'Intelligent discontent is the mainspring of civilization.' -- Eugene V. Debs

Monday, September 14, 2009

The Honduran Coup Never Happened (Part 4) 

Forgotten all about this, haven't you? The Obama administration, unwilling to challenge an oligarchy that has been closely connected to the US for decades, has taken the silent approach, and just let the Honduran coup fade from public view. Over two and a half months of the last six months of Zelaya's term have already passed. Maybe, by early December, the coup government will let him reenter the presidential palace just long enough to gather up whatever clothes and credit cards he left behind when he was forcibly removed by the military.

One need only look to the International Monetary Fund to recognize the true contours of US policy, as recently reported by Mark Weisbrot:

No country in the world recognizes the coup government of Honduras. From the Western Hemisphere and the European Union, only the United States retains an ambassador there. The World Bank paused lending to Honduras two days after the coup, and the Inter-American Development Bank did the same the next day. More recently the Central American Bank of Economic Integration suspended credit to Honduras. The European Union has suspended over $90 million in aid as well, and is considering further sanctions.

But the IMF has gone ahead and dumped a large amount of money on Honduras – the equivalent would be more than $160 billion in the United States – as though everything is ok there.

This is in keeping with U.S. policy, which is not surprising since the United States has been – since the IMF’s creation in 1944 – the Fund’s principal overseer. Washington has so far made only a symbolic gesture in cutting off about $18.5 million to Honduras, while continuing to pour in tens of millions more.

In fact, more than two months after the Honduran military overthrew the elected president of Honduras, the United States government has yet to determine that a military coup has actually occurred. This is because such a determination would require, under the U.S. Foreign Appropriations Act, a cut off of aid.

One of the largest sources of U.S. aid is the Millennium Challenge Corporation (MCC), a government entity whose board is chaired by U.S. Secretary of State Hillary Clinton.

Interestingly, there were two military coups in the last year in countries that were receiving MCC money: Madagascar and Mauritania. In both of those cases, MCC aid was suspended within three days of the coup.

The IMF’s decision to give money to the Honduran government is reminiscent of its reaction to the 2002 coup that temporarily overthrew President Hugo Chavez of Venezuela. Just a few hours after that coup, the IMF’s spokesperson announced that “we stand ready to assist the new administration in whatever manner they find suitable.” This immediate pledge of support by the IMF to a military-installed government was at the time unprecedented. Given the resources and power of the IMF, it was an important source of international legitimacy for the coup government. Members of the U.S. Congress later wrote to the IMF to inquire how this happened. How did the IMF decide so quickly to support this illegitimate government? The Fund responded that no decision was made, that this was just an off-the-cuff remark by its spokesperson. But this seems very unlikely, and in the video on the IMF’s web site, the spokesperson appears to be reading from a prepared statement when talking about money for the coup government.

In the Honduran case, the IMF would likely say that the current funds are part of a $250 billion package in which all member countries are receiving a share proportional to their IMF quota, regardless of governance. This is true, but it doesn’t resolve the question as to whom the funds should be disbursed to, in the case of a non-recognized, illegitimate government that has seized power by force. The Fund could very easily postpone disbursing this money until some kind of determination could be made, rather than simply acting as though there were no question about the legitimacy of the coup government.

Interestingly, the IMF had no problem cutting off funds under its standby arrangement with the democratically-elected government of President Zelaya in November of last year, when the Fund did not agree with his economic policies.

Meanwhile, resistance to the coup continues, despite government repression.

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