264 May 3, 1983 BACKING HONDURAS: TAKING STAND FOR DE M OC RA C Y INTRODUCTION Honduras is the p oorest country in Central America, and may be facing the most difficult period in its modern history. fragile democracy and its stability are threatened by'economic crisis as unemployment and underemployment each approach 45 percent. process at a time whe n violent disputes ranged along its borders, the 3.6 million Hondurans now are threatened by possible anned conflict with Nicaragua and with attempts at destabilization by outside guerrilla forces Its Having achieved civilian rule through an electoral To b o lster faltering Honduras, the Reagan Administration has been providing it with economic and military assistance. Secretary of State Thomas Enders has described the Reagan Admini- stration's policy in Latin America and the Caribbean as a llpolicy to use ou r limited resources to support democracies and encourage those nations in trans-ition to democracy.11 tration to carry out such a policy in Central America have been attacked by Congress. The lawmakers, in fact, are threatening to cut back military aid to Honduras. Honduras is an infant democracy which deserves to be nurtured and encouraged by the U.S.

Honduras is one of four Latin American nations to make the transition from military to civilian rule durinq the Reagan Administration. In April 1980, concern about violence in El Salvador and Nicaragua, and for the stability of Honduras, prompted the Honduran military to allow elections for a constituent assenibly. Presidential elections followed in November 1981, and civilian rule resumed on January 27, 1982 Assistant Efforts by the Adminis This is very puzzling, for Honduras has become a key element in the struggle for El Salvador. Leftist forces in El Salvador are using Honduran 2 I territory to channel weapons and supplies from Nicaragua and to stage attac k s on the Salvadoran army. Honduran air space is violated repeatedly by planes from Cuba and Nicaragua transporting aid to the Salvadoran guerrillas. The violence raging within its neighbors has driven some 46,000 refugees into Honduras, creating an enormo u s economic burden. How long the fragile Honduran democracy can survive such pressures is uncertain. help, however, it will not survive for long. Without U.S THE HONDURAN ECONOMY The Honduran economy of 2.8 billion annual Gross National Product ranks 127th in the world. country, Honduras has been adversely affected by the worldwide recession. Honduras.long has depended on the U.S. for trade, agricultural exchange and industrial development U.S. corpora- tions were established in Honduras over a century ago a nd the U.S. has remained Honduras' most important trade partner. The U.S. supplies up to 45 percent of that country's imports and buys more than half its exports U.S. investments in Honduras are currently valued at $320 million Coffee is produced by some 46,000 independent small growers.

Other agricultural production comes from 250,000 small farmers and stockbreeders who own their own plots. tions with investments in Honduras have spawned and trained small and medium independent producers in such agricultu ral sectors as bananas, oleaginous plants and tropical fruits. The multinationals also have provided assistance to cooperatives and land reform settlements Basically an agricultural Multinational corpora Land reform, accompanied by significant reform of l abor laws, was implemented in 19

75. The labor movement had begun 21 years earlier when a small group of banana pickers went on strike demanding recognition and improved labor relations In 1963, the U.S. AFL-CIO and their representatives AIFLD (American In stitute for Free Labor Development) began working with the Honduran labor unions to develop what is now the most advanced and organized labor force in the region. significant cooperation between private enterprise and the labor unions, leading to the deve l opment of a skilled workforce. This is in sharp contrast to neighboring countries where such efforts have had little success and the labor unions have followed a leftist approach to solving labor problems AIFLD's efforts have resulted in Although Honduras has a tradition of honoring its debts, commercial loans from foreign lending institutions have been reduced drastically due to the violence in the region. This makes Honduras a high risk investment area. of the region's recent turmoil, Honduras had obtain e d foreign credits of almost $200 million. This now has been reduced to only $20 million. Suazo Cordova has renegotiated its loan from the International Prior to the start The civilian government of President Roberto 3 Monetary Fund. owes $1.5 billion the H onduran banana crop causing millions of dollars in damage. The U.S. posted sugar quota is also exacerbating the economic crisis. Sugar is one of Honduras' major exports. Yet, last year, the U.S. sugar quota granted Honduras only a 1.0 percent sales ratio, in contrast to Nicaragua's 2.4 percent allotment. This allowed Honduras to sell only 28,000 metric tons of sugar to the U.S. at 22 cents per pound. As a result, Honduras now has a 100,000 metric ton sugar surplus which it must try to sell at the world mar k et price of 6 cents per pound--far below production costs In contrast to Mexico's 80 billion debt, Honduras This March, hurricane winds destroyed about 70 percent of The country's new sugar refineries, which were financed with U.S. funds at high interest r ates, now are forced to operate below capacity. If operating at capacity, these refineries could employ some 16,000 Hondurans U.S. for its tourism, medical supplies and training, transportation services, and agricultural and industrial trade, it has suffe r ed from U.S. high interest rates, unemployment, high metal and petroleum prices, and low exports. While an economic recovery is underway in the U.S there may not be enough time for it to have a positive effect on Honduras without assistance from the U.S. a nd others. Beyond the AID projects already underway, encourage- ment of private investment in the country would generate an atmosphere of support for the democracy in Honduras. Honduras maintains an open door to foreign investment; foreign capital is give n the same treatment and protection as domestic capital. This is where the trade benefits of the Caribbean Basin Initiative program would be advantageous to both Hondurans and the U.S Because Honduras depends on the U.S.-HONDURAN MILITARY ASSISTANCE Milita ry assistance from the U.S to Honduras began in the mid-1950s and continued at an even pace until it was curtailed in 1969 because of the war between El Salvador and Honduras. It was resumed in 19

75. Between 1975 and 1980, such assistance (includ- ing mil itary training) amounted to about $2.6 million annually. The total military assistance allocated to Honduras between the 1950s and 1981 was only $24.8 million. During this thirty-year period, some 3,871 Honduran soldiers were trained by the U.S less than a third of the total Honduran army. of trainees was in 1981--262 students In comparison with the training and assistance offered to other countries in the area, U.S. military assistance to Honduras has remained minimal refugees fleeing the violence in Nica r agua El Salvador and The highest number Aggravating Honduras' economic problems are the thousands of 1 Bana.na Damage," AP-WX/O3/21/83 1323 EST, Miami. 4 Guatemala political Honduras These refugees also complicate an already fragile There are 46,000 refug e es in and social situation including 18,000 Salvadorans; 3,000 Guatemalans, 18,000 Miskito Indians and 6,000 Nicaraguans. The biggest influx comes across Nicaragua's borders with Honduras and from the Nicaraguan Atlantic Coast region, home of the Miskito Indians, victims of savage repression by the Sandinistas.

In addition to economic woes H0nduras.faces.a military challenge from Nicaragua and terrorist activity aimed at prevent- ing the evolution of a politically stable Honduras.

The increase of violence in areas bordering with Nicaragua along the Coco River is forcing the Honduran military to establish tighter security in that region. Threats from guerrilla groups based in Nicaragua such as the Cinchonero Popular Liberation Movem e nt and the People's Revolutionary Movement MRP) prompted both the Honduran government and the U.S. to reevaluate Honduran military readiness and security. ation, the U.S. increased its FY 1982 military grant from $1 million to $10 million, while reprogram ming of military sales credit was raised from $9 million to $19 million, giving Honduras a total of $30 million in military assistance for 1982.

In the FY 1983 continuing resolution, Congress appropriated $20.3 million. In March 1983, the Reagan Administra tion submitted a request to Congress for supplemental FY 1983 appropriations of $17 million. For FY 1984, the Administration has requested $83 million in economic assistance, $40 million for the Military Assistance Program MAP) and $1 million in Internati o nal Military Education and Training (IMET). In addition, the Senate Foreign Relations Committee has authorized an $8 million grant to recon- struct an airfield to be used for emergency purposes by the U.S This grant comprises part of a $21 million package which was requested in FY 1982 and was authorized by Congress. ing $13 million has been appropriated for the construction of a runway at a new airbase in Comayague. aircraft parking facilities as well as provide storage areas for U.S. C-130 aircraft fuel tanks. In addition to bolstering U.S security in the region, this runway will help Honduras.

Sandinista regime has spent at least $150 million to expand at least five major airfields, some close to the Honduran border An additional $150 million has gone fo r port improvements, convert- ing at least one of Nicaragua's two east coast ports to a deep water facility. Such ports could be used for submarine replenish- ment and maintenance. The airfields' fuel storage capabilities have been improved, making it pos s ible for Cuba's Soviet built warplanes to refuel outside their immediate area Throuqh a supplemental appropri The remain The base will enlarge U.S In the meantime, the threat from Nicaragua grows. The 5 COMPARISONS OF HONDURAN AND NICARAGUAN MILITARY POWE R I Honduras Ni c a ragua Army 14,500 Combined Active Military Air Force 1,000 Army, Air Force, Navy Navy 800 Combined Militia and Combined Police Reserves and Paramilitary Forces Ready Reserve Total 1,700 18,000 25,000 113,000 138,000 Air Force figures in c lude 110 pilots trained in Soviet bloc nations and capable of handling MiGs HONDURAS AND ITS NEIGHBORS The most critical problem facing Honduras is the Marxist Leninist regime in neighboring Nicaragua. Until the 1979 Sandhi- sta revolution, Honduran relat i ons with Nicaragua were cordial; since then, they have deteriorated substantially due to violations of its territories by Sandinista forces aiding Salvadoran guerril- las. Among the most recent violations have been Radio Sandino jamming of domestic Hondur an newscasts. the forging of a quasi-alliance between the democratically oriented nations of the region. On January 19, 1982, Honduras, El Salvador and Costa Rica signed a document proclaiming the "Central American Democratic Community."

Nicarapa has denou nced this community A front page article. in the Sandinista newspaper Barricada described the union as a regrettable error. It noted that, "Nicaragua cannot recognize this decision as just. Neither can Nicaragua consider the decision a political solution that will lead to the establishment of peace in the region."

Nowhere in the Democratic Community treaty is there mention of excluding a neighboring country, such as Nicaragua, although it does mention that the Ilarms race in Central America in increas- ing tensions in an irresponsible manner, places the stability of the region in danger It also Ilcondemns terrorism and subversioni1 in the region.2 Recent months have seen In view of these increasing terrorist'attacks, Hondurans have joined in a show of soli d arity with the Suazo government thousand Hondurans marched in the streets of Tegucigalpa in support of Suazo. Thousands also marched in support of the government during the siege in San Pedro Sula solidarity with any of the leftist groups, outside of stud e nt support at the National University On August 16, over ten At no time has there been a significant show of 6 Since this treaty was signed, administrations in all three coun- tries have changed. threat of destabilization, relations among these three nati o ns continue to be close. as an encouraging sign of commitment to the development of demo- cracy. of the importance of efforts by Central American nations to foster the development of democracy in the region Yet in view of the perceived continuing This agr e ement has been viewed by the U.S The Reagan Administration has become increasingly aware NICARAGUAN-HONDURAN DISPUTES The danger mounts of full-scale armed conflict between Honduras and Nicaragua. Honduras finds it difficult to patrol its 700 kilometer bo r der with Nicaragua because it lacks sufficient military personnel and roads to this uninhabited area.3 Nicaragua, on the other hand enjoys a more developed road system to its border with Honduras and has a huge military force. Indeed, the present Sandinis t a forces are four times larger than the pre- Sandinista National Guard Army of Dictator Anastasio Somoza. Today's forces, moreover, are calculated to be eight times more powerful than Somozals. and Militia, in fact, is larger than all the military forces of the rest of Central America combined.

The present 138,000-man combined Army While Nicaragua continues to charge Honduras with border violations, Nicaraguan violations against Honduras receive little media coverage. Since early this year, Nicaragua has b een inter- fering with the broadcasts of Honduras' main radio station. This interference has been traced to a powerful transmitter of between 10 and 15 thousand kilowatts, placed near the Gulf of Fonseca bordering El Salvador, Honduras, and Nicaragua) ins ide Nicaraguan territ~ry Sandinistas transporting weapons to Salvadoran guerrillas some 70 miles inside Honduran territory.

The Honduran army recently sighted a convoy of CUBA'S ROLE AND TERRORISM Assistant Secretary of State for Inter-American Affairs Tho mas Enders recently stated that Cuba's strategy is to unite The border area is so remote and uninhabited that Nicaraguan forces could advance for days into Honduran territory without the.knowledge of the Honduran military. This actually occurred recently, following a violation of Honduran territory by Nicaragua closest pay phone when its radio malfunctioned, with the Honduran govern ment unaware of the violation of its territory for three days. In anticipation of the possibility of future conflicts with Ni caragua President Suazo sent Foreign Minister Paz Barnica to address the Permanent Council of the Organization of American States and the United Nations Security Council, with a peace and disarmament proposal last year.

However, this proposal has not recei ved serious consideration by either of these organizations, and Nicaragua has refused to accept the idea of a mutual disarmament in the region A command post had to walk to the 7 the left in countries of the Caribbean and Central Ameri~a Castro provided p a ra-military training to small numbers of Hondu- ran radicals in the early 1960s and, in the late 1970s, resumed military training for members of the Honduran Communist Party (PCH). In fact, the PCH was integrated into the Internationalist Brigade to fight in the Nicaraguan civil war. Even now, Cuba uses Honduran leftists and Honduran territory as a conduit for arms and other aid to guerrillas in Central America. concealed arms intended for Salvadoran guerrillas was found in Honduras in January 19

81. Cuba is encouraging extremist groups in Honduras to unify and launch armed attacks against the elected government. Cuba also is increasing military training of such groups and promising Honduran guerrillas their own arms, including submachine guns A cache of A Deparment of Defense report last year outlined Soviet/Cuban influence in Latin America. Eight areas of influence were described: military/economic activity in Latin America; Cuba's military buildup; Soviet influence and presence in Cuba; Cuban/ Soviet bui ldup in Nicaragua; Communist influence/presence in Nicaragua; Cuban subversive activity in El Salvador; and the overall Soviet/Cuban influence in Latin America.

Terrorist activity in Honduras increased during 1980-81, almost certainly because of Cuba's inc reased involvement in the region. This year, acts of terrorism have become common. Since 1980, there have been kidnappings, aircraft hijackings, bank robberies, bombings of public*buildings, attacks on U.S. corpora- tions a machine gun attack on the U.S. E mbassy, the bombing of electrical power plants, and the September 17, 1982, siege of over a hundred people, mostly business leaders, in San Pedro Sula.6 In December 1982 a terrorist group kidnapped Honduran President Suazo Cordova's daughter while she was in Guatemala.

They demanded that a communique attacking relations with the United States be published in major Central America newspapers before she could be released. The terrorists identified themselves as "The People's Revolutionary Movement, MRP IXIM a group with no known relation to any terrorist group in Guatemala or Honduras. Suazo's daughter, Xiomara Suazo Estrada, was released after the communique was printed It was later learned that the guerrillas were Argentine and Colombian terrorists working with leftists in Guatemala.

The kidnapping of President Suazo's daughter indicates that terrorists, allied with the Sandinista revolution and Cuba, can trigger fear throughout Central America on behalf of l1liberationI1 movements. The conflict clearly has been regionalized 5 Strategic Situation in Central America and the Caribbean," Department of State, Current Policy, no. 352, December 14, 1982.

Thomas Ende rs Cuban Support for 'Terrorism and Insurgency in the. Western Hemisphere Department of State Bulletin, August 1982 8 POLICY RECOMMENDATIONS Honduras is entering a second'year of negative economic growth, high unemployment and economic barriers. This is d u e not only to world .economic conditions, but also to the violence at its border. The U.S. should recognize Honduras' fragile situation and the particular problems that it confronts. As such U.S policy should inchde aid for the Honduran private sector. Ho n durans fear violence from guerrilla activity less than hunger, poverty and unemployment. International institutions should be encouraged to grant loans to help offset Honduras' deficit. Productivity must be boosted by increased imports of agricultural and industrial products. employment and reduce the threat of social violence. the Administration should encourage private lending institutions to extend short-term loans for the continued industrial develop- ment of Honduras This .in turn will generate greate r Moreover Development assistance under the Caribbean Basin Initiative CBI) should be increased from $29 million in N 1983 to $35 million for N 19

84. The overall CBI economic assistance program for FY 1983 of $63.1 million should be increased in line with Honduras' immediate needs. The present U.S. sugar quota for Honduras should be raised to at least 3.0 from the present low 1.0 percent to give its sugar surplus a chance in a competitive world market.

The Administration should request additional funds to increase AID projects already in progress as well as develop educational and health programs. electric plant in El Cajon, which will enable Honduras to cut petroleum imports and to export electricity. Development of the Olancho Pulp and Paper project wou l d allow Honduras to make greater use of its forest resources to a level meeting the immediate needs of the present crisis and for Honduras to safeguard its national security. buildup of military forces and anti-air systems in Nicaragua poses a grave threa t not only to Honduras but to all of Central America. Recent shipments of arms to Nicaragua demonstrate that the escalation will continue. Congress should approve a $17 million supplemental to the $21 million already requested by the Administration for mil i tary education and training in FY 1983 This amount should be increased in N 1984 from the Administration's request of $41 million in MAP and IMET to $50 million combined. This would enable the Honduran government to purchase surveillance equipment similar to the current U.S. radar in the area.

The Honduran Armed Forces, however, must not be allowed to interpret such military support as encouragement for a military takeover. This would be viewed by Congress as anti-democratic and could result in a cut-off o f all aid to the country. This must be made clear to the military in view of its past corruption This includes the completion of a hydro Military assistance should not only be continued but increased The present 9 and abuse of government. United States wi ll not allow terrorism and subversion to destabi- lize a democratic ally.

The Suazo government has made two significant moves to demonstrate its commitment for democratic development. joined with Costa Rica and El Salvador in a Democratic Community and it has presented a peace proposal before the Organization of American States and U.N. This proposal calls for general disarma- ment in Central America; termination'of arms traffic in the area; reduction in the number of foreign advisors (El Salvador has 50 U . S. military advisors to Nicaragua's 2,000 Cubans an agreement for a multilateral agreement that will strengthen the democratic pluralistic system, including rights of free expression of politi- cal will. The U.S. should encourage the other democratic nati o ns of Latin America and Europe to support the government of Honduras and to acknowledge its efforts to develop a democratic union in the region It should also be.made clear that the It has U.S. policy should aid Nicaraguan democratic forces in exile to ga i n recognition before the OAS Permanent Commission and the U.N. Security Council. forum from which to voice their grievances, but also would alle- viate political pressures on the Honduran government encourage a more active role by the Organization of Amer i can States To date, it has backed the elections in both Honduras and El Salvador and opposed terrorism in any and all of Latin America. The OAS' Human Rights Commission should be encouraged to take a more prominent role in investigating human rights abuse s against the Miskito population from Nicaragua, Salvadoran refugees and Guatemalan refugees. Congress should review the findings of such a commission before even considering curtailing U.S. assistance to Honduras This would not only give them a public In t he event of crisis in Central America, the U.S. should CONCLUSION An unprecendented 80 percent of the Honduran people went to the polls in November 1981 to elect the current civilian govern- ment. Since then, Honduran democracy has survived some of the mo st difficult challenges faced by any Honduran administration.

Honduras suffers from grave economic and political pressures caused by the world recession and attempts by Nicaragua to destabi- lize its democratic government. Honduras is being victimized by N icaraguan aggression against Honduras' border region. When the Sandinistas were only a guerrilla movement four years ago, they were able to launch their attack on the Somoza regime from this same, hard to control, region inside Honduras.

Should Congress r estrict assistance for Honduras as it has for El Salvador, it will be clear to friendly and democratic 10 countries in Latin America that they cannot rely on the United States for support It is time to send a clear message to Latin America that the U.S re m ains part of the Americas, and that stability and democratic evolution in all of the Americas is of major concern to the U.S. government and its people. viewed as supporting only authoritarian regimes in the area, it must promote its image as an advocate of democracy among the affected countries. There is no better place to start than Honduras U.S. legislators must take a stand for democracy and freedom.

If the U.S. no longer wishes to be Richard Arau j o Policy Analyst