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Map of Central America |
CIAO DATE: 04/03
Honduras Alert: President-elect Vows to Fight Crime
Hemisphere Focus: 2001-2002
December 4, 2001
Overview
In what were generally deemed to be clean and uneventful general elections on November 25th, Hondurans picked Ricardo Maduro of the Partido Nacionalista (PN) as their new president. The opposition leader faces a bevy of challenges, including record crime rates, widespread poverty, and the lingering effects of destruction wrought by Hurricane Mitch in 1998.
Maduro won by a comfortable 9 percent margin over his chief opposition, Rafael Piñeda Ponce of the governing Partido Liberal (PL). According to official numbers, Maduro got 52.9 percent of the total, while Piñeda received 43.4 percent. The candidates of the Partido de Inovación y Unidad (PINU), Unificación Democrática (UD), and Partido Demócrata Cristiano (PDCH) received 1.56 percent, 1.18 percent, and 0.96 percent of the votes, respectively.
The PN fared well across the country, winning, in addition to the presidency, the prized mayoralties of the capital city of Tegucigalpa and San Pedro Sula, the business center of Honduras. In congressional elections the PN received 46.6 percent of the votes, the PL, 39.25 percent, and the small parties a combined 14.7 percent. Without an outright majority in the legislature, consensus-building will be critical to the success of Maduro's presidency. He is slated to take office on January 27th.
Maduro's win was not a result of dissatisfaction with the current president, Carlos Flores of the PL. In fact, polls show that if Flores had presented himself as a candidate again, he would have won. Thanks in part to the substantive aid he got from the international community, Flores is credited with having advanced the reconstruction effort after Hurricane Mitch, which killed thousands of people and caused billions of dollars in damage. During his four years in power, Flores has also taken significant steps to consolidate democracy, especially by bringing the military under civilian leadership. Only 20 years ago Honduras was under military rule.
Crime-buster
The president-elect, a 54-year-old Stanford University-trained conservative economist and businessman, won victory thanks to a strong emphasis on tackling crime, currently Hondurans' prime preoccupation. The country is plagued by violence, the result of high levels of unemployment (around 35 percent) and poverty-it is one of the poorest countries in the hemisphere-and the rampant spread of street gangs.
During his campaign the candidate championed the need to adopt a "zero-tolerance" program against crime, to strengthen the judicial system so as to "eliminate impunity" and to increase the number of police from the current one per 1,000 citizens to one per 300. Having personally suffered the murder of his son in an apparent kidnapping attempt in 1997, Maduro was perceived to have a strong personal incentive to tackle this issue. Moreover, violence occurring days before the elections-when a congressional candidate was killed and gunmen shot at a political party headquarters-further underscored this central issue.
Rounding out his campaign platform, Maduro promised to improve the quality of education, pursue greater transparency in government, further open the economy, and achieve greater integration with the rest of Central America.
Tough job ahead
Notwithstanding the outgoing president's accomplishments, Maduro will inherit a country with many troubles. In the short term, he will have to contend with the political polarization that the elections created. Party loyalties are strong in Honduras, and government jobs historically have been doled out as political patronage. Maduro has pledged to break with this mold and pick only the best qualified officials for his administration, regardless of political affiliation, but many Hondurans are skeptical.
Perhaps the greatest challenge will be to create much-needed jobs. This is no easy task, for just as the local economy was recuperating from Hurricane Mitch, it was hit this year by a plunge in the price of some key exports, notably coffee, a crippling drought, and tropical storm. It has also been hurt by the general slowdown in the global economy and by the events of September 11, which have reduced tourism revenues and remittances from the nearly 100,000 Honduran residents in the United States. Both tourism and family remittances are important generators of foreign currency for the country.
Having served as head of the country's central bank between 1991 and 1994 and succeeded in private business, the president-elect is well prepared to try to improve economic performance. To this end, he is calling for a reduction of the fiscal deficit, which is running at more than 4 percent of GDP. He has promised to trim the bureaucracy, eliminate non-necessary expenditures (reducing, for example, the number of embassies abroad) and to curtail government perks, such as first-class travel for government personnel. He also favors providing micro credits to small entrepreneurs.
The country's prospects will also hinge on ongoing support from foreign donors and lenders. Maduro, who is fluent in English, is expected to win continued support from Washington (a large contributor to the Hurricane Mitch relief effort), either directly through aid or indirectly through greater trade access and/or through extension of "temporary protected status" afforded to non-resident Hondurans living in the United States. Maduro is also expected to do a better job than Flores did at marketing the country to foreign investors.
Honduras also depends on foreign debt relief, and Maduro has said he will pursue further debt-relief deals with global lenders. The country has an estimated $4.08 billion in foreign debt. Under the IMF's Heavily Indebted Poor Countries initiative, Honduras has already qualified for a reduction of debt-servicing costs on the order of US$556 million in net present value terms. But this relief is contingent on the country's continued adherence to targets set under the IMF's poverty reduction and growth facility (PRGF). Although compliance has been erratic, the completion point has been passed in principle. The PRGF program will last through the end of 2002. Structural reforms agreed on under the program include part-privatization of the state telecommunications company, Empresa Hondureña de Telecomunicaciones (Hondutel), as well as reform of the social security system, the financial sector, and the judiciary.
Honduras deserves much credit for having taken another step on November 25 in bolstering its democracy. Now, the onus will be on the new government to deliver on the goods of democracy in the form of a better standard of living, improved education, and other social services. Assuming that the regional and global environment begins to improve in 2002, Maduro appears well-equipped to make some slow but steady progress.
Miguel Diaz directs the CSIS South America Project, which focuses primarily on advising U.S. policymakers and the private sector on political and economic developments in the region through the U.S.-Mercosur Study Group (a bipartisan group in the U.S. Congress). The project also provides briefings for the Washington policy community and private sector. Diaz brings to CSIS nearly ten years of investment banking experience, having worked most recently as the senior Latin American economist/strategist for Nikko Securities Inc. in New York. Furthermore, Diaz has worked as a consultant and journalist, and remains a regular columnist for the Economist Intelligence Unit, and other publications focusing on Latin American financial issues. Also, in the early 1990's, Diaz worked as an economist for the Central Intelligence Agency and as a strategic market Analyst for Eaton Corporation. He holds an MA degree in Latin American studies from the Johns Hopkins School of Advanced International Studies and a BA degree in political science from Hobart College. Born and raised in New York, Diaz has also lived in Colombia, Venezuela, and Mexico.