"The 1990-2010 crisis in historical perspective" by Miguel Cáceres Rivera and Sucelinda Zelaya (Part 1 of 4)

In the first days after the coup d'Etat of 2009, Honduran scholars rapidly produced reports putting the coup in necessary economic and political context. One of the most creative of these works was by economist Miguel Cáceres Rivera in the form of a Letter to a Honduran friend who is away.

Now he and historian Sucelinda Zelaya (Professor of History at the Universidad Nacional Autonoma de Honduras) have published an analysis of the economic factors in three major crises of the last 110 years, culminating in what they call "the crisis 1990-2010", which led to the coup d'Etat. Their analysis, in six short but dense pages, makes clear how Honduras went from a country of cattle ranchers and farmers to one dominated by a small, monopolistic business class. It is essential reading.

The three crises that these scholars identify came in the first third of the 20th century, from the end of the 1950s through the mid-1970s, and the most recent, starting in 1990 through the present. Anyone familiar with Honduran history will immediately realize they point to the prior incidents in modern Honduran history where constitutionally elected governments were succeeded by long-term dictatorships. Because the analysis is long and packed with detail, I am breaking up my discussion into separate parts, one for each crisis they identify and a final post translating in full their analysis of how these crises led to the coup of 2009.

It pays to read the entire argument. Think of it as a primer in Honduran political economy.

First crisis

Starting between 1880 and 1900, banana production took the role of primary source of capital previously held by mining and cattle-ranching.

The authors note that initially, there existed a possibility for small-scale banana production to lead to wider distribution of economic benefits, in the same way that coffee growing did in Costa Rica, but that this possibility was blocked by the growth of foreign-owned monopoly banana companies made possible through Honduran government concessions.

In their analysis, this led to a substitution of "taking [political] power and appropriating public funds as a form of compensating for this limitation", making governance the route to wealth for those who had previously profited from mining and ranching.

Because the political struggle between the two major parties led to "frequent coups d'Etat" accompanied by armed conflicts, a "food crisis" of reduced production developed, followed by a "demographic crisis" of slower population growth among the campesino population, the majority of the population.

This "crisis of reproduction" took place in the non-banana growing areas, making up 12 of the 17 states of the country at the time. While the area closest to Tegucigalpa, hardest hit by conflicts, saw greatest population declines, the area along the north coast from San Pedro Sula to La Ceiba, center of banana production, saw its population grow.

The dictatorship of Tiburcio Carías Andino followed this period of governmental upheaval. Per capita income of the population outside the banana-producing area went up, and the small business elite grew into a larger-scale industrial elite, using the capital they were accumulating.

Self-conscious of their economic contribution to the production of the country and their position on the social scale, this industrial class demanded and proclaimed for itself a share of political power towards the end of the 1940s.