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.