Crisis in Honduras

Fearing Zelaya’s ouster would set a terrible precedent in a region where in the not-too-distant past military coups were common, the international community has thrown its weight behind Zelaya, demanding he be reinstated. The U.S., European Union and lenders such as the World Bank have suspended aid to the country. U.S.-backed talks mediated by Costa Rica’s President Oscar Arias appear to have come to a dead end—with Zelaya demanding an unconditional return to power, while the interim government, backed by the country’s courts, attorney general and congress, maintained such a return would be illegal, and therefore impossible.

The crisis put the Obama administration in a difficult spot. Hoping to mark a new day in its relations with the region and mindful of its past U.S. support of coups in Latin America, the U.S. has led efforts for a negotiated solution. But Washington’s insistence that Zelaya return to power has angered many middle-class Hondurans, who feel the U.S. has profoundly misread the situation. They view Zelaya’s ouster not as a coup but a legal and patriotic defense of the country’s institutions from a Chávez-style power grab.

“The terror of Chávez goes beyond the rational, it’s a panic,” says Edmundo Orellana, Zelaya’s former defense minister, who blames the fear inspired by Chávez for Zelaya’s ouster. Moises Starkman, who advised Zelaya on special projects and now works for the interim government, also blames Chávez. “This is a showdown which will determine if the Chávista model triumphs or not,” he says.

Honduras’ refusal to buckle under pressure has startled the U.S., which historically has cast a long shadow over Honduras. It was the original Banana Republic, where in the 19th and much of the 20th centuries, U.S. companies like United Fruit made and unmade presidents. In the 1980s, Honduras served as a base for U.S.-backed Contra rebels fighting the Sandinista government next door in Nicaragua. This time, however, the U.S. has been unable to work its will here. “We have received all sort of pressures from different people, which we will never accept in any circumstance,” Micheletti said in July following a phone call from Secretary of State Hillary Clinton urging Zelaya’s return.

Unexpectedly, the Honduras affair threatens to embroil the Obama administration in an unwelcome controversy as it labors to push health reform and other crucial programs through congress. Recently, 17 Republican senators sent a letter to Clinton arguing that the U.S. is on the wrong side of history on Honduras. One irate Republican senator has refused to proceed with confirmation hearings for two important Obama administration appointments, including the State Department’s top Latin America hand.

A closer look at Zelaya’s life sheds light on how the son of a right-wing landowner ended up in an ideological marriage of convenience with Chávez. It also shows how Zelaya’s plans for adopting the Chávez recipe for getting and keeping power alienated virtually the entire Honduran establishment.

Nothing in Zelaya’s background suggested he would become an international symbol of imperiled democracy. Zelaya is a product of Olancho, a violent, semi-feudal macho state in central Honduras that is dominated by pistol-packing landowners who run huge estates. One of four children, Zelaya grew up the son of rural privilege. His family, involved in logging and ranching, has been a dominant force in Olancho for decades.

In 1975, when he was 23 years old, his father was jailed for helping army officers torture and murder 14 rural activists, including two priests. Zelaya dropped out of college and went home to Olancho to take care of the family businesses. He visited his incarcerated father often, at times even sleeping in the prison, says Victor Meza, who served as Zelaya’s last interior minister. “That shaped him,” says Meza. Sentenced to 20 years, Zelaya’s father was freed in 1980 in a general amnesty.

No one remembers Zelaya having strong ideological leanings as a young man. He ran his family’s logging operations and eventually became a director of Honduras’ top business organization. He also worked his way up the ranks of the Liberal Party, the country’s oldest and most important political party, serving first as a deputy then as Honduras’ minister of investment. Friends and colleagues say Zelaya is disorganized and has little formal education. But they credit him with acute political instincts. “His background is milking cows, and all of a sudden he’s speaking before the United Nations,” says Meza. Zelaya is a quick study, he adds.

After a failed 2001 run, Zelaya won the presidency in 2005 by a sliver. At his inauguration, he threw away his prepared speech and improvised, making numerous gaffes. “It would be a sign of the way he would run his government,” says Miguel Calix, a Honduran political scientist.

At first, Zelaya wasn’t very ideological and spent a lot of time traveling. He was a big spender. On one notable trip to Washington, he took 40 people along, including his infant granddaughter, whom he handed off to a startled President George W. Bush at a White House ceremony.

 Two years into his term, Zelaya reshuffled his government, bringing into his cabinet an influential hard-line cadre of ministers dominated by Patricia Rodas, his foreign minister known as “los Patricios.” Rodas, the daughter of a famous right-wing Liberal party leader, has a reputation as a doctrinaire Marxist from her university days.

The world economy also pushed him leftwards. In 2007, Honduras was hit hard by record high oil prices. The country has no refining capacity and imports all its fuel. As oil prices climbed, Honduras, whose power plants run on fuel, was forced to hike electricity prices and ration power.

At first, Zelaya tried to lower the cost of imports by buying oil products in bulk, but the plan failed. So in 2007, he decreed a cut in fuel prices by 52 U.S. cents per gallon, with the companies and the government splitting the cost. But this move led to fuel shortages as the importers complained about reduced revenues. By mid-2008, the oil companies threatened to stop new investments in Honduras.

Neighboring Nicaragua, which had been getting cut rate fuel from Caracas since 2005 under a program called Petrocaribe, was having no such problems. A Chávez brainchild, Petrocaribe sells Venezuelan oil at market prices but allows its 18 member-countries to finance a part of the oil at low interest rates. As of 2007, Petrocaribe has provided $1.2 billion in financing—a similar amount to the Inter-American Development Bank’s soft loans in that period.

As Zelaya battled the oil companies, Chávez offered cheap fuel. Few in Honduras opposed the country’s entry into the Venezuelan oil pact when the Congress approved it in March 2007. “I pushed hard for Petrocaribe,” says Adolfo Facusse, head of Honduras’ industrialists’ chamber and now a Zelaya opponent. Since then, Petrocaribe has provided the government some $126 million in savings.

Zelaya quickly entered the Venezuelan’s embrace. “They get along very well and trade jokes,” says Meza, the former interior minister. In August, Zelaya joined the ALBA—a nine-nation trade and political pact that Chávez uses to counter U.S. influence in the region. Other ALBA members include Bolivia, Cuba, Ecuador, and Nicaragua.

At the ALBA ceremony in Tegucigalpa, Zelaya joined Chávez and Nicaragua’s Ortega before thousands of Hondurans, most of whom the government had paid a few dollars to attend. He copied Chávez’ incendiary rhetoric. “Today we are taking a step towards becoming a government of the center-left, and if anyone dislikes this, we’ll just remove the word ‘center’ and keep the left,” he said.

Chávez didn’t go down well in conservative Honduras, but Zelaya blamed lack of help from the U.S. and others for his left turn. “I’ve been looking for projects from the IADB and Europe, and found a modest response. They don’t have emergency funds and I’ve been obligated to attract new forms of financing like ALBA,” he told Reuters in an interview. Cardinal Óscar Rodríguez, who taught Zelaya as a child, said the president told him he was getting close to Chávez “for the money.”