Before the military takeover in June, President Manuel Zelaya tried to
present himself as a great defender of the poor, arguing that he was
against the political and economic elite who have always manipulated
the system to benefit a few. He maintained that he, in contrast to the
elite class, wanted to listen to the voice of the people and amend the
Constitution to benefit Honduras’ poorest. After the coup, “Mel” was
viewed as a martyr whom the elite had unjustly kicked out of the
country because he had tried to help the poor. The reality is that his
3.5 years as president were characterized by corruption, improvisation,
and pathetic management of the money designated by the Poverty
Reduction Strategy program of the International Monetary Fund (IMF) to
help the neediest. In light of these actions, we should consider Zelaya
an enemy of the poor.
Poverty Reduction Strategy In
2006, Honduras received a debt-forgiveness package of $4 billion. This
quantity is almost equivalent to the GDP—all that the country produces
in one year—and sufficient to help transform the country, reform the
health and education systems or jumpstart thousands of
micro-enterprises and provide irrigation systems to thousands of
farmers. These $4 billion were the payoff after 20 years of
structural adjustment policies of the IMF. Honduras had to devalue its
currency, eliminate subsidies for the poor, privatize state-owned
enterprises, etc. The poor are almost always those who most suffer from
the consequences of these policies. After twenty years of suffering
with the promise of the alleviation of the deficit, they finally saw
the light at the end of the tunnel.
In 2005, the administration
of President Maduro and the civil society began to formulate plans for
how to invest these funds in the most cost-efficient way. The only
condition imposed by the IMF was that they must be spent according to
the “Poverty Reduction Strategy.” During this year, those involved in
allocating these funds had meetings all over the country where they
presented hundreds of projects to be executed at the municipal level;
Honduras’ civil society worked to present a comprehensive plan on the
regional level. Many ideas were presented—some very good ones—and many
expectations, but in the end it was up to the Zelaya administration to
decide how to invest the funds when he took office in 2006. The table
was set with excellent ideas and proposals from Honduras’ most
knowledgeable experts, and money was available to put these ideas into
practice.
However, in Zelaya’s second month of presidency, the
teachers—the strongest association in the country—held a strike,
demanding that their demands be met. The Zelaya administration did not
have a funds budgeted to meet their demands and was faced with the
choice of either making budget cuts or cracking down on corruption to
recover the misappropriated funds. The strike lasted several days and
included violence, leaving the government with a choice to make. The
Zelaya administration knew where to find the money—from the Poverty
Reduction Strategy funds. Zelaya proceeded to assure the teachers that
he would meet their demands “without sacrificing anyone’s
interests”—using money from the Poverty Reduction Strategy. The strike
ended with the Zelaya administration having spent 70% of the$4 billion
on salary increases for current teachers and health workers and nothing
for professionals entering these fields. The other 30 percent went to
small projects and bonuses distributed in rural areas with more political than practical ends.
In
summary, Zelaya, who now presents himself as the defender of the poor,
had in his hands the opportunity to transform the lives of millions of
poor through new hospitals, high schools, computers, irrigation systems
and micro-enterprise projects. In the end, 20 years of sacrifice
benefited a few at the expense of millions and did not change anything.
This irresponsibility should never be forgiven.
Minimum Wage The
minimum wage increase is one of the few examples in which Zelaya did
something on behalf of the poor, although this too was influenced by
political interests. The wage increased from $175 to $275 monthly—about
a 60 percent increase—and business owners had only 15 days to adjust
their budgets and implement the change. Many sources have said that the
increase was necessary but do not agree with the way in which it was
executed.
First, Zelaya approved a 60 percent increase in the
midst of a global economic crisis. In December of 2008, many banks were
bankrupt and many companies were deciding to close or consolidate their
activities to cut losses. A 60 percent increase at this moment meant
that Honduras frightened away new investments, and companies currently
operating decided to cut down on or stop doing business in Honduras.
According to the Honduran Counsel on Private Enterprise (COHEP), Honduras lost 15,000 jobs in little more than a day.
Second,
in Honduras, a minimum wage increase is almost always considered and
agreed upon by the working class and business owners. If they cannot
reach an agreement, the State takes action. In this case, Zelaya made
his decision without consulting labor syndicates, experts, or business
owners. Thus, economists had no time to analyze the proposal or suggest
ways to maximize the positive impacts and minimize the negative.
Finally,
in Honduras the salaries of many professionals run parallel to the
minimum wage. A university professor or a doctor might earn ten to
twenty times the minimum wage, meaning that an increase of the minimum
wage of $100 per month implies an increase for these professionals of
$1,000 to $2,000 all at once. In the Autonomous University of Honduras,
the new minimum wage policy
resulted in a minimum wage increase of $40 million, an amount that
neither the university nor the country could pay. As a result, a
teacher’s strike caused the university to close for more than two
months.
The minimum wage increase by the Zelaya administration
is another example of a policy that could have been almost 100 percent
positive for the poor. However, actions taken too quickly and poor
decisions or those made with questionable intentions resulted in the
loss of thousands of jobs, enormous wage increases for the upper-middle
class, and thousands of university students who lost two months of
class.
Corruption During his
campaign and in the rhetoric surrounding his presidency, Zelaya
promised to put an end to corruption and to create the most transparent
government in the history of Honduras. Clearly, this is not how his
administration turned out.
Before becoming president, Zelaya was
the director of the Honduran Fund for Social Investment (FHIS); during
his administration of the funds, $40 million were “lost.” The Attorney
General accused him of embezzlement, but Zelaya was able to avoid this
accusation. No one ever discovered who kept the money.
The
Zelaya administration was also characterized by several corruption
scandals—the Minister of Health was accused during his first month of
favoring certain pharmaceutical companies. Instead of requesting an
investigation, Zelaya was the first to defend this action. Perhaps the
worst scandal or at least the most blatant was the one involving Hondutel,
the state telephone company. Zelaya named his personal friend Marcelo
Chimirri as general director although he had no related work
experience. A 2008 report by the Superior Court of Accounts (TSC)
revealed cases of embezzlement and millions of lempiras lost due to
fabricated “call centers” authorized by Chimirri. Once again, instead
of ordering an in-depth investigation of the case, Zelaya sent
government lawyers to Miami to defend his friend.
Poor Management of Public Funds During his campaign, Zelaya also promised that
he and his cabinet would travel only by bus in the same manner as the
common Honduran. In the end, he spent millions of dollars on official
trips in the presidential plane, unjustified consultants, and personal
expenses.
In three years, Zelaya spent more than $1.6 million
traveling in the presidential plane known as the “West Wind,” including
at least 80 trips in September 2008. The coordinator of the Social
Forum for the External Debt of Honduras (FOSDEH), Mauricio Díaz, denounced this action.
According to a memorandum from
the Superior Court of Accounts, Zelaya also spent $4.2 million in
consulting, $109,852 in personal expenses, and $1.6 million in
professional costs without documentation. Although this report was
issued by the de facto government and thus is questionable, these
numbers are not unbelievable. With all the money spent solely on
undocumented personal and professional costs, it would have been
possible to construct 1,970 houses.
Finally, the Zelaya
administration never presented a 2009 budget despite the pretext of the
worldwide economic crisis. None of the other Central American
governments followed the same reasoning; all created budgets with the
thought that the crisis demanded a rational prioritization of expenses.
Meanwhile, Zelaya invested millions of lempiras of public funds in a
state-run newspaper, television station, radio spots, and
demonstrations in favor of the government.
Intentions of Constitutional Change In
March of 2009, Zelaya began an effort to reform Honduras’ Constitution,
announcing a referendum for Sunday, June 28. Zelaya used very powerful
rhetoric to argue the necessity of a new Constitution. His speech was
filled with assurances that he was fighting on behalf of the poor and
against the corrupt elites, in favor of full citizen participation and
that he wanted to listen to the voice of the weak. This rhetoric
touched a nerve with the large majority of Hondurans who harbored
resentment against the elite that had governed in the past. An evidence
of Zelaya’s power is that many people still believed him even after his
actions during the three years of his presidency said the opposite.
During the seven months that Zelaya was promoting the Cuarta Urna, or “Fourth Ballot Box,” church members, civil
society, and other government officials asked for clarification on what
exactly he hoped to achieve with the new Constitution. Their doubts
centered around whether or not Zelaya simply wanted to remain in power
and was attempting illegally to reform the Constitutional article that
did not permit re-election. Zelaya never responded to these concerns
with concrete answers, only with vague comments about listening to the
poor. Given this and the national and international context, it is
difficult to believe Zelaya and had no intention of remaining in power.
Conclusion In
conclusion, the rhetoric of Zelaya’s government was very
powerful—defender of the poor, full citizen participation, and
manipulation and corruption by the elite. His rhetoric was powerful
because many of his criticisms of the system were true and awakened a
very real resentment in the Honduran majority. The only problem was
that his language did not line up with his actions. In contrast to his
rhetoric of love for the poor, he mis-spent $400,000 million of Poverty
Reduction Strategy funds that should have gone to transforming the
health or education system. It was Zelaya who failed to build homes,
defended the corrupt, and fabricated on-the-fly solutions to the most
profound problems of the country. It is difficult to believe him and
even more difficult to defend him.