Tuesday, July 30, 2013

"I've got a little list...": of mines, and oil fields, and more

So with the way cleared by Congressional action passing a new law to monetize the potential of natural resources (the "La Ley de Promoción del Desarrollo y Reconversión de la Deuda Pública"), Porfirio Lobo Sosa has declared that he is ready to start:
Lobo said that the Government has granted around 280 mining concessions that are not being exploited and that, through this law, the Executive Branch can put into use and with them can cope with the enormous burden that the internal debt of the country represents.

That's right: 280 mining concessions ready to be reassigned under the new law.

Lobo Sosa says he is going to call a meeting with various social sectors urging him to veto the law-- but that he doesn't think it is in the best interests of the country to do so. For him, the new law is totally perfect:

"The Government says... there's a mine or there's oil in Honduras, and who would like to buy this project, then they auction this and someone comes and offers more and they calculate the royalties."

"The Government isn't the guarantor, the Government isn't responsible, the Government receives the money and someone else bets that the mine is going to yield the money that he is paying, or perhaps that he is going to win and if he doesn't or interrupts development it won't matter, the Government will receive its money."

Sounds like a great deal for the government, right? Only not everyone in the Honduran government agrees.

One of the UD party delegates, Sergio Castellanos, gave press interviews in Honduras today claiming the law was passed without a legal quorum. That is what we can call a process story: not very interesting. But what is interesting is what he had to say about the content and purpose of the law:
According to Castellanos, there was bad faith in the approval of that decree because they told the deputies in Lempira that what they were going to have was a sale of junk, they never talked about the quantity of idle (natural) resources that the State has, they said one thing and approved another, he reiterated.

At the same time, he affirmed that it appeared that there are people interested in making deals with this law, they are people that have made gold studs in this government.  They did this in secret, in the first place because it is not certain that the product that will result from this law will serve to pay the public debt, nor even the current costs.

"I believe that they have surprised all the deputies by introducing a proposed law of that magnitude, without having gone over it with all the benches", he said.

“Here, what this means is that we are facing a deal by the Government with the parasitic businessmen that have been favored with other deals, like the purchase of security chambers, buying energy and other things".

So yes, Pepe Lobo has a little list... and the interesting thing will be seeing who benefits from it.

Monday, July 29, 2013

Selling the Wind, or How Honduras Will Finance Its Debt

The government of Honduras wants to sell you the wind. Literally.

The proposal is for a new kind of investment instrument.

On July 20, the Honduran Congress passed a law called the Ley de promocón del desarrollo y reconversion de deuda publica, which can be read here in its entirety. 

The newly passed law, proposed by the Executive Branch, creates a special commission of trustees sited in the Central Bank of Honduras.  That commission, which includes the Minister of Natural Resources, will identify "idle" assets.  It will also create a technical committee to analyze the financial potential and return on such assets, and oversee the concession of assets to private parties.

So what are these "idle resources" that Honduras proposes selling?  The wind, for wind power; the rivers and the land for hydroelectric power; and mineral rights - gold, silver, and iron in particular, though it also just sold petroleum exploration rights. They can be pretty much anything not already under the control of the Comisión para la Promoción de la Alianza Público-Privada (COALIANZA).

Once the resource is identified as idle, the government will seek to lease it in concession to a third party. The lease process will involve estimating the income-producing potential of the asset, both for the party leasing it, and for the government.

The lease will produce, among other things, a future income stream for the government for the length of the lease. The leasing part of the law merely makes references to the processes used by COALIANZA for its concessions.  The same rules will apply.

Normally income from a lease would trickle in to the government coffers over the length of a lease, producing income for both the present and future governments of Honduras. 

But the new law empowers the Central Bank, or someone delegated by it, to securitize this future income stream and sell it to others, based on the discounted present value of that future income stream. 

This discounted present value of the future income stream will come to the government in a lump sum, rather than as several smaller payments over the lease duration.

The law specifies that it must be used to pay down the Honduran government's debt.

The Financial Minister, Wilfredo Cerrato, argued that the state would be getting the future income that this resource would generate over longer periods, like 20 years, but getting it all now instead of year by year over the 20 years, and that the money would then be used to pay down the national debt, because at least for now, the law prohibits it to be used to pay current expenses. 

Cerrato added:
What we want is to pay the internal debt, which is short term at high interest rates, to achieve what the law's title says, "reconversion of the debt".

Cerrato characterized the "idle resources" that are covered by the new law as not generating wealth but rather producing poverty.  He suggested that Honduran pension plans would be likely purchasers of the assets.

The law, which originated with Lobo Sosa's executive branch, was introduced and passed during a Congressional session held in Lempira rather than the capital of Tegucigalpa. 

The bill had not previously been disclosed or put through committee.  Its content was unknown to most at the start of this Congressional session.

Because the session was held outside the capital, fewer members attended, and those who did attend were primarily National Party members.

During the Congressional session, Congress voted to suspend the requirement for three debates and to hold only one debate on this law.  It then passed the law in a single debate. This has brought about much grousing from almost all sectors.

The law, by not going through the committee review, passed pretty much as it was submitted by the Executive Branch.  It was not publicly disclosed, so there was no discussion about what Congress was enacting. That seems to have been by design.

As Ralph Flores, an executive of the Foro Social de la Deuda Externa y Desarrollo de Honduras (FOSDEH) stated, the people should have been consulted.  FOSDEH is one place where the Honduran public gets to comment on proposed government policy.

Flores said that he thought the law probably was a good financial move, but that the government of Honduras shouldn't be managed like a private company.  As these are resources belonging to all the citizens, he said, probably they should have been consulted before the law was approved:
Unfortunately here they only talk about this type of activity as beneficial.  There needs to be an objective balance.  There are methodologies to analyze if an investment is positive or negative for the economy or for a society.  Here we only look at the financial stream as a positive element.

Mauricio Oliva, the new head of Congress, says that such lease arrangements are nothing new, that the approach has been used successfully by many other countries, and points to Costa Rica and Colombia. 

Cerrato vehemently defends the law, claiming that without it Honduras won't make payroll for government employees in November.  That in turn suggests they already have assets identified and potential buyers of concessions lined up and presume they can bring securities on these assets to market before November.

Hugo Noé Pino, who represents the  Instituto Centroamericano de Estudios Fiscales (ICEFI) in Honduras, told La Prensa that the law was suspicious because not only of the rapidity with which it was proposed and passed, but for the lateness in Lobo Sosa's term.  This made him suspect that there were some ulterior motives.  He said the law sells Honduras in pieces:
"The most worrying part of this affair, given that the government has not shown itself to be trustworthy, is that  through this hurried law, just as with the model cities, [it has] committed all the resources of the state of Honduras without leaving to the next government any possibility of structuring its own recovery and investment plan for the country.  The next government will have its hands tied by these decisions."

Lobo Sosa says the law helps, not hinders, future governments.  Lobo Sosa goes on to claim this will not benefit his government one bit, a statement seemly contradicted by his Finance Minister's statement that without this law the government will not be able to meet the November payroll, implying income to this government, surely a benefit.

By using the processes specific to COALIANZA, the government avoids its own contracting law which would impose a greater transparency on the process.  It was this process that resulted in COALIANZA signing an MOU with Michael Strong for a model city somewhere other than where Congress had stated it wanted model cities (eg, San Pedro Sula instead of Puerto Cortes). 

COALIANZA's processes are not transparent nor do they always work towards the same goals as the government, as the model cities bungle demonstrated.  Civil society has no input into what the new commission decides to license. 

All resource-based projects involve expropriation (with long delays in payment in cases like the Patuca III dam project now underway). They may involve the dislocation of populations living on the concession, without any compensation.

There are no controls on either the number of employees, or the budget of the oversight commission set up in the new law.  It is unconstrained, and at this time, unfunded. Future governments will have to allocate it a budget for salaries and operations.
Civil society should pause at the statements of the Finance Minister that employee pension funds should invest in these financial instruments, which are effectively unsecured bets where a payment to the government up front gives the lease holder the "right" to profits from exploitation of a resources that may or may not be successful.

It has been an expressed goal of Honduran governments since at least 2009 to use the large government employee pension funds to improve the liquidity of the central government. It sounds like Cerrato sees this as one such mechanism.

This is just the latest of a series of laws passed by this administration that takes control of national assets and turns them over to private parties. 

These include the original model cities law, and the COALIANZA law that has sold concessions to airports, roadways, and railways. It includes the ZEDE law (aka model cities 2) which creates private economic development zones that can have their own laws, as well as the new mining law, which pretty much gives mining companies permission to do what they want on their concession.

There apparently is nothing that the Lobo Sosa government won't privatize.

Even the wind.

Wednesday, July 17, 2013

Glass Half Full? Glass Half Empty?

Proceso Digital reports that Porfirio Lobo Sosa has congratulated his administration for going nine days so far this year without a single murder in Tegucigalpa.  Mind you that's nine single days, not nine contiguous ones.  Lobo Sosa said:
"In Tegucigalpa we have achieved nine days with 0 murders.  I'm not saying [nine days] in order.  This is something historic.  I have no reason to lie to you."

Proceso Digital checked with the coroner in Tegucigalpa, and found that this is true.  There have been 9 single days when no murder victims arrived at the city morgue this year.  For the record, those days were April 30,  May 12, May 20, May 21, June 7, June 28, June 29, July 11 and July 13.  Lobo Sosa explained why he found this remarkable:
"Before we were always talking about 2 digits; there were more than 30 murders.  Today we have many days at a national level with only 1 digit.  We had one day with 5 [murders] in the country and this is not something to be happy about, but yes it's getting better, and its because of the police cleanup and the participation of the Armed Forces."

So is it really getting better?

The Observatory of Violence of the National Autonomous University begs to differ. 

Its director, Migdonia Ayestas, told La Tribuna today that so far this year there have been an average of 595 murders per month in Honduras, around 20 per day through May 31 of this year. 

There are four departments with low homicide rates: Valle, Gracias a Dios, the Bay Islands, and Intibuca, each with fewer than 33 murders per month. On the other hand, there are four with exceptionally high murder rates: Atlantida, Colon, Comayagua, and Copan, where the murder rates exceed 165 per month. 

Tegucigalpa, by the way, is in the department of Francisco Morazan, which is not in either list. 

While Ayestas didn't elaborate, those numbers, when extrapolated to the whole year, contradict Lobo Sosa's optimistic spin. 

If extended to the full year we can project about 7,140 expected murders in Honduras for 2013.  That's a murder rate approximating 85.1- 86 per 100,000 population, depending on what you conclude the population of Honduras will be at year end. 

By comparison, there were 7,172 murders last year (2012) giving a murder rate of either 85.5 per 100,000 (Observatory of Violence) or 91.6 per 100,000 (Organization of American States). 

(The reason for the difference is a disagreement about the population of Honduras last year. )

So, not much of a change from 2012: 32 fewer murders than last year, but about the same murder rate as 2012.

And still the highest murder rate in the world-- even if there have been nine days without a murder.

Tuesday, July 16, 2013

New Culture Warriors, New Tactics

The culture war in Honduras is heating up-- and there's a new player involved.

Yesterday the Minister of  Culture, Tulio Mariano González, asked the director of the Casa Morazan (Morazan House) Museum to resign.  Gonzalez wrote:
"If you don't want to work in harmony with the authorities and criticize the government, please resign so that other people who have the will can take you're place."

Carlos Turcios, the Director of the museum, has told the press that his entire budget will be used up on July 31 so the museum will have to fire staff unless the government allocates more funds to pay the staff to keep it open. 

González told the press that the museum was not going to be allowed to close.  He said:
 "NASA also had its budget cut but that doesn't mean that NASA is closing.  What we need to do is improve our offering, improve the initiative, make more work and this is what we're doing in all parts."

Except that NASA would close if you cut its budget so that it could not pay the people it needs to carry out its mission.  A museum cannot stay open without staff to operate it.

According to Turcios, the museum has 8 employees, and enough money to pay half their salaries through July 31. After that, he has 74,000 lempiras ($3700) to pay people for the rest of the year.  He told Conexihon that
"After the 31 of July there is no budget for us but we will not close the Casa Morazan."

Meanwhile, González says the museum is only closing temporarily.  La Prensa says he told radio station HRN that
"The Honduran Institute of Anthropology and History is doing a restoration and decided to close it [the Casa Morazan] for two weeks while doing the work to provide better service."

(The Minister may be referring to the installation of 46 objects that the Honduran Institute of Anthropology and History agreed to loan the Casa Morazan.)

So why did Gonzaléz call for Turcios to resign, when he is apparently volunteering to run the museum, for free?

Turcios thinks that González is operating under a misunderstanding.

The museum rented space for a week long community action seminar by the Confederación Unitaria de Trabajadores de Honduras (CUTH). A group called the Frente Amplio de Trabajadores de la Cultura y el Arte (Broad Coalition of Workers in Culture and Art) was included.

The Frente Amplio is a new player on the scene of culture, organized earlier this summer with an agenda prominently calling for the resignation of the current Minister of Culture. The original announcement of its formation indicted "the total disfunctionality of the Secretaría de Cultura, Artes y Deportes (SCAD) and the head of that same institution, Tulio Mariano Gonzales". Their conclusion was that the leaders of SCAD "are not interested at all in culture" and have put historic patrimony in danger "through governmental indolence".

The initial statements about the formation of the Frente Amplio say that "this is not a closed group, since all artists, intellectuals, and creators of art" are welcome. So unlike the unions of SCAD and other cultural entities like IHAH, which have either gone along with decisions of the ministry and its appointees, or suffered retaliation for efforts to correct mismanagement, the Frente Amplio is not subject to the same kinds of pressures that can be placed on employees.

On Monday the Frente Amplio denounced the virtual abandonment of local Casas de Cultura by the Ministry of Culture, and mismanagement of national museums. They singled out the Casa Morazan, noting that "the budget has been reduced to 800,000 lempiras (some 39,000 dollars), so that it will cease operations this coming [July] 31".

Turcios says some "political activists" in the Secretaria de Cultura, Artes, y Deportes, Minister González's organization, used this statement as a pretext to denounce him for supposedly allowing "political" activities to take place in the museum, resulting in the Minister asking for his resignation.

We think the Minister can't take criticism-- and is unwilling to admit that under his guidance, cultural organizations are falling apart in the country.

Monday, July 15, 2013

Honduran Development Leads to Death of Indigenous Leader

Honduran and international press have reported the murder of Tomás García, a Lenca leader, on July 14.

The immediate cause: a bullet from the gun of a member of the engineering battalion of the Honduran armed forces.

But it would be too simple to stop the story there. This is a story of exploitation of Honduras' natural resources, and of popular opposition to their destructive effects, largely ignored outside activist media outlets.

The bare outline of the facts, relayed from Radio Resistencia host Félix Molina by Adrienne Pine, starts simply:
Allan García, 17 year-old Lenca boy, was checked in to the Santa Barbara hospital this Monday at 1:00pm, injured by the Honduran military in the community of Río Blanco, Intibucá. The medical diagnosis is that a high-caliber bullet went through his thorax and that he requires urgent medical intervention. He was sent via emergency transfer this afternoon to Hospital Mario Rivas in San Pedro Sula. In the same attack, his father —Tomás García Domínguez, Lenca community organizer—was murdered around noon, also by the army which is guarding the DESA Company of the Chinese state firm SYNOHIDRO, which plans to build a dam on the Gualcarque River against the will of the indigenous community.

The Mexican news outlet El Informador reported that "close to 400,000 indigenous people are opposed to the construction of a dam by a Chinese company". That company, SYNOHIDRO, is well known as the contractor for controversial dams proposed on the Patuca River in Olancho, in eastern Honduras, expected to cause major environmental damage in the Rio Platano Biosphere, and protested by indigenous people in eastern Honduras as prejudicial to their livelihoods.

In April, International Cry posted notice of the beginning of protests by Lenca residents against the Agua Zarca dam, located on the opposite side of the country in southwest Honduras, on what some news reports call the Rio Blanco, more accurately, the Rio Gualcarque. They reported that this project was one of "around 360 newly accepted development concessions in Honduras, 30% of which are on indigenous lands".  The post describes actions taken by the protesters in April to disrupt the attempt to initiate dam construction.

SOA Watch reported in April about how the local Lenca community mobilized, both to lobby the Honduran government to rescind the Agua Zarca project, and to actively block construction efforts on the dam, which was made possible by legislation passed in 2009 during the de facto regime of Roberto Micheletti. SOA Watch quotes an unnamed woman from the community eloquently describing what is at stake in this struggle:
“What we’ve decided as the community of Rio Blanco, together in one voice, is that they withdraw those machines… Because we haven’t given permission for dams to be built. As the community of Rio Blanco, when the Mayor came for a town hall meeting, what we said was No and No. All in one voice, we said No. He got mad and he got up and left. He went to make a decision with those who like money under the table. That’s what they did. And today they have us oppressed. On the land where we harvest corn, beans, rice, yucca, coffee, they have buried the harvest with the dirt that they throw from the machines. Because of this, today, as the Rio Blanco community we have decided that the hydroelectric company will not continue working. We will not leave the blockade until they withdraw the machines. Because we are poor campesinos and there are about 300 children. Where will the children go? We have to pass this piece of land onto our children, each one of them, so that they can survive.”

According to Indian Country Media Network, on May 23 "police forcibly removed the indigenous demonstrators from the area with tear gas and arrests". The next day, Berta Caceres, Director of the organization COPINH (Consejo Cívico de Organizaciones Populares y Indígenas de Honduras) was arrested on what are widely seen as false charges of possession of firearms, charges suspended but not dismissed by a Honduran judge.

This seemed to be an attempt to intimidate the leadership of COPINH. Taken in this context, the death of Tomás García is an escalation from intimidation to deadly force, against indigenous leaders of protests.

Perhaps predictably, Honduran press reports accused the indigenous protesters of initiating the most recent violence. This is a familiar approach in Honduran reporting, presenting protests as illegitimate interference with the rights of property owners, with "destruction of property" raised as justification for fatal violence.

Coverage by El Heraldo was particularly egregious: the Honduran paper largely quoted a press release from the company. Their story goes that "owing to the violent intervention of the demonstrators of COPINH Tomás García died, and Allan García Domínguez also was injured", leaving a bizarre impression that it was the protesters, not the military, who resorted to firing on the crowd.

While the company press release leaves out the details of just who fired the fatal shots, Berta Cáceres explained that as 300 members of the group were protesting, "members of the armed forces who were accompanied by the police" committed the fatal shooting. In contrast, Vos el Soberano describes the demonstration as peaceful, the latest of 106 days of peaceful protests.

COPINH characterizes the protest as an assertion of Lenca sovereignty, "based on Convenio 169 about Indigenous Peoples, our historic memory, and the right to life and to collective rights as original people" of Honduras. Under ILO Convention 169, indigenous people in Honduras expect to be consulted about development projects that will affect them.

ILO 169 was adopted by Honduras in 1995, and while it would be a stretch to say that previous governments were enthusiastic in implementing it, after the 2009 coup indigenous groups experienced marked reversals in progress in asserting rights of consultation as Honduras rapidly expanded exploitation of natural resources. The post-coup congressional development process ran roughshod over environmental protection. Bad deals for energy generation were common. Increases in gold mining were encouraged, destroying the health and environment of rural communities.

Indigenous activists have fought back-- with little notice from mainstream news media internationally.

Perhaps that will change, now that intimidation has turned deadly. But we aren't counting on it.

ebido a la intervención violenta de los manifestantes del Copinh falleció el señor Tomas García, resultando herido también el señor Alan García Domínguez

Leer más en: http://www.elheraldo.hn/Secciones-Principales/Pais/Dos-muertos-y-un-herido-en-protesta
Síganos en: www.facebook.com/diarioelheraldo y @diarioelheraldo en Twitter
Consejo Cívico de Organizaciones Populares e Indígenas de Honduras

Leer más en: http://www.elheraldo.hn/Secciones-Principales/Pais/Dos-muertos-y-un-herido-en-protesta
Síganos en: www.facebook.com/diarioelheraldo y @diarioelheraldo en Twitter
Consejo Cívico de Organizaciones Populares e Indígenas de Honduras

Leer más en: http://www.elheraldo.hn/Secciones-Principales/Pais/Dos-muertos-y-un-herido-en-protesta
Síganos en: www.facebook.com/diarioelheraldo y @diarioelheraldo en Twitter
debido a la intervención violenta de los manifestantes del Copinh falleció el señor Tomas García, resultando herido también el señor Alan García Domínguez

Leer más en: http://www.elheraldo.hn/Secciones-Principales/Pais/Dos-muertos-y-un-herido-en-protesta
Síganos en: www.facebook.com/diarioelheraldo y @diarioelheraldo en Twitter