Presidential Somersaults and Elite’s Greed
in Honduras
The Foretold
and Untold Chronicles of an Unusual Coup
By José Cuesta
Hondurans consider themselves to be
proverbially calm. When asked how they are
doing, they will most likely answer a
laconic “tranquilo.” They consciously
distance themselves from their rebellious
Nicaraguan and industrious El-Salvadorian
neighbors. If this is a good indication of
the Honduran collective psyche, it might
offer an explanation for the traditional
absence of the country in the headlines. The
military ousting of President Zelaya in his
pajamas on the morning of June 28th,
however, did make it into the news
worldwide.
Yet nothing is what meets the eye in
Honduras. Despite what would seem a very low
“decisiveness parameter”, in the language of
economic theory of conflict, Honduras has
hosted more than 400 armed uprisings since
independence from the Spaniards. In the
1960s, Hondurans and El-Salvadorians brawled
into a war that was ignited by their rivalry
during the soccer World Cup qualifying
round. The hundreds of disappeared civilians
in the ‘70s made little dent on the
Hondurans’ trust in the military, second
only to their faith in the Church, as
reported year in and out by Latinobarómetro
opinion polls.
Even though Honduras has lacked a rebel
group seeking separatist goals, break-away
enclaves or ethnic tensions exist between
several groups that share very little in
common, from Miskitos in the
sparsely-populated Eastern jungles to
English-speaking black Garifunas in the
tourist-based wealthy northern islands (once
a haven for pirates)—in this Central America
country of 7.7 million people slightly
larger than the state of Tennessee.
The country is also the third poorest in
Latin America—after only Haiti and
Nicaragua—and is abundant in neither
high-value mineral nor agricultural natural
resources. Yet, the infamous economic abuse
and political interference of large fruit
transnational corporations during the first
quarter of the last century led to the
coining of the term “Banana Republic”, later
replaced by the “backyard” of the U.S.
counter-insurgence operations against
Nicaraguan Sandinistas.
Adding to these numerous contradictions in
Honduran history, the military toppled Mr.
Zelaya’s administration just five months
before the legal expiration of his term. The
military alleges that they simply responded
to an indictment by the Supreme Court ruling
out Mr Zelaya’s aspirations of a
constitutional reform referendum as illegal.
In fact, Article 239 of the current 1982
Constitution sanctions a President who
instigates the reform of its foundational
articles (called pétreos, literally, cast in
stone) with separation from public office.
These circumstances make the Honduran coup
unique as the military overthrew a legally
elected President ostensibly on behalf of
preserving the constitutional rule of law
that was perceived (certainly by the
socioeconomic elite) to be threatened by the
incumbent government. The military did not
seize power for itself, but instead
transferred it to the opposition group,
which maintained the constitutional rule of
law pre-existing the coup. Even though
preserving the Constitutional rule of law is
certainly a mandate of the armed forces
(Article 272 of the Constitution), they
incurred unconstitutional acts in Mr.
Zelaya’s overthrow: Article 102 indicates
that a Honduran citizen cannot be extradited
or handed over to a foreign State; Article
278 explicitly indicates that the armed
forces must obey President’s commands;
Article 375 states that those violating the
Constitution ought to be tried under the
Constitution and incumbent laws.
In any event, this is clearly different from
the last century’s assiduous military coups,
grabbing power and changing the
Constitutional order, as well as from
recurrent popular protests forcing the
incumbent President out of office observed
in Latin America since the ’90s. In
contrast, the Honduran coup took place in
order to maintain a threatened—or so it was
perceived—status quo. The military was the
executing instrument but not its direct
beneficiary.
The Foretold Chronicle of a “Somersaulting”
President
In hindsight, Mr. Zelaya’s attempts to
reform the Constitution via summoning a new
Constitutional Assembly that would
potentially pave his way for re-election,
were inexorably what took him out of office.
Why then Mr. Zelaya’s insistence? Some
analysts point to the erratic, impulsive and
confrontational character of Mr. Zelaya,
which would have magnified the large
discount rates into the future and short
planning horizons that politicians are
typically bestowed with. A Chilean analyst,
Angel Saldomando, puts forward another
view—not inconsistent with the
former—stressing Mr. Zelaya’s incapacity to
generate minimum political consensus. That
inability led him to a disproportionate
personalist and antagonist behavior, in
which the consultation of the constitutional
reform was a question of life-or-death.
However truthful, these are opportunistic
explanations of the Honduran coup. A longer
term perspective is in order, going back at
least to 1981, when Honduras returned to
democratic rule after years of intermittent
military dictatorships. Since then, seven
elections have been held periodically every
four years, with four transitions of power
between the two major parties, Liberal and
National, both widely considered
conservative. The 1982 Constitution
precludes Presidents from seeking
re-election, either for consecutive or
non-consecutive terms. However, more than
twenty five years later, analysts consider
the Honduran democracy to be far from fully
developed, engaged instead in a continuous
partisan uncooperative electoral-like state;
overridden by rent-seeking and clientelist
behavior; and insufficient—albeit
increasing—political participation of civil
society.
By November 2005, Mr. Zelaya unexpectedly
won the Presidential election with 46
percent of the total vote. His subsequent
years in office were marked by international
oil, food, and financial crises,
exacerbating the country structural economic
problems (declining labor productivity; no
diversification strategies; scarce reform
progress) and political troubles
(corruption, reform paralysis, and
insecurity). The poverty reduction strategy
that had guided policy making in the
previous two administrations—but seen by
many as an imposition of a neoliberal
international community—was moved out the
limelight. In a 360 degree shift, Mr. Zelaya
turned his initial conservative ideological
position towards leftish positions, adhering
in August 2008 to the left-wing coalition of
ALBA, the Bolivarian Alternative for the
Americas, with Venezuela as its powerhouse.
That shift generated fear and uncertainty in
a significant section of the Honduran
society, which was further alarmed when,
eight months before elections, Mr. Zelaya
announced his intention to call a new
constitutional assembly referendum
coinciding with the November elections day
that would possibly revoke the prohibition
of re-election. Congress, the political
establishment (including his own party), and
the judiciary (both Supreme Court and
Supreme Electoral Tribunal) all declared the
referendum illegal in June 2009. Mr. Zelaya
replied by organizing a popular consultation
(to be held on June 28, 2009) on the need to
summon the constitutional assembly
referendum. The military publicly warned the
President of the dire consequences of his
plans. After that, Mr. Zelaya removed the
Armed Forces General in Chief, General
Vasquez. The day after, June 27, 2009, Mr.
Zelaya headed for an air force base
accompanied by a horde of supporters to
recover the electoral material for the
popular consultation that had been seized
hours before by the air force. The following
morning, the military arrested and ousted
the President to Costa Rica.
Since then, Mr. Zelaya has symbolically
participated in institutional meetings by a
sympathetic international—mainly Latin
American—community such as ALBA and UNASUR
(Union of South American Nations, in
English) summits and the American States
Organization, OAS, sessions. OAS’s initial
endeavors to restore the ousted president
failed, seen by many as the workings of a
lop-sided leftish ideological position
driving OAS actions.
Prompted by the U.S. government, a couple of
rounds of negotiations between Mr. Zelaya’s
and de facto President Mr. Michelletti’s
teams took place in Costa Rica under the
auspices of President and former Peace Nobel
Laureate, Mr. Arias. The negotiation also
failed by the refusal of the two
protagonists to meet in person. Ironically,
President Obama’s public calls for the
restoration of Mr. Zelaya equally
disappointed the de facto administration
(whose Foreign Ministry doubted Mr. Obama’s
knowledge of the situation with clear racist
overtones) as well as the previous
administration: Zelaya himself and
Venezuela’s President Chavez accused him of
not doing enough to put him back in office.
Part of this U.S. anomie may be explained by
the decisive phases undergoing key domestic
and foreign issues for the Obama
administration, such as health reform,
Afghanistan’s election and U.S. involvement
in Iraq, to cite a few.
Mr. Zelaya’s behavior since his ousting has
not helped, either, increasingly perceived
as being orchestrated from Caracas:
specifically his repeated calls to
supporters for a direct confrontation with
the de facto government (initially calling
for an insurrection, then for resistance)
and his bizarre attempts to enter the
country, first by a broadcasted live
incursion by plane, then, literally
speaking, by momentarily stepping in and out
of the border with Nicaragua. In the
contexts of the clashes between supporters
and security forces, three people have died.
The Untold Story of Elite Greed and Social
Contract Rupture
Under the theory of conflict developed by
economists such as Grossman, Hirschleifer,
Collier and Hoeffler, the Honduran coup can
be modeled as one in which the opposition’s
greed plays a critical motivating role. In
peace, the government has access to fiscal
revenues of both supporters and opposition
(whether or how successfully the opposition
manages to evade their taxes is not
considered here, but it will not change the
conclusions). This public provision of
services may well be the result of the
public good nature of most of these
services—many universal, others simply
ill-targeted in practice—rather than a
benevolent nature of the government.
The government receives external resources
in the form of investments and aid that in
turn can be destined to economic productive
development (which in Honduras has led to
investments in infrastructure and timid
export-led diversification), military
activities, and the financing of public
transfers, which in Honduras has meant
substantive additional resources for the
poverty reduction strategy linked to
debt-relief. At its peak since the
initiative started in the late 1990s,
poverty related spending represented 10
percent of the GDP. The opposition carries
out its productive activities, is taxed, and
receives public transfers as seen above.
This constitutes what some in the context of
conflict theory call “social contract”, a
formal or informal arrangement that governs
the allocation of resources and the peaceful
settlement of grievances. Its fissure is
frequently responsible for the onset of
civil conflict, as has been the case in
Africa (along with ethnic and regional
dimensions not applicable to Latin America).
Interestingly, this notion of social
contract intertwines greed and grievances,
which have traditionally separated economist
and non-economist explanations of conflict
outbreak and duration.
There are obviously several degrees of
social contract fractures, only some of
which should expectedly bring about such
dire consequences as to prompt a rebellion
or a coup. In the case of Honduras, was the
lack of expected economic growth or faster
poverty reductions likely seen as a social
contract rupture? Unlikely. For that to
happen, poor performance must be solely
attributed to the government’s decisions,
which becomes increasingly difficult to
sustain in the globalized era we live.
Furthermore, days before his overthrown, a
Gallup opinion poll reported Mr. Zelaya’s
approval rates at 46 percent, surprisingly
intact with respect to those taken four
years ago when he was elected. Did he
announce draconian economic, trade, taxation
or social policy shifts that would
dramatically affect investors’ expectations?
No. In fact, both net inflows of foreign
direct investments and gross capital
formation as a proportion of GDP have been
moderately increasing since 2005.
What, then, would likely cause a social
contract fracture in Honduras? We need to
look at politics not economics. The issue of
re-election was central in Mr. Zelaya’s
announcements of constitutional reform,
starting with a process of constitutional
overhaul by a new Assembly clearly
reminiscent of Venezuela, Bolivia, and
Ecuador’s recent reforms. It is unclear,
nonetheless, the extent to which the terms
of the constitutional overhaul were already
drafted or planned, which must only have
contributed towards a greater deal of
uncertainty and anxiety among the economic,
social and political elite in the country.
The social contract at risk was not
necessarily that governing the transfers
across citizens’ political identities.
Instead, it pointed to the accustomed power
sharing between the two major parties,
Liberal and National, which equates to the
share of power among the handful of families
dominating the political and economic
spheres of the country. In a simulation
exercise that models the rupture of social
contract for Honduras, I estimated that the
feared losses by this elite sector must have
exceeded a whopping 11 percent of the GDP in
order to green-light the military ousting of
Mr. Zelaya. Perceived losses by the elite
might have consisted of direct
redistributions of wealth to the non-elite
as well as indirectly from the empowerment
of other groups such as supportive radical
civil society organizations. The estimated
amount undoubtedly would constitute a
massive redistribution of resources within
any society large enough to support such
drastic measures. Also, it is a mobilization
of resources feasible enough in Honduras,
which has recently witnessed poverty-related
spending within a similar order of
magnitude. It is also reassuringly close to
Paul Collier’s gross estimates of a 15
percent GDP loss in an average civil war.
The Next Critical Question
Beyond the questions of what motivated Mr.
Zelaya and the elite to what they did, the
social contract and greed explanation
suggests that even in a heavily indebted
poor country subject to continuous
monitoring by the international community
and strongly dependent on aid and
debt-relief, the influence of the
international community is ineffective in
defraying a major crisis when the mechanisms
that guarantee the elites’ grip on power are
at risk. Regardless of the advocated
principle of defending democracy’s
legitimacy against a coup or the principle
of defending the Constitution against its
internal threats, it is the conventional
fear—justified or not—of extraordinary
economic losses expected under new rules of
the game that might explain the lion’s share
of motivations for the unusual coup in
Honduras. The critical question for the
future is whether more deliberate efforts to
reform the economy, to tackle daunting
levels of poverty and inequality, and to
make Honduras’ form of democracy more
participatory will meet the same fate as Mr.
Zelaya’s purported re-election ambitions. |
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