Sowing the Future

Right now, the Future of Honduras and Latin America is sown.

The Right

For three decades a project for modernizing Latin America with the help of neo-conservatism has been carried out. Pieces in this puzzle have been strong demands from IMF on the countries budgets, cutting social spending, and opening up for free trade, resulting in hardships for significant groups of the population in the countries in question.

This has led to much resentment and a growing leftist backlash.

The Left

The focus of the backlash is in the form of the Bolivarian Revolution, also known as Socialism in the XXI Century, and their alliance, ALBA. They speak about participatory democracy, and holding constituting constitutional assemblies (constituyente) to re-found countries. The other side of the coin is an undermining of the institutional structures that have been developed over the course of centuries, and whose role it is to safeguard both the rule of law and human rights. The result is a popular tyranny, lawlessness, and the only sectors of the economy that really benefit from the change are the drug cartels and the corruption.

President Manuel Zelaya took Honduras into ALBA. The main reason was the lucrative oil contracts. When the global oil prices went through the roof the other year, Honduras – which produces a lot of its electricity in diesel-powered plants – was in deep economical trouble. Zelaya’s foreign minister Patricia Rodas, who grew up in revolutionary Nicaragua, put Zelaya in contact with Hugo Chávez in Venezuela, the founder of ALBA. That opened the door to buying oil at a discount price from the South American nation, whose slogan now is “Fatherland, Socialism or Death!”

Chávez also offered a personal incentive to Zelaya, as he also does to Ortega and others. If Zelaya bought oil for say $100 millions for Honduras, he collecting that amount from the companies that actually sold it, but he only needed to pay $50 millions of it to Chávez. The rest was his to use as he pleased. Formally it was a loan that didn’t have to paid pack for over 20 years, but in private Zelaya admitted that it didn’t actually have to be paid back – ever. In other words, it was a kickback to him. From a foreign state, which in many countries risks falling under the definition of treason. At any rate he circumvented the budget process, which is in violation of the constitution.

This leftist project is closely connected to cocaine smuggling, not at least via the Colombian communist guerilla FARC. The cartels benefit greatly when people lose confidence in the police, or when a crime wave overwhelms the government.

Several ALBA presidents have changed their constitutions to enable themselves to remain in power. The process that they prefer is to hold a constituyente, which in itself is a circumvention of the constitutional democratic process. Through that stratagem Chávez, Correa, and Morales have managed to short-circuit the institutional checks and balances. However, when Mel Zelaya tried the same method in Honduras, he drew the shortest straw. The Supreme Court sent the army to arrest him.

Sowing the seeds of the future

The reaction of the world was to declare the event a military coup, but that was clearly a case of jumping to conclusions without having all the facts. Hardly surprising, the key country setting the tone of how to treat Honduras, is USA. However, the signals from USA have been anything but clear.

The foreign relations committee in the Senate is chaired by senator Kerry. It seems that they are taking the statements from Zelaya for truths. They call the deposing of Zelaya a coup, and thus side with the left.

On the other hand, the secretary of state in the US, Hillary Clinton, is engaging with the new president, “Pepe” Lobo. They recently signed a document of understanding. I am guessing that Clinton is continuing to use the same playbook as her husband in the 90’s, i.e., IMF, free trade agreements, and other things belonging to the agenda of the right. This has caused Zelaya and his allies to accuse the US of having been behind what they call a coup, in order to turn the clock back in Honduras, to the neo-conservative agenda.

If this analysis is correct, there is a conflict between Clinton holding on to the old Right, and Kerry embracing the new Left. But what is happening in Honduras itself? Which side will prevail?

Apparently Pepe Lobo from the Nacionalista party is dancing with the Right, while Zelaya, albeit deposed, from the left wing of the Liberal party, is dancing with the Left and with the resistencia, FNRP. But where is the majority of the people?

The Center

The majority does not have a well-defined political leader at present. However, we can probably find the majority as those who made up the camisas blancas, the white-shirts, in last year’s huge demonstrations that as the most basic common denominator had a call for the rule of law.

I think it would be a huge mistake to think that these are the same as the supporters of the neo-conservative agenda. Many of the white-shirts surely share the goals of many who demonstrated in red shirts, but they don’t agree with the methods of populism and “dictatorship of the majority”. They seem to want reform and a socially responsible government, but under the rule of law, with full respect for individual rights and freedoms.

This new center is still under the surface, but it is not inactive. They are working with hands-on tasks aimed at transforming Honduras – the transformation that the politicians have been unable or unwilling to bring. They fight corruption, they work for the rule of law, but they have to stay under the radar since they have very powerful enemies: The drug cartels and the criminal networks (which stretch into politics) have everything to lose if they succeed.

Honduras is staking out its own future, a new path in the center of Latin American politics.

If they succeed, and they just might, innovation and entrepreneurship will be driving the country’s economy in ten year’s time; not maquilas. Institutional reforms, a modernized public administration system, and stringent rules and principles for legislation, may make away with corruption as the governing principle of the republic. Education, free trade, consequence-neutral regulation, renewable energy, and a access to capital can propel the country into the realm of developed nations. Today all of this seems like a remote dream. But remember, why aim for the possible? It has already been done. It is only the impossible that remains to be done. And it is only the first one over the line that wins.

This new center has to grow from within. All that the international community can and should do is to get out of the way during the birth process. Unfortunately Chávez keeps spending money and diplomatic effort on sabotaging it, and the US is apparently fighting internally.

If I could have one wish, it would be that Obama took sides neither for the Right nor for the Left, but for the new Center, and dedicated his diplomatic effort to give that Center the space it needs to grow organically.

Why it was good that Sweden left Honduras

This summer Sweden closed its foreign aid office in Tegucigalpa. It was a move that was decided when Zelaya was president, and motivated by the corruption in his administration, from what I have heard. Although this means the gradual termination of assistance to human rights (including the ombudsman for human rights, who the zelayistas love to criticize), women’s groups, and higher education (millions go to UNAH, the strongly left-leaning national university), it may actually be for the better.

Why? Because foreign aid often cements the existing structures, much like government efforts to promote innovation tends to strengthen the existing market structure rather than lead to a re-orientation. It also corrupts.

Unless the aid is given in very specific ways, and with a high degree of understanding of what is going on behind the scenes, it is, IMHO, more often than not counter-productive. For instance, if UNAH gets $8M they are likely to use it for salaries first, building maintenance second, and only the crumbles left over will go to the thing that in the long run is most important: The library, the information, the communication.

Personally I would rather see the money spent on buying subscriptions and the infrastructure needed to use the electronic subscriptions. Also, supporting a domestic high-quality journal would seem important, so that Honduran scholars can start rising to the level where they become a force to count with. That is something that in 20 to 30 years really can make a difference, propelling the country forward as an innovative entrepreneurial center of excellence. Salaries, on the other hand, will just go to buy Chinese imports in the local mall.

During the time of transit all forces must be directed towards creating the conditions for change, for entrepreneurship, for innovation, for starting new businesses, for research. This requires using domestic resources, and the process must be driven by domestic forces. Foreign aid should only amount to goods or services that cannot be made in the country, or purchased for the local currency. Furthermore, it must never compete with local business. It is a problem that the US donates so much goods and services, as it undermines and corrupts the local economy. That has to be phased out, the sooner the better.

I realize that those involved with foreign aid of that kind are going to get on my case now, but somebody has to point out that the emperor is naked. Everyone making a living on aid to Honduras has a vested interest in Honduras remaining poor. For Honduras to rise to glory, she has to say “I am too proud to accept donations!”

Therefore, it was a blessing in disguise that Sweden and ASDI left Honduras, since that leaves the agents of change with a better chance of succeeding. The former US ambassador accurately analyzed the dynamics in June, 2010.

The right-wing push led by IMF over the past few decades was met with a backlash, a leftist, populist, pseudo-democratic movement led by Venezuela and Cuba. However, what happened in Honduras was the first step of a third way, a reaction to both the strong right policies, and the leftist-popular movement; a New Center that is based on the rule of law, strong democratic institutions, liberal trade agreements, innovation, and entrepreneurship.

This Nuevo Centro as I would like to call it is based in the white shirts of 2009, a movement that is full of energy, albeit under the surface at present, acting silently but efficiently to gradually transform the ugly duckling into a swan. They need to be in the shadows because they have no international backing.

USA apparently is split between supporting the IMF and FTAA order on the one hand, and punishing Honduras hand in hand with Chavez on the other. All the ALBA countries are of course for the populist leftist backlash. But wait and see. Honduras is not sleeping. A new center is growing in the ashes of last year’s crisis.