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Honduras: U.S. ‘Democracy Promotion’ in Honduras


By Dawn Paley

A new round of democracy promotion projects funded by the United States in Honduras could prove to be a crucial reinforcement of the political project proposed by Honduran coup backers and the country’s business elite.

USAID, based its latest $2 million disbursement to Honduras, announced in July 2010, on the policy goals set out in a document called the Country Plan (Plan de País), a set of policies adopted in January, 2010 during the de facto presidency of Roberto Micheletti Bain.

“The Plan was developed by the Ministry of Planning, being closely supervised by the bankers, the National Association of Industrialists (ANDI), federations and chambers of commerce and NGOs, excluding labor and peasant organizations,” wrote Honduran researcher David Antonio Vivar Reyes in an email to NACLA. The Country Plan makes policy proposals that stretch over the next seven periods of government in Honduras, or until 2038.

“This political project, magically approved on a single night, at the last session of a Putschist Congress, repealed: the Honduran Council of Science and Technology (COHCIT), the Commission Sula Valley Executive, the National Competitiveness Commission, and the Technical Secretariat for Cooperation, [and] Citizen Participation Act,” wrote Vivar. These repeals, together with the Country Plan allowed the business and development elite to set the tone of policymaking before the inauguration of President Porfirio Lobo on January 27.

Beyond the standard proposals to reduce poverty and corruption in Honduras are other objectives that include making the country more economically competitive on the global market, moving public spending from state funded programs to municipal programs, and pushing for increased hydroelectricity and water privatization.

History of US Funding for the Honduran Elite

This will continue the long history of U.S. funding of the Honduran elite, the very players allegedly behind the June 2009 military coup that ousted former president Manuel Zelaya. This elite group, which includes many early beneficiaries of USAID programs, controls much of the country’s maquila industry, along with other export industries, large tourism projects, and Honduran branches of U.S. chains. What is cloaked as funding for democracy is likely to help these elites consolidate their power, and serve as an impetus to push through neoliberal economic reforms that were stalled under Zelaya.

USAID has a long and storied history in Honduras. From the 1960s onwards, the agency made large loans to the Honduran Financing Bank (FICENSA), which was controlled by wealthy factory owners and industrialists who funneled the money to the country’s private sector (Euraque 1996, 84).

Though the language around democracy promotion as an international development priority is relatively new, U.S. foreign aid has consistently been shaped by U.S. foreign policy. In the case of Washington’s relationship with Honduras, aid flows since the 1960s and particularly during the 1980s have been instrumental in creating particular kinds of citizen groups and business organizations.

William Robinson describes the transition to democracy in Honduras during the 1980s as a time when “millions of dollars in AID funding went to grassroots sectors in an attempt to achieve their subordinate incorporation into the project rather than their coercive exclusion,” (2003, 122). The “project” Robinson refers to is the U.S.-led transformation of Honduras from a military dictatorship to a democracy, which happened together with the occupation of the country by the U.S. military. Robinson explains that U.S. troops in Honduras at this time had a three part mission: crush incipient revolutionary movements inside Honduras, provide a military backbone of stabilization during the transition to democracy, and wage war on revolutionary movements in neighboring countries (Robinson 2003, 123).

According to the U.S. State Department, during this period “Honduras became host to the largest Peace Corps mission in the world and nongovernmental and international voluntary agencies proliferated.”

In the 1990s, AID funded the creation of almost two dozen business associations, along with private-sector organizations like the Foundation for Investment and Export Development (FIDE), the National Council to Promote Exports and Investments, the National Association of Honduran Exporters, and the Honduran American Chamber of Commerce (Robinson 2003, 125). Robinson also points out how the Honduran Council of Private Enterprise (COHEP) was denied funding throughout the 1990s, until such time as it ceased to function as a national-capital controlled organization that promoted import substitution industrialization (which protected the country’s domestic industry), and appointed Richard Zablah as its president (2003, 124). Zablah was a transnationally oriented maquila owner, fully committed to an export-led and outward-focused business model for Honduras.

”Democray and Governance”

The focus of USAID’s programming in Honduras changed in 2004, when the agency began funding “democracy and governance.” Between 2004 and 2008, the United States spent $18 million on democracy promotion in Honduras. Over this period, the Washington-based consulting firm Management Systems International received contracts worth $9.3 million to “promote transparency and citizen participation in targeted municipalities,” and to work to reform various organizations and institutions in Honduras. Florida International University carried out a $4.2 million contract to implement a new criminal code and promote the rule of law and judicial reform. The Federation of Honduran Nongovernmental Organizations (FOPRIDEH) received over $3 million for contracts related to judicial reform, free and fair elections, electoral pluralism, anti-corruption, and the “facilitation and consolidation of national networks of nongovernmental organizations involved in governance issues.”

Given the 2009 coup, it’s obvious that these programs did little to stabilize the country. On the contrary, one outcome was the strengthening of the influence of the Honduran elite responsible for the coup.


The most recent democracy promotion initiative announced by USAID is a $2 million project called “Decentralization Enabling Environment (DEE).” In the project description, the agency states, “in theory decentralization can ”create more transparent political institutions, inculcate stronger citizen support for government, and improve democratic participation.” The decentralization project aims to break down national-level services and management so they can be managed by municipalities. In some cases, though it may not be explicit in the USAID documents, this decentralization can lead to the eventual privatization of locally managed resources, including water.

David Vivar explains to NACLA that looking at the education sector is a good way to understand the decentralization process and why it is a priority for the United States.

“The reference model is undoubtedly the private school,” writes Vivar. “The central idea was that if we manage to provide public schools the same autonomy and encourage competition between public schools through the introduction of various mechanisms, market allocation, such as school vouchers or financing formulas, the quality of education and the use of resources would improve substantially.”

Even USAID can’t pretend that their policies of promoting decentralization are popular. A recent agency document states, “Honduran authorities supporting decentralization are met with considerable resistance from unions, central government bureaucrats, and those who equate decentralization with privatization and/or reduction of recipient benefits.”

There is little evidence that decentralization and delegating performance monitoring to the local level have led to improve the quality of education, says Vivar, who thinks that instead of improving the quality of education, decentralization has increased the level of control over school staff and teachers.

“As you … know, teachers have been one of the strongest movements throughout the last 20 years . . . The interest of the investment is not the improvement of quality but the demobilization of social movements and the weakening of the state,” writes Vivar.

USAID’s contract for Honduras is now out for solicitation, with applicants requested to apply before September 30. So far, three organizations have expressed interest: an Illinois financial services firm, Finnera; a DC based law firm, the Johnson Law Group International; and a Birmingham based organization called Global Recovery Group.

While Washington quietly continues to fund democracy-promotion activities that were invented by the Honduran elite, Hondurans continue to risk their lives to resist a government that they see as nothing more than the continuation of a military coup.


Works Cited:

Euraque, Darío. Reinterpreting the Banana Republic: Region and State in Honduras, 1870-1972. North Carolina: University of North Carolina Press, 1996.

Robinson, William I. Transnational Conflicts: Central America, Social Change and Globalization. New York: Verso, 2003.


Dawn Paley is a NACLA Research Associate.


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