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By: Lorenzo Dee Belveal Last week, Carlos Roberto Flores set about doing what Honduras’s presidents have been expected to do since La Republica began holding scheduled elections instead of unscheduled revolutions: Namely - Go get some money. "Getting some money" is a never-ending project in Honduras. Only the techniques vary, depending on the ingenuity and imagination of the incumbent occupant of the Palacio Presidencial. Each repeat performance calls for a tighter script and more inspired performances, because Honduras operates under some serious and increasing hardships, whether as a supplicant for international charity, or a potential borrower. Indeed, whether the money is donated or loaned, it will likely cost the benefactors about the same amount, because the record of Honduras defaults (on both interest and principal) makes for highly discouraging and repetitious reading. Operating from a current base-line indebtedness in excess of $4-billion dollars, it is unlikely that this sorry record of non-performance on financial obligations will improve any time soon. On May 10, 1998, this journalist wrote an editorial entitled, "The Flores Tax Plan - Theater of the Absurd". That economic appraisal declared in general terms that, in the view of anyone who could do simple arithmetic, the Flores tax proposal had to be seen as a "talking paper" for more borrowing, rather than a program for making Honduras solvent and economically self-sufficient. This piece first appeared in the Washington Post’s "International Open Forum", and was later posted on my WebSite at: <http://www.goodfelloweb.com/lorenzo/>. Nobody has seen fit to challenge my conclusions. The Flores meeting last week with seven of his cabinet principals validates my earlier pessimism concerning the fiscal master-plan for his term in office. With Don Carlos as the point man, and seven cabinet loyalists completing the roster, the game plan calls for "blitzing" the heads of state who were on hand for the recent "Americas Summit". It is to be presumed that all manner of firm friendships and good vibrations were generated among the distinguished invitees to that conclave. More particularly, since it was at this international pow-wow, that President Flores made Honduras the seventh signatory to the "Anti-Corruption Convention", he personally basks in a complimentary - if ever so conditional - public relations light. The largest question now looming in the minds of many interested observers is whether Don Carlos has the stomach or the political clout to fly in the face of long-established political practice, by taking his anti-corruption pledge beyond the mere formality of signing it. If President Flores can summon the courage to take a firm and highly visible stand against political and judicial corruption in his own administration - and make it stick - Honduras will surely reap great benefits, in terms of enhanced international respect. Should he fail to promptly begin making good on his anti-corruption promise, the signing of same will be quickly written off as just one more hollow public relations gesture. In which case he would have been much better advised to not have signed it at all. However this may play out in weeks and months to come, it is presumably from this base, that El Presidente, hopes to immediately begin rounding up untold millions of dollars, with which to bankroll a variety of good works to benefit the economically bled-white and credibility-strapped Republica de Honduras. Announced plans for this grand tour in search of lots of dollars, include efforts to generate both "cooperation from sister countries" (read: non-repayable cash grants), and "financing" (read: loans) from governmental and international sources. (This language is broad enough to include everything from national treasuries, to multinationals like the World Bank and the International Monetary Fund - in whose hallowed halls Honduras will certainly not arrive as a stranger.) While wishing this group of international treasure-hunters nothing but the best, in their efforts to gain entry into the pockets of the more affluent nations and organizations in our hemispheric neighborhood, I see some difficulties standing in their way. At the risk of being deemed a faithless crepe-hanger, when unbridled optimism should be the order of the day, some of the hurdles that will have to be overcome on the way deserve to be recognized. Laying eager hands on the many millions - or billions - needed to transform President Flores’ rose-colored vision for Honduras, into real bricks, school books and mortar, will surely prove to be easier said than done. The first consideration that could prove to be a serious impediment to tapping into international largess, is the hard fact that Honduras doesn’t repay its borrowings. It never has. This is how the monstrous arrears - in excess of $4-billion dollars - has been accrued. Default on interest and principal obligations has been the rule, rather than the exception, in Honduras financial dealings. While there are a variety of exculpatory explanations offered up to soften the fiscal reality, excuses do not change the bottom-line. Honduras is a rotten credit- risk. Potential lenders know this, which information is not going to encourage them to come up with the heavy money required to undertake such costly projects as revitalizing and diversifying Honduras agriculture, restructuring and upgrading Honduras public education, and - mirabile dictu - constructing an inter-oceanic highway! The international banking community realizes that the betting odds are something like 7- to -3, that any amount of money sent to Honduras, under whatever kind of arrangements, will never be seen again. This long record of non-performance will surely constitute a hard spot to get over in any kind of credit-line negotiation, but it is not the worst impediment to Honduras borrowing. The Honduras judicial system is widely and consistently viewed as no more than a bad joke. This is the unflattering opinion of a broad cross-section of private investors, commercial developers, and international lenders, that your reporter has recently interviewed. People who manage large financial resources - whether their own or the assembled wealth of others - are smart enough to realize that, without laws to protect their contractual interests, there is no such thing as a good or a safe deal. Forget such conventional investment considerations as asset-appreciation and return-on-money. These phrases become just confidence-game come-ons, cheese in the borrower’s mousetrap, unless the court system that underpins everything else is trustworthy. This single, crucial, consideration leaves Honduras in a kind of investment purgatory, because - as virtually the entire international financial industry has come to understand - Honduras courts are without statutory integrity, and Honduras judges regularly write their rulings without reference to either law or logic. How could it be otherwise? Bear in mind that until very recently, the President of the Honduras Supreme Court was paid US$1,197 per month. Supreme Court Justices were paid US$845 per month. A Judge Of Letters (equal to a District Federal Court Judge) got US$1,038 per month, and Fiscals (equivalent to an F.B.I. agent), took home US$538 each month. Other elective and appointive officials’ salaries are equally penurious. Some raises are reported to be in the works, but it’s safe to assume that, raises or not, government functionaries will still be largely dependent on "informal" income to make ends meet. To compensate for these starvation-level salaries, all elected and most appointed office-holders are covered under a blanket of constitutional immunity for the full range of both civil and criminal wrongdoing. The message here can hardly be missed: To live decently, a Honduras official of any grade, is expected to augment his or her official salary with "tips", bribes, or outright thievery. By conferring legal immunity on him or her, bribe-taking, forging official documents, etc., present golden opportunities for illicit enrichment, but without the reciprocal threat of fines, imprisonment, and other legal penalties that regularly punish breach of public trust in more law-abiding venues. Honduras officials are above the laws of the land, that ostensibly apply to everyone else. Small wonder that such poor paying political positions are in such great demand at election time! Basic salary is not important when a government job comes with a built-in license to steal. How can any reasonable person expect public officials to remain honest and functionally circumspect, in the face of such powerful inducements to corruption, and all without personal risk? This combination of criminal incentives and legal protections add up to the reasons that this reporter has declared, "Other Latin American countries have corruption in their political systems. In Honduras, corruption IS THE SYSTEM." With this as a background, one must wonder about what kind of lures President Carlos Roberto Flores and his Cabinet Ministers hope to dangle in front of either lenders or investors. Without a reputation for honesty, reliability and fair performance on prior obligations - and lacking an honorable Judicial System to act as a trustworthy referee between commercial interests, why would any sensible person or institution consider undertaking any kind of financial commitments in Honduras? Except perhaps in the name of sweet charity, itself? Before going out on his quest for some really big money, El Presidente, should be giving serious thought to cleaning up the sovereign act. A high degree of commercial confidence must exist on the part of those whose investments Honduras so desperately needs, in order to catch up with the rest of the world. The bitter truth is that Honduras has, long since, depleted its national and commercial credibility. As a sovereign nation, Honduras has repeatedly shown its erstwhile friends and neighbors that it neither respects nor feels any pressing need to comply with the laws, protocols, domestic and international restraints, that circumscribe the behavior of reasonable people and civilized countries, everywhere. There is, however, one law that Honduras can not ignore. It’s the law of diminishing returns. This immutable law is asserting itself in every facet of Honduras political, commercial, and private life. It’s a sad and highly visible economic - and human - reality. And it’s too bad! But worse, infinitely worse, is the fact that those individuals prominently positioned in the ranks of national leadership don’t seem to care enough for Honduras, or its future, to get serious about leading the way out of dead-end social and economic oblivion. ========== E N D ========== Lorenzo Dee Belveal, Author
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