Drug War Capitalism (34 page)

In the early 1960s, the Bank for Central American Economic Integration and the US Agency for International Development (USAID) began to make large loans, of which the primary beneficiaries were the elite merchants and factory owners of San Pedro Sula, who joined together to create the Honduran Financing Bank (FICENSA). The creation of FICENSA was crucial in facilitating the extension of US resources to the Honduran private sector, as previously the military had been the main organization to take advantage of US “aid” to Honduras. Historian Edelberto Torres Rivas argues that the integration of Central American economies through the Central American Common Market (CACM) in the post-WWII period caused new social groups to emerge, including “the state, the local industrial and financial bourgeoisie, and children of the landowning oligarchy,” together creating the social base necessary for foreign investment.[18] Though the functioning of the CACM was seriously disrupted by the 1969 soccer war between Honduras and El Salvador, the social and economic base created during this long period of military rule would serve as a jumping off point for the project of democratization in Honduras. It also served as the soil from which the transnational economic project would germinate and grow to dominate the country’s bipartisan political system by the end of the 1980s.

Pressure from the United States pushed the military to aid in a transition toward a civilian democracy, and “although the Carter administration never severed military assistance to Honduras, it pressured General Paz to relinquish power.”[19] The transition to democracy was finalized in 1982, with the election of Liberal Roberto Suazo Córdova. After the 1981 elections, the US immediately came out with a series of recommendations known as Reaganomics for Honduras, released by then ambassador to the United States, John Dmitri Negroponte, days after Suazo’s election.[20] Regardless of the democratic opening, according to the US Congressional Research Service, “the military continued to operate as an autonomous institution.”[21]

Dr. Robinson defines a polyarchic system as having an exclusive focus on elections, which limits “the focus to political contestation among elites through procedurally free elections; the question of who controls the material and cultural resources of society, as well as asymmetries and inequalities, among groups within a single nation and among nations within the international order, becomes extraneous to the discussion of democracy.” For Hondurans, the transition toward democracy looked a lot like a transition to polyarchy.[22] It resulted in the closure of traditional political spaces, an increase in repression, and the imposition of economic and military programs at odds with popular opinion.[23] The Suazo/Reagan years saw the implementation of a “national security” doctrine in Honduras. That doctrine transformed Honduras into a staging area for US-led counterinsurgency efforts on the isthmus, and included the construction of twelve military bases where hundreds of thousands of US and third-party soldiers were trained. “Honduran society was altered by becoming the location of three non-national armies and was converted into the aggressive military axis of US foreign policy” in Central America.[24] US troops in Honduras had a three-part mission: crush incipient revolutionary (armed and popular) movements inside Honduras, provide a military backbone of stabilization during the transition to democracy, and wage war on revolutionary movements in neighboring countries.[25]

In 1981, US military aid to the country spiked, and over the next four years, the US would provide $41.48 million in military assistance to Honduras, second only to El Salvador in the region.[26] Between 1985 and 1992, the US would give another $83.33 million to the government of Honduras, earmarked for military spending.[27] During the 1980s, Honduras received $1.6 billion in economic and military aid from the United States.[28] By 1983, there were death squads in Honduras targeting political activists for murder or disappearance.[29] During the 1980s, there were at least 180 people disappeared, and hundreds of political dissidents were murdered—a significant number in such a small country, but still only a fraction of the level of violence wrought in Guatemala and El Salvador.[30] According to former US ambassador to Honduras Jack R. Binns, “one of the bitterest ironies was that Honduras’s human rights record deteriorated sharply under a democratic government, in part because US policy makers deliberately closed their eyes to growing abuses.”[31] Not only was there a build-up in the presence of the US military, but the United States also funneled money into Honduran civil society and the private sector often via USAID. According to the US State Department, at this time, “Honduras became host to the largest Peace Corps mission in the world, and nongovernmental and international voluntary agencies proliferated.”

“That era was one of disappearances, of torture, of the organization of death squads,” said Dr. Juan Almendarez about the 1980s, when I interviewed him in his clinic, off a small street near downtown Tegucigalpa, in 2009. Almendarez is a well-known activist and medical doctor who served as rector of the Autonomous University of Honduras. In person, he is soft-spoken, cycling back between history and the present in order to make his views understood. “I am a survivor of torture. I was condemned by the death squads during the decade of the ’80s, and it’s important to remember that there are still some [death squad members and members of the military and government] from that era who are today part of the coup d’état in Honduras.” Having participated in movements for decades, Almendarez was clear about the difference between the struggles in Honduras in the 1980s and those today. “It’s important to understand that in the ’80s the direct confrontation was more [against] the political sector working together with Army. Today, the struggle is precisely about the neoliberal economic model, imperial globalization, and this whole campaign by financial capital to gain power over our lands, to take our resources.”

Transnational ’90s

The Honduran elite is understood historically to be lacking power and coherency, and it is sometimes said to constitute the weakest oligarchy in Central America. With the onset of formal democracy in the 1980s, a transnationally oriented segment of the national elite began to gain coherence in Honduras, and toward the end of the decade they gained the upper hand over national capitalist groups.[32] “During the 1980s, as the country was being militarized, AID bankrolled the formation of almost two dozen business associations and private sector organizations that responded to the demands of transnationalism.”[33] According to the University of California’s Dr. Robinson, these included the Foundation for Investment and Export Development (FIDE), the National Council to Promote Exports and Investments, the Federation of Agro Export Producers, the National Association of Honduran Exporters, and the Honduran American Chamber of Commerce, among others. Half of the $711 million in economic aid that funneled in between 1980 and 1990 went directly from the US government to private sector groups, “entirely bypassing the government.”[34]

In one of the early political moves toward institutionalizing transnationalism, the US government signed the Caribbean Basin Economic Recovery Act (CBERA) in 1984. CBERA was part of a series of policies known collectively as the Caribbean Basin Initiative (CBI). The CBI would provide favorable conditions for export-led development in the maquila sector. According to the World Bank, while “this act did not grant textiles tariff-free access to US markets, it did exempt them from the Multifibre Arrangement (MFA) as long as they were assembled using US inputs.”[35] By encouraging Caribbean countries to assemble garments using imported US cloth, the CBI explicitly made clothing production into a transnational activity. In addition, the CBERA carried with it a number of mandatory criteria for all countries that participated in it, which among other things stipulated that they not be communist, that they not nationalize property of US citizens, and that they be party to an extradition treaty with the United States.

It wasn’t until 1990 that the government of Honduras would introduce economic measures and policies that fully institutionalized the open markets and government policies synonymous with neoliberalism. President Rafael Callejas “agreed in March 1990 to the first of three major structural adjustment programs negotiated with the IMF, USAID, and other international lenders,” including the World Bank and the Inter-American Development Bank.[36] This agreement, known in Honduras as “
el paquetazo
” (which translates as “the big package”) encouraged foreign direct investment in nontraditional exports, tourism, free trade areas,
maquiladoras
(sweatshops), and ushered in currency devaluation and fiscal austerity measures. In 1990, Honduran exports to the United States, by far the country’s largest trading partner, were worth $429 million; by 2007, exports from Honduras to the US were worth $3.728 billion.
^[37]

The Structural Adjustment Program (SAP) signed by Callejas eliminated protectionism for small and medium-sized businesses in Honduras, which would find they could no longer compete with larger corporations.[38] According to Honduran economist Alcides Hernández, the SAP and the economic stabilization program embarked upon by the Callejas regime “legitimized the rising rate of unemployment, the fall of net salaries, the deterioration of social services in the public sector, and the conversion of the state into a subsidiary of private export capital, which would likely become the most important emerging source for capital accumulation in the current economic crisis.”[39]

The maquila sector, operating from free trade zones and paying little tax, became Honduras’s contribution to global capitalism. Neoliberalism continued to deepen, and the international finance institution (like the IMF or the World Bank) oriented macroeconomic policies, which were promoted throughout the 1980s and adopted formally in 1990, became the norm in Honduras. Even while local economic conditions declined, the transnational elite continued to benefit from so-called austerity measures within Honduras. “Creating a good investment climate means creating a climate against working people,” said Yadira Minero, of the Center for Women’s Rights in Honduras (CDM), in an interview in San Pedro Sula. “Foreign investment isn’t our salvation.”

Demilitarization began to take place at this time, with support from the private sector and as a result of the fact that militarization had become “unnecessary and unproductive for the transnational agenda,” whose backers felt constrained by the military.[40] “During the 1990s, successive Honduran administrations took steps to reduce the power of the military. Mandatory military service was abolished, the police and several state-owned enterprises were removed from military control, and—after the ratification of constitutional reforms in 1999—the military was subordinated to a civilian-appointed defense minister.”[41] Military cutbacks were in part a response to the changing geopolitical context of Central America at that time. US funding for the Honduran military began to drop, to $500,000 in 1995 and $325,000 in 1995.[42] Revolutionary movements in Guatemala and El Salvador had been violently repressed, and peace accords were drafted and signed.

When Hurricane Mitch hit Honduras in October 1998, 11,000 people were killed and two million were made homeless.[43] Mitch was used as an excuse to change national law, including the Mining Law, in order to improve conditions for foreign direct investment. Though following Mitch the country was allowed to suspend payments on US$4.4 billion in debt (amounting to 46 percent of its annual budget), “this restructuring of Honduras’s debt and the extension of additional loans required the [Carlos Flores Facussé] administration to pursue structural adjustment policies while pledging to reduce poverty.”[44]

The Honduran Elite and the 2009 Coup

Deepening economic inequality and social unrest was the backdrop when Manuel “Mel” Zelaya Rosales, a member of the Liberal Party, was elected president in November 2005. He was removed from the presidency on June 28, 2009, via a coup d’état. Throughout most of his presidency, he could have been considered a political moderate, though he did make concessions, including putting a moratorium on controversial new mining deals, proposing a plebiscite on constitutional reform, raising the minimum wage and teachers’ pay, and cutting elementary school tuition. Zelaya is from an elite family, and worked in the logging and agricultural industries and later in government before being elected president. In fact, coup backer Adolfo Facussé told AP after the coup that “Mel Zelaya is one of us and—well—it just got out of his control. But the people think that he is an instrument of [Venezuela’s Hugo] Chávez and that the fight is with Chávez.”[45]

Zelaya’s presidency came at a time of increased protest and resistance among Honduran social movements, who were unhappy with the policies that impoverished so many people. According to
The Economist
’s assessment of Zelaya’s first year in office, “Simmering social tensions have resulted in around 200 protests since the government took office, and there is a risk of more of these in the future.”[46] Eventually, Zelaya began ceding more and more ground to popular movements. Dario Euraque, a Honduran historian and author, explained to me that “for the first time in Honduran twentieth-century history and actually nineteenth-century history, you have a president, with all his failures and problems and issues that most of the opposition points to, but the fact is that this president, who himself comes from the elites of Honduras, put out not only a discourse but even many policies that fundamentally questioned the political system of Honduras.”

Zelaya’s steps toward a constitutional assembly garnered massive opposition from elite factions in Honduras. The significance of the possibility of a
Constituyente
(constituent assembly, as it is known in Honduras) was not lost on members of the country’s poor majority, many of whom saw changing the constitution as beginning the kind of systemic change necessary to make Honduras more equitable. Zelaya was removed from his home and flown to Costa Rica by the army early in the morning of June 28, the day that a preliminary vote on constitutional reform was planned. Euraque relates that Zelaya drove the already precarious situation of the bipartisan political system toward a crisis by opening up the possibility of a constitutional assembly.