Poor Honduras, Unlucky Again : Its Role as a U.S. Watchdog Dims Its Chances for Prosperity

Even before the outbreak of hostilities in Central America, Honduras was considered the poorest country in the region. Despite the $1 billion in military and economic aid that Washington has pumped in since 1981, not much has changed; Honduras remains chronically underdeveloped.

Sharing a 350-mile border with Nicaragua, Honduras conveniently fitted the Reagan Administration’s plans to turn back the Sandinista revolution. Selected to become a strategic ally of Washington, Honduras was hastily catapulted from its obscurity. In return for lending its soil for use by the Contras, the U.S. military and the Central Intelligence Agency, Honduras was rewarded with flattery, attention and gifts. A recent agreement negotiated between the two governments will provide the Honduran air force with a $75-million package of 12 F-5s, the only such sophisticated fighter aircraft in the region.

The region’s wars have taken a heavy toll on Honduras, even though it has not been directly involved in the fighting (except on two occasions when the army was urgently deployed along the border to push back Sandinista soldiers pursuing Contras into Honduran territory). According to the National Electrical Commission, the interruption of energy transmission to Costa Rica and Panama has cost the government $1 million a month. More than 10,000 Hondurans have been uprooted from their homes by the Contras. The coffee growers, who constitute the majority of the displaced, estimate their losses in the millions of dollars. Tens of thousands of Salvadoran and Nicaraguan refugees live in camps sponsored by the United Nations. Thousands of Nicaraguans also live in unsupervised communities along the border. Anxiety is greatest, however, about the hundreds of armed Contras who are roaming about in southern Honduras: What will they do when Washington cuts off their aid?

Despite assiduous tutoring by the United States, the Honduran economy refuses to perform. (In a radio interview late last year, Vice President Jaime Rosenthal said that Honduras’ economic plan had been prepared by the head of the U.S. Agency for International Development and the U.S. ambassador and submitted to the Hondurans for their comments.) According to studies by the Central Bank, Honduras must achieve a growth rate of 4% a year simply to maintain the standard of living available in 1967. In the early 1980s, the Honduran economy registered an absolute negative growth. In large measure due to whopping aid programs from Washington, the economy grew by 2.6% in 1986. At the same time, population grew by a shocking 3.5%, nullifying the effects of that modest growth. Approximately 35% of export income currently goes to cover payment of a $3-billion external debt. For the first time ever, Honduras has been forced to seek new credit to cover outstanding debt obligations.

A recent study by the association of Honduran economists places unemployment at 40% among those considered to be economically active. And the U.N. Economic Commission for Latin America shows that purchasing power has dropped by 30% since 1980.

The wars in the region have aggravated the economic crisis; they have not created it. Conversely, peace will not reactivate the Honduran economy. The problems are structural, and deeply embedded in Honduran society. Modest economic gains can be expected, however. For example, an easing of tensions would facilitate regional trade. Honduras would doubtless benefit from any efforts to resuscitate the Central American Common Market. Investments could be expected to increase, though not necessarily in the short run.

Paradoxically, peace would not be an unmixed blessing for Honduras. On the plus side of the ledger, the Contras would be disarmed and resettled. The threat of a hot war with Nicaragua would subside. Many, if not most, of the 50,000 refugees here would be able to return home--as would the Hondurans displaced by the war. And there would be pressure for the U.S. military to reduce its presence in Honduras.

On the other hand, peace is premised on the consolidation of the Sandinista government in Nicaragua. To ensure that the Sandinistas do not become a threat to U.S. security interests, the Honduran military would be expected to play an increasingly important role in containing the Sandinistas. The Contras, funded and trained to be an active anti-Sandinista force, would be replaced by the Honduran military as a passive anti-Sandinista force.

For the Guatemalan, Salvadoran and Nicaraguan armies, peace represents the end of fighting. For the Honduran military, which has not been in combat, peace will not represent an end to the war. As the gendarmes anointed to protect U.S. interests in the region, the military’s preoccupation with security will only intensify. The “permanent threat” is a perfect tonic for the military Establishment and a bane to those seeking to strengthen civilian institutions. Peace, unfortunately, offers no remedies for Honduras’ fragile democracy.

Theoretically, peace would permit more open public discussion about the role of the military. An alert Honduran public with strong international support could argue for a reduced military budget, fewer officers and soldiers, and a moratorium on the delivery of more F-5 fighter jets. Scarce resources could then be used for urgently needed infrastructure and development projects.

Decisions made in Washington will be decisive in the competition for power. The Administration and Congress must decide whether to support the democracy of the civilians or the authoritarianism of the military. An emphasis on security, with a commitment to build up the military, will make hapless victims of the civilians struggling to foster democracy.

The Contadora effort and the peace accords signed in Guatemala have provided a blueprint for alleviating tensions and seeking greater comity among the five Central American nations. A reduced role for the region’s military is the touchstone of these agreements and the sine qua non for a lasting peace. The United States, as usual, holds the trump card. Aid and diplomacy should concentrate on responding to Honduras’ critical development needs, not Washington’s definition of its security needs. A stable and democratic Honduras, after all, is the best antidote to a leftist Nicaragua.