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CORRUPTION-HONDURAS: International Aid Hanging by a Thread

Thelma Mejía

TEGUCIGALPA, Aug 17 2007 (IPS) - The Honduran government of Manuel Zelaya has not been able to overcome the country’s reputation for corruption, to the extent that it is on the point of losing millions of dollars in aid from the Millennium Challenge Account, a fund set up by the United States to help extremely poor countries.

Funding for Honduras amounting to 215 million dollars was approved in late 2005 for a five-year period, but so far only 28 million dollars have been transferred.

This aid is conditional upon compliance with transparency standards, a favourable investment climate and efforts to fight corruption. But Honduras did not pass the first evaluation, carried out early this year.

The second evaluation is due in November, and according to the deputy director of the Millennium Challenge Account for Honduras, Jonathan Brooks, whether the aid continues or is suspended depends on the results.

That is when it will be decided whether the country is still eligible or must start a remedial process to continue receiving the disbursements, after fulfilling a series of conditions that cannot be predicted at this moment, Brooks told the Honduran press.

In addition, the Swedish International Development Cooperation Agency (SIDA) has announced that its aid to Honduras will be “substantially” reduced as of 2008.


It is not that this country of seven million people does not need international aid. According to the Honduran government’s Second Country Report, 2007, on the Millennium Development Goals (MDGs), 62 percent of Honduran households are poor, and 42 percent are extremely poor.

The problem appears to be something different. The World Bank report on Worldwide Governance Indicators 1996-2006 includes a ranking for control of corruption in 212 countries and territories, and Honduras has slipped down several places because of its lack of transparency.

The ranking was a composite of a dozen indicators, including transparency, effectiveness of the fight against corruption, violence, social stability and governance, based on surveys of hundreds of citizens, experts, business people and social leaders and compiled by at least 33 bodies, including the Chile-based Latinobarómetro and the U.S. organisation Freedom House.

The partial release of the report drew fire in Honduras, with Yani Rosenthal, minister of the Presidency, saying the report “gives a false perception with intent to harm us for unfathomable reasons.”

Rosenthal attributed this “false perception” to the fact that the period under evaluation spans more time under previous governments than the present one. The data include only Zelaya’s first year in office, and he has now been president for 19 months.

Since taking office on Jan. 27, 2006, the government has been the target of over 10 allegations of corruption, including theft of electrical energy by high administration officials, irregularities in tenders for health supplies, the hiring of advisers for non-existent jobs, waste of resources in the telephone company, influence peddling and abuse of power in handing out road building and energy generation contracts.

The latest scandal broke out in July, when an investigative commission appointed by the president confirmed irregularities in contracts approved by the head of the Road Fund, Ramiro Chacón. But once the commission had reported its findings, Zelaya rewarded Chacón by offering him the post of vice minister in the Secretariat of Public Works, Housing and Transport.

In the view of Enrique Flores, presidential adviser for legal affairs, some of the allegations are “unfounded, because since the president took office, his commitment to transparency has been so great that a law of access to public information has been approved, as a sign of good faith, to rescue the credibility and dignity of this country,” he told IPS.

But the sunshine law, which will come into force next year, creates a series of obstacles for public access to information, experts and activists say. On Aug. 9, Congress elected commissioners for the future Institute of Access to Public Information (IAIP), which will implement the law, in less than three minutes amid loud disturbances, shouts and whistles.

The disturbances were due to a protest by telecommunications workers, as well as parties that opposed the nominees.

The commissioners appointed are loyal to the traditional power-broking parties in Honduras: the governing Liberal Party and the opposition National Party. International aid officials attending the session in Congress left in amazement.

“I can’t believe what happened, it was grotesque, we couldn’t hear a thing because of the racket, and in the middle of all that they elect people for really important positions, without any debate or finding out what their background is, or their commitment to transparency. If this is your democracy, I don’t understand it!” an aid official who wished to remain anonymous told IPS.

International aid agencies have followed the creation of the IAIP with interest, as a fundamental step to guarantee transparency.

U.S. Ambassador to Honduras Charles Ford issued a clear warning before the IAIP commissioners were elected.

He said his country was very interested in seeing how the Millennium Account funds were spent. Corruption is a topic that we have talked about, government to government, as an area of great interest to us, but the fight against corruption doesn’t mean much if the guilty aren’t going to jail, Ford said.

The National Report on Transparency, published a month ago by the state National Anti-Corruption Council, recorded 3,000 known cases of corruption in the last six years, but only 11 of these have gone to court.

Sources at the Supreme Court told IPS that in the second week of August, several cases against persons linked to the fraudulent bankruptcy of banks in the north of the country had been dismissed.

Julieta Castellanos, a political analyst and expert on corruption and security, told IPS that “the level of impunity is so high, it’s hard to know if the country has hit bottom or is still in the process of going down.”

“There’s a vicious circle and there doesn’t seem to be a place to break it. Even when we monitor the media, we see that although the press reports cases of corruption, the news stops there: there is no follow-up by journalists or by the authorities. It’s like a show that gives information and disinformation at the same time,” she said.

Given this climate, it is not surprising that Sweden’s SIDA should announce a “substantial reduction” in its annual aid to the country, which is estimated at something over 50 million dollars, most of it in grants.

Ann Stödberg, with the Swedish Embassy’s development aid section, said she did not know how much the aid would be cut. “We will announce the official position in September. We are reformulating all our cooperation projects in the countries where we have assistance programmes,” she said.

 
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