As The US Withdraws, Hugo Chavez Moves In

The United States has cut back its aid to Honduras.

The Peace Corp has withdrawn, perhaps for only a month, perhaps for a longer period.

Honduras did not qualify for the new Millennium Challenge grant competition this year, and so has been offered lesser aid.

BID and the World Bank are funding at lower levels than in the past.

Yet the government must go on.

Like Manuel Zelaya Rosales, Porfirio Lobo Sosa is turning to ready sources of investment in Honduras to replace the US and European reductions. China and Taiwan figure large in Lobo Sosa's plans, as do Brazil and Colombia.

But also among the choices being discussed is soliciting funding from Hugo Chavez of Venezuela.

Suddenly the right wing in Honduras is quiet. Porfirio Lobo Sosa has announced that a return of Honduras to its Petrocaribe contract is assured; which has garnered nothing but praise from business organizations. US Ambassador Charles Ford, when Zelaya did the same, said charges could be brought against Honduras for violating the rights of existing transnational corporations and their importers in Honduras to sell their products at a higher price, noting it would reduce the profitability of Texaco, Shell, and Esso.

In June of 2008, ANDI and Transportation Council asked the government to supply them with lower priced Venezuelan oil. COHEP, the other main business council, also saw the Petrocaribe deal as good in 2008. PVDSA allowed the government of Honduras to buy 50% of the oil on a 25 year loan at 1% interest. The balance was sold at market rates. Honduras made its payments to PDVSA, even under Micheletti's de facto government, while using the income from investing the deferred payments for social projects in Honduras.

Now Hugo Chavez has offered to end the conflict over land in the Aguan by having the Venezuelan state oil company, Alba-Petróleo, pay the 546 million lempiras on the loan the Honduran government will set up to buy 5700 hectares of land in the Aguan at market rate. This would make it possible for the government to get better terms with the bank.

Title to the land would pass to Alba-Petróleo, which intends to mortgage it back to the campesinos of MUCA and MARCA.

Chavez also offered to have Alba-Petróleo build an African palm fruit processing plant with agreements to give MUCA and MARCA access to markets for their palm oil. This, by the way, would be in direct competition with Miguel Facussé whose DINANT Corporation has already built a palm oil processing plant in the Aguan, who expected to get much of the palm fruit from MUCA and MARCA to process.

The amount of land being discussed, 5700 hectares, is larger than that mentioned in a purchase agreed to between the government and Facussé of 4045.7 hectares. Its not clear where the additional land is coming from, but it may be that Facussé has agreed to be bought completely out of the Aguan.

This deal raises some potential legal issues, since under the agreement, Alba-Petróleo would presumably, temporarily hold title to the land before mortgaging it to the campesino organizations, and this appears to contrevene article 14 of the Honduran constitution, which allows foreign governments title only to the land occupied by their embassy. This could easily be overcome by having title pass to the Honduran government as guarantor of the campesino organization's mortgage.

El Heraldo reports that the rough details for such an accord have already been worked out with INA and it awaits Porfirio Lobo Sosa's permission to go ahead and negotiate the final details.

Facussé expects to be paid on January 4 for 4045. hectares of land.