products. Taxes on banana and mineral exports were established. Both of these activities were controlled by foreign companies, also at this time the creation of the National Honduran Peasants Association (ANACH) and the National Peasants Union (UNC) was being promoted and more support was given to union organizations like the Honduran Workers' Union (CTH) and the General Workers' Union (CGT). These populist reforms discouraged private investors. Another negative factor, around the same time, was the destruction of a large part of the banana plantations (especially those of the United Fruit Company) by Hurricane Fifi in 1974. As a result of these events there was a 10 percent shrinkage in the agricultural field between 1973 and 1975. Thanks to international support, basically in the form of easy loans, and to tne exceptional coffee prices reached in 1976-79, the country recovered a good part of its production and export potential. By implementing certain monetary measures, the Central Bank was able to halt import growth, thus controlling the commercial balance deficit. However, fuel costs grew from 26 million dollars in 1973 to 113 million in 1979 (as compared to the 500 percent cost rise in the preceding 20 years). The government contracted 200 million dollars worth of loans with the Interamerican Bank in 1976 to start up big projects like those of the Industrial Forestry Corporation of Olancho (CORFINO). Originally the project contemplated the installation and development of two sawmills and the installation of a pulp and paper plant in the country's northeastern region. The first sawmill has just started to function, two years behind schedule and over the budget. Because of serious problems, both financial and of economic viability, the construction of the second sawmill and the pulp and paper plant is doubtful. On the other hand the hydroelectric project of El Cajon is running within both time and budget limits. Started in 1979, at a cost of approximately 680 million dollars, this project is near completion. Hopefully it will be ready to start up around the middle of 1985, at which time it will mean great savings on fuel for the country. The National Port Company in Puerto Cortes built the free zone installations in Cortes in 1978 in which various manufacturing industries, such as clothing factories, sports equipment, metal-mechanical products, etc., were installed. To date the results are mixed; there have been some successes but some companies have withdrawn due to an inability to compete. These three projects explain the huge investments made by the public sector, which in the 1970s grew at an average rate of 18.7 percent while private investments grew at the rate of 15.4 percent. This decade was characterized by a big decrease in exports because of a deterioration in the trade terms. Besides the rise in energy prices, most of the

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import products went up in price, dealing a serious blow to the balance of payments. From 1975 to 1979 the level of the country's foreign debt soared by approximately 145 percent. This increase was caused by the rapid growth in government spending, which doubled and caused a substantial budget deficit. The economic contraction produced a rise in unemployment. Population growth (around 3.5 percent) further increased the number of youths that made up the base of the Honduran population pyramid. This increase, besides demanding a greater productivity from the work force, also imposed additional social obligations on the state. ECONOMIC DEVELOPMENT FROM 1980 TO 1984 In 1980 another economic recession began, marked by low rates of real economic growth, with an annual average of hardly 0.8 percent in the last four years. The quality of life at this time had deteriorated badly. Low-income families have suffered the most. Stagnating production weakened investments and at the same time negatively affected exports, thus nullifying the expected sustained growth that had been achieved in the three preceding decades. Other factors had an impact upon this depressing trend: slow recovery of the world economy, which meant little demand for our exports; lack of official international economic aid; and an almost total closure of commercial lines of credit and of those granted by multinational private banks. The average growth in exports in 1980-84 was almost null. However, there was a small improvement, as exports had experienced negative rates in 1981 and 1982 of - 8 . 3 percent and —13.3 percent respectively. Imports in the same period showed a negative rate of - 0 . 4 percent; a result of the decreases in 1981 and 1982 of —5.8 percent and - 2 5 . 9 percent. For an industrial sector that depends on the outside for the purchase of 40 percent of its manufacturing supplies this drop signifies the paralysis of a large portion of its production lines. The agricultural field showed slight increases, not exceeding 2.5 percent. Given the importance of this field to our economy (by itself it constitutes a third of the Gross Domestic Product and provides work for 60 percent of the workers), this increase staved off hunger among the populace. At the beginning of 1982 the dilemma that the new government had to face was that, already in 1981, the demand for imports had reached the level of 1,233 million dollars. However, exports, both because of their value and the availability of foreign credit lines, had suffered drastic reductions. By 1982 export value had already decreased to 950 million dollars, a 23 percent reduction, which was 283 million dollars less than the demand for imports. This obliged the monetary authorities to take corrective measures. A gradual

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monetary adjustment distributed over a fixed period of time was decided upon. At the same time a policy of selective halts of imports was followed. Nineteen-eighty-three was another years of economic stagnation, similar to the preceding year. Exports, imports, and foreign investments stuck at the same level; the only difference was that in 1982 the Central Bank of Honduras had to close the gap of the balance of payments by using 92.5 million dollars of the international reserves, while in 1983 it used 18 million. In 1983 the major problem was the budget deficit which, instead of diminishing, increased 12 percent as compared to 1982's 9 percent increase. The budget deficit for 1983 ended up at 276 million dollars, as revenues stayed at the same level while government expenditures continued to rise. The interest payments on the foreign debt of some decentralized institutions influenced this deterioration. The deficit financing was made up of 43 percent foreign credit and 57 percent national credit. Prices were a positive factor, as the annual rate of inflation stopped at 8.9 percent which was less than the percentages registered in 1981 and 1982. The measures adopted by the monetary authorities, in facilitating the granting of import permits (especially for raw materials and parts) in hopes of giving a boost to national production and relieving unemployment, greatly lessened the inflationary pressures. SOME OF THE MOST RELEVANT ASPECTS OF THE CRISIS OF THE 1980s Social Cost of the Crisis Official statistics estimate that 20 percent of the work force, more than 200,000 people, were unemployed. These figures do not include underemployment, which was estimated at between 45 and 60 percent, mainly among agricultural workers. Perhaps commerce and industry produced the major impact on unemployment. There have been massive dismissals because of factory closings and temporary layoffs due to lack of supplies. It is estimated that the banana companies dismissed, in mass, approximately 4,000 workers in 1982. The continued collapse of the construction industry (8 percent in 1981 and 4 percent in 1982) made a strong impact on production; the multiplying effects produced many repercussions. It is estimated that in 1981-83, 38 percent of the almost 40,000 construction workers lost their jobs. Fiscal Policies Even though certain measures were implemented, the government has not been able to contain the budget deficit either with national credit financing or the creation of new money. The explanation is in the continual fall of revenue

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and the social demands on government spending. Labor demands, whether on the government administration or the decentralized para-statal organizations, have contributed to this deterioration. Labor conflicts demand larger pay raises each time, and in the end the government, in the majority of the cases, has agreed to these petitions. The International Monetary Fund, in its "Annual Monetary Perspective" (spring 1984) said that, "in the absence of any budgetary or direct monetary stimulus, the governments will have to depend on a range of policies directed toward a more efficient running of their economies. These include, in particular, reductions in the power of the workers' unions to apply restrictive practices and force up work prices and, also, a wide range of measures that encourage productive performance and investment." If the government cannot withstand such pressures when faced with (nontechnocratic) reality, how would it be feasible for the private sector to restrain the ever-rising demands of labor? Another grave problem of the foreign debt is the incessant rise in services; this is the item that has grown the most in the national budget. In 1982 the budget deficit was 116 million dollars more than in 1981, and in 1983 it will be almost equal to the level of the preceding year, i.e., 352 million dollars. Government expenditures rose 20 percent in 1982 and 6 percent in 1983, while revenue rose 10 percent and 9 percent respectively. For 1984 a rise in fiscal revenues and a decrease in government (both central and para-statal organizations) expenditures was programmed. It is still too early to know if these objectives have been reached. Foreign Debt The origin of Honduras's foreign debt was the construction of the Interoceanic Railway in 1867-70, when various loans were contracted in London for 6 million pounds sterling. The work was left unfinished and the loan plus 29 million pounds sterling of overdue interest was finally paid off in 1953. In a quarter of a century, from 1925 to 1950, the balance of the foreign debt decreased from 8 million to 1 million dollars. Heavy foreign debt was incurred in 1958. As a signatory of the Alliance for Progress of the Central American Common Market that period's administration promised to develop the basic infrastructure for communications and to tackle the problems involving health, housing, and education. The debt was contracted through international organizations and the funds were used for: (1) the hydroelectric project at Cañaveral Rio Lindo; (2) the western highway, which leads to the borders of El Salvador and Guatemala; (3) the housing projects of the National Housing Institute; and (4) a maternity-pediatrics hospital complex. Already in 1962 the foreign debt had reached 24 million dollars, 8 million of which was for the para-statal organizations.

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Although at the beginning of the 1970s the foreign debt had already increased to 93.5 million, it grew sixfold by 1979, reaching a total of 602 million dollars, in order to fulfill the financial obligations established in the National Plan for Development (1973-78). Of this total, 70 percent was government debt and the rest was private business debt. The government's emphasis on investments and rendering services in the last half of the 1970s, and the inability of the tax system to generate revenues of sufficient magnitude to finance these higher levels of investment and services, resulted in an ever-growing budget deficit. This, in turn, induced massive use of credit, national and international. As international inflation increased, due to the rise in oil prices, the world found itself sinking into an economic contraction. This affected the primary export products of developing nations, which at the same time were loading themselves with debts far beyond their economic capabilities. The negative aspect of this crisis was accentuated by the region's political tragedy, which in turn produced bigger deficits, larger imbalances in commercial trade, problems in obtaining new credit, and an exodus of private capital. At the start of the 1980s Honduran foreign debt began to blossom into a danger that seriously interfered with the balance of payments and its prompt payment. One problem is that a good part of the foreign debt is made up of loans contracted by the decentralized organizations from private international banking organizations with unfavorable terms of time limits and interest. In effect, the Honduran foreign debt, which in 1978 stood at 696 million dollars, equivalent to 36.5 percent of the Gross Domestic Product, reached 1,800 million dollars, or more than 50 percent, in 1983. This was further aggravated by the fact that the debt with the foreign commercial banks and suppliers increased from 134 million to 401 million dollars in the same period.

Renegotiation of the Foreign Debt In 1982 Honduras began to renegotiate the outstanding foreign debt (127 million dollars) with the international private banks. Negotiations did not prosper as Honduras was only offered a short-term, seven year loan; a twoyear period of grace; an annual commission of more than 600,000 dollars; and no new credit. In the last negotiations (September 1984) there was more agreement and better conditions. The new payoff periods call for 11 years plus a 3 year period of grace and the new interest rates would be 1 7 /h percent over the London Interbank Offer Rate (LIBOR) for the renegotiated credit and 1/2 percent over the LIBOR rate at the end of each year for the restructured payments.

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Foreign loans continue to be indispensable. Faced with an incapacity to generate sufficient national savings, we will continue to need foreign resources to be able to take care of the developmental demands essential to a growing population. It is improbable that Honduras or other developing nations can put into practice measures that allow them to reduce their foreign debt as long as the world economy's deterioration has not been overcome.

Trade Terms Exports are the most important factor for our economic growth. Commercial businesses contribute 60 percent to national production, but in the last few years they have found themselves restrained by the disappointing prices of our principal export products. The cycles have repeated for decades. Our economy is typically agroexport and we cannot expect sustained, dynamic growth when the products we export suffer from a very elastic demand on the world market. In the period 1950-79 the value of Honduras's exports multiplied by 12, but we have not achieved any great diversification. Bananas have had the most emphasis, followed by coffee. Any downward movement of demand or global price of these two products causes us severe decreases in exports. It is obvious that the fragility of our export structure is our Achilles' heel. As the region is made up of developing countries, the impact of the global economic recession represents an important element in the deterioration of its economic and financial structures. In the last four years the terms of commercial trade have deteriorated more than 30 percent. Our international trade prospects are uncertain, because the tendency of the prices of bananas, coffee, sugar, meat, and wood does not show promise of a strong enough gain to be able to strengthen our exports.

The Balance of Payments One of the propositions of the 1982-83 financial program was to improve the current balance of payments. After sustaining deficits for many years, the loss of international reserves was reduced in 1983. The balance of payments adjustment has been made by decreasing imports by 200 million dollars. It has been just as great a sacrifice for the consumer as for the manufacturers. Exports are the most important factor for economic growth, but we also suffer from other problems. The difficulties in obtaining working capital (bank and commercial credits) aggravate even more the stability problems. As a consequence, our ability to attract foreign money has weakened perceptibly.

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The anticyclical governmental policies have caused growing budget deficits that have affected monetary stability and the balance of payments. Credit restriction measures (although necessary to reduce pressures on prices and, therefore, on the balance of payments) have in effect resulted in the transfer of more resources to the state to the detriment of possible development that can only come from more activity in the private sector.

Social Welfare of the People The growing urbanization experienced in the last twenty-two years has been produced by massive migration from the rural areas to the cities. This escape valve for population pressure on the farmlands has changed the face of the principal cities (Tegucigalpa and San Pedro Sula). The state is out of phase with, and cannot satisfy, the demands created by this growth, as the economy is growing at a slower rate than is the population in general and at a much slower rate than is the urban population. In 1960-82 the annual rate of growth of this migration has been 9.3 percent. The marginal urban population is the poorest in the country; their living standards have not been significantly improved by their movement. In the last twenty years the economy grew at an annual rate of 4.4 percent, while the poorest population (rural plus marginal urban) decreased by barely two points, from 81 to 79 percent. In terms of social welfare, the economy's growth rate should be greater than 4 percent. In particular there must be an improvement in the living standards of the marginal urban population, which is estimated at 42 percent of the total population and shows a tendency to reach 50 percent by the end of this decade. Therefore, in certain aspects growth has been dynamic but incapable of attenuating the level of poverty found in an estimated 79 percent of the population.

CONCLUSION We are living in very difficult times. While part of the world is suffering from a drastic lack of basic products, other regions (Latin America included) are producing an excess of sugar, bananas, cocoa, coffee, meat, wood, silver, and other metals. This situation may favor the United States, the European Economic Community, and Japan, but developing nations such as Honduras depend almost exclusively on the exportation of those items. These countries find their principal source of income, and consequently their ability to import, seriously reduced. This fact not only makes the payment of the foreign debt difficult but also increases the number of people who live below the poverty level. From another point of view it is clear that our shrinking trade

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income increases unemployment which in turn aggravates the social picture, already made critical by the population explosion. Again we descend into a vicious cycle. So many problems and social pressures oblige the government to spend more, which invariably means bigger budget deficits. When outside financing does not cover these deficits, the government either resorts to the creation of new money, which fuels the flames of inflation, or to contracting national loans that invariably absorb savings that would otherwise be available for investment in production. Honduras's budget for 1985 clearly reflects these problems. The grand total of 927 million dollars is 165 million higher than the 1984 budget. The budget deficit will be in excess of 420 million, of which less than half will have foreign financing. The budget imbalance will mean an expansion of currency that in turn will affect exchange stability. By tying the value of the lempira to the dollar originally, it was possible to limit inflationary pressures and guarantee exporters stable exchange rates. Unfortunately in the last two years Honduras's rate of inflation has exceeded that of the United States, which means that now the fight against rising prices falls almost entirely on exports and the exporters cannot pass along the increase in domestic costs that result from higher prices and salaries. The consequences of such a policy have been to promote increases in consumer spending, thus reducing savings and investment. Throughout all its developmental process, our economy has revolved around the same three primary products without being able to achieve diversification. Thus, after more than a century, we are still dependent on the banana, coffee, and mining industries. The fruit companies as well as the coffee and mining companies have been suffering consecutive losses in the last years, which is truly a matter for concern under the present circumstances. Because the production and export costs of bananas exceed those in other countries, it is hardly surprising that these companies are reducing their investments in Honduras. On the other hand, U. S. aid, which has risen from 140 million dollars in fiscal year 1983 to 247 million in 1984 and had been budgeted at 201 million for 1985, has been vital to the support of the economy. It may be that the 1985 figure will be increased; additional assistance has been requested and is going through top-level government negotiations. In light of these recent events more aid is vital. At the last assembly of the IMF and the World Bank, the major powers categorically opposed expansion of the use of special bill-of-exchange rights for developing nations; at the same time the additional funds requested by the World Bank and its affiliates were refused. The justification for this negative action was given by the U. S. secretary of the treasury, who affirmed that U. S. economic improvement had already begun to benefit the economies of the rest of the world and that, moreover, it was necessary to emphasize that new capital movements should

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be private, attracted by special incentives offered by the developing nations. The reality, however, is quite different, particularly in Honduras, where there is very little movement of direct, private capital. If it is true that very soon the developed countries' prosperity will benefit us, then the foreign aid required will not be more than short-term. Without this aid we cannot expect the economic reactivation so necessary for regaining the standard of life our people d e m a n d .

9

The Poverty of Progress in Honduras Raul Moncarz

This paper analyzes the new economic situation faced by Honduras since 1979. The decisive influence of the international economy in Honduras has been widely recognized, given the open-economy characteristics of the country. Notwithstanding the rapid economic growth registered in the last thirty years, at least up to 1979, Honduras today faces the severest economic and social crisis in its history. There is reasonable evidence that the last five years have witnessed a remarkable reversal of the Honduran economy, mainly in the financial and capital sectors. This is complemented by the contraction of foreign capital flow into the area and the disincentives for entrepreneurship. Changes have also been suggested by the international community in the allocation of resources. Less government intervention is recommended, to be coupled with the more efficient allocation of resources. Finally, corruption at all levels is having an effect on the growth and development of the country. Honduras is faced today with forces that, as usual, it cannot control, but now they have transcended the economic sphere and impact the core of Honduran institutions. In evaluating economic policies, their overall impact on the economy and on society cannot be ignored. This is particularly true when dealing with such external and internal shocks as those that have been experienced in Honduras. These changes are restructuring the economy and the society in accordance with some sort of policy that can be identified as quasifreemarket and individualistic. As Dr. Vinelli has indicated (chapter 8) this phase in the Honduran political economy is one of economic depression, with attendant external and internal instability aggravated by external noneconomic forces. This period is also characterized by a reversal of the role of the government, from one of entrepreneur and vehicle of change to one of conservatism. These changes 111

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are due in great part to a new consensus among the U. S. and other multinational agencies in favor of a return to achieving a more efficient allocation of resources through market forces. EXTERNAL FACTORS

During the last five years, the evolution of the Honduran economy has been characterized by the deepening crisis of the external sector, due on one hand to the decline of production and internal supply in Honduras and on the other hand to the slowdown in demand and rising protectionism of the industrial countries. Other decisive influences in this behavior are the deterioration of the terms of trade (30 percent) and the unpredictable shifts in the rate of interest, which allows for local capital outflows and raises the level of foreign debt. All of this had made for an acute shortage of foreign exchange, which has weakened considerably the capacity to import goods and services. In the last three years (1981-1984) the rate of growth of the Honduran economy has been negative. Private and public debt has considerably increased the burden of servicing the foreign debt, such that 20 percent of foreign exchange is diverted toward the payment of debt service. Specifically, as of December 31, 1983, the foreign public debt of Honduras was $1.62 billion. This figure included $185 million in amortizations in arrears that were being rescheduled. Debt service, which until 1978 had accounted for less than 10 percent of exports of goods and services, represented over 23 percent in 1984.1 Another influential element in the country's external sector can be attributed to the anti-inflation policies of the advanced countries, promoting significant increases in world interest rates from 1979 on. The nominal London Interbank Offer Rate (LIBOR) in 1979-1984 was nearly double its 19731978 value, and if measured in real terms it moved from barely positive to 5 percent. Higher interest rates in the United States and Europe had the largely unintended effect of strengthening the dollar. The IMF has estimated that the continuation of higher world interest rates, falling export prices, and the appreciation of the dollar had the effect of moving the real interest cost to the majority of net-oil-importing developing countries from a range of minus 7 to minus 11 percent per annum during the period 1973-1978 to a range of plus 7 to plus 10 percent in 1981.2 The interest rate shift of this order of magnitude is probably the most significant factor upsetting the previous pattern of world adjustment. Furthermore, the Honduran economy is subject to exogenous shocks that tend to be more frequent and intense than those experienced by industrial countries. This is due to the instability of the international price of major export products, together with the sudden changes in the price of imported products. Both elements have been a prominent source of unexpected external shocks that force either the deflation of the economy, if inflation and the

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status quo are to be kept under control, or borrowing and increased expenditures if recession and unemployment are to be avoided.3 In Honduras, the former solution has been adopted. As a result, local entrepreneurs have been constrained by increased production costs, the contradiction of bank credit, and ultimately the possible closing of their enterprises. Another effect of current conditions is that the freeze on wages and the increases in prices create a severe recession that drives many domestic companies into deep financial difficulties. Meanwhile, the ranks of the unemployed in Honduras have expanded as more and more businesses fail and the level of government expenditures goes down. Honduras is also experiencing a new difficulty with credit from overseas buyers, which has now essentially disappeared. Companies have stopped making pre-export advances, and banks are no longer able to finance the repayment of that historical company-to-company credit, unless Honduras's central bank approves the transaction. Another major portion of Honduran working capital has consisted of supplier credit for import of fertilizers, insecticides, vehicle spare parts and fuel, or for industrial raw materials and components. These company-to-company and foreign bank credits for imports have succumbed to the same contracting pattern as that seen in export financing.4 Given Honduras's recent unique relation with the United States, there seems to be light at the end of the tunnel. The latest deficits in the balance of payments have been covered by a higher inflow of private and official capital. Honduras negotiated export financing lines with private foreign banks. It also obtained funds under the Caribbean Basin Initiative and used compensatory lines of credit from the International Monetary Fund, the Venezuelan Investment Fund, the United States Agency for International Development, and the Bank of Mexico.5 DEVALUATION AND EXTERNAL SHOCKS

Chronic balance of payments disequilibrium had not been a structural feature of the Honduran economy until recently. These imbalances have been aggravated by external supply shocks—autonomous price increases in imported raw materials, and capital flights as a function of declining expectations and the new Honduran role in the region. This is one reason that some people talk about devaluation, which could go together with monetary control, wage repression, and other policies that form part of the International Monetary Fund's stabilization package. It is important to recognize that Honduras's industry is almost nonexistent. Products manufactured that claim some sort of comparative advantage, such as textiles, apparel, and shoes, have not even reached levels of production to satisfy the local markets, not to mention future U. S. markets. Analysis of the Honduran industrial sector shows a need to develop expertise in

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production, distribution, and marketing of export products.6 The paradigm that advocates changes in relative prices in order to benefit export prices, reduction of government expenditures, a slowdown of the growth of the money supply, and a decline of local demand has proven ideologically inconsistent with the Latin American experience. It is also obvious that Honduras does not have the experience or established industrial base that could even be compared with the rest of the countries with some export base. In the 1980s, assuming that the IMF has not learned from its mistakes, the same causes would inhibit the success of the traditional policies just cited. Honduras confronts the additional difficulty that any devaluation of the currency (assuming no other Central American country will act accordingly) will not increase exports while the terms of trade are decreasing for commodities. This is further complicated by the fact that Honduras does not possess export experience for new nontraditional products. Logically, we cannot ask all countries simultaneously to tighten their belts, cut back imports, increase exports and least of all can we ask Hondurans to do it. But if other countries in the region devalue or change their import/export taxes, then Honduras will have to face the new facts and take appropriate measures. Perhaps the most negative effect of devaluation would be an undermining of the confidence needed to get foreign bankers to lend to the government, to keep businesses from raising prices, and to persuade labor to accept smaller wage increases. It would also bring about a rise in bankruptcies, because a devaluation makes foreign currency loans more expensive to repay. Such problems would lead to slower economic growth, meaning more unemployment and more Hondurans looking for work in the United States. An alternative view advocates the imposition of exchange controls and suggests that the end result would be greater growth and development for Honduras. If exchange controls are to be effective, however, more stringent administrative controls must be imposed in various fields and the power and the number of officials responsible for their implementation must be greatly augmented. The logic of the system, if it is intended to preclude inequality and disorder, inevitably requires an increasing degree of interference in economic life.7 INTERNAL SECTOR

The evolution of the political economy of Honduras has been affected by factors related to its socioeconomic instability. The result has been a deepening of the problem of unemployment and underemployment in the country.8 Capital expenditures show a drastic decline of 27 percent in 1983 compared with a 33 percent decline in the previous year. Local savings have stopped accumulating or have fled. Locals and foreigners have been disinvesting and dollar income has eroded during the long recession in Honduras's foreign markets. Financial investment and capital transfers dropped by 40

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percent while real investment declined by 10 percent in 1983. These declines reflect the significant reduction in Honduran counterpart funding for several externally financed projects. Private investments have shown a successive decrease since 1981, registering a decline of 27 percent in 1981, 36.5 percent in 1982, and 1.4 percent in 1983. These events make any possible reactivation of the Honduran productive capacity very difficult in the short run.9 THE FINANCIAL SYSTEM

The Honduran financial system has suffered more than any other sector, in part due to mismanagement, a point which Dr. Vinelli neglects. This sector has also suffered because diminished private savings have endangered exchange rates and a "flight of domestic money" has greatly reduced the real size of the domestic banking system. In 1983, the money supply grew by an estimated 15 percent, whereas GDP grew by 5 percent at current prices. This higher liquidity was produced by an approximately 17 percent increase in credit to the public sector and by the scarcity of foreign exchange, which led the private sector to keep its bank deposits high in expectation of import permits. Bank credit to the private sector rose by 13 percent. Of the total, half went to agricultural and industrial activities, one third to construction, trade, and services, and the rest to consumer spending.10 Given these facts, the government has assumed a decisive and strategic role in the mobilization of internal financial resources, adapting an expansionary policy of government expenditures to counteract, at least partially, the depressed situation encountered in private consumption and investment. These inadequate policies reflect, at least in part, a rather desperate attempt to rescue political and economic experiments that had sought to solve the old problems of slower growth, distributive contradictions, tax difficulties, and levels of inflation higher than the ones experienced in the 1950s, 1960s, and early 1970s. But this time the economic crisis has been accompanied by a deep crisis in the political system of the region that continues to affect Honduras. So even though the level of government expenditures increased, the narrow base of fiscal revenues, heavily dependent historically upon export taxes and import duties, has not. Efforts to increase income taxes and raise tax yields have been difficult to enforce and usually have resulted in excessive overhead in relation to revenue. Indeed, the Honduran government was forced to cut back its efforts to raise tax revenue because the new tariff system could not be implemented for technical reasons. Additionally, the government had to take steps that reduced its revenue." In response, the government increased internal financing through the Central Bank. The result has been increased pressures on internal prices and the level of reserves. From a social viewpoint, inflation eroded even more the

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standard of living of the urban population. The consumer price index showed a slower rate of growth—dropping to 8.9 percent in 1983. Housing ana household services were the only two components of the family market basket that did not decline. Lower world inflation and stabilization of oil prices and of the parallel market's exchange rate also have helped in holding down the rate of inflation. 12 With increases in the money supply of 15 percent a year it is highly unlikely that prices will come down any time soon, as Dr. Vinelli suggests. On the contrary, assuming that this rate of increase in the money supply continues, we will see higher prices in 1985. The resulting deficits, and their effects on internal prices and balance of payments, and the lack of foreign exchange have forced the Honduran government to abandon its compensatory policies. Since 1983, it has adopted stabilization policies oriented to lowering the levels of aggregate demand and internal financing, while applying restrictive exchange measures. As expected these measures have had mixed results. They reduced the external gap, increased financial savings, stabilized the exchange rate, and lowered inflation. However, gross domestic product fell for the second straight year, and real per capita income, adjusted for the terms of trade, has fallen by 20 percent since 1980. The evidence also indicates that current revenue has remained virtually unchanged in the last three years. Low levels of domestic economic activity, sluggish exports, import restrictions, and the limited impact of tax measures adopted in 1982 were all contributing factors. Despite strict wage freeze measures and restrictions on purchases on goods and services, the efforts to reduce the growth of current spending proved unsuccessful and this spending rose by 12 percent in 1983." Two of the most important factors contributing to these conditions are higher national defense spending and interest payments. As guarantor, the central government had to pay the debt service of its decentralized corporations, such as the Corporación Nacional de Desarrollo y Inversión (CONADI) and others, which ran into financial difficulties and were unable to honor their foreign commitments. The decline in national savings can also explain the foreign indebtedness spiral experienced by Honduras; it follows that in the measure in which Honduras increases its levels of domestic savings, in the same measure its restriction on foreign financing will diminish. This implies for the medium term the formulation of development financing strategies that rest on a larger utilization of internal resources. 14

WHAT TO DO? A number of suggestions have been made, and some even implemented, to help Honduras out of its present difficulties. They include working capital funds to repair, refurbish, and replace equipment, and remobilize the work

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force. Another priority, capital investment, may cover a longer time span, and is of little consideration at this time. Even though these measures are plausible and logical, the situation in Honduras has stabilized at a very low level of economic activity, or it is improving or deteriorating at a very marginal rate. As a matter of fact, one question after visiting Honduras is, where has all the assistance gone? Corruption and management difficulties also need to be considered, as well as the exact nature of entrepreneurs in the country. There is no doubt that the United States is helping Honduras. The basic question is—is it enough? As Falcoff 5 noted, the United States and Honduras should be clear about what each party is seeking, what outcomes are most probable, and what their human, political, and strategic costs will be. Hondurans see themselves, and are perceived by a number of people and institutions, to be the staunchest allies that the United States has in the region. The country is being used as a platform for counterinsurgency, encouraged and seemingly financed by the United States. This approach strengthens the military sector of the Honduran society, possibly weakening the civilian sector. U. S. military aid was $77.5 million in fiscal 1984 and $62.5 million in fiscal 1985. U. S. economic assistance, although larger than the military in dollar terms, came to only $118 million in 1984, and $138 million in 1985, rather insignificant in economic terms. Possible Solutions to the Crisis One possible alternative would be an "autarkic" approach, in which the Honduran government would confine the scope of its policy focus to national problems and attempt to insulate itself from the former vicissitudes of external forces. Consistent with this approach, international banks, and more importantly governments, would also act autarkically and retrench, pulling back from further lending. Under these conditions, economic growth would occur in Honduras, if it were able to stimulate growth through internal policies in the face of a contractionary world financial and trade environment. 16 If Honduras follows this approach, financial flows would contract, forcing the country to rely on trade-financed growth. Another possible solution, which is very close to the one being followed now, is austerity. For the last three years the enforcement of austerity in an incipient democracy like Honduras has been a very tough task. Those who feel the pain are all too willing to listen to those who cry that austerity is unnecessary or unjust.' 7 Enforcement is especially difficult on city dwellers, bur it also affects the poor rural peasant. IMF officials and economists, sheltered from politics, tend to suppose that meeting austerity targets is a matter of overcoming technical difficulties. In Honduras's case, if the choice lies between prolonged austerity and change, the public and the military will choose change.

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Holding down imports in an effort to try to achieve a trade surplus is very painful for a country like Honduras. The country has depended for many years on imported capital to sustain growth. Having been forced to curtail its imports, Honduras has now in effect become an exporter of capital, building up credits abroad. At home, that means capital scarcity, slow growth, high unemployment, and, with an expanding population, flat or declining per capita income. Another solution may be the Caribbean Basin Initiative (CBI). The CBI is not designed to be a giant aid package. On the contrary, it is aimed to be a series of tools for the private sector to lead economic development. Obviously, investments by the private sector in a region of increasing tensions are difficult, both for local and foreign investors. So in the short run there is hope, but unemployment and underemployment keep increasing. It has to be added that given the host of market distortions that impede the efficient functioning of the Honduran market structure, old doubts remain as to whether private capital will necessarily flow to the areas that are most desirable from the social standpoint.18 In theory this problem is solved by the nonmarket process that currently performs most investment allocation in developing nations. However, when economic decision-making power is highly centralized and objectives vague, there is ample opportunity for error or corruption. In many developing nations this is the rule rather than the exception.19

The IMF

The IMF line is that the costs of adjustment must be measured against those of not adopting timely adjustment policies. Without corrective policies, which form the core of Fund-supported adjustment programs, continuing internal and external imbalances will eventually run into a financing constraint. Not only will international reserves be depleted but international creditworthiness will also be eroded, leading to reduced access to, or even a withdrawal of, foreign funds. In the short run, the costs of IMF stabilization are the unavoidable sacrifices that accompany the correction of an unsustainable situation. Delayed or disorderly adjustment imposes even more severe costs on the country and jeopardizes the prospects of medium-term balance-of-payments viability and growth. Honduras seems to have embraced at least partially this line of reasoning. Other Views

Rather than rely on capital imports, it might be easier and much cheaper in the long run to accelerate growth by following different domestic policies that

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will tend to discourage foreign intervention. The government could also privatize some of its previous investments and create a climate that would increase domestic savings and entrepreneurship. The desired result would be an accelerated rate of growth; national entrepreneurs would become a dominant class, and the structure of the economy would gradually be transformed into a modern society. At some point during this phase foreign investors may recover their confidence and reenter the economy, perhaps investing even more than previously. The form and composition of this investment, however, is likely to differ significantly from that of the earlier period. Less emphasis will be placed on plantation crops, extractive industries, or public utilities; more emphasis will be placed on light industry, consumer services, and intermediate producer goods. Another possible, although only partial, solution consists of a redistribution of certain types of consumer goods to poorer members of society. Such an approach is attractive, not only on grounds of social justice but also on its strictly economic merits. Furthermore, standards of housing are low, clothing is poor, morale is low, and public medical services are inadequate. Increasing per capita consumer expenditure on low-cost housing, better diets, public health, and education will raise levels of energy, health, and education. In sum, certain marginal consumer expenditures may have positive growth-inducing effects. Quite a bit can be done to raise productivity and consumption with little capital per person. CONCLUSION Economic history seems to show that progress turns chiefly on the operations of three major forces—technological innovation that improves productive efficiency, the restructuring of traditional modes by innovations, and the opening of new and broader markets inside and outside national boundaries. Analysis of the Honduran economy indicates that the problems inherent in the lack of advancement in any of these variables are not only related to current economic problems, but to structural and institutional deficiencies which must be addressed if the potential of the Honduran people is to be realized. Some potentially profitable state enterprises should be sold (if anybody can be found with enough money and courage to buy). Land reform should continue, but it should be land reform that turns tenants into owners and provides extension services and credits that would boost food production and rural incomes. Continued access to the markets of developed countries, particularly those for manufactured goods, and renewed efforts to strengthen intraregional trade are necessary conditions for the reestablishment of the economic health of the country. Furthermore, the external flow of private and public soft

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funds to the country must expand if Honduras is going to continue to be a viable market society.

NOTES 1. "Economic and Social Progress in Latin America, Inter-American Development Bank, 1984 Report," (Washington, D. C., 1984), p. 326. 2. International Monetary Fund, "IMF Survey," 15 November 1982, p. 36. 3. M. Diamond, "Toward a Change in the Economic Paradigm Through the Experience of Developing Countries," Journal of Economic Development 5, no. 1 (1978). 4. William Bolin, "Help Central America Now," Foreign Affairs 62, no. 5 (Summer 1984): 1099. 5. "Economic and Social Progress in Latin America," Inter-American Development Bank, 1984 Report, p. 326. 6. Marta Ortiz, "The Strategic Implications of the Caribbean Basin Initiative: A Case Study of the Honduran Export Sector," Occasional Paper Series Dialogues, Dialogue #31, Latin American and Caribbean Center, Florida International University, pp. 1-3. 7. Jacques Rueff, Balance of Payment (New York: The Macmillan Co., 1967), pp. 120-132. 8. "Evolución de la economía centroamericana en 1983 y perspectivas a mediano plazo," Banco Centroamericano de Integración Económica, 25 October 1984, p. 6. 9. Ibid., p. 16. 10. "Economic and Social Progress in Latin America," Inter-American Development Bank, 1984 Report, p. 327. 11. Ibid., p. 328. 12. Ibid., p. 327. 13. Ibid., p. 326. 14. Luis R. Caceres, "Savings in a Global Context," Savings and Development (Paris) 1985: 324-349. 15. M. Falcoff, "How to Understand Central America," Commentary 78, no. 3 (Sept. 1984): 38. 16. C. M. Bradford, Jr., "International Debt and the World Economy," in A. Jorge and J. Salazar Carrillo, Trade, Debt and Growth in Latin America (New York: Pergamon Press, 1984), pp. 121-126. 17. Fortune, 12 December 1983, p. 128. 18. G. K. Helleiner, "World Market Imperfections and the Developing Countries," in Williams Cline, Policy Alternatives for a New International Economic Order (New York: Praeger, 1979), pp. 357-359. 19. Rachel McCullock, "U. S. Relations with Developing Countries: Conflict and Opportunity," The Annals of the American Academy of Political and Social Science 460 (March 1982): 120-126.

10

The Model in Crisis Efrain Diaz

Dr. Vinelli's work on the problems and prospects of the Honduran economy is a serious, well-done contribution, and important conclusions can be deduced from his analysis: • The ever-increasing offer of basic export products, coupled with a demand that is not growing at the same rate, are affecting countries like Honduras that have made exports the mainstay of their growth. This reduces their import capacity, makes the payment of the foreign debt difficult, and increases poverty. • The budget deficit can also be attributed to social pressure from organized groups of the constantly growing population. • The budget imbalance means currency expansion, limiting resources that could be used by the private sector for production investments, and dangerously affects exchange stability for exporters who cannot pass along the rise in domestic costs. • The lack of export diversification and the shrinking investments of the banana and mining industries are a cause for anxiety. • U. S. foreign aid has been vital to the economy and without this aid it would not be possible to reactivate the economy, a necessary condition to reestablish Honduran living standards. • The economic recovery of modern capitalism would benefit the Honduran economy, and the financial policies of countries like the United States emphasize that new capital movements should be private, expecting the poorer countries to offer incentives to attract private, foreign investment. The truth, in the case of Honduras, is that this has not happened. Nevertheless, I would like to add some ideas that are important for a better understanding of the subject under discussion.

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Although it is true that in the last 30 years the Honduran economy has shown elevated growth rates, on an average these rates have not exceeded 4 . 5 percent annually. Moreover, they have not been achieved in a sustained and stable manner that would permit a significant increment in the cumulative, per capita income. The per capita income actually decreased from 349 (U. S.) dollars in 1978 to 315 dollars in 1983. The dependent and peripheral characteristics of the Honduran economy stand out; f r o m colonial times to the present the decisive factors for the economy have been external. This explains the propensity of Honduran analysts to look to the exterior for the roots of the problems as well as the solutions. This dependence is predominantly on the United States in economic and political matters. Honduras's economic growth has happened in an atmosphere of financial and monetary stability. This has only been possible because of a growing foreign capital flow in the form of loans that have been increasing as of 1974, so much so that the foreign debt increased f r o m 373 million lempiras in that year, to 2 , 7 3 6 million in 1984. Meanwhile, the current balance of payments has suffered f r o m ever increasing deficits ever since the beginning of the 1960s. The weaknesses and vulnerability pointed out above originated with and are explained by the substantial drain on the economic surplus of a transnationalized economy. In effect, the years after independence clearly established that the insertion of Honduras's economy into capitalistic, international connections happened by means of foreign capital; first in the middle of the 19th century by way of the mining enclave and later at the start of this century through the banana plantations. This has formed a national middle class that is extremely dependent on foreign capital, has not laid out solid bases for native capitalistic development, and is incapable of backing their own national projects. Manifestations of the present crisis can be explained by the fact that the growth and limited modernization of Honduran society have occurred without modifying the essence of the agro-export-mining economic model. Even the import-substitution phase (resulting f r o m the integrationist project) was not decisive in the formation and growth of the Gross Domestic Product in the preceding thirty years. Thus, exporters traditionally had to finance the commercial deficit caused by trade with other Central American countries. Perhaps the most serious question, and possibly the explanation of the crisis, is the fact that this liberal, transnational (or agro-export-mining) model is essentially concentrated and excludes the great majority of the people. It has not been able to attenuate the Hondurans' extreme poverty. According to studies by the Economic Commission for Latin America (CEPAL) in 1982, the poor m a d e up 65 percent of the population, or 2 . 6 million people. If the characteristics of this society are not modified, in the year 2 0 0 0 Honduras will find itself unable to fulfill the basic needs of 4 . 4 million

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people (this figure represents 63.4 percent of the population in the year 2000, a slightly lower percentage than that of 1982). The poverty is not only extensive but also terribly unequal. The richest 20 percent of the population got 69.7 percent of the national revenue in 1970 and 69.9 percent in 1982, and it is estimated that they will have 70.6 percent in the year 2000. By contrast, the income of the poor in relation to the national revenue was 16.9 percent in 1970, 16.5 percent in 1982 and is expected to decrease to 15 percent in the year 2000. The process of industrialization, impelled by economic integration, has been directed towards a market that depends on attention to upper- and middle-class demands; generates little employment; is highly dependent on foreign resources; and, lacks real possibilities of providing better wages for the workers. The logic of this liberal system has an additional ingredient that works against the country's productivity; by this I mean the "consumer" ideology which so negatively exerts pressure on imports and the wages of the middle and lower classes. Honduras is still a rural society but with no development in the farmlands. This explains why the migration from rural areas to cities has grown at an annual rate of 9.3 percent from 1960 to 1982, and why the marginal urban population made up 42 percent (531,000 people) of the total urban population. One of the main problems here is the hypertrophy of the tertiary sector, which is a consequence of the nature of peripheral development: insufficient industrialization; growing unemployment; and, reinforcement of the idea of fixed assets. This hypertrophy of unproductive activities, is often manifested by almost permanent, public-finance crises. The agricultural field, more than any other because it is naturally the most important to Honduras' economy, shows that the big problem lies in the low and deficient use of available resources. For example, hardly 30 percent of the available, arable land is cultivated. The agriculture-animal husbandry sector, so important to food production, registered in 1981 and 1982 growth rates of not more than 2 percent annually. The reason for this situation must be sought in the country's deficient agrarian structure. It is the general opinion that the policy of state capitalism, adopted at the beginning of the 1970s, has caused disproportionate growth in the public sector and that the public financial imbalances started with the growth of state-owned business and the attention paid to the social pressures of the populace. Undoubtedly the national debt has grown impressively, especially since 1977, when it grew from 1,062 million lempiras to 3,918 million by the middle of 1984. This was partially because of the need to cover the costs of the government-sponsored projects like El Cajón, Corporación Forestal Industrial de Olancho (CORFINO), and the Bajo Aguan. Certainly government investment, on the average, slightly exceeded private investment from 1980 to 1984; the first was around 553.2 million lempiras, while the second was 539 million.

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The coefficient of government spending, which in 1970 was 14.7 percent, rose to 24.9 percent in 1980 and decreased to 23.6 percent in 1982. Nevertheless, a great part of the expansion was done to favor a small sector of Honduras's private businesses (such as those of the sugar, textile, cement, and food industries) in such a way that the private foreign debt, guaranteed by the state on March 31, 1984, amounted to 684.5 million lempiras. Many of these businessmen made up the erstwhile Asociación para el Desarrollo de Honduras (APROH). On the other hand, the increase in government spending can be explained by the ever-increasing military apportionment, exemptions conceded to the mining and banana transnationals, the generalized system of fiscal concessions for industrial development, and the political spending that has characterized the government of Suazo Cordova. It does not seem so clear that social demands have been a determining factor in the budget deficit. The preceding brief analysis indicates that the traditional growth model has reached its limits, having been able to better hardly 20 percent of the population considered not poor (1980), and is oriented towards benefiting a reduced sector of private businesses that are clearly monopolistic within the national market. There is no intrinsic capacity for sustained growth; it is dependent on and vulnerable to external factors, with limited possibilities for general autonomous financing, and is essentially unequal. In this situation, financial adjustment measures have been applied that have deepened the imbalances (unemployment, economic stagnation, larger fiscal gaps), or "new" policies have been practiced that try to overcome production inactivity by radically liberalizing the economy and opening the doors to capital even more with free zones or industrias de maquila (industries that charge for manufacturing services; customer provides materials and retains the final product). It is no coincidence that the "Reaganomics for Honduras" proposal, made by the U.S. embassy in March of 1982, contains suggestions that have been followed to the letter by the economic authorities of Honduras's government and which recently have been shaped into a pact with the Agency for International Development (AID), using an outline that is clearly neoliberal. This policy has the effect of eliminating those state activities oriented towards bettering the general living standards of the people; trampling initiatives that give priority to labor; reducing gains made in protecting wages; undercutting, above all, those agrarian reform groups, whether associative or co-op, that are worker controlled; and repressing the people. These short-term, monetarist, neoliberal views that are proposed do not offer an adequate answer to the crisis. The bases of support for the traditional model—possibilities of a dynamic rise in the world economy and great abundance of external resources—collapse and impose limits on their own growth. The Economic Commission for Latin America very sensibly points out that

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w h a t is n e e d e d is a realistic, pragmatic f o c u s , w h i c h at the s a m e t i m e a l l o w s taking advantage o f the opportunities o f f e r e d by the international e c o n o m y and s e e k s to attenuate e c o n o m i c vulnerability by creating alternative d e v e l o p mental patterns o f a c c u m u l a t i o n and c o n s u m p t i o n . T h u s a n e w e c o n o m i c project is c a l l e d for, inspired by that w h i c h is set out by the D e p a r t m e n t o f Social Action o f the Latin A m e r i c a n Episcopal C o n f e r e n c e ( C E L A M ) in their d o c u m e n t , " T h e G a p B e t w e e n the Rich and P o o r of Latin A m e r i c a , " w h i c h states: At present the transnational, liberal model is in crisis. It is becoming clear that its suppositions include a series of fallacies, proclaimed in the name of a dehumanized science, incapable of responding to the needs of the people. The ideological alternatives that predominated in this century in the West are also in crisis. These criticized liberalism without loosening the ties of positivism and materialism; what is more, they deified them. The world clamors for new models and ideas which, converted into developmental strategies, convoke the majority of the human race to construct an economic policy that personalizes society, socializes relations, liberates without creating new oppressions; that is capable of combining the enormous scientific and technological potential with human, rather than only material, necessities and possibilities.

Part 4

Agricultural Policy and Prospects

11

Honduras: Agricultural Policy and Perspectives Mario Ponce

Honduras, the poorest country in Central America, is one of the least studied and understood in the hemisphere. This statement is valid not only for foreigners but also for the majority of Hondurans, who generally have a distorted notion about their country's reality. Most Hondurans are poor people. The indicators of absolute poverty are many—high illiteracy, high infant mortality, low life expectancy, malnutrition, real income insufficient for the acquisition of basic goods and services, low agricultural yields, and little industrialization. Vis-à-vis this reality, there is the physical potential available to alleviate such poverty, but on this issue, we Hondurans have diverse opinions. Many believe there are large areas of virgin arable lands that can be made productive, and thus that it is not necessary, and may prove to be detrimental, to promote policies for a more equitable distribution of land. The opposite view sees in Honduras an extremely poor territory with limited prospects for development. Perhaps reality is somewhere in between. There may yet be exploitable resources, if appropriate measures are taken to combine them with technical personnel and the necessary capital, and thus to be able to reach a more or less reasonable level of economic growth and well-being. To deal with the theme of agricultural productivity and policy, it is necessary first to pinpoint the physical and human resources available to us, and then to examine development policy, its degree of effectiveness, and any alternatives that might be considered.

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GENERAL CHARACTERISTICS OF THE COUNTRY Agricultural Resources Honduras borders the Caribbean Sea to the north, Nicaragua to the south, El Salvador to the southwest, and Guatemala to the northwest. The Pacific coastline between Nicaragua and El Salvador is a 90-mile arch and the Caribbean coastline is 400 miles long. The territorial surface is 112,100 km 2 (11.2 million hectares), equal to the size of the state of Ohio. Two important mountain ranges divide the country, giving it low tropical lands parallel to both coastlines. Between mountains, there are valleys and plains of relative fertility. Climate varies f r o m temperate in the mountains to tropical in the lowlands. Rainfall determines the pattern of agricultural exploitation, with an initial crop in the period from May to September and a second crop f r o m September to January. Along the northern coast and in the eastern part of the country, heavy rains fall between October and March. Honduras is essentially mountainous; so it has been figured that 4 . 3 million hectares (38 percent of the total area) has agricultural potential for crops or pastures. This is the root of some misconceptions that many Hondurans have about the possibilities of expanding the farming frontier. They assume that there are still large areas of virgin arable lands, and are even assured that 4 0 percent of this potential is located in regions of the eastern plains, for the most part unexploited, of Gracias a Dios and El Bajo Patuca. The plains of Gracias a Dios, commonly known as La Mosquitia, represent almost 60 percent of the country's flatlands. W h o e v e r has visited this area and knows about agronomy and soils becomes aware that these plains have no potential for agriculture, livestock, or even forestry. In spite of plentiful rainfall, most of the area has skimpy vegetation and sandy or swampy soil. For some reason, little studied or explained, it does not offer any possibility for agriculture. And one must add to all this the total lack of an infrastructure that would link it to the rest of the country or to the exterior. In the Alto and Bajo Patuca, there are the most extensive broad-leaf forest reserves in the whole country. These lands have an apparent fertility due to the accumulation of organic matter f r o m leaves and other forestry waste. Experience, however, shows that when forests are destroyed and the organic matter source is wiped out, soils that are superficial b e c o m e wastelands in a few years. Besides, most of this area has a high topographic inclination and its deforestation causes rapid erosion, to the degree that in a period of two to three years of agricultural use the rocky surface emerges. Hence the rational thing to do is to keep this vast area as forestry reserve, subject to a controlled exploitation that would guarantee the continuity of the forest. Soils in the interior valleys are alluvial, varying f r o m sand to heavy clay, and they are generally nitrogen-deficient and lacking in elements and c o m p o -

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nents important for soils. Most do not have irrigation possibilities and the fertile soil layer is superficial, limiting its agricultural potential. These valleys, which extend for 515,000 hectares, are scattered throughout the country, some of them without linkages or communication networks with domestic or foreign markets. Undoubtedly, the agricultural lands are in the plains of the northern and southern coasts, which include the Valle del Aguan, some 648,000 hectares of fertile land. Yet, only a small portion of this area is used satisfactorily. Its complete utilization demands large investments in flood control, drainage, irrigation, and research on soil use and conservation in tropical areas. Forestry Resources Almost two-thirds of the country is covered by forests, that is, some 7.4 million hectares, of which 68 percent may be classified as productive forests. The rest consists of areas degraded by industrial exploitation, agriculture, and shepherding, or of mangroves or underbrush. In an Agency for International Development (AID) document on the national economic scene1 there is the following classification of forests in Honduras: Lowland, humid, tropical forests, located mainly at the mouth of the Caribbean, represent one of the most biologically diverse ecosystems in the Americas. It has been subject to massive destruction by itinerant farmers, cattlemen, agro-industries, and forestry industries. Aging tropical forests are the dominant type of vegetation along the lowlands of the Pacific coast, but they have been almost totally destroyed by farmers and cattlemen. Dark forests are primarily located in the mountains of central Honduras and on the Caribbean slope. Their role is the regulation of surface and underground drinking water supplies, irrigation, and hydroelectric energy production. These forests have remained relatively untouched due to their inaccessibility, but they are threatened by agricultural growth of the cut and burn type. Association of pines and caks in the highlands provides pine for export. It covers most of western Honduras and it varies in elevation from 600 to 1,800 meters. The pine savannah in the lowlands is found in La Mosquitia (Gracias a Dios) and is made up primarily of Caribbean pine (Pinus caribara). This area has not been seriously exploited, but it has been identified by forest farmers as an area of potential for pine production. This chapter does not aim at an in-depth treatment of the topic of forestry exploitation, but only at pinpointing the significance of forests in the Honduran economy, their income and employment potential, and the interest that should prevail in their conservation. Around one-third of Honduras's

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timberlands has been deforested due to poor exploitation, slash-and-burn agriculture and grazing. Forestry, conducted in a rational manner, may become a very important component of industrialization, export commodities and energy source. Until now, timber exploitation has proceeded in a primitive fashion, exporting unfinished, poorly milled lumber with little value added. There is, thus, a great potential in more advanced industrialization processes and in the better utilization of other forestry resources, such as pine tar, seeds, oils, tuna latex, etc.

Land Tenure In Honduras, as in most Latin American countries, the productive structure of the primary sector is characterized by dualism: a vast peasant-agrarian sector on the one hand, and on the other a limited more modern commercial sector, which controls most of the arable land and almost all of the irrigated land. It also generates a considerable proportion of the main export commodities. This framework has undergone some recent changes as a result of the land redistribution that, to a greater or lesser degree, has been taking place through the past couple of decades, although the best lands are still in the hands of a few families. Nevertheless, beyond and between these two contrasting forms of social organization of production, there is a sizable middle rural sector which plays an important role in the nation's productive structure. The 1974 Animal Husbandry National Census shows that then there were some 2.6 million hectares in farms, of which 124,800 were units smaller than or equal to 5 hectares. These farms occupied 9 percent of the area with an average of 2 hectares per farm. At the other extreme, 445 homesteads of 500+ hectares, which occupied an area of 579,000 hectares (22 percent of the farming area), show an average of 1,300 hectares per farm. The greatest amount of land was found in the 5- to 30-hectare category where 62,650 homesteads appeared, with 930,600 hectares; and the 50 to 500 hectares where 7,460 farms occupied an area of 881,000 hectares. Hence, 60 percent of the land is in midsize properties, which substantially limits the application of the Agrarian Reform Law because of the size of the properties. The greatest thrust to provide the land to the campesinado (peasantry) started in 1972 as a product of organized pressure by popular groups. Because of group pressure and the urgency to deliver land, land endowment intensified the peasant settlements or collective-farm formats. In this manner, land has been granted to some 35,000 families in 1,360 group settlements, amounting to 220,000 hectares. Most of these settlements have been established in national virgin lands, i.e., Bajo Aguan Valley. It is estimated that less than 20 percent were settlements on privately owned lands.

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Human Resources Another significant component of national development is the quantity and quality of the human factor. In Honduras, the population is shaped by a very broad pyramidal base, it is mostly rural, and it is located, for the most part, in the poorest areas in terms of agrarian resources. This population has also a high rate of unemployment or underemployment, low income, and high levels of malnutrition and illiteracy. (Fifty-five percent of the rural agricultural labor force is illiterate.) Population in 1984 was estimated to be 4.2 million people, 61 percent rural. The biggest concentration is found in the interior of the country, in the temperate areas of the east and south of the Republic. This puts a high density of people in places where the land is less suitable for agricultural exploitation, either because of topography or because of low fertility of the soil. As a consequence, a subsistence agriculture is practiced in lands which normally should be reserved for forestry. The economically active population in agriculture comes to some 600,000 people, and a large percentage are young, between 15 and 25 years old. Recent figures on open unemployment are as high as 21.5 percent. It is also estimated that 75 percent of the workforce is underemployed due to a lack of full-time jobs. People have insufficient income to provide adequate diets for themselves or their families. Some 45 percent of the labor force are wage-earners and the rest are self-employed in family work without pay. Among wage-earners, the ratio is 5:1 between part and fulltime workers. Malnutrition, according to the Economic Commission for Latin America (ECLA) studies, is evident in 61 percent of the population in the whole country. The Public Health Ministry estimates that malnutrition affects 70 percent of the people of Honduras. In the rural area, this figure reaches 75 percent. There are several causes for malnutrition in Honduras, namely, the low level of productivity, low income of population, deficiencies in the food marketing and distribution system, and improper physiological utilization of food due to infectious and contagious diseases. This situation is also attributed to the state's institutional inability to deal with the problem, the low political priority assigned to it, and a shortage of funds and physical and human resources. Malnutrition is perhaps the most appalling problem for the people of Honduras. Thus it is important to make a brief reference to the composition of their diet and to the relationship between income level and the cost of a basic bag of groceries. Studies conducted on food consumption and nutrient ingestion in the country show that most households depend highly on corn, beans, and rice as the daily staple. There are regions that get up to 91 percent of their caloric intake from these three products, and for most of the people (urban and rural) dependence on these staples is over 50 percent (Figure 11.1).

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Figure 11.1 Source of Calories MAIN CITIES (1,800 UNITS)

FATS ' MEATS I \ (9%) I S U G A R \ (7%)

OTHER URBAN AREAS (1.700 UNITS)

03%)

CORN

145'.)

OTHERS (12%)

RURAL (1,500 UNITS) (6%) .

SUGAR !%)

FATS (10%)

GORN (54%)

\ OTHERS (5%)

MEATS (3%)

SUGAR/ (7%) ,

FATS (10%)

RICE (8%)

Source: Taken from the Document No. 42A/83 "Food Consumption and Nutrients Intake by Socio-Economic Groups in Honduran Households" of the project "Study of the Effects of Agricultural Development Policies on Food Consumption in Central America" SI ECA/ECID.

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In regard to the capacity to fulfill basic needs through income levels, in 1980 estimates were made of the cost of a basic bag of groceries that would provide a minimum-cost average diet for a family of six. The monthly cost for these groceries was estimated at 240 lempiras (US$120). The comparison of this figure with household income shows that it is impossible for most families to satisfy their minimum nourishment requirements. In the main cities, 46 percent of the households reported income below 500 lempiras (US$250) monthly, and expenses for food less than the cost of the basic grocery basket, which makes clear their inability to eat adequately. In other urban areas, the situation is even more dramatic, as 75 percent of households had a monthly income under 500 lempiras and did not spend enough on food to get the quantities and varieties recommended. In rural areas none of the income groups analyzed spent sufficiently on foodstuffs to satisfy family needs. These studies2 further show that 88 percent of the families had a monthly income below 300 lempiras (US$150) and that the food budget did not even reach 100 lempiras (US$50) per month. So, even allowing for home-grown foods as an important nutritional complement in family farms, all the indicators show an alarming situation in the rural sector, indicative of a high degree of undernourishment, which confirms the conclusions arrived at through other indicators. AGRICULTURAL PRODUCTION STRUCTURE

Agriculture is the most important activity in the Honduran economy. It comprises 30 percent of the PIB (Domestic Gross Product), it generates the most jobs (60 percent), and it provides two-thirds of the export revenues. Agricultural production is in the hands of the private sector. There are two types of property: (a) individual (including associations) and (b) collective (settlements, cooperatives, and business partnerships). Collective property is a structure established under the agrarian reform program around 1967. There are some 1,360 collective ownership units, involving 35,000 families and about 220,000 hectares of land. This productive sector is called the "reformed sector." There are three categories of individual ownership and productive units, i.e., small subsistence farms, small and midsize market farms, and large commercial farms. The number of farms in each category follows a farm-classification pattern of units below 5 hectares, from 5 to 50 hectares, and over 50 hectares. Total growth of the rural sector in the last 20 years has been discouraging. An AID report summarizes the situation as follows: 3 Vigorous growth from 1960 to 1965 and stagnation from 1965 to 1975, particularly towards the end of the decade, due to Hurricane Fifi in 1974 and to the 1975 drought, both of which caused considerable shortage. From 1976 to 1979 the sector recovered to the 1974 levels; it declined 28 percent in 1980, but recovered slightly (1 percent) in 1981.

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In Honduras, there is a dichotomy in agricultural exploitation. Production of basic foodstuffs for the people (basic grains) originates in thousands of small productive units, where subsistence agricultural methods prevail, and in the midsize commercial farms. Generally, this type of agricultural exploitation gets little support (credit, agricultural extension services, subsidies, etc.) either from the public or private sectors, hence its primitive and traditional features. Export production has modalities belonging to commercial agricultural business. Some crops are raised on large farms; others, like coffee, in small units but with more advanced harvesting techniques.

Main Domestic Consumption Crops Basic grains are the most important crops for domestic consumption. The "basic grain" label includes corn, beans, rice, and sorgo (sorghum). The first three are principally allocated for human consumption. As indicated before, corn and beans are the basic staple of the population. Sorgo, or little corn, is used both for human consumption and animal feed. Corn Corn is the most widespread crop in Honduras. It is raised by thousands of growers, mostly in farms no larger than 50 hectares. Farms under 5 hectares and from 5 to 50 hectares make up 83 percent of the cornfields and 83 percent of the production. The emergence of the reformed sector has allowed an increase in the farming of fertile lands on the plains, with more advanced harvesting techniques bringing about a positive impact on agricultural modernization of domestic food production. The yearly production of corn has remained between 349,600 and 391,000 metric tons, except for two years in which the combination of favorable climate and other factors yielded bigger harvests. Unitary yields are low, with a downward trend (1.10 MT per hectare in 1974 and 0.99 MT per hectare in 1980). As the rate of production growth has fallen short of the demand generated by demographic increase and industrial utilization, there have been shortages in supply, partially covered by imports. Beans Red-bean farming shows the same characteristics as that of corn, namely, it is in the hands of small and midsize growers (84 percent of fields and 80 percent of output). Annual production in the last decade has remained relatively unchanged, fluctuating between 30,000 and 35,000 metric tons. Yields per unit are generally very low and the methods used are very traditional. The same thing is true of little corn (sorgo) production; it is harvested by peasants in the poorest lands of the country. Over 50 percent of the crop is

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harvested in Honduras's souther region. The eastern central and western central regions are next in crop size. Planting is done in low-fertility soils and broken topography, with traditional harvesting techniques. Consequently, yields per hectare are low, with a downward trend due to soil exhaustion. Rice Rice has relatively less significance within the "basic grains" groups. As with the other grains, most of the growers are on small and midsize farms. Harvesting techniques are traditional with the dry-planting method prevailing. Yields, as with the other three crops, are low (1.5 M T arroz granzal hectare). In years past, there was an increase in production due to the adoption of more advanced harvesting techniques in peasant settlements, where the planting of "flood rice" has increased. Credit aid, technical assistance, ana price guarantees have been a major factor in the increase of the amount and quality of production. Basic grains are the mainstay of the people's diet, the main crops for domestic consumption. There is, however, another crop worth mentioning because of its significance for domestic nourishment and because it constitutes a sample of agricultural diversification brought about by agrarian reform: the oil or African palm. This species was introduced to the Honduran North Coast by United Fruit Co. in the 1940s, in the San Alejo region in the province of Atlantida. Towards the end of the decade of the 1960s, the company had some 3,150 hectares of African palm, with an output of 30,210 MT of oil. The National Agrarian Institute, by intensifying agrarian reform action in the Bajo Aguan Valley, at the beginning of the 1970s promoted the planting of African palm and the installation of processing plants by rural cooperatives in agricultural production. At present, it is estimated that there is an area of 18,030 hectares in the north with an output of 80,460 MT of oil, which tends to increase as new plantations start production. Almost the entire oil production is processed for domestic consumption, and for other Central American countries, as cooking oil, margarine, soap, etc. To the extent that production increases, there are oil surpluses which are exported outside Central America.

Export Crops Coffee Coffee is considered the most important agro-export commodity and has the greatest weight in the national economy. The Coffee Census confirms the existence of 40,000 growers in an area of 175,696 manzanas. This crop is spread throughout the national territory, although 63 percent is centered in five provinces that are the main producers. This is a small-

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grower crop in geographic areas of irregular topography and on high slopes, where it helps to preserve ecology and to avoid erosion. On small farms, which are the majority, there is little technology and thus a very low level of productivity. Technological advances are evident on large farms, which produce bigger yields. Big growers make up 0.6 percent of the total number of coffee farms and 14 percent of the land and generate 29 percent of the output. Annual production surpasses 1.6 million quintales (quintal=100 lbs.) or 72,400 MT. Almost the whole harvest is allocated for export, and thus it represents a sizable amount of hard currency and state revenues from export tariffs.

Bananas Bananas are the second, and in some years the first, export commodity. This crop has been almost exclusively under the control of transnational corporations, Tela Railroad Co. and Standard Fruit Co. Beginning in the 1960s, however, these companies have promoted a policy of diversification of production, while keeping control over the commercialization process of the fruit. Thus, now banana production for export is shared by transnational corporations and peasant cooperatives and independent domestic producers. There are some 17,600 hectares of banana fields; 41 percent are transnational plantations and 58 percent belong to independent growers, peasant cooperatives, and the Honduran Banana Corporation. It is the crop that shows the highest degree of technology, which makes Honduras one of the exporters with the highest yield per field-unit in the world. Traditionally, bananas have been the main export commodity, although in later years coffee has surpassed it. In any case, the fruit amounts to over 30 percent of all export revenues; 75 percent of these exports go to the U. S. A. and 25 percent to Europe and the rest of the world.

Sugar Cane Two crop modalities are practiced in sugar cane. One is traditional, with little or no technology. This is the habitual practice of small growers throughout the country in limited areas and in all sorts of soil and topography. Yields are low and harvesting is rudimentary to produce panela, used in place of sugar in rural areas. Commercial sugar-cane plantations supply sugar-mill requirements. There are eight sugar mills in the country with a capacity for processing 3.6 million tons of sugar cane. At present, 2.6 million tons are processed, amounting to 71 percent of the existing capacity. Sugar cane, as the raw material of the sugar mills, is planted in fertile plains lands with more advanced harvesting techniques; 37 percent of the plantations belong to sugar companies and the rest—that is 63 percent—is in the private sector, mainly peasant cooperatives and settlements. Fifty percent

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of the sugar is domestically consumed, the rest is exported to the preferential U. S. market and to the world. Tobacco Tobacco has been a traditional crop in western Honduras, especially in the province of Copan. With the installation of the Honduran Tobacco Co. plant in 1928, this harvest was increased for cigarette manufacturing, for both domestic consumption and export. More recently, in the 1960s, Cuban refugees introduced new varieties and advanced tobacco planting techniques for cigars, and thus this harvest has been intensified and brought to various regions within the country. In this fashion, leaf tobacco and processed tobacco products—cigars and cigarettes—have become important export commodities amounting to 21.5 million lempiras (US$10.8 million). Cotton Cotton plantations were significant in the past. However, the harvested area had ups and downs in the 1970s, to the extent that foreign-market prices fluctuated with an open downward trend in the mid-range term. Peasant groups, beneficiaries of agrarian reform, and individual producers in southern, eastern, central, and northeastern Honduras are cotton growers. Fields, in later years, do not exceed 4,500 hectares. Almost the entire production of the fiber goes for export, with only a small portion kept for national consumption. Besides these export crops, there are others of lesser importance that may be of future interest, such as pineapple, grapefruit, coconut, sesame seed, and plantain.

Cattle-raising Cattle-raising is an item of interest in the Honduran economy, for the export benefits it could generate as well as for the impact it can have on the improvement of the diet of the population. However, in cattle export there are conflicting aspects vis-a-vis traditional crops, due to peasant pressure to resolve their problem of supply of agrarian consumer products, that make it necessary to reconsider the way to develop this activity. There are 90,250 productive cattle-raising units, covering an area of 3.2 million hectares. Within them, a large quantity of small units coexist with a moderate number of midsize units and a small number of large units. So at one extreme there are units of less than 20 hectares in an area that constitutes about 63 percent of the total and accounts for somewhat less than 15 percent of the area and around 22 percent of cattle; and at the other extreme, units of 400 hectares or more that make up 0.9 percent of the total number of units and add up to 19 percent of the area and 12 percent of the cattle.

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The larger units generally take big chunks of flatlands in the most fertile areas of the country ana in large measure they displace the individual agricultural producer. Cattle-raising in Honduras has many deficiencies, which if corrected would possibly free large areas for agricultural production. Studies conducted on this sector pinpoint the following weaknesses: 4 • Low level of productivity basically due to low procreation indexes. • High mortality rate in female calves. • Low weight per animal for destace (meat-cutting) and low milk production per milk cow. • Slow incorporation of easily available and nationally known technology• Atomization of cattle-raising production. • Poor management of grasslands, creating low levels of yield in quantity and quality. • Shortage of infrastructure in the cattle-raising enterprise.

A SUMMARY VIEW OF AGRICULTURE The agricultural setting in Honduras is determined, to a certain extent, by structural situations. The country is mountainous, with scattered valleys of low or medium fertility and an ever-so-limited agricultural frontier. There are also infrastructure limitations (roads, irrigation systems, drainages, etc.) that hinder development of commercial agriculture. On the other hand, a high percentage of the rural population lives in areas with lesser agricultural potential, which brings about a division of property and a concentration on subsistence farms. Although there has been talk of agrarian reform for 25 years, the process has not advanced in satisfactory fashion. Around 300 rural ownerships control 20 percent of arable, most-fertile lands. These lands are, for the most part, worked inefficiently, with extensive cattle-raising. Agrarian reform program expectations of granting 600,000 hectares of land to 120,000 families by 1978 were unfulfilled. Barely one-fourth of this goal has been reached. There are some 60,000 midsize producers who contribute little to commercial channels and who operate with a high degree of inefficiency. The bulk of the peasants make up more than 125,000 families who work on subsistence family farms and who keep themselves out of any type of financial or technical assistance. Finally, there are some 125,000 landless families who depend on jobs on the large ranches and commercial farms. It is within this group that the greater degree of rural unemployment or underemployment is concentrated. The reformed sector has great problems. Many settlements are in remote areas or in lands unsuitable for agricultural exploitation. Generally, the settle-

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ments and peasant cooperatives are mismanaged; they lack credit and they do not have insumos (fertilizers and seeds) and technical assistance and thus do not rise above the subsistence level. The highest unemployment and underemployment indexes are in the rural areas. Income is low and does not allow for minimum nutritional requirements to be fulfilled. Hence the most alarming malnutrition, ill health, and indigence are evident. Naturally, this situation negatively reflects on the productive capacity of the rural family. As a consequence, the behavior of the agrarian sector is deficient. The country depends on four basic grains for domestic consumption and on five export commodities—bananas, coffee, timber, meats, and sugar. Output of basic grains has stagnated in a declining level of productivity. Sporadic years with greater yield are rather due to favorable rainfall than to government development policies. The impact of the delay in increasing productivity is severe and is getting worse: 1982 foodstuffs production estimates reached only 80 percent of the 1969-1971 yield, while total agricultural output, including export crops, reached only 85 percent of the level of a decade ago and its growth rate is less. Also, the possibilities of increased markets for the traditional export commodities are limited. Even if they continue to bring in the needed hard currency for the nation's development, present trends point to a decrease in productivity and in export capacity before the end of the century. There are also limitations imposed by international market conditions. Banana exports are concentrated in low-growth markets. As there is a world division among producers, it is difficult to penetrate nontraditional markets with a greater growth rate. Efforts made towards reducing the world supply of bananas have failed and producing countries have rather increased their planted areas. The coffee market grows slowly, besides being controlled by conditions imposed by the International Coffee Agreement, which does not offer favorable perspectives for Honduras. The world sugar market suffers from a chronic oversupply. Consequently, prices are kept low and improvement does not appear likely in the near future. The U.S. preferential market offers better prices, but quotas assigned to Honduras are insufficient and do not absorb the exportable output (only 50 percent of exports go to the U.S.A.). Beef has become an important export item. However, production practices are inefficient and depend mainly on the extensive use of land to the detriment of agricultural producers, especially those who supply the domestic market. Beef producers depend exclusively on the U.S. market, which has shown a high degree of instability, due both to competition from other exporters and to trade barriers imposed to protect U.S. producers. These quantitative and qualitative restrictions limit expansion possibilities for cattle output and the use of more efficient production techniques that could free

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lands for production of basic foodstuffs.

POLICIES FOR IMPROVEMENT OF AGRICULTURE Fundamental changes in agrarian policy and in the public structure of the sector are a must to improve the behavior of agriculture, both in supplies for domestic consumption and in the productivity increase and the diversification of export commodities. To the extent that nutritional needs would be centered in urban areas, subsistence agriculture would be unable to supply and distribute foodstuffs for consumers. By the same token, it is improbable that, in the years remaining until the end of the century, significant changes would occur in the food preferences or in the real-income level of Hondurans, who will continue to depend on basic grains to fulfill their nutritional needs. Assuming that present per capita consumption levels are maintained, demand for corn, beans, and rice by the year 2000 will be 632,200, 117,000 and 78,200 MT, respectively. This means an annual increase of 2.5 percent for corn, 6.1 percent for beans and 4 . 0 percent for rice, much higher on all counts than the historic growth rates. There must also be a reversal in the decreasing rate of production of beans of recent years. To correct the high degree of malnutrition in the Honduran population, it is necessary to increase the per capita intake of basic foodstuffs. If requirements are measured in terms of the supply needed to provide the minimum recommended diet to the population, grain production would have to increase to higher levels than those indicated above. Under this assumption, corn requirements would be 645,700, beans 133,100, and rice 98,800 MT. This represents annual rates of growth of 2.6, 6.8 and 5.2 percent, respectively. Grains ought to be domestically produced if hard currency is to be reserved for other goals in the process of economic development. A productive increase of this nature will demand an increase in the area of cultivation and an increase in levels of productivity. This is possible but only through an extraordinary effort that would require more infrastructure investment, advanced harvesting techniques, and a greater application of seeds and fertilizers. In other words, agricultural activity has to become more specialized and commercialized. Farmers have to have access to fertilizers, machinery, agrochemicals, improved varieties of seeds, and storage and commercialization facilities. All of this should be geared to the small and midsize growers who are the main producers of basic grains. Export commodities offer a similar picture to that of basic grains, except bananas, which are cultivated with a high degree of technology. Coffee and beef are principally supplied by small and midsize producers and sugar cane is cultivated on large individual or cooperative farms. But these three products share the common denominator of a low productivity index, even when compared with neighboring Central American countries.

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Traditional crops will continue to be for many years the main hard currency source, so it should be a concern to achieve greater efficiency to maintain or increase participation in traditional markets, even if efforts are made towards diversification. We are in this case trying to increase not only productivity but also the level of industrialization of such products and their by-products. For several reasons it is obvious that the development of the agrarian sector in Honduras will depend on small and midsize farms, duly organized and managed so that they may use commercial resources to produce a commercial market. This means that agrarian policy ought to be directed at strengthening this group of producers. This implies modifying the approach followed in recent years and modifying the thrust of rural development in such a way that the benefits of private and public assistance may be extended to a greater number of small and midsize farms. Among the most important changes needed are the following: 1. Simplification and dynamization of governmental participation. It is necessary that projects be designed and executed within a coherent framework of economic policy. Agricultural planning is an important element in government decision-making, especially for long-term diagnostic studies and for planning of short-term projects. With such purpose, the responsibility for agricultural and food policy should be consolidated, so it may be one body that will define priorities, establish policies, and manage programs. The lack of central direction and responsibility for coordinating production and implementation units causes a considerable gap between what is planned and what is implemented. It would rather seem that development activities are programmed on an ad hoc and nonintegrated basis, which brings about a deficient implementation of projects and, undoubtedly, low effectiveness and impact. Another unfavorable consequence of the lack of coordination between the diverse units that plan and implement agricultural development projects is the absence of actualized, trustworthy, and informed statistics. An issue that should be analyzed in the study of the limits of government participation in agrarian development is the role to be played by autonomous institutions. In this sense, there are opinions that reforms should envision a fundamental change in the role of autonomous entities, so that their functions would be transferred, whenever possible, to the private sector or to central governmental entities. Such an argument is based on the fact that the economically mixed structure appropriate some years ago, when these agencies were created, has become an obstacle to economic development and a hindrance to foreign investment. 5 It is acknowledged that the action of autonomous entities has not been satisfactory, but this has been due largely to the role played by the private sector and other interested groups in the public arena. In other words, the purposes for which these entities were created are to promote private-enterprise participation and to safeguard the country's

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natural resources, but in fact these purposes have been diverted to goals foreign to the original objectives. Likewise, private enterprise has not, in the past, shown interest in helping the small and midsize grower, and there is no evidence that the future will be any different, as it is logically assumed that its interests are bound to the large agro-enterprise that offers greater security and enhanced profit perspectives. Neither has the private sector shown any interest in conserving or renewing natural resources. In the particular case of Honduras, in which most of the renewable natural resources are national resources, it is logical that there be state participation to safeguard its patrimony and insure its continuity. So, the need for an agricultural policy that works towards the incorporation of the small or midsize farmer and the peasant settlements into the market economy, as well as towards the renovation and conservation of natural resources in behalf of the collectivity, points to the desirability of maintaining state or para-state participation in the planning and implementation of agrarian policy. It is desirable indeed to revise the degree and format of such participation so as to eradicate past mistakes. 2. Intensification and reactivation of the agrarian reform. Agrarian reform is one of the most important measures to incorporate the peasantry into the economic, social, and cultural development of the nation. This is precisely the reason behind the Agrarian Reform Law issued in 1975, but its effective implementation has become a controversial issue nationwide. Due to the affected interests, the implementation of the agrarian reform must necessarily go together with a high degree of political consensus to obtain the understanding and support of the authorities who are involved in the process. This has not yet been achieved in Honduras. All political parties have raised the idea of agrarian reform as a banner for social recovery, but in fact they have sidestepped the problem, leading to a virtual stalemate in such actions as land redistribution, which is now the most pressing aspect of the process. Under the present administration, the entitlement of lands in peasant hands has been emphasized. It is, without doubt, an important measure, as it contributes to insure ownership, allows the adoption of more efficient exploitation techniques, and under certain circumstances works as a guarantee to obtain credit assistance. However, among the top problems facing the nation is the urgent need to reduce the high rate of unemployment in the rural areas and to increase levels of production of basic foodstuffs and export commodities. This requires, among other things, the broadening of the productive base through the distribution of inadequately exploited lands or of those landholdings that surpass the ownership limits established in the Agrarian Reform Law, as well as the distribution of public lands suitable for agricultural exploitation that are still under state control. All of this must be done in accordance with the priorities of the law (Art. 49), meaning that those areas served by the economic and social infrastructure should be immediately affected, leaving for later those areas which are not accessible or those with

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little infrastructure. Until now, only public lands have been affected and, for the most part, illegally owned lands have been recovered. Nevertheless, there are vast areas of private property that are wasted or inadequately exploited and that should be affected if the law were correctly applied. Unfortunately, expropriation procedures have become so burdensome and protracted that it is practically impossible to recover those lands legally. Given the large number of landless peasants and of those who work small plots, it is evident that redistribution of wasted or inadequately utilized lands, or those landholdings that exceed size limits imposed by law, will fall short of satisfying needs; consequently, the agrarian reform should be geared, through the remainder of the century, to other actions in order to broaden land endowments for agriculture. The following three stages must be considered in the near future to tackle the agrarian challenge of the country: • The expedient redistribution of wasted, inadequately utilized lands served by a socioeconomic infrastructure should be a priority swiftly carried out. • The broadening of the agrarian frontier through the colonization of unexploited areas should be a second priority. There are not many virgin lands left in Honduras with agricultural potential, but it is indeed possible to rehabilitate lands previously utilized if the necessary infrastructure is built (Sico y Paulaya Valleys, for instance). • Last but not least is the recovery of vast areas in the Sula, Aguan, and Luan Valleys, the coastal flatlands in the north, and small areas on the southern coast of Honduras. These high-fertility lands are not utilized because flood-control and drainage facilities are lacking. Their utilization demands extensive investments, but this would allow the incorporation to agricultural use of thousands of hectares, benefiting a considerable number of rural families. Needless to say, all these actions should go together with complementary measures to increase productivity or the degree of land utilization, such as a more generalized use of irrigation. The improvement of productivity is another agrarian reform objective that should have priority when agrarian policy is being reconsidered. It is clear that the agrarian reform process should not be limited to land grants for the peasants but ought to include a vigorous financial and technical effort to consolidate groups who have been beneficiaries of the process. The lack of follow-up by the authorities, due to insufficient financial resources, the absence of qualified personnel, and diverse other problems has meant that most of the peasant settlements have not been able to consolidate as viable agroenterprises. Hence, the assertions of opponents of the agrarian process that it is a failure, using as proof the neglect in the units, peasant desertion from settlements, and low productivity. However, there are a great many examples

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of satisfactory peasant response to appropriate support, and even with the inherent difficulties of emerging endeavors, there are a sizable number of productive rural cooperatives and settlements that already constitute a significant force within the nation's economy. Such is the case of African-palm plantations (15,000 hectares); grapefruit (2,000 hectares); bananas (12,400 hectares); and the thousands of hectares in basic grains as well as vast areas earmarked for cattle-raising. 3. Credit and technical assistance to the small and midsize producers. This report affirms that a way to accelerate agrarian development in Honduras is through the reorientation of agrarian policy, so that it may be able to incorporate small and midsize producers and peasant settlements into the market economy. Such policy means the massive channeling of financial and technical resources, including infrastructure endeavors, for the benefit of these productive groups. Credit and technical assistance are a fundamental part of the proposed approach. Studies conducted on the make-up of the financial system6 show that it is controlled by private commercial banks and a few public development banks. With the exception of savings and loans associations and a few other financial institutions, there is a limited number of specialized financial institutions or other kinds in the formal financial markets. "There is a credit union network of some importance, in terms of their membership number, in the rural areas, but the total volume of its funds is probably relatively small. Also, there are other types of lenders in the informal credit markets, but the functions of financial intermediary, which these lenders perform, impact a limited milieu." 7 Tables 11.1, 11.2, and 11.3 show the performance of the national banking system through the 1970s per financed activity. It can be noted that most of the credit resources are allocated to export crops and cattle-raising. In 1980, for example, the balance of agricultural loans by year's end show that 77 percent were for export crops and livestock (52 percent and 25 percent, respectively). On the other hand, basic grains, so vital for national nourishment, only amounted to 13 percent, and other crops, also for domestic use, 10 percent. If a differentiation is made between commercial banking and state banks, this disparity is even sharper. Commercial banks grant very little credit for basic grains and other crops; almost all credit is earmarked for export crops, such as coffee, tobacco, and sugar cane. If an evaluation is made of the credit volume in private banks alone, the percentage for export commodities and livestock is 81 percent. As banking policies require that loans be duly guaranteed, preferably with urban mortgage collaterals, a scrutiny of the make-up of the private banking portfolio shows that the greater beneficiaries are the large agroenterprises, farmers, and cattlemen who are capable of fulfilling the requirements of daily commercial norms. In this fashion, thousands of small and midsize producers are excluded from the benefits of private credit. Distribution of credit in development banks (public) shows a more balanced picture in

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