September 5, 2009

Guest blog: Analysis of the US announcement to stop aid to Honduras

The following is a guest blog by Pete, written Thursday after the US State Department announced the cutting of aid to Honduras:

Now that the dust has settled (a little) after today's declaration of "Termination of Assistance and Other Measures Affecting the De Facto Regime in Honduras" by the US State Department, I think you can break down the declaration into four main areas:

1) The termination of a broad range of assistance

2) Revocation of visas for individual members and supporters of the de facto regime.

3) Inability to support the outcome of the scheduled elections at this time.

4) Agreement to the San Jose Accord

Let's have a look at the four points and see what this means for Honduras:

1) "The termination of a broad range of assistance" - a very vague statement which can mean everything or nothing. It seems to be a termination of all aid except humanitarian aid. It breaks down as follows - US $8.96 million from the State Department, $9.4 million from USAID and $11 million from the Millennium Challenge Corporation (MCC). This is very close to the US $28 million figure Gabriella Nuñez announced today. The US $11 million from the MCC will not be confirmed until next week at a MCC board meeting, of which Hillary Clinton is a member.

When you see figures of US $200 million being quoted in the press, please note that this is the total figure allocated under the Millennium Challenge Corporation agreement (actually $191 million). Of this, $80 million has already been allocated, leaving $111 million still to be spent. The $11 million announced as "terminated" today is the quarterly allocation for Oct-Dec 2009, and assuming that at some time in the future, the project continues, then really this is only a suspension.

Approximately 60% of the Millennium Challenge is allocated to the construction of the CA-5 international highway in Southern Honduras. Whilst its suspension may leave us with the biggest set of road-works in Latin America for some time, it will not cause undue hardship. Of more concern is the Rural Development Project which consumes 36% of the Millennium Challenge. This project helps farmers to improve their output, whether by technological means or by simply providing better road access. However, this project again could be considered as "suspended" rather than terminated and again will not cause hardship but will stifle improvements.

So, in all, a cut of a maximum of US $28 million - not unsubstantial but nothing that will hurt Honduras seriously and I am sure that Gabriella Nuñez had already anticipated these cuts and planned accordingly.

2) "Revocation of visas for individual members and supporters of the de facto regime" - as yet, no names have been released but I would expect it to refer to more senior members of the Micheletti government than the last visa revocation when four visas were revoked. At a guess, it may be applied to the Honduran negotiating team which have been causing no little trouble during their US visits, although nothing of this reached the mainstream press.

3) "Inability to support the outcome of the scheduled elections at this time" - note the phrase "at this time". The US also say in the declaration "That election must be undertaken in a free, fair and transparent manner. It must also be free of taint and open to all Hondurans to exercise their democratic franchise." What I read into this is that the US are playing a waiting game.

Whilst having to agree with the OAS etc. that elections will not be recognised, assuming that the election campaign runs smoothly and with no restrictions or repression from the Micheletti government (which would indeed be a stupid thing to do), then I can see Hillary Clinton accepting the election result as fair and recognising the new government in January 2010. Indeed, what else could she do? By continually quoting "democratic, constitutional governance", the State Department would have a difficult job in denying that the elections were not democratic or constitutional. Don't forget that the election process actually started in 2008 with the primaries under Zelaya's government and until now nothing (including June 28th) has interfered with their progress.

4) "Agreement to the San Jose Accord" - this is really a dead duck by now, and I feel it is being rolled out by the State Department daily as a sop to the OAS. There are so many points of disagreement that have been mentioned by various commentators that I don't intend to spend any time debating them.

Conclusion: whilst today's State Department declaration may at first glance seem to be bad news, I feel it's far less than what Zelaya wanted. Whilst the financial details seem harsh at first, breaking them down and analysing them makes them seem not quite so bad. Note that the phrase "military coup" has still not been quoted by the Obama government and I don't think that they can find the proof to legally justify it. The visa revocation may not be too serious and I am sure there are ways around it, such as tourist visas or substitution of government negotiators. The most important aspect is the as yet non-recognition of the elections and the new government, and this is an area which will make or break the chances of the new government.

Overall, I feel that Hillary Clinton may not be in total agreement with her diplomats and this declaration in fact gives some hope for the future, at this moment still a slim hope but growing day by day.
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