The spokesperson for the Misión de Apoyo Contra la Corrupción y la Impunidad (MACCIH), Juan Jimenez Mayor, told the listening audience yesterday on the TV program Frente a Frente in Honduras that MACCIH is investigating the accusations made during the trial of Fabio Lobo in the United States that his father, then President, Porfirio Lobo Sosa, took bribes from the Los Cachiros drug cartel to avoid extradition or investigation by the National Police.
The accusations against Lobo Sosa were made by Devis Rivera Maradiaga, one of the former heads of the Los Cachiros narcotics cartel in Honduras during Fabio Lobo's trial.
Jimenez Mayor backed off his initial statement a bit, saying that he wasn't indicating Lobo Sosa was guilty of anything, just that the accusation was being investigated.
Jimenez Mayor told Frente a Frente that MACCIH was also investigating accusations against ex-First Lady, Rosa Elena de Lobo and other connected people in the country. He also mentioned the IHSS corruption case where he said MACCIH was particularly interested in the DIMESA case, which had the most important contract with Mario Zelaya and he hoped it would be brought to trial soon.
"Our focus is on networks of corruption, both public and private", Jimenez Mayor said.
Showing posts with label Porfirio Lobo Sosa. Show all posts
Showing posts with label Porfirio Lobo Sosa. Show all posts
Thursday, September 7, 2017
Wednesday, September 6, 2017
Fabio Lobo Sentenced to 24 years, fined $50,000
Fabio Lobo was sentenced yesterday to 24 years in a federal prison, fined $50,000, and agreed to forfeit a further $267,000 for conspiring to bring cocaine into the United States. Fabio Lobo is the son of ex-Honduran President Porfirio Lobo Sosa.
Acting US Attorney Joon H. Kim stated that Fabio Lobo had sought out drug traffickers with offers of assistance with the intention of enriching himself. He continued:
During the trail testimony was offered that among those corrupt officials was the current Minister of Security, Julian Pacheco Tinoco, and his own father, then President Porfirio Lobo Sosa. The DEA alleges that Los Chachiros paid over $500,000 in bribes to then President Porfirio Lobo Sosa to avoid extradition to the United States and to avoid investigation by Honduran police.
Lobo, whose lawyer says he will file an appeal of the sentence as "overly harsh", will serve his sentence in a Federal prison near Orlando, Florida, to facilitate access by his family.
Acting US Attorney Joon H. Kim stated that Fabio Lobo had sought out drug traffickers with offers of assistance with the intention of enriching himself. He continued:
"Lobo used his father's position and his own connections to bring drug traffickers together with corrupt police and government officials."
During the trail testimony was offered that among those corrupt officials was the current Minister of Security, Julian Pacheco Tinoco, and his own father, then President Porfirio Lobo Sosa. The DEA alleges that Los Chachiros paid over $500,000 in bribes to then President Porfirio Lobo Sosa to avoid extradition to the United States and to avoid investigation by Honduran police.
Lobo, whose lawyer says he will file an appeal of the sentence as "overly harsh", will serve his sentence in a Federal prison near Orlando, Florida, to facilitate access by his family.
Monday, March 6, 2017
Los Cachiros name Honduran Ex-President as Protector
One of the leaders of Honduras's Cachiros drug cartel testifying at the trial of Fabio Lobo told a Federal judge yesterday that he paid enormous bribes for protection to both Porfirio Lobo Sosa, ex-President of Honduras, and to his son, Fabio.
Devis Leonel Rivera Maradiaga, one of two brothers identified by the US Treasury as the leaders of the Los Cachiros drug cartel in Honduras spent over 3 hours on the stand in the trial of Fabio Lobo for drug trafficking in the US. Los Cachiros operated as a cartel in Honduras from 2008 to 2013.
During his testimony, Rivera Maradiaga was asked if he had received assistance from Porfirio Lobo Sosa, to which he replied "Yes" indicating that the first time was in 2009 when Lobo Sosa was still a Presidential candidate for the National Party. Rivera Maradiaga testified that he paid Lobo Sosa $250,000 - $300,000 for that initial protection as a campaign contribution. Rivera Maradiaga also mentioned a second meeting with Lobo Sosa where he gave him a packet of 500 lempira bills "eight or twelve inches high". Rivera Maradiaga also testified that he was present at a third meeting, post election, with Lobo Sosa in which Lobo Sosa promised not to extradite him to the United States and said he would give them government contracts to pay back the bribe they gave him during the campaign. It was at this third meeting that Lobo Sosa designated his son, Fabio Lobo, as his intermediary for Los Cachiros and made him their contract for security.
Rivera Maradiaga testified that Fabio Lobo helped him with security arrangements on two occasions. In 2012 Fabio helped Los Cachiros with a 400 kilogram shipment of cocaine that arrived by plane. The second time, in 2013, it was a ton of cocaine. Fabio Lobo received a payment of $30,000 for the first shipment, along with several vehicles and an AR-15. Rivera Maradiaga says Fabio Lobo "asked for a bit more for the second shipment because he had to pay the Chief, that is General Tinoco."
Devis Leonel Rivera Maradiaga, one of two brothers identified by the US Treasury as the leaders of the Los Cachiros drug cartel in Honduras spent over 3 hours on the stand in the trial of Fabio Lobo for drug trafficking in the US. Los Cachiros operated as a cartel in Honduras from 2008 to 2013.
During his testimony, Rivera Maradiaga was asked if he had received assistance from Porfirio Lobo Sosa, to which he replied "Yes" indicating that the first time was in 2009 when Lobo Sosa was still a Presidential candidate for the National Party. Rivera Maradiaga testified that he paid Lobo Sosa $250,000 - $300,000 for that initial protection as a campaign contribution. Rivera Maradiaga also mentioned a second meeting with Lobo Sosa where he gave him a packet of 500 lempira bills "eight or twelve inches high". Rivera Maradiaga also testified that he was present at a third meeting, post election, with Lobo Sosa in which Lobo Sosa promised not to extradite him to the United States and said he would give them government contracts to pay back the bribe they gave him during the campaign. It was at this third meeting that Lobo Sosa designated his son, Fabio Lobo, as his intermediary for Los Cachiros and made him their contract for security.
Rivera Maradiaga testified that Fabio Lobo helped him with security arrangements on two occasions. In 2012 Fabio helped Los Cachiros with a 400 kilogram shipment of cocaine that arrived by plane. The second time, in 2013, it was a ton of cocaine. Fabio Lobo received a payment of $30,000 for the first shipment, along with several vehicles and an AR-15. Rivera Maradiaga says Fabio Lobo "asked for a bit more for the second shipment because he had to pay the Chief, that is General Tinoco."
Thursday, April 21, 2016
Enacting Impunity
Oscar Alvarez Guerrero, current head of the National Party but previously the Security Minister for Porfirio Lobo Sosa and enactor of the "mano dura" approach to gangs may not mean to, but is enacting impunity.
For the last month Honduras has been coping with leak after leak about corruption within the National Police, culminating in the El Heraldo and New York Times stories naming the police who organized and murdered two high government officials, drug czar Julian Aristides Gonzalez and consultant to the polivce investigating drug trafficking, Alfredo Landaverde.
Among those who have been publicly named is Oscar Alvarez. The Public Prosecutor's office has been, and continues to be slow to act on this information, preferring to "investigate the veracity of the leaked documents" instead of taking action to talk to those implicated. But today, the Public Prosecutor's office had cited Oscar Alvarez to appear to make a statement and answer questions.
Alvarez sent his lawyer, Jaime Banegas, to tell the Public Prosecutor that "because he was a high government official, they should take his testimony at his home, at the day and hour he chooses." Alvarez told the press:
The message is clear. "I'm too important, and too busy running the National Party and being a Congress person to be interviewed by a bunch of lawyers investigating murder;" emphasis on "important". That's not only arrogant, but basically tells everyone that impunity is alive and well with the political elite in Honduras.
For the last month Honduras has been coping with leak after leak about corruption within the National Police, culminating in the El Heraldo and New York Times stories naming the police who organized and murdered two high government officials, drug czar Julian Aristides Gonzalez and consultant to the polivce investigating drug trafficking, Alfredo Landaverde.
Among those who have been publicly named is Oscar Alvarez. The Public Prosecutor's office has been, and continues to be slow to act on this information, preferring to "investigate the veracity of the leaked documents" instead of taking action to talk to those implicated. But today, the Public Prosecutor's office had cited Oscar Alvarez to appear to make a statement and answer questions.
Alvarez sent his lawyer, Jaime Banegas, to tell the Public Prosecutor that "because he was a high government official, they should take his testimony at his home, at the day and hour he chooses." Alvarez told the press:
"I can't be cited because I don't have anything to do with the case."
The message is clear. "I'm too important, and too busy running the National Party and being a Congress person to be interviewed by a bunch of lawyers investigating murder;" emphasis on "important". That's not only arrogant, but basically tells everyone that impunity is alive and well with the political elite in Honduras.
Wednesday, July 29, 2015
Juan Orlando Hernández Visits Asia
Honduran President Juan Orlando Hernández traveled to Asia last week to further joint development agreements. He returned with many wishes of goodwill, but few concrete commitments.
His trip took him to South Korea, Japan, and Taiwan. During the trip, Hernandez promoted Honduras as a gateway for Asian commerce with all of Central America.
The first stop on the tour was South Korea. There he signed a memo of understanding with the port of Busan, to develop commerce between Busan and ports in Honduras. The agreement anticipates cooperation in port management and development with the goal of increasing shipping between Honduran ports and Busan. In a meeting with the Busan Chamber of Commerce Hernandez spoke of the investment opportunities in Honduras and his goal of making Honduras the shipping logistical center of the Americas.
What Honduran ports? The Honduran press was vague about this, but there is every reason to think the main target is Honduras' port facilities on the Pacific Coast, where the country has a small coastal access via the Gulf of Fonseca.
Hernández also signed an agreement with the Korean government to supply Honduras with electric cars and establish a network of charging stations for them. To do this, Korea also agreed it would have to improve the electricity supply and distribution network in Honduras.
Wrapping up his achievements, Hernandez asked the World Taekwando Federation (WTF) in Korea to send taekwando teachers to Honduras to train Honduran children in schools, and in public parks and government buildings. He asked that this program be funded through the Korean International Cooperation Agency (KOICA), and that the WTF do this as part of its Taekwando Peace Corps. He is quoted as saying
While in South Korea, Hernández also took delivery of the long-awaited ZEDE feasibility study, completed by KOICA. Alert readers may recall that one of the identified target areas for development as a ZEDE is the Honduran Pacific port of Amapala, on El Tigre Island in the Gulf of Fonseca. Nonetheless, reporting on the Korean leg of Hernández' trip does not mention ZEDE development.
In the next stop on his trip, in Japan, Hernandez sought further cooperation between the Japanese International Cooperation Agency (JICA) and Honduras. He received assurances that Japan would fund $135 million in renovations to two existing hydroelectric projects, Rio Lindo and Cañaveral, to raise them to 60 megawatts output.
He also asked JICA to supply Honduras with teachers of art and sports to train Honduran children in schools and public places as part of his vision of how to deal with juvenile delinquency, complementing his endorsement of Taekwondo while in South Korea.
In addition, Hernandez requested that JICA fund the construction of a bridge from the city of Amapala, on El Tigre island, to the mainland. This might be characterized as Honduras' own Bridge to Nowhere: the entire municipality of Amapala, which includes the islands in the Gulf of Fonseca, has a population reported to be around 11,000.
So why the interest in a bridge there?
The bridge is cornerstone infrastructure needed for Hernandez's vision of ZEDEs in southern Honduras. The Rough Guide to Honduras evocatively describes the town of Amapala, located on Isla del Tigre, as "once the country’s major Pacific port and now a decaying relic of the nineteenth century". What Hernández envisions is making Amapala a major port again, with other people putting up the development capital.
Moving on to Taiwan, Hernández signed an agreement to promote mutual trade and investment. He made presentations to a group of businessmen and met with the Taiwanese government to pitch Honduras as Taiwan's way of getting more Taiwanese goods into Central America by exploiting Honduras's membership in CAFTA.
What did not come out of the Asian trip was any announcement of a group of investors prepared to take on development of the ZEDE opportunity. Nonetheless, the echoes of that initiative were there in the background, as they have been on most of Hernández' foreign presentations.
For example, earlier this month a Honduran commission traveled to Mexico to secure funding to complete two more segments of another infrastructure project that would be necessary to support Hernandez's ZEDE vision, the so called "dry canal": a four lane highway from Honduras's Pacific Coast to its Caribbean coast.
The two road segments, already under construction by Mexican firm CAABSA and totaling a length of 54 km., need a further $30 million to be completed. A third segment of 46 km. is being built by a Brazilian firm, funded by a loan from the Brazilian Development Bank. The whole of this roadway is supposed to be completed in 2017 and is necessary to make ZEDE developments along Honduras's Pacific coast economically feasible.
No reports exist in Honduran press relating the results of the Mexican trip. But combined with Hernández' pursuit of Japanese government funding for the bridge to Amapala, the mission of the Mexican trip shows that developing the Amapala port remains the focus of the Hernández government. Whether it will attract the foreign investment required, as a ZEDE or otherwise, remains to be seen.
His trip took him to South Korea, Japan, and Taiwan. During the trip, Hernandez promoted Honduras as a gateway for Asian commerce with all of Central America.
The first stop on the tour was South Korea. There he signed a memo of understanding with the port of Busan, to develop commerce between Busan and ports in Honduras. The agreement anticipates cooperation in port management and development with the goal of increasing shipping between Honduran ports and Busan. In a meeting with the Busan Chamber of Commerce Hernandez spoke of the investment opportunities in Honduras and his goal of making Honduras the shipping logistical center of the Americas.
What Honduran ports? The Honduran press was vague about this, but there is every reason to think the main target is Honduras' port facilities on the Pacific Coast, where the country has a small coastal access via the Gulf of Fonseca.
Hernández also signed an agreement with the Korean government to supply Honduras with electric cars and establish a network of charging stations for them. To do this, Korea also agreed it would have to improve the electricity supply and distribution network in Honduras.
Wrapping up his achievements, Hernandez asked the World Taekwando Federation (WTF) in Korea to send taekwando teachers to Honduras to train Honduran children in schools, and in public parks and government buildings. He asked that this program be funded through the Korean International Cooperation Agency (KOICA), and that the WTF do this as part of its Taekwando Peace Corps. He is quoted as saying
“Violence is one of the serious social problems facing Latin American countries, and I think taekwondo is the most effective tool to solve the issue".Hernandez had previous contact with the WTF while President of the Honduran Congress, when he attended a dinner in Korea to honor then-president Porfirio Lobo Sosa, who holds a 3rd Kukkiwon Dan certificate.
While in South Korea, Hernández also took delivery of the long-awaited ZEDE feasibility study, completed by KOICA. Alert readers may recall that one of the identified target areas for development as a ZEDE is the Honduran Pacific port of Amapala, on El Tigre Island in the Gulf of Fonseca. Nonetheless, reporting on the Korean leg of Hernández' trip does not mention ZEDE development.
In the next stop on his trip, in Japan, Hernandez sought further cooperation between the Japanese International Cooperation Agency (JICA) and Honduras. He received assurances that Japan would fund $135 million in renovations to two existing hydroelectric projects, Rio Lindo and Cañaveral, to raise them to 60 megawatts output.
He also asked JICA to supply Honduras with teachers of art and sports to train Honduran children in schools and public places as part of his vision of how to deal with juvenile delinquency, complementing his endorsement of Taekwondo while in South Korea.
In addition, Hernandez requested that JICA fund the construction of a bridge from the city of Amapala, on El Tigre island, to the mainland. This might be characterized as Honduras' own Bridge to Nowhere: the entire municipality of Amapala, which includes the islands in the Gulf of Fonseca, has a population reported to be around 11,000.
So why the interest in a bridge there?
The bridge is cornerstone infrastructure needed for Hernandez's vision of ZEDEs in southern Honduras. The Rough Guide to Honduras evocatively describes the town of Amapala, located on Isla del Tigre, as "once the country’s major Pacific port and now a decaying relic of the nineteenth century". What Hernández envisions is making Amapala a major port again, with other people putting up the development capital.
Moving on to Taiwan, Hernández signed an agreement to promote mutual trade and investment. He made presentations to a group of businessmen and met with the Taiwanese government to pitch Honduras as Taiwan's way of getting more Taiwanese goods into Central America by exploiting Honduras's membership in CAFTA.
What did not come out of the Asian trip was any announcement of a group of investors prepared to take on development of the ZEDE opportunity. Nonetheless, the echoes of that initiative were there in the background, as they have been on most of Hernández' foreign presentations.
For example, earlier this month a Honduran commission traveled to Mexico to secure funding to complete two more segments of another infrastructure project that would be necessary to support Hernandez's ZEDE vision, the so called "dry canal": a four lane highway from Honduras's Pacific Coast to its Caribbean coast.
The two road segments, already under construction by Mexican firm CAABSA and totaling a length of 54 km., need a further $30 million to be completed. A third segment of 46 km. is being built by a Brazilian firm, funded by a loan from the Brazilian Development Bank. The whole of this roadway is supposed to be completed in 2017 and is necessary to make ZEDE developments along Honduras's Pacific coast economically feasible.
No reports exist in Honduran press relating the results of the Mexican trip. But combined with Hernández' pursuit of Japanese government funding for the bridge to Amapala, the mission of the Mexican trip shows that developing the Amapala port remains the focus of the Hernández government. Whether it will attract the foreign investment required, as a ZEDE or otherwise, remains to be seen.
Tuesday, November 18, 2014
Honduras's Millennium Challege Scorecard, 2015 Edition.
Honduras once again failed to resolve issues that prevent it from obtaining a Millennium Challenge Compact from the US Government. Honduras failed to score a passing grade on 10 criteria, though not the same 10 criteria it failed to score a passing grade on last year. These yearly scorecards determine a country's eligibility for a Millennium Challenge Compact.
The Millennium Challenge Corporation (MCC) uses what it describes as"objective and quantifiable policy indicators in three broad policy categories: Ruling Justly, Investing in People, and Encouraging Economic Freedom". These broad areas are broken down into several measures in each area, each listed with the third party that developed and scored the countries.
The Millennium Challenge Corporation board then selects five countries from those that receive passing scores on all indicators and allows them to develop a compact, based on available moneys allocated by the US Congress. These compacts can be worth up to $250 million to a country. In addition, a few countries each year get a 1-3 year grant called a Threshold grant designed to help them improve their score where they fall below the 50% threshold. Threshold grants are $10-$30 million.
In August, 2013 Honduras received a 3 year, $15.6 million, Threshold grant to "to improve public financial management and create more effective and transparent public-private partnerships." This program had a number of concrete programs designed to improve Honduras's scores in several areas:
The 2013 scorecard forms the basis of assigning Honduras to the Threshold program, so lets look at the areas where Honduras was deficient (below average) on that scorecard and see what's happened since then.
Under the rubric of scoring Economic Freedom, the MCC uses a number of indicators. Honduras in 2013 had deficient scores (below the median score) in four of them: Fiscal Policy, Gender in the Economy, Land Rights and Access, and Business Start-Ups. In 2013 Honduras scored a 50% in Fiscal Policy. That meant that 50% of the countries scored better, and 50% scored worse than Honduras. Its ranking on this criterion worsened in 2014, to 46% and plunged on the 2015 scorecard to 26%. That plunge can directly be attributed to the economic policies of the Porfirio Lobo Sosa government, whose last year in office forms the basis of the 2015 score. The Threshold program has not yet had a chance to affect this indicator.
Honduras was deficient in 2013 in women's participation in the economy, called Gender in the Economy. Here Honduras started with a score of 21% on the 2013 scorecard, improved its score in 2014 to 41% then saw its score decline again in 2015 to 37%. No Threshold grant goals sought to address this criterion.
Land rights and Access was another criterion where Honduras was deficient. Here Honduras began 2013 with a score of 32% and saw it decline on the 2014 scorecard to 23%. On the 2015 scorecard it improved slightly to 25%. No Threshold grant goals seek to address this criterion.
The final Economic Freedom indicator where Honduras was deficient was in Business Start-Ups. In 2013 Honduras scored 28%. That improved to 50% on the 2014 scorecard, but decreased to 43% on the 2015 scorecard. No Threshold grant goals addressed this criterion.
Honduras was also judged deficient in Girls Secondary Education Enrollment Rate. Here Honduras began with a score of 16% and actually managed to improve it in the 2014 and 2015 scorecards, so that in the latest scorecard its 31%, nearly double what it was two years ago. Still there's a lot of room for improvement here. No Threshold grant money had improving this indicator as a goal.
Under the rubric of Investing in People, Honduras had two areas of concern: Girl's Secondary Education Enrollment Rate and Children's Health. Honduras scored 16% on the 2013 scorecard in Girl's Secondary Education Enrollment Rate. This continued to improve in 2014, where Honduras scored 22% and 2015 where Honduras scored 31%. Children's Health scored 43% in 2013 but improved to good levels in 2014 and 2015 (56% in each) and is not currently an area of concern. By comparison, another criterion, the Immunization Rate, became of concern in 2014 and continues to be of concern as Honduras's ranking plummets. Honduras scored 87% on the 2013 scorecard. It scored 44% on the 2014 scorecard, and 37% on the 2015 scorecard. No Threshold grant goals address any of these three criteria.
Under the rubric of Ruling Justly, the MCC found Honduras deficient in four of the six criteria in 2013: Freedom of Information, Government Effectiveness, Rule of Law, and Control of Corruption. Honduras scored just 28% in Freedom of Information on the 2013 scorecard. Its score has decreased on each subsequent scorecard to 27% in 2014 and 21% in 2015. Government Effectiveness follows the same trajectory. Honduras scored 44% on the 2013 scorecard, and its score declined in each subsequent scorecard, to 27% in 2014, and 25% in 2015. The criterion Rule of Law scored 44% on the 2013 scorecard, but only 4% on the 2014 scorecard, and 7% on the 2015 scorecard. Finally, in Control of Corruption, Honduras scored only 16% on the 2013 scorecard, 15% on the 2014 scorecard, and 21% on the 2015 scorecard. The Threshold grant was designed to affect both the Government Effectiveness and Control of Corruption criteria, but because these measures only reflect the years of the Porfirio Lobo Sosa government, it has yet to show any results.
So Honduras is still deficient in 10 criteria though not the same 10 criteria that were deficient in 2013. Child Health was eliminated as a concern, and Immunization Rates became a concern during the last two years. The Threshold grant has yet to be able to show any results, but that is to be expected. The scorecard has yet to report on years in which the Threshold Grant was active. Honduras's deficiencies are directly attributable to the Porfirio Lobo Sosa government's actions, not the drug trade, not gangs.
Whether the Hernandez government can use the Threshold grant to turn some of these scores around remains to be seen.
The Millennium Challenge Corporation (MCC) uses what it describes as"objective and quantifiable policy indicators in three broad policy categories: Ruling Justly, Investing in People, and Encouraging Economic Freedom". These broad areas are broken down into several measures in each area, each listed with the third party that developed and scored the countries.
Ruling JustlyThis set of criteria was adopted in 2012.
Civil Liberties (Freedom House)
Political Rights (Freedom House)
Control of Corruption (World Bank/Brookings Institution WGI)
Government Effectiveness (World Bank/Brookings Institution WGI)
Rule of Law (World Bank/Brookings Institution WGI)
Freedom of Information (Freedom House / FRINGE Special/ Open Net Initiative)
Investing in People
Immunization Rates (World Health Organization and UNICEF)
Public Expenditure on Health (World Health Organization)
Girls’ Education (UNESCO)
Primary Education Completion (Scorecard LICs)
Secondary Education Enrolment (Scorecards LMICs)
Public Expenditure on Primary Education (UNESCO)
Child Health (CIESIN and YCELP)
Natural Resource Protection (CIESIN and YCELP)
Encouraging Economic Freedom
Business Start-Up (IFC)
Land Rights and Access (IFAD and IFC)
Trade Policy (Heritage Foundation)
Regulatory Quality (World Bank/Brookings Institution WGI)
Inflation (IMF WEO)
Fiscal Policy (IMF WEO)
Access to Credit (IFC)
Gender in the Economy (IFC)
The Millennium Challenge Corporation board then selects five countries from those that receive passing scores on all indicators and allows them to develop a compact, based on available moneys allocated by the US Congress. These compacts can be worth up to $250 million to a country. In addition, a few countries each year get a 1-3 year grant called a Threshold grant designed to help them improve their score where they fall below the 50% threshold. Threshold grants are $10-$30 million.
In August, 2013 Honduras received a 3 year, $15.6 million, Threshold grant to "to improve public financial management and create more effective and transparent public-private partnerships." This program had a number of concrete programs designed to improve Honduras's scores in several areas:
Public Financial ManagementDepending on the statistic, the years 2012 and 2013 form the baseline for evaluating the effectiveness of the Threshold program.
1. Budget and Treasury Management
2. Improve Procurement Capacity, Planning, and Controls
3. Improve the Capabilities of the Tribunal Superior de Cuentas
4. Grants to Civil Society Organizations to Foster Accountability
Public - Private Partnerships
1. Enhance COALIANZA's capabilities to Select, Finance, and Manage Risk.
2. Fund Fundación para la Inversión y Desarrollo de Exportaciones to provide government solutions supported by user fees and manage exports through an eregulations.org government platform.
The 2013 scorecard forms the basis of assigning Honduras to the Threshold program, so lets look at the areas where Honduras was deficient (below average) on that scorecard and see what's happened since then.
Under the rubric of scoring Economic Freedom, the MCC uses a number of indicators. Honduras in 2013 had deficient scores (below the median score) in four of them: Fiscal Policy, Gender in the Economy, Land Rights and Access, and Business Start-Ups. In 2013 Honduras scored a 50% in Fiscal Policy. That meant that 50% of the countries scored better, and 50% scored worse than Honduras. Its ranking on this criterion worsened in 2014, to 46% and plunged on the 2015 scorecard to 26%. That plunge can directly be attributed to the economic policies of the Porfirio Lobo Sosa government, whose last year in office forms the basis of the 2015 score. The Threshold program has not yet had a chance to affect this indicator.
Honduras was deficient in 2013 in women's participation in the economy, called Gender in the Economy. Here Honduras started with a score of 21% on the 2013 scorecard, improved its score in 2014 to 41% then saw its score decline again in 2015 to 37%. No Threshold grant goals sought to address this criterion.
Land rights and Access was another criterion where Honduras was deficient. Here Honduras began 2013 with a score of 32% and saw it decline on the 2014 scorecard to 23%. On the 2015 scorecard it improved slightly to 25%. No Threshold grant goals seek to address this criterion.
The final Economic Freedom indicator where Honduras was deficient was in Business Start-Ups. In 2013 Honduras scored 28%. That improved to 50% on the 2014 scorecard, but decreased to 43% on the 2015 scorecard. No Threshold grant goals addressed this criterion.
Honduras was also judged deficient in Girls Secondary Education Enrollment Rate. Here Honduras began with a score of 16% and actually managed to improve it in the 2014 and 2015 scorecards, so that in the latest scorecard its 31%, nearly double what it was two years ago. Still there's a lot of room for improvement here. No Threshold grant money had improving this indicator as a goal.
Under the rubric of Investing in People, Honduras had two areas of concern: Girl's Secondary Education Enrollment Rate and Children's Health. Honduras scored 16% on the 2013 scorecard in Girl's Secondary Education Enrollment Rate. This continued to improve in 2014, where Honduras scored 22% and 2015 where Honduras scored 31%. Children's Health scored 43% in 2013 but improved to good levels in 2014 and 2015 (56% in each) and is not currently an area of concern. By comparison, another criterion, the Immunization Rate, became of concern in 2014 and continues to be of concern as Honduras's ranking plummets. Honduras scored 87% on the 2013 scorecard. It scored 44% on the 2014 scorecard, and 37% on the 2015 scorecard. No Threshold grant goals address any of these three criteria.
Under the rubric of Ruling Justly, the MCC found Honduras deficient in four of the six criteria in 2013: Freedom of Information, Government Effectiveness, Rule of Law, and Control of Corruption. Honduras scored just 28% in Freedom of Information on the 2013 scorecard. Its score has decreased on each subsequent scorecard to 27% in 2014 and 21% in 2015. Government Effectiveness follows the same trajectory. Honduras scored 44% on the 2013 scorecard, and its score declined in each subsequent scorecard, to 27% in 2014, and 25% in 2015. The criterion Rule of Law scored 44% on the 2013 scorecard, but only 4% on the 2014 scorecard, and 7% on the 2015 scorecard. Finally, in Control of Corruption, Honduras scored only 16% on the 2013 scorecard, 15% on the 2014 scorecard, and 21% on the 2015 scorecard. The Threshold grant was designed to affect both the Government Effectiveness and Control of Corruption criteria, but because these measures only reflect the years of the Porfirio Lobo Sosa government, it has yet to show any results.
So Honduras is still deficient in 10 criteria though not the same 10 criteria that were deficient in 2013. Child Health was eliminated as a concern, and Immunization Rates became a concern during the last two years. The Threshold grant has yet to be able to show any results, but that is to be expected. The scorecard has yet to report on years in which the Threshold Grant was active. Honduras's deficiencies are directly attributable to the Porfirio Lobo Sosa government's actions, not the drug trade, not gangs.
Whether the Hernandez government can use the Threshold grant to turn some of these scores around remains to be seen.
Friday, February 28, 2014
Moody's Cuts Honduras Credit Again
Moody's Investor Service cut Honduras's credit rating from B2 to B3 today.
Honduras now has a rating equal to that of the Congo and Argentina.
The reason: the widening fiscal deficit of the Honduran government. Moody's places Honduras's credit rating as tied for the worst rating in Central America:
Moody's describes Baa as a low risk investment, Ba as a somewhat risky investment, and B as a risky investment.
Porfirio Lobo Sosa was supposed to get the government budget under control in 2013, but he didn't. Instead, he let it balloon out of control, and the deficit went from 5.9% of Honduras's gross domestic product to 7.7 % of the GDP.
This news comes as Juan Orlando Hernandez celebrates his first 30 days in power, and amid reports that in general, investors are counting on him to turn the fiscal deficits around.
They just don't believe Honduras will achieve the goals his administration has set.
Honduras now has a rating equal to that of the Congo and Argentina.
The reason: the widening fiscal deficit of the Honduran government. Moody's places Honduras's credit rating as tied for the worst rating in Central America:
Costa Rica Baa3
Panama Baa2
Nicaragua B3
El Salvador Ba3
Honduras B3
Guatemala Ba1
Moody's describes Baa as a low risk investment, Ba as a somewhat risky investment, and B as a risky investment.
Porfirio Lobo Sosa was supposed to get the government budget under control in 2013, but he didn't. Instead, he let it balloon out of control, and the deficit went from 5.9% of Honduras's gross domestic product to 7.7 % of the GDP.
This news comes as Juan Orlando Hernandez celebrates his first 30 days in power, and amid reports that in general, investors are counting on him to turn the fiscal deficits around.
They just don't believe Honduras will achieve the goals his administration has set.
Thursday, February 13, 2014
Cell Phone Blocking versus Cell Phone Interception
Honduras has embarked on a very stupid program of forcing its cell phone providers to block calls from within the 23 prisons in Honduras.
It's not that the idea is necessarily bad. But the implementation they chose is exceptionally stupid.
The Honduran Congress under Porfirio Lobo Sosa passed a bill that requires cell phone providers to block any calls from prisons. This is not something that is done easily in a standard cell phone base station and requires special programming (and probably required the purchase of that capability from the base station provider).
The idiocy comes from the fact that the law specifies that for each prison location, no cell phone be able to complete a call, text message, or Internet connection within a one kilometer circle around the prison.
The Honduran Congress definitely shouldn't have specified a technical solution to what recognizably is a problem for their desired management of the prison population. But they did, and they chose the worst possible solution for the Honduran populace that lives near the prisons.
It probably bears emphasis that in Honduras, prisons are often located in densely populated areas surrounded by housing.
The residents of these cities and towns living within one kilometer of the prisons targeted are suffering because their cell phones don't work, either. That means no emergency service calls for medical help, no fire protection, no calling the police to report a crime in progress.
In some cases the congressionally mandated solution wipes out the telecommunications capabilities of businesses. And the affected zone is not actually limited to the mandated one kilometer: people living 2-3 km away from the prison in Gracias a Dios cannot use their phones.
Why? Because the system works by geolocating each phone and determining its distance from the prison. This is not always an accurate process.
Arturo Corrales, the Security Minister held over from the Lobo Sosa administration, strongly supports the law, and today said
But who defines the "common good" being served here?
There's an awful lot of people who can no longer use their cell phones despite a legitimate right to do so.
Cell phone jamming has been proposed as a possible alternative technology, but in trials around the world, it has a mixed record of success. If there's a cell tower near the prison, it can easily swamp the jamming signal, and managing the tuning of the jammers is time consuming and requires ongoing attention.
The Honduran military already has this capability and deployed it in 2009 during the coup if Corrales wants to try it.
The technological solution that's most appropriate for what Honduras wants to achieve is called "managed access".
In this system, the prison would establish a small cell phone base station to provide a radio umbrella over the prison. That umbrella can be tuned fairly accurately to only affect the prison population.
When a cell phone connects to the system, the system determines if it is an authorized cell number. Authorized cell phones are then connected to the commercial services. Unauthorized cell phones simply stop working.
Such systems are available from multiple vendors and have successfully been used in US prisons.
Corrales alludes to efforts to study possible technological solutions that might limit blocking to just the prison, but in the meantime, Honduran citizens with legitimate rights to use a cell phone will continue to suffer because Congress inappropriately specified a technological solution it did not understand.
It's not that the idea is necessarily bad. But the implementation they chose is exceptionally stupid.
The Honduran Congress under Porfirio Lobo Sosa passed a bill that requires cell phone providers to block any calls from prisons. This is not something that is done easily in a standard cell phone base station and requires special programming (and probably required the purchase of that capability from the base station provider).
The idiocy comes from the fact that the law specifies that for each prison location, no cell phone be able to complete a call, text message, or Internet connection within a one kilometer circle around the prison.
The Honduran Congress definitely shouldn't have specified a technical solution to what recognizably is a problem for their desired management of the prison population. But they did, and they chose the worst possible solution for the Honduran populace that lives near the prisons.
It probably bears emphasis that in Honduras, prisons are often located in densely populated areas surrounded by housing.
The residents of these cities and towns living within one kilometer of the prisons targeted are suffering because their cell phones don't work, either. That means no emergency service calls for medical help, no fire protection, no calling the police to report a crime in progress.
In some cases the congressionally mandated solution wipes out the telecommunications capabilities of businesses. And the affected zone is not actually limited to the mandated one kilometer: people living 2-3 km away from the prison in Gracias a Dios cannot use their phones.
Why? Because the system works by geolocating each phone and determining its distance from the prison. This is not always an accurate process.
Arturo Corrales, the Security Minister held over from the Lobo Sosa administration, strongly supports the law, and today said
the common good is above the good of individuals.
But who defines the "common good" being served here?
There's an awful lot of people who can no longer use their cell phones despite a legitimate right to do so.
Cell phone jamming has been proposed as a possible alternative technology, but in trials around the world, it has a mixed record of success. If there's a cell tower near the prison, it can easily swamp the jamming signal, and managing the tuning of the jammers is time consuming and requires ongoing attention.
The Honduran military already has this capability and deployed it in 2009 during the coup if Corrales wants to try it.
The technological solution that's most appropriate for what Honduras wants to achieve is called "managed access".
In this system, the prison would establish a small cell phone base station to provide a radio umbrella over the prison. That umbrella can be tuned fairly accurately to only affect the prison population.
When a cell phone connects to the system, the system determines if it is an authorized cell number. Authorized cell phones are then connected to the commercial services. Unauthorized cell phones simply stop working.
Such systems are available from multiple vendors and have successfully been used in US prisons.
Corrales alludes to efforts to study possible technological solutions that might limit blocking to just the prison, but in the meantime, Honduran citizens with legitimate rights to use a cell phone will continue to suffer because Congress inappropriately specified a technological solution it did not understand.
Sunday, January 26, 2014
Political Promises in Honduras
They say you can tell when a lawyer is lying because his lips are moving.
Well, in Honduras, the same should be said of politicians.
Back on July 20, Congress passed a controversial law called the Ley de promoción del desarrollo y reconversion de deuda publica (Decreto 145-2013) by which Honduras seeks to monetize its income stream from its national resources. We wrote about it, and the controversy surrounding the sudden introduction and passage of the law back on July 29, and you should reread it for details about the law.
The law was then sent to Porfirio Lobo Sosa for action on July 23.
Now in theory, Honduran law says Lobo Sosa had 10 days to either sign or veto the law. He signs the law by writing an order that says "Por Tanto Ejecutese" or vetos it by writing "Vuelva al Congreso" with a letter explaining what he thinks is wrong with it. If he takes no action, it enters limbo. It becomes law, but it is not in effect or enforceable until its printed in La Gaceta.
Porfirio Lobo Sosa initially defended the law, saying :
But the law provoked a lot of opposition, both from business( the Associacion Nacional de Industriales de Honduras (ANDI) and the Asociacion Nacional de Minería Metálica, and even COHEP), unions (like Sindicato de Trabajadores de la Industria de Bebidas y Similares), and campesino groups.
On August 15, 2013, after Lobo Sosa had to have acted one way or another, he announced he would not sign the law, not because he didn't believe in it, but rather because it might hurt Juan Orlando Hernandez's chances of getting elected:
Now he was very clear to say he's not going to veto the law, but just put it in his desk. That meant the law was already law, just not in effect because it hadn't been published.
And the law wasn't a campaign issue.
Then the Presidential campaign concluded, with Juan Orlando Hernandez declared President. When it could no longer influence the results of the election, Porfirio Lobo Sosa signed the law on December 18, and ordered its publication in La Gaceta where it appeared in the December 20, 2013 issue, which came out this week (they're slow to publish).
It is now in effect, and the government of Juan Orlando Hernandez, who championed the law, will have 90 days to implement the administrative structure and regulations that will govern the issuance securities backed by natural resources income streams.
Honduras wants to sell the net present value of its wind, its rivers, and its mineral rights. Who will buy them?
Well, in Honduras, the same should be said of politicians.
Back on July 20, Congress passed a controversial law called the Ley de promoción del desarrollo y reconversion de deuda publica (Decreto 145-2013) by which Honduras seeks to monetize its income stream from its national resources. We wrote about it, and the controversy surrounding the sudden introduction and passage of the law back on July 29, and you should reread it for details about the law.
The law was then sent to Porfirio Lobo Sosa for action on July 23.
Now in theory, Honduran law says Lobo Sosa had 10 days to either sign or veto the law. He signs the law by writing an order that says "Por Tanto Ejecutese" or vetos it by writing "Vuelva al Congreso" with a letter explaining what he thinks is wrong with it. If he takes no action, it enters limbo. It becomes law, but it is not in effect or enforceable until its printed in La Gaceta.
Porfirio Lobo Sosa initially defended the law, saying :
To veto this law would be to go against the interests of the nation.
But the law provoked a lot of opposition, both from business( the Associacion Nacional de Industriales de Honduras (ANDI) and the Asociacion Nacional de Minería Metálica, and even COHEP), unions (like Sindicato de Trabajadores de la Industria de Bebidas y Similares), and campesino groups.
On August 15, 2013, after Lobo Sosa had to have acted one way or another, he announced he would not sign the law, not because he didn't believe in it, but rather because it might hurt Juan Orlando Hernandez's chances of getting elected:
I'm not going to convert this into a campaign issue. When the new president arrives he can decide to approve it or not; it will stay in the desk for him.
Now he was very clear to say he's not going to veto the law, but just put it in his desk. That meant the law was already law, just not in effect because it hadn't been published.
And the law wasn't a campaign issue.
Then the Presidential campaign concluded, with Juan Orlando Hernandez declared President. When it could no longer influence the results of the election, Porfirio Lobo Sosa signed the law on December 18, and ordered its publication in La Gaceta where it appeared in the December 20, 2013 issue, which came out this week (they're slow to publish).
It is now in effect, and the government of Juan Orlando Hernandez, who championed the law, will have 90 days to implement the administrative structure and regulations that will govern the issuance securities backed by natural resources income streams.
Honduras wants to sell the net present value of its wind, its rivers, and its mineral rights. Who will buy them?
Wednesday, January 22, 2014
Police Cleansing: Gone
The lame duck Honduran Congress was busy yesterday.
Among their "accomplishments" was the elimination of the Comision de la Reforma de Seguridad Publica, the group responsible for developing the current procedures for cleansing the police.
The Cominision de la Reforma de Seguridad Publica was created on 31 January 2012, given the responsibility to design, plan, and certify a process totally reforming the police, the Public Prosecutor's office, and the Judicial branch. They were charged with reorganizing said governmental entities and proposing any needed legislation to back up the changes.
While they worked out procedures to detect and clear out some kinds of corruption in the police and Public Prosecutor's office, and drafted laws to back up their model of reforms to the public security aparatus in Honduras, the Lobo Sosa government never acted on those changes, effectively pocket vetoing them.
Juan Orlando Hernández, the incoming president, has a completely different idea of how the reforms should go, emphasizing building up military police rather than employing the community policing (based on a Japanese model) that the CSRP had proposed.
The lame duck Congress, ever so much in Hernández's pocket, lamented that the CSRP "never delivered the expected results" and so yesterday they voted the CSRP out of existence.
RIP CSRP.
Among their "accomplishments" was the elimination of the Comision de la Reforma de Seguridad Publica, the group responsible for developing the current procedures for cleansing the police.
The Cominision de la Reforma de Seguridad Publica was created on 31 January 2012, given the responsibility to design, plan, and certify a process totally reforming the police, the Public Prosecutor's office, and the Judicial branch. They were charged with reorganizing said governmental entities and proposing any needed legislation to back up the changes.
While they worked out procedures to detect and clear out some kinds of corruption in the police and Public Prosecutor's office, and drafted laws to back up their model of reforms to the public security aparatus in Honduras, the Lobo Sosa government never acted on those changes, effectively pocket vetoing them.
Juan Orlando Hernández, the incoming president, has a completely different idea of how the reforms should go, emphasizing building up military police rather than employing the community policing (based on a Japanese model) that the CSRP had proposed.
The lame duck Congress, ever so much in Hernández's pocket, lamented that the CSRP "never delivered the expected results" and so yesterday they voted the CSRP out of existence.
RIP CSRP.
Saturday, January 18, 2014
Government Reorganization: Massive Centralization Proposed
We're beginning to see the pieces of how Juan Orlando Hernández's transition team wants to re-organize the Honduran government. We've accumulated our description through press reports (notably this, and this) and sources in Honduras with knowledge of the planning.
The names of proposed units vary, but the shape is clear: massive centralization and an emphasis on economic development, subordinating many of the functions of the executive branch to new structures of authority.
But there's a hitch: on Friday, the emerging plans got slapped down when Congress refused to authorize changes to the Ley de Administración Pública that would be necessary to implement what one Honduran source described to us as massive centralization.
Here's what the transition team proposed:
Eight super Ministries whose heads would form Hernandez's cabinet:
The new structure demotes many of the existing Secretariats (such as Gobernacion, Justicia y Derechos Humanos, Agricultura y Ganaderia) to a director level below a super Minister. It folds all the existing Secretariats into the eight super Ministries, if not at the director level, then as part of merged portfolios.
Each of the eight cabinet ministers will have a series of direct reports, many of them running institutions that under Lobo Sosa were represented at the cabinet level.
Thus, Economic Planning and Regulation would include the Banco Central de Honduras (BCH), the Comision de Bancos y Seguros (CNBS), and the former cabinet-level Secretaria de Finanzas (SEFIN), among others.
Interior and Decentralization encompasses the former Interior Ministry, immigration services, and the National Registry of People (RNP)
Economic Development incorporates the Secretaria de Recursos Naturales y Ambiente (SERNA), and the Secretaria de Agricultura y Ganaderia, each previously cabinet level on its own.
Productive Infrastructure takes over the former Secretaria de Obras Publicas, Transporte, y Vivienda (SOPTRAVI).
Defense and Security essentially remains as it did under Arturo Corrales, folding together the former Secretaria de Defensa and the Secretaria de Seguridad, combining cabinet-level responsibility for the military and police.
Foreign Relations and International Cooperation replaces and continues the existing Ministry of Foreign Relations.
Takeaway?
Power would be concentrated in a very few individuals.
The proposed shape of the government shows the neoliberal economic agenda that is the focus of this government. For example, the affairs of the former cabinet-level Ministry of Culture would be rolled into the new ministry of economic development.
The goal was allegedly to reduce the size of the Honduran government, and reduce its budget by some 700 million lempiras (about $35 million). But it's not clear where the savings would come from. Each super Ministry must do what all the previous Secretariats incorporated in it did.
This led Congress to reject the entire thing this Friday.
At the same time Congress was given the proposed structure, and changes to the Ley de Administración Pública to implement it, it was also given the Hernández budget for 2014 based on doing that reorganization. The rough outline of spending reportedly is:
Congress members said that the plan they received, along with the budget above, doesn't appear to eliminate any part of the existing government and just tacks a bureaucracy for a super Ministry on top of it, bloating the budget by 18 to 20 million per super Ministry.
An unnamed Congressman is quoted as saying "they think they invented hot water....they sent us a bunch of foolishness and clumsy structures".
Now Congress, not Hernandez's transition team, will have the final say on if and how the government will be re-organized when they take the question up again in the next few days.
The names of proposed units vary, but the shape is clear: massive centralization and an emphasis on economic development, subordinating many of the functions of the executive branch to new structures of authority.
But there's a hitch: on Friday, the emerging plans got slapped down when Congress refused to authorize changes to the Ley de Administración Pública that would be necessary to implement what one Honduran source described to us as massive centralization.
Here's what the transition team proposed:
Eight super Ministries whose heads would form Hernandez's cabinet:
- Strategic Planning (Conducción Estrategica)
- Interior and Decentralization (Gobernabilidad y Descentralización)
- Economic Development (Desarrollo Economico)
- Social Development and Inclusion (Desarrollo e Inclusión Social)
- Defense and Security (Defensa y Seguridad)
- Productive Infrastructure (Infraestructura Productiva)
- Foreign Relations and International Cooperation (Relaciones Exteriores y Cooperación Internacional)
- Economic Planning and Regulation (Conducción y Regulación Economica)
The new structure demotes many of the existing Secretariats (such as Gobernacion, Justicia y Derechos Humanos, Agricultura y Ganaderia) to a director level below a super Minister. It folds all the existing Secretariats into the eight super Ministries, if not at the director level, then as part of merged portfolios.
Each of the eight cabinet ministers will have a series of direct reports, many of them running institutions that under Lobo Sosa were represented at the cabinet level.
Thus, Economic Planning and Regulation would include the Banco Central de Honduras (BCH), the Comision de Bancos y Seguros (CNBS), and the former cabinet-level Secretaria de Finanzas (SEFIN), among others.
Interior and Decentralization encompasses the former Interior Ministry, immigration services, and the National Registry of People (RNP)
Economic Development incorporates the Secretaria de Recursos Naturales y Ambiente (SERNA), and the Secretaria de Agricultura y Ganaderia, each previously cabinet level on its own.
Productive Infrastructure takes over the former Secretaria de Obras Publicas, Transporte, y Vivienda (SOPTRAVI).
Defense and Security essentially remains as it did under Arturo Corrales, folding together the former Secretaria de Defensa and the Secretaria de Seguridad, combining cabinet-level responsibility for the military and police.
Foreign Relations and International Cooperation replaces and continues the existing Ministry of Foreign Relations.
Takeaway?
Power would be concentrated in a very few individuals.
The proposed shape of the government shows the neoliberal economic agenda that is the focus of this government. For example, the affairs of the former cabinet-level Ministry of Culture would be rolled into the new ministry of economic development.
The goal was allegedly to reduce the size of the Honduran government, and reduce its budget by some 700 million lempiras (about $35 million). But it's not clear where the savings would come from. Each super Ministry must do what all the previous Secretariats incorporated in it did.
This led Congress to reject the entire thing this Friday.
At the same time Congress was given the proposed structure, and changes to the Ley de Administración Pública to implement it, it was also given the Hernández budget for 2014 based on doing that reorganization. The rough outline of spending reportedly is:
Strategic Planning - 2000 million lempiras ($100 million)
Interior and Decentralization - 7000 million lempiras ($350 million)
Economic Development - 5000 million lempiras ($250 million)
Social Development and Inclusion - 70,000 million lempiras ($3.5 billion)
Defense and Security - 8000 million lempiras ($400 million)
Productive Infrastructure - 40,000 million lempiras ($2 billion)
Foreign Relations and International Cooperation - 855 million lempiras ($42.7 million)
Economic Planning and Regulation- 45,000 million lempiras ($2.25 billion)
Congress members said that the plan they received, along with the budget above, doesn't appear to eliminate any part of the existing government and just tacks a bureaucracy for a super Ministry on top of it, bloating the budget by 18 to 20 million per super Ministry.
An unnamed Congressman is quoted as saying "they think they invented hot water....they sent us a bunch of foolishness and clumsy structures".
Now Congress, not Hernandez's transition team, will have the final say on if and how the government will be re-organized when they take the question up again in the next few days.
Thursday, December 26, 2013
Renewable Power Down in Honduras
Despite having increased its installed base of renewable energy generation sources, Honduras is actually getting proportionally less energy from renewable sources than it previously was.
The result of this lower generation has been roving blackouts all across Honduras this year. This comes despite policies of the Lobo Sosa administration.
In 2010 they approved 47 renewable energy projects, with a combined generation capacity of 750 megawatts. Only four of those projects have actually broken ground to begin construction, and only one, a small hydroelectric project generating 12 megawatts, is actually operating.
In 2010, Honduras generated 6,744.3 gigawatt hours of power, split as follows:
From 2010 to 2013, Honduras saw a slight increase in installed capacity, from 1610 megwatts to 1734.9 megawatts. That's a 124.9 megawatt increase, nearly all of it because of a single wind power farm, Cerro Hule (102 megawatts), coming on line.
There was a slight increase in biomass generation by 2013 as well, from an installed capacity of 91.4 megawatts to 105.5 megawatts, primarily from sugar cane processing.
By installed capacity, in 2010 renewable sources represented 38.4% of the generating capacity of Honduras. In 2013 that had risen to 43.7% of installed capacity, as the director of SERNA reported earlier this year.
But despite representing almost 44% of the generating capacity, renewable installations actually generated only 40% of the power produced in Honduras this year.
Why was this?
There was an overall drop in power generation in Honduras between 2010 and 2013. In 2010, Honduras generated 6744.3 gigawatt hours of power. In 2013, it generated 5898.8 gigawatt hours, a decrease of 845.5 gigawatt hours.
The good news is that wind power and biomass generation increased.
The bad news is that everything else decreased. Oil-fired plants generated 22 gigawatt hours less electricity in 2013 versus 2010.
The biggest drop in generation came from hydroelectric.
In 2010 hydroelectric plants generated 44.8% of the power used in Honduras. In 2013, only 33.7% of the power generated in Honduras came from hydroelectric, a drop of 11%. Total hydraulic generation dropped by nearly a third, from 3083.3 gigawatt hours in 2010 to 1999.1 gigawatt hours in 2013. Part of this is due to mismanagement of the El Cajón dam, built on the Comayagua River in the 1980s.
The amount of water in its reservoir has been lowered to reduce pressure on the dam, which is reportedly leaking more than 2000 liters per second through cracks that threaten to flood the turbine room. Reduced water pressure means reduced production of electricity.
Another factor contributing to this decrease in hydroelectric generation is drought. Much of the southern half of the country has been experiencing a multi-year drought.
The renewable energy strategy of ENEE places a higher emphasis on hydroelectric projects than any other form of renewable energy. The majority of the 47 renewable energy projects approved in 2010 were hydroelectric projects, mostly small.
Honduras is at continuing risk for drought going forward, according to climate change maps.
Other types of renewable power would seem like better options for the future, and would lower the confrontations caused with local people-- often rural farmers, and in many cases indigenous people.
Unfortunately, when Honduras strikes out into renewable energy, it is just as likely to grant contracts to companies with no expertise.
So the hydroelectric projects that can be done with local resources keep on coming. But the power generated does not.
The result of this lower generation has been roving blackouts all across Honduras this year. This comes despite policies of the Lobo Sosa administration.
In 2010 they approved 47 renewable energy projects, with a combined generation capacity of 750 megawatts. Only four of those projects have actually broken ground to begin construction, and only one, a small hydroelectric project generating 12 megawatts, is actually operating.
In 2010, Honduras generated 6,744.3 gigawatt hours of power, split as follows:
- 3,449.6 gigawatt hours (52%) from oil fired plants
- 3,080.3 gigawatt hours (44.8%) from hydraulic generation
- 142.1 gigawatt hours (2.1%) from biomass
- 22.1 gigawatt hours (0.3%) from imported power
From 2010 to 2013, Honduras saw a slight increase in installed capacity, from 1610 megwatts to 1734.9 megawatts. That's a 124.9 megawatt increase, nearly all of it because of a single wind power farm, Cerro Hule (102 megawatts), coming on line.
There was a slight increase in biomass generation by 2013 as well, from an installed capacity of 91.4 megawatts to 105.5 megawatts, primarily from sugar cane processing.
By installed capacity, in 2010 renewable sources represented 38.4% of the generating capacity of Honduras. In 2013 that had risen to 43.7% of installed capacity, as the director of SERNA reported earlier this year.
But despite representing almost 44% of the generating capacity, renewable installations actually generated only 40% of the power produced in Honduras this year.
Why was this?
There was an overall drop in power generation in Honduras between 2010 and 2013. In 2010, Honduras generated 6744.3 gigawatt hours of power. In 2013, it generated 5898.8 gigawatt hours, a decrease of 845.5 gigawatt hours.
The good news is that wind power and biomass generation increased.
The bad news is that everything else decreased. Oil-fired plants generated 22 gigawatt hours less electricity in 2013 versus 2010.
The biggest drop in generation came from hydroelectric.
In 2010 hydroelectric plants generated 44.8% of the power used in Honduras. In 2013, only 33.7% of the power generated in Honduras came from hydroelectric, a drop of 11%. Total hydraulic generation dropped by nearly a third, from 3083.3 gigawatt hours in 2010 to 1999.1 gigawatt hours in 2013. Part of this is due to mismanagement of the El Cajón dam, built on the Comayagua River in the 1980s.
The amount of water in its reservoir has been lowered to reduce pressure on the dam, which is reportedly leaking more than 2000 liters per second through cracks that threaten to flood the turbine room. Reduced water pressure means reduced production of electricity.
Another factor contributing to this decrease in hydroelectric generation is drought. Much of the southern half of the country has been experiencing a multi-year drought.
The renewable energy strategy of ENEE places a higher emphasis on hydroelectric projects than any other form of renewable energy. The majority of the 47 renewable energy projects approved in 2010 were hydroelectric projects, mostly small.
Honduras is at continuing risk for drought going forward, according to climate change maps.
Other types of renewable power would seem like better options for the future, and would lower the confrontations caused with local people-- often rural farmers, and in many cases indigenous people.
Unfortunately, when Honduras strikes out into renewable energy, it is just as likely to grant contracts to companies with no expertise.
So the hydroelectric projects that can be done with local resources keep on coming. But the power generated does not.
Monday, December 23, 2013
New Taxes, Old Economic Problems
The lame duck Honduran Congress is now piling on taxes to try and make up for the last four years of spending as the Lobo Sosa administration prepares to give way to the presidency of Juan Orlando Hernández.
On Saturday, December 21, the Congress passed a new, extensive series of taxes and rule changes designed to bring up to 4000 million lempiras ($200 million) in new revenue to the government over the next year. The same measure imposes restrictions on the transfer of income between government branches that is expected to bring about a further 12000 million lempiras ($600 million) in savings.
Everyone will pay a new "special contribution" of 3% on all sales. This is on top of the already existing sales tax of 12%.
All customs tax exemptions (commonly used by religious institutions, businesses aimed at tourism, newspapers, and power generation companies) are cancelled. Telephone and cable television service will be subject to the 15% tax, but internet service will continue to be taxed at 12%.
Everyone except those given an exemption under legislation called the Regímenes Especiales de Importación y Turismo will pay a further 5% tax on taxable income greater than 1 million lempiras ($50,000).
Consumption taxes are in general regressive-- they disproportionately affect the poorest members of a population. In addition to the general impact that the Honduran poor will experience from the added special contribution tax, other aspects of the new law will sharply affect their use of energy.
Some consumers receive a subsidy on their electric service. Until now, that subsidy has been for those who consume less than 150 kw/month. From today forward, the subsidy will only be for those who consume 75 kw/month or less.
Gasoline will be taxed a further 5.3 lempiras/gallon ($0.25/gallon). The income is supposed to be earmarked for infrastructure and social welfare projects.
But the poor are not targeted by the new sweeping tax increases: property owners will see sharp increases in taxation as well.
The central government will retain 10% of the gains from the purchase or sale of property, bonds, rights, and titles as a capital gains tax. Dividends will be taxed at 10% as well.
Consumption and property transfer taxes make sense as policy because Honduras has a poor record of tax collection on basic income tax. But that doesn't mean income tax rates were left alone, either.
Foreign companies will pay a tax of 10% on gross income in Honduras. Honduran companies will pay 1.5% on their gross income over 3 million lempiras ($150,000) except if their business is selling cement, services given to the government, pharmaceuticals for human consumption, petroleum products, or supplies for baking, which will pay a tax of 0.75%.
The tax law also contemplates retaining more money for the central government at the expense of entities it owes fixed levels of funding.
The new law freezes the 2014 budget for the central government at 2013 levels. But it also changes how amounts specified in the constitution for other government entities, such as municipal governments and the National Autonomous University, are calculated. Some kinds of income that previously counted in calculating the amounts to transfer will be exempt from being counted now. This means that all dependencies specified as receiving a fixed percent of the government income will receive a budget cut, while the central government will retain more.
On top of all this, there is yet another revision to the security tax.
This revision extends the security tax to cover previously exempt bank accounts with deposits under 120,000 lempiras. Now, all savings and checking accounts will be taxed. COHEP, one of the principal business organizations in the country, warns that this might lead to capital flight.
So why is Congress doing this now?
Part of the answer is that Honduras simply has to find more revenue or the government cannot continue. And some of the answer is partisan politics, with a hand-off of government from one National Party president to another, something that has never happened since the new Honduran constitution was set in place in the 1980s. Even with the new taxes and savings envisioned under this law, it will not close the fiscal deficit under which the government operates.
Right now the lame duck Congress has enough National Party members to pass anything they want, short of a constitutional amendment. The new Congress might not be so amenable. The National Party will not have sufficient representation to do what it wants. It will need to make alliances with other parties in order to enact legislation, making laws like this one difficult to pass.
Most of the Liberal Party members in the present Congress opposed the new taxes, and suggested that the press headline their coverage "National Party passes new taxes". The Liberal membership in the incoming Congress will be joined by LIBRE and PAC contingents that can also be expected to be less inclined to automatically agree with the ruling party's legislative direction
The Lobo Sosa government used 1.4 billion dollars in borrowing to make ends meet this year. Under the new tax law's projections, the increases will, at best, cover half of that.
It will be up to the next government to figure out how to cover the other half, while improving actual tax collection enough to cover those projections. And that is presumably why, along with changes in the leadership of the police and military, the first choices for government offices made by Juan Orlando Hernández included a new head of the Dirección Ejecutivo de Ingresos (Executive Office of Income), Miriam Guzman, reportedly already at work.
On Saturday, December 21, the Congress passed a new, extensive series of taxes and rule changes designed to bring up to 4000 million lempiras ($200 million) in new revenue to the government over the next year. The same measure imposes restrictions on the transfer of income between government branches that is expected to bring about a further 12000 million lempiras ($600 million) in savings.
Everyone will pay a new "special contribution" of 3% on all sales. This is on top of the already existing sales tax of 12%.
All customs tax exemptions (commonly used by religious institutions, businesses aimed at tourism, newspapers, and power generation companies) are cancelled. Telephone and cable television service will be subject to the 15% tax, but internet service will continue to be taxed at 12%.
Everyone except those given an exemption under legislation called the Regímenes Especiales de Importación y Turismo will pay a further 5% tax on taxable income greater than 1 million lempiras ($50,000).
Consumption taxes are in general regressive-- they disproportionately affect the poorest members of a population. In addition to the general impact that the Honduran poor will experience from the added special contribution tax, other aspects of the new law will sharply affect their use of energy.
Some consumers receive a subsidy on their electric service. Until now, that subsidy has been for those who consume less than 150 kw/month. From today forward, the subsidy will only be for those who consume 75 kw/month or less.
Gasoline will be taxed a further 5.3 lempiras/gallon ($0.25/gallon). The income is supposed to be earmarked for infrastructure and social welfare projects.
But the poor are not targeted by the new sweeping tax increases: property owners will see sharp increases in taxation as well.
The central government will retain 10% of the gains from the purchase or sale of property, bonds, rights, and titles as a capital gains tax. Dividends will be taxed at 10% as well.
Consumption and property transfer taxes make sense as policy because Honduras has a poor record of tax collection on basic income tax. But that doesn't mean income tax rates were left alone, either.
Foreign companies will pay a tax of 10% on gross income in Honduras. Honduran companies will pay 1.5% on their gross income over 3 million lempiras ($150,000) except if their business is selling cement, services given to the government, pharmaceuticals for human consumption, petroleum products, or supplies for baking, which will pay a tax of 0.75%.
The tax law also contemplates retaining more money for the central government at the expense of entities it owes fixed levels of funding.
The new law freezes the 2014 budget for the central government at 2013 levels. But it also changes how amounts specified in the constitution for other government entities, such as municipal governments and the National Autonomous University, are calculated. Some kinds of income that previously counted in calculating the amounts to transfer will be exempt from being counted now. This means that all dependencies specified as receiving a fixed percent of the government income will receive a budget cut, while the central government will retain more.
On top of all this, there is yet another revision to the security tax.
This revision extends the security tax to cover previously exempt bank accounts with deposits under 120,000 lempiras. Now, all savings and checking accounts will be taxed. COHEP, one of the principal business organizations in the country, warns that this might lead to capital flight.
So why is Congress doing this now?
Part of the answer is that Honduras simply has to find more revenue or the government cannot continue. And some of the answer is partisan politics, with a hand-off of government from one National Party president to another, something that has never happened since the new Honduran constitution was set in place in the 1980s. Even with the new taxes and savings envisioned under this law, it will not close the fiscal deficit under which the government operates.
Right now the lame duck Congress has enough National Party members to pass anything they want, short of a constitutional amendment. The new Congress might not be so amenable. The National Party will not have sufficient representation to do what it wants. It will need to make alliances with other parties in order to enact legislation, making laws like this one difficult to pass.
Most of the Liberal Party members in the present Congress opposed the new taxes, and suggested that the press headline their coverage "National Party passes new taxes". The Liberal membership in the incoming Congress will be joined by LIBRE and PAC contingents that can also be expected to be less inclined to automatically agree with the ruling party's legislative direction
The Lobo Sosa government used 1.4 billion dollars in borrowing to make ends meet this year. Under the new tax law's projections, the increases will, at best, cover half of that.
It will be up to the next government to figure out how to cover the other half, while improving actual tax collection enough to cover those projections. And that is presumably why, along with changes in the leadership of the police and military, the first choices for government offices made by Juan Orlando Hernández included a new head of the Dirección Ejecutivo de Ingresos (Executive Office of Income), Miriam Guzman, reportedly already at work.
Thursday, December 19, 2013
Tigre Bonilla and Rene Osorio Canales Out
Porfirio Lobo Sosa is letting Juan Orlando Hernández start making changes in the Honduran government before he is sworn in this coming January, underlining the collaboration that exists between these two Partido Nacional administrations, while highlighting their differences in key changes in the police and military leadership.
On December 17, Lobo Sosa gave his Ministers until the end of the day to hand in their resignations so that Hernandez could install his choices once he made them. The first act was to shuffle the command in the police and military. The new holders of these positions have already been sworn in by Lobo Sosa today, with Hernández speaking at the ceremony.
Juan Carlos "Tigre" Bonilla is out. Ramon Antonio Sabillon Pineda is the new police commander. Sabillon previously was the commander of the special investigations division of the police.
Bonilla is rumored to have had differences with Arturo Corrales, the Security Minister, who Hernández is considering keeping in that office.
Felix Villanueva Mejia will be the assistant director of the police. The preventative police will be headed by Javier Leopoldo Flores Milla, while Hernández will keep the current director of the transit police, Abencio Atilio Flores Morazán, in that position. The director of the investigative police (Dirección Nacional de Investigación Criminal) will be Jose Leandro Osorio. The special investigative police will be headed by Ruben Martel Garcia,while Hector Ivan Mejia will serve as director of the police academy. Abraham Flores Marcelino will be head of the police special unit, and José Leonel Enamorado will be the police commander of the joint military and police task force.
The high command of the Honduran Armed Forces was also changed significantly.
In the place of the current military commander, Rene Osorio Canales, will be Fredy Santiago Diaz Zelaya. In December Zelaya received his fifth star, along with Julian Pacheco Tinoco, who will remain as commander of the Military Intelligence service. Rigoberto Espinosa Posadas, who was promoted in December, will be second in command of the Honduran Joint Chiefs. Miguel Palacios Romero will be the military Inspector General. Jorge Alberto Fernández López will command the Air Force, and Héctor Orlando Caballero Espinoza will command the Navy.
Lobo Sosa also let Juan Orlando Hernández name and install his head of the Dirección Ejecutivo de Ingresos (DEI), the Honduran equivalent of the IRS.
This important government unit, which failed to meet its quotas all through the Lobo Sosa government, will be Miriam Guzman. She also has taken the reins of her government unit already.
On December 17, Lobo Sosa gave his Ministers until the end of the day to hand in their resignations so that Hernandez could install his choices once he made them. The first act was to shuffle the command in the police and military. The new holders of these positions have already been sworn in by Lobo Sosa today, with Hernández speaking at the ceremony.
Juan Carlos "Tigre" Bonilla is out. Ramon Antonio Sabillon Pineda is the new police commander. Sabillon previously was the commander of the special investigations division of the police.
Bonilla is rumored to have had differences with Arturo Corrales, the Security Minister, who Hernández is considering keeping in that office.
Felix Villanueva Mejia will be the assistant director of the police. The preventative police will be headed by Javier Leopoldo Flores Milla, while Hernández will keep the current director of the transit police, Abencio Atilio Flores Morazán, in that position. The director of the investigative police (Dirección Nacional de Investigación Criminal) will be Jose Leandro Osorio. The special investigative police will be headed by Ruben Martel Garcia,while Hector Ivan Mejia will serve as director of the police academy. Abraham Flores Marcelino will be head of the police special unit, and José Leonel Enamorado will be the police commander of the joint military and police task force.
The high command of the Honduran Armed Forces was also changed significantly.
In the place of the current military commander, Rene Osorio Canales, will be Fredy Santiago Diaz Zelaya. In December Zelaya received his fifth star, along with Julian Pacheco Tinoco, who will remain as commander of the Military Intelligence service. Rigoberto Espinosa Posadas, who was promoted in December, will be second in command of the Honduran Joint Chiefs. Miguel Palacios Romero will be the military Inspector General. Jorge Alberto Fernández López will command the Air Force, and Héctor Orlando Caballero Espinoza will command the Navy.
Lobo Sosa also let Juan Orlando Hernández name and install his head of the Dirección Ejecutivo de Ingresos (DEI), the Honduran equivalent of the IRS.
This important government unit, which failed to meet its quotas all through the Lobo Sosa government, will be Miriam Guzman. She also has taken the reins of her government unit already.
Tuesday, December 10, 2013
More Honduran Bonds Coming
Honduras has yet to place an offering of the final $250 million dollars in government bonds authorized by Decreto 183-2012 of November, 2012 in a foreign capital market, but already Congress is modifying it to authorize the placement of even more government bonds to finance current expenditures.
Through Decreto 183-2012 the Honduran Congress authorized the sale of up to $750 million dollars in government bonds, placed in domestic or foreign capital markets. In the spring of this year, they successfully offered $500 million dollars of that in bonds that had slightly more than 7% interest. However, when they sought to place the remaining $250 million dollars in government bonds this summer, they found the interest rate had risen to above 10% and withdrew the offer. They have announced that they intend to try again this month to sell the last $250 million in bonds, hoping for a better interest rate.
But acting rapidly yesterday, the Honduran Congress, reportedly without dissent, amended the original bill to authorize up to $1 billion dollars in bonds, an increment of a further $250 million, because it has become clear that the original amount will not meet the financial needs of the Lobo Sosa government.
Honduras owed about $4.8 billion dollars at the start of the Zelaya Rosales administration, when it qualified for debt relief under the Initiative for Highly Indebted Poor Countries and received a total of $3.5 billion in relief. That left it a foreign debt of about $1.3 billion dollars.
As of September this year, Honduras's foreign debt was back up to $5.68 billion dollars. $842 million of that increase occurred just this year. La Tribuna reports that for 2013 so far, the debt incurred ($1.496 billion) is about 3.2 times the government income for the same period ($455 million).
Honduran sociologist Julio Navarro notes
That's why Congress is authorizing more bonds to meet the current obligations of the Lobo Sosa government. But Navarro continues:
Yikes!
Through Decreto 183-2012 the Honduran Congress authorized the sale of up to $750 million dollars in government bonds, placed in domestic or foreign capital markets. In the spring of this year, they successfully offered $500 million dollars of that in bonds that had slightly more than 7% interest. However, when they sought to place the remaining $250 million dollars in government bonds this summer, they found the interest rate had risen to above 10% and withdrew the offer. They have announced that they intend to try again this month to sell the last $250 million in bonds, hoping for a better interest rate.
But acting rapidly yesterday, the Honduran Congress, reportedly without dissent, amended the original bill to authorize up to $1 billion dollars in bonds, an increment of a further $250 million, because it has become clear that the original amount will not meet the financial needs of the Lobo Sosa government.
Honduras owed about $4.8 billion dollars at the start of the Zelaya Rosales administration, when it qualified for debt relief under the Initiative for Highly Indebted Poor Countries and received a total of $3.5 billion in relief. That left it a foreign debt of about $1.3 billion dollars.
As of September this year, Honduras's foreign debt was back up to $5.68 billion dollars. $842 million of that increase occurred just this year. La Tribuna reports that for 2013 so far, the debt incurred ($1.496 billion) is about 3.2 times the government income for the same period ($455 million).
Honduran sociologist Julio Navarro notes
"The first difficulty that this government has is how to pay its salary obligations to about 205 million government employees....this is a problem for this [the Lobo Sosa] government and it's a problem that the next government will inherit."
That's why Congress is authorizing more bonds to meet the current obligations of the Lobo Sosa government. But Navarro continues:
"The other real problem of the next government is how to negotiate the expiration of the bonds the government has with private financial institutions, like banks and pension systems; the government currently has no way to pay off this internal debt."
Yikes!
Saturday, November 23, 2013
"The image of openness"? Election Observers Harassed
The normally open borders of Honduras with its neighbors are only partly open this week. Venacio Cervantes, head of Immigration, said yesterday that the borders are open, but that foreigners must justify their trip into Honduras at this time. "All entrances will be controlled," said the retired General.
Actually, he said a lot more: "All hotheads and national and foreign agitators who promote boycotting the election will be neutralized".
Today, he was ordered by Porfirio Lobo Sosa to stop, after two separate incidents of harassment of foreign election observers were reported by domestic and foreign press.
Cervantes reportedly said that he was
Unfortunately, the "hotheads" he thought would be slowing the electoral process included duly accredited election observers-- on whom any hope of this election being seen as transparent rests.
The earliest incident happened Friday, Nov. 22. ERIC, the Equipo de Reflexión Investigación y Comunicación, a Jesuit organization long established in Honduras, had its offices in El Progresso, Yoro, raided by Immigration police from the town. They entered a room where over 100 foreign election observers had just finished receiving training from a Tribunal Supremo Electoral official, and demanded that the Guatemalans, Salvadorans, US Citizens, and Canadians that made up the group present their TSE accreditation documents.
They also ordered the leader of the group, Alexis Lanza, to bring everyone down to the nearest Immigration office for unstated reasons.
Honduran Immigration police have no authority to enforce the election law, nor have they been formally asked to do so by the TSE. They have no legal power to ask for a foreign election observer's TSE accreditation documents. The only thing they can legally ask someone to produce is their passport or other immigration documents that identify them and authorize them to be in the country.
Then on Saturday, November 23, military police entered the Aurora Hotel in Tegucigalpa, and ordered everyone in the hotel to leave their rooms, interrupting a meeting of LIBRE activist Eduardo Enrique Reina with his duly assigned and accredited foreign election observers. All were asked to identify themselves and were threatened with explusion from the country.
That was too much for David Matamoros, president of the TSE, who ordered Immigration to stop following and harassing foreigners, saying
Matamoros says he went directly to President Lobo Sosa to ask that Immigration, which is part of the executive branch, be ordered to cease its operations following foreigners in the country. Matamoros also issued instructions to the police and Armed Forces pointing out that they, in support of the election, were supposed to protect, not harass, election observers.
Anything to preserve the image of openness and tranquility.
Actually, he said a lot more: "All hotheads and national and foreign agitators who promote boycotting the election will be neutralized".
Today, he was ordered by Porfirio Lobo Sosa to stop, after two separate incidents of harassment of foreign election observers were reported by domestic and foreign press.
Cervantes reportedly said that he was
not going to permit disorder from [those] that come to slow down the electoral process, and those hotheads who want to protest and make unrest and confusion; the armed forces will proceed in accordance with all that's legal and we shall be forceful in the application of the law.
Unfortunately, the "hotheads" he thought would be slowing the electoral process included duly accredited election observers-- on whom any hope of this election being seen as transparent rests.
The earliest incident happened Friday, Nov. 22. ERIC, the Equipo de Reflexión Investigación y Comunicación, a Jesuit organization long established in Honduras, had its offices in El Progresso, Yoro, raided by Immigration police from the town. They entered a room where over 100 foreign election observers had just finished receiving training from a Tribunal Supremo Electoral official, and demanded that the Guatemalans, Salvadorans, US Citizens, and Canadians that made up the group present their TSE accreditation documents.
They also ordered the leader of the group, Alexis Lanza, to bring everyone down to the nearest Immigration office for unstated reasons.
Honduran Immigration police have no authority to enforce the election law, nor have they been formally asked to do so by the TSE. They have no legal power to ask for a foreign election observer's TSE accreditation documents. The only thing they can legally ask someone to produce is their passport or other immigration documents that identify them and authorize them to be in the country.
Then on Saturday, November 23, military police entered the Aurora Hotel in Tegucigalpa, and ordered everyone in the hotel to leave their rooms, interrupting a meeting of LIBRE activist Eduardo Enrique Reina with his duly assigned and accredited foreign election observers. All were asked to identify themselves and were threatened with explusion from the country.
That was too much for David Matamoros, president of the TSE, who ordered Immigration to stop following and harassing foreigners, saying
They told me they were following two people who had entered the country 10 days ago, but at this moment we cannot have any discussion of the act of going to a place where we have invited foreigners, because we must maintain the image of openness, the image of peace and tranquility which we want to have, not only for the Hondurans, but also for the international observers.
Matamoros says he went directly to President Lobo Sosa to ask that Immigration, which is part of the executive branch, be ordered to cease its operations following foreigners in the country. Matamoros also issued instructions to the police and Armed Forces pointing out that they, in support of the election, were supposed to protect, not harass, election observers.
Anything to preserve the image of openness and tranquility.
Monday, November 18, 2013
Political Pragmatism?
It was surreal to read an Agence France-Presse interview with Adolfo Facussé, one of the vocal supporters of the coup against Manuel Zelaya Rosales in 2009, saying Xiomara Castro could represent real change in Honduras, whereas none of the other candidates does.
Facussé, who is president of the Asociación Nacional de Industriales (ANDI), said:
How exactly the nation needs to change is pretty clear: Facussé went on to characterize the Lobo Sosa government, and especially its economic policies, as a disaster. Of Juan Orlando Hernandez, the National Party candidate for President, Facussé said "he has the characteristics to become an autocratic president."
Aline Flores, president of the other leading business group in Honduras, Consejo Hondureño de la Empresa Privada (Cohep), made it clear she didn't agree with Facussé about LIBRE. She said:
Facussé did get support in his criticism of the Lobo Sosa government. Oscar Galeano, a former president of COHEP, said
Facussé said he was not afraid of leftist ideas, though he's not enchanted with Castro's call for a Constitutional Assembly:
That seems to fly in the face of Facussé's support for the 2009 coup, but he clearly thinks that political intervention made a point that will limit what even a LIBRE president does:
It is shocking to see a Honduran businessman call the government "idiotic". But increasing social inequality, impoverishing the populace, is exactly what the last two National Party presidencies have done.
A recent study by The Center for Economic Policy Research , "Honduras Since the Coup: Economic and Social Outcomes", authored by Jake Johnston and Stephan Lefebvre, points out that
Only three countries in Latin America have seen their GINI coefficient, a measure of how unequal the distribution of income is in the country, increase since 2009. The rest have seen decreases of 1 to 7 percent. Honduras had a 12.5% increase in its GINI coefficient, from .50 in 2009, to .59 in 2011, the latest year for which there are records. That's the greatest increase of any country in Latin America, and the highest absolute value for a GINI coefficient in Latin America.
In fact, since 2001, inequality has consistently increased under Nationalist governments, declining only during the four years of the Zelaya administration. Under Zelaya, Honduras had about the same level of economic inequality as Costa Rica in 2009.
And as the Honduran businessmen speaking out note, poverty is bad for business. The rich may get richer while the poor get poorer, but eventually, you run out of customers.
Facussé, who is president of the Asociación Nacional de Industriales (ANDI), said:
We have businessmen from all the parties. Libre has something that appeals to me and that is the promise of change. The country definitely needs to change.
How exactly the nation needs to change is pretty clear: Facussé went on to characterize the Lobo Sosa government, and especially its economic policies, as a disaster. Of Juan Orlando Hernandez, the National Party candidate for President, Facussé said "he has the characteristics to become an autocratic president."
Aline Flores, president of the other leading business group in Honduras, Consejo Hondureño de la Empresa Privada (Cohep), made it clear she didn't agree with Facussé about LIBRE. She said:
He (Facussé) has always had his own opinion and I respect him a lot, but we don't share some ideas.
Facussé did get support in his criticism of the Lobo Sosa government. Oscar Galeano, a former president of COHEP, said
Some businessmen will prefer the right, some the center, and others the left. What is certain is that Honduras cannot continue depending on irresponsible governments that don't promote investment and development, because (with Lobo), we have lost much time; we have a high rate of unemployment.
Facussé said he was not afraid of leftist ideas, though he's not enchanted with Castro's call for a Constitutional Assembly:
I'm not afraid of the ideas of the left, the intelligent left (....) they have not done badly in El Salvador; in Nicaragua the businessmen are content. We, without having a leftist government, have an idiotic government. For businessmen it is not good to have a populace dying of hunger, poor people.
That seems to fly in the face of Facussé's support for the 2009 coup, but he clearly thinks that political intervention made a point that will limit what even a LIBRE president does:
If Doña Xiomara is elected, Don Mel Zelaya will have the intelligence to manage things [the government] without confronting the rest of society.
It is shocking to see a Honduran businessman call the government "idiotic". But increasing social inequality, impoverishing the populace, is exactly what the last two National Party presidencies have done.
A recent study by The Center for Economic Policy Research , "Honduras Since the Coup: Economic and Social Outcomes", authored by Jake Johnston and Stephan Lefebvre, points out that
Economic inequality, which decreased for four consecutive years starting in 2006, began trending upward in 2010. Honduras now has the most unequal distribution of income in Latin America.
Only three countries in Latin America have seen their GINI coefficient, a measure of how unequal the distribution of income is in the country, increase since 2009. The rest have seen decreases of 1 to 7 percent. Honduras had a 12.5% increase in its GINI coefficient, from .50 in 2009, to .59 in 2011, the latest year for which there are records. That's the greatest increase of any country in Latin America, and the highest absolute value for a GINI coefficient in Latin America.
In fact, since 2001, inequality has consistently increased under Nationalist governments, declining only during the four years of the Zelaya administration. Under Zelaya, Honduras had about the same level of economic inequality as Costa Rica in 2009.
And as the Honduran businessmen speaking out note, poverty is bad for business. The rich may get richer while the poor get poorer, but eventually, you run out of customers.
Monday, October 14, 2013
Honduras seeks $250 million in US Capital Market
Honduras will seek to sell $250 million in sovereign bonds in the United States in December.
To that end, it dispatched a team of government dignitaries to the United States to discuss the markets and the feasibility of placing the bonds. María Elena Mondragón, head of the Banco Central de Honduras, and Wilfrido Cerrato, the Finance minister, will meet with Representatives of the International Monetary Fund and the World Bank to talk about the possibility of placing these bonds at an acceptable rate. The funds raised will be used to support 2013 government spending.
The last time Honduras sought to place bonds, they found the 10% interest rate that would have been required too high. That seems unlikely to be much better now. In August, S&P reduced Honduras's debt rating to practically junk levels.
The Lobo Sosa government has been chronically late in paying government employees and contractors. Just today it reported that it had 5,900 million lempiras (about $295 million) backlog of payments owed, a backlog that it currently cannot pay.
Part of that debt is due to inefficiencies in collecting taxes owed the government. Collections are running about 2,000 million lempiras ($100 million) behind projections and have been since April. The other part is due to spending more that was even projected to come in through taxes and other forms of income.
The bonds Honduras seeks to place in the US capital market are not all it needs to close out the year. It will also seek to place a further 3,000 million lempiras ($150 million) in bonds internally. The Honduran government projects that if it places all these bonds, it will close the year with its debt equal to about 40.7 % of the Gross Domestic Product, better than the 45% of GDP predicted at the beginning of the year.
Honduran government monetary policy, especially the tactic of not paying segments of the workforce, has resulted in numerous public employee strikes. Last week it was the transit police, who were owed two months salary. This week it's the doctors, janitors, nurses, and medical staff at government hospitals, who are owed more than three months of back salary.
The police settled their strike after receiving one month's back pay.
Instead of paying the medical workers part of their back pay, Lobo Sosa had their strike declared illegal.
There is no money to pay these government workers without placing bonds, in part because of the $18.7 million payment made mid-September on the existing $500 million in bonds.
Do we need to say it: Honduras is broke.
To that end, it dispatched a team of government dignitaries to the United States to discuss the markets and the feasibility of placing the bonds. María Elena Mondragón, head of the Banco Central de Honduras, and Wilfrido Cerrato, the Finance minister, will meet with Representatives of the International Monetary Fund and the World Bank to talk about the possibility of placing these bonds at an acceptable rate. The funds raised will be used to support 2013 government spending.
The last time Honduras sought to place bonds, they found the 10% interest rate that would have been required too high. That seems unlikely to be much better now. In August, S&P reduced Honduras's debt rating to practically junk levels.
The Lobo Sosa government has been chronically late in paying government employees and contractors. Just today it reported that it had 5,900 million lempiras (about $295 million) backlog of payments owed, a backlog that it currently cannot pay.
Part of that debt is due to inefficiencies in collecting taxes owed the government. Collections are running about 2,000 million lempiras ($100 million) behind projections and have been since April. The other part is due to spending more that was even projected to come in through taxes and other forms of income.
The bonds Honduras seeks to place in the US capital market are not all it needs to close out the year. It will also seek to place a further 3,000 million lempiras ($150 million) in bonds internally. The Honduran government projects that if it places all these bonds, it will close the year with its debt equal to about 40.7 % of the Gross Domestic Product, better than the 45% of GDP predicted at the beginning of the year.
Honduran government monetary policy, especially the tactic of not paying segments of the workforce, has resulted in numerous public employee strikes. Last week it was the transit police, who were owed two months salary. This week it's the doctors, janitors, nurses, and medical staff at government hospitals, who are owed more than three months of back salary.
The police settled their strike after receiving one month's back pay.
Instead of paying the medical workers part of their back pay, Lobo Sosa had their strike declared illegal.
There is no money to pay these government workers without placing bonds, in part because of the $18.7 million payment made mid-September on the existing $500 million in bonds.
Do we need to say it: Honduras is broke.
Thursday, October 3, 2013
Murder By The Numbers
The Lobo Sosa government and the independent Observatorio de Violencia disagree on the number of murders in Honduras in the first six months of 2013.
The difference is substantial.
The government says there have been 2,629 murders. The Observatorio de Violencia recorded 3,547 homicides during the same period.
The difference?
The government says there isn't paperwork or bodies to substantiate 918 homicides counted by the Observatorio. The Observatorio says it has paperwork and bodies for all of them, and that it got that information from the same government sources the Minister of Security and Defense, Arturo Corrales, says don't have them.
There is an explanation.
Corrales admits that when he was appointed, he ordered a change in the methodology of the way homicides were counted, applying a new Sistema Regional de Indicadores Estandardizados de Convivencia y Seguridad Ciudadana (Standard Indicators of Living Together and Citizen Security), promulgated by the Banco Interamericano de Desarrollo (BID). This is a way of standardizing social statistics, including the measure of homicides, between countries to allow comparison. This new protocol to standardize how countries report crime statistics is described in an article (linked above) published in the 2012 edition of the Revista Panamericana de Salud Publica.
So Corrales asserts that the difference in count is because the Observatorio de Violencia is not following the proper methodology. For Corrales to count a death as murder, he requires both that there be an autopsy, and a coroner's report calling the death homicide. Corrales says that those 918 cases are only "possible homicides" because either they lack the body, or the coroner's report declaring it a homicide.
Reality check: coroners work in, and autopsies are only performed, in Tegucigalpa, La Ceiba, and San Pedro Sula. Many families do not allow autopsies to be performed, reclaiming the body for burial almost immediately. Thus any statistic that requires both an autopsy and coroner's report will significantly undercount homicides in Honduras.
The Observatorio de Violencia has been following internationally recognized procedures since 2004, using the same approach to accumulate data from the national police and the investigative police, as well as the coroners.
Migdonia Ayestas, the Observatorio de Violencia coordinator, said of Corrales:
Of the 918 disputed cases, all have a police report; 786 of them have a cause of death indicated in the report; and only 135 lack the name of the individual. Ayestas says there are about 400 cases where the police have not declared the death a homicide, and that the Observatorio does not count those cases.
Why is this a problem? Changing methods impedes assessing trends over time.
Corrales wants to assert that the current homicide rate in Honduras has fallen dramatically, to 70 per 100,000 population from the reported 85-91 per 100,000 in 2012. The Observatorio de Violencia agrees that the homicide rate has fallen slightly, to about 80 per 100,000. The difference is that the Observatorio de Violencia is comparing two numbers calculated the same way; Corrales has changed the rules, so really we cannot compare the 2012 and 2013 numbers. One way the murder rate fell about 18-23%; the way the Observatorio has always used, by 6-12%.
The takeaway here is that the government is no longer following the same procedures it was following for counting murders, and therefore the numbers it gives out from now on will be incommensurate with the homicide rates it reported before. The Observatorio de Violencia is following the same procedures, so its current and past numbers will be comparable.
Or, put another way, Corrales is prepared to change the way he counts homicides so that it looks like the Lobo Sosa government is being much more effective against crime than it really is. To do so he invented a methodology that because of how things work in Honduras, will significantly undercount the homicide rate.
The difference is substantial.
The government says there have been 2,629 murders. The Observatorio de Violencia recorded 3,547 homicides during the same period.
The difference?
The government says there isn't paperwork or bodies to substantiate 918 homicides counted by the Observatorio. The Observatorio says it has paperwork and bodies for all of them, and that it got that information from the same government sources the Minister of Security and Defense, Arturo Corrales, says don't have them.
There is an explanation.
Corrales admits that when he was appointed, he ordered a change in the methodology of the way homicides were counted, applying a new Sistema Regional de Indicadores Estandardizados de Convivencia y Seguridad Ciudadana (Standard Indicators of Living Together and Citizen Security), promulgated by the Banco Interamericano de Desarrollo (BID). This is a way of standardizing social statistics, including the measure of homicides, between countries to allow comparison. This new protocol to standardize how countries report crime statistics is described in an article (linked above) published in the 2012 edition of the Revista Panamericana de Salud Publica.
So Corrales asserts that the difference in count is because the Observatorio de Violencia is not following the proper methodology. For Corrales to count a death as murder, he requires both that there be an autopsy, and a coroner's report calling the death homicide. Corrales says that those 918 cases are only "possible homicides" because either they lack the body, or the coroner's report declaring it a homicide.
Reality check: coroners work in, and autopsies are only performed, in Tegucigalpa, La Ceiba, and San Pedro Sula. Many families do not allow autopsies to be performed, reclaiming the body for burial almost immediately. Thus any statistic that requires both an autopsy and coroner's report will significantly undercount homicides in Honduras.
The Observatorio de Violencia has been following internationally recognized procedures since 2004, using the same approach to accumulate data from the national police and the investigative police, as well as the coroners.
Migdonia Ayestas, the Observatorio de Violencia coordinator, said of Corrales:
If the Secretary of Security does not incorporate all the homicides attested to in his files, there is a problem with his analysis. The police report says "dead", says by firearm, and gives a name and surname.
Of the 918 disputed cases, all have a police report; 786 of them have a cause of death indicated in the report; and only 135 lack the name of the individual. Ayestas says there are about 400 cases where the police have not declared the death a homicide, and that the Observatorio does not count those cases.
Why is this a problem? Changing methods impedes assessing trends over time.
Corrales wants to assert that the current homicide rate in Honduras has fallen dramatically, to 70 per 100,000 population from the reported 85-91 per 100,000 in 2012. The Observatorio de Violencia agrees that the homicide rate has fallen slightly, to about 80 per 100,000. The difference is that the Observatorio de Violencia is comparing two numbers calculated the same way; Corrales has changed the rules, so really we cannot compare the 2012 and 2013 numbers. One way the murder rate fell about 18-23%; the way the Observatorio has always used, by 6-12%.
The takeaway here is that the government is no longer following the same procedures it was following for counting murders, and therefore the numbers it gives out from now on will be incommensurate with the homicide rates it reported before. The Observatorio de Violencia is following the same procedures, so its current and past numbers will be comparable.
Or, put another way, Corrales is prepared to change the way he counts homicides so that it looks like the Lobo Sosa government is being much more effective against crime than it really is. To do so he invented a methodology that because of how things work in Honduras, will significantly undercount the homicide rate.
Friday, September 13, 2013
Miskito Land Councils Receive Land titles
English language news sources reported this week that five Miskito federations received collective land titles through the Instituto Nacional Agrario.
The titles cover 970,000 hectares (approx. 1.6 million acres) of land in the eastern part of Honduras, along the Caribbean coast and the border with Nicaragua. This constitutes almost 7% of the land area of Honduras. The latest land titles add to titles for other lands allocated in 2012 and May, 2013.
The recipients of these titles are territorial councils. Twelve Miskito and Pech Federations are organized in territorial councils:
The councils and their territories are contiguous zones in far northeast Honduras:
(Click to enlarge. Map taken from page 16 of this source.)
Honduras acquired title to the land that has now been titled from Great Britain through the Cruz-Wyke treaty of 1859. This treaty ceded British control of the Bay Islands of Utila, Guanaja, Roatan, Morat, Elena, and Barbarete to Honduras. It required Honduras to recognize existing land titles on those islands, and for Honduras to observe freedom of religion and worship for their residents.
Article II of the treaty recognized ownership by Honduras of the land occupied by the Miskito, except for land that might be claimed by the government of Nicaragua. Otherwise, the treaty was non-specific about the boundaries involved.
Article III of the treaty is what underlies the new land titles. It reads:
Article III went on to called for an annual fund to be established for educating the Miskito over a ten year period, the fund to be guaranteed by income from the logging rights to any state-owned land in the Bay Islands and Miskito territory. That means the Treaty recognized that not all the land in the ceded territory was privately held.
Only some of the present-day territorial councils have received title to the lands they occupy, as prescribed by the treaty. On August 30, 2012, the council of Katainaska received title to the lands around Laguna Caratasca, where the US is building a military base for the Honduran Navy.
In May, 2013, the council of Auhya Yari received title to lands around Puerto Lempira.
Five councils received land grants together totaling 970,000 hectares in the latest phase of complying with the treaty. The council of Finzamos (26 communities, 1340 families) received title to lands around Morocon - Segovia. The council of Truksinasta (26 communities, 840 families) received title to lands round Tipi. The council of Wamakliscinasta (19 communities, 790 families) received title to lands around Auka. The council of Lainasta (39 communities, 1800 families) received title to lands around Laka. The council of Waitasta (18 communities, 1200 families) received title to lands along Honduras's eastern border with Nicaragua.
These titles are corporate, indivisible, and non-transferable.
Sounds great, right?
The Consejo Coordinador de Organizaciones Populares e Indígenas de Honduras (COPINH) suggests, through its spokesperson, Bertha Caceres, that the Lobo Sosa government has an ulterior motive in granting these land titles at this particular time. She said:
In May this year, at the same time as the second set of Miskito land titles were being issued, the Lobo Sosa government announced it had granted British Gas Group a license to explore for off-shore oil and gas all along the coast of Honduras, from Tela east to Nicaragua.
Honduras has had at least one test well yield oil in the sea off the Moskito lands, and the area around Tela contains suspected gas reserves.
The grant to British Gas Group will bring in a substantial sum for the government, whether or not the company finds gas or oil. However, to get their environmental license, they must get the consent of the Miskito peoples, through a series of public meetings that are just about to take place.
So maybe the timing on these land titles is coincidental. Or maybe it is meant to influence local attitude toward the environmental license for British Gas Group, in the hope of avoiding the kind of conflict that is happening everywhere else the Lobo Sosa government has authorized exploitation of natural resources near indigenous communities.
Either way, titling this land is long over due, a treaty right, not a gesture the government should be credited with taking out of the goodness of its heart.
The titles cover 970,000 hectares (approx. 1.6 million acres) of land in the eastern part of Honduras, along the Caribbean coast and the border with Nicaragua. This constitutes almost 7% of the land area of Honduras. The latest land titles add to titles for other lands allocated in 2012 and May, 2013.
The recipients of these titles are territorial councils. Twelve Miskito and Pech Federations are organized in territorial councils:
Rayaka - located in Belen,
Diunat - Brus Laguna,
Finzmos - Morocon - Segovia
Katainasta - Laguna Caratasca
Auhya Yari - Puerto Lempira
Lainasta - Laka
Wamakliscinasta - Auka
Watiasta - Eastern Mosquitia, along the Caribbean coast adjacent to Nicaragua
Bamiasta - Ahuas, Rio Patuca, Biosfera Río Plátano
Bakinasta - Wampusirpi, Río Patuca, Reserva TawakaAsagni
Batiasta - Barra Patuca
Truksinasta - Tipi
The councils and their territories are contiguous zones in far northeast Honduras:
Honduras acquired title to the land that has now been titled from Great Britain through the Cruz-Wyke treaty of 1859. This treaty ceded British control of the Bay Islands of Utila, Guanaja, Roatan, Morat, Elena, and Barbarete to Honduras. It required Honduras to recognize existing land titles on those islands, and for Honduras to observe freedom of religion and worship for their residents.
Article II of the treaty recognized ownership by Honduras of the land occupied by the Miskito, except for land that might be claimed by the government of Nicaragua. Otherwise, the treaty was non-specific about the boundaries involved.
Article III of the treaty is what underlies the new land titles. It reads:
The Misquito Indians in the district recognized by Article II of this Treaty as belonging to and under the sovereignty of the Republic of Honduras shall be at liberty to remove, with their property, from the territory of the Republic, and to proceed withersoever they may desire; and such of the Mosquito Indians who remain within the said district shall not be disturbed in the possession on any lands or other property which they may hold or occupy, and shall enjoy, as natives of the Republic of Honduras, all rights and privileges enjoyed generally by the natives of the Republic.
Article III went on to called for an annual fund to be established for educating the Miskito over a ten year period, the fund to be guaranteed by income from the logging rights to any state-owned land in the Bay Islands and Miskito territory. That means the Treaty recognized that not all the land in the ceded territory was privately held.
Only some of the present-day territorial councils have received title to the lands they occupy, as prescribed by the treaty. On August 30, 2012, the council of Katainaska received title to the lands around Laguna Caratasca, where the US is building a military base for the Honduran Navy.
In May, 2013, the council of Auhya Yari received title to lands around Puerto Lempira.
Five councils received land grants together totaling 970,000 hectares in the latest phase of complying with the treaty. The council of Finzamos (26 communities, 1340 families) received title to lands around Morocon - Segovia. The council of Truksinasta (26 communities, 840 families) received title to lands round Tipi. The council of Wamakliscinasta (19 communities, 790 families) received title to lands around Auka. The council of Lainasta (39 communities, 1800 families) received title to lands around Laka. The council of Waitasta (18 communities, 1200 families) received title to lands along Honduras's eastern border with Nicaragua.
These titles are corporate, indivisible, and non-transferable.
Sounds great, right?
The Consejo Coordinador de Organizaciones Populares e Indígenas de Honduras (COPINH) suggests, through its spokesperson, Bertha Caceres, that the Lobo Sosa government has an ulterior motive in granting these land titles at this particular time. She said:
"What a coincidence. They authorize land titles just as they are to begin asking the Misquito people to approve oil and gas exploration by the English company British Gas Group."
In May this year, at the same time as the second set of Miskito land titles were being issued, the Lobo Sosa government announced it had granted British Gas Group a license to explore for off-shore oil and gas all along the coast of Honduras, from Tela east to Nicaragua.
Honduras has had at least one test well yield oil in the sea off the Moskito lands, and the area around Tela contains suspected gas reserves.
The grant to British Gas Group will bring in a substantial sum for the government, whether or not the company finds gas or oil. However, to get their environmental license, they must get the consent of the Miskito peoples, through a series of public meetings that are just about to take place.
So maybe the timing on these land titles is coincidental. Or maybe it is meant to influence local attitude toward the environmental license for British Gas Group, in the hope of avoiding the kind of conflict that is happening everywhere else the Lobo Sosa government has authorized exploitation of natural resources near indigenous communities.
Either way, titling this land is long over due, a treaty right, not a gesture the government should be credited with taking out of the goodness of its heart.
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