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Honduran Aid Sleight of Hand: Like a Street Corner Shell Game

September 3, 2009

The State Department’s announcement today of the termination of certain assistance funding to Honduras as a result of the June 28 coup falls in the category of “too little, too late.”  The decision by the International Monetary Fund, announced a few days ago, to lend the coup government $160 million falls into the category of  “do you think we are stupid?”

Obviously, the US made sure that the IMF loan was made before it announced the termination of aid and the whole idea is to have the IMF loan cover for the money the US says it is terminating.

But, keep an eye on this shell game.  If by any chance President Zelaya returns to Honduras as president, I’m betting the US will use the conditions of the IMF loan to hamstring him just to make sure he doesn’t get carried away and do something good for the people of Honduras.  This approach worked quite well for the US in the case of President Jean-Bertrand Aristide of Haiti.

But the real experts on all this are over at the the Center for Economic Policy Research which issued a press release today on this issue.

PRESS RELEASE:  Center for Economic Policy Research

State Department Steps Against Honduran Coup Don’t Go Far Enough

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For Immediate Release: September 3, 2009
Contact: Alan Barber, (202) 293-5380 x 115

Washington, D.C.– The U.S. State Department issued a release today announcing “the termination of a broad range of assistance to the government of Honduras as a result of the coup d’etat that took place on June 28.”

“The State Department is responding to pressure, but it’s still not clear if the Obama administration is serious about dislodging the coup regime that it continues to support with military and economic aid,” said Mark Weisbrot, Co-Director of CEPR.

State Department spokesman Fred Lash told CEPR that total U.S. assistance to Honduras was $100 million and today’s decision affected $30 million: this included $8.96 million from the State Department, $9.4 million from USAID, and $11 million from the Millenium Challenge Corporation (MCC) (which will not be officially cancelled until its Board meets next week).

“There is still quite a bit of money that is not food assistance or anything that poor people need that continues to flow to the dictatorship,” said Weisbrot.

“Also, the State Department still hasn’t officially determined that a military coup took place in Honduras,” he added.

Weisbrot also noted that the International Monetary Fund decided just a few days ago to give Honduras more than $160 million. Since the United States has a veto over IMF decisions, this will be seen by the coup regime as a decision of the U.S. government.

“The IMF money, which is a huge amount of money for Honduras, will more than compensate for any cuts in U.S. official aid.”

The World Bank paused lending to Honduras two days after the coup, and the Inter-American Development Bank did the same the next day. More recently the Central American Bank of Economic Integration suspended credit to Honduras. The European Union has suspended over $90 million in aid as well, and is considering further sanctions.

According to the release, “The Department of State further announces that we have identified individual members and supporters of the de facto regime whose visas are in the process of being revoked.”

The State Department would not release the names of those whose visas may be revoked.

The release also states: “we would not be able to support the outcome of the scheduled elections [in Honduras]. A positive conclusion of the Arias process would provide a sound basis for legitimate elections to proceed.”

This decision on elections brings the United States closer to other countries in the hemisphere, who have stated that they will not recognize elections conducted under the coup government.

However, Weisbrot noted that the 3-month election campaign period has already started, and it is taking place under conditions of political repression and media censorship.

“Each day that goes by with the coup government in power makes it less likely that these elections could be considered legitimate,” said Weisbrot. “Certainly the idea of moving the election up one month to October, which is part of the Arias accord, has to be abandoned.”


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