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Honduras: Business Condemns Sanctions

Honduran business leaders argue that border closings and possible US sanctions violate CAFTA.


A two-day border closure this week against Honduras is being condemned by the private sector in Central America.  "The private sector in Central America and Panama immediately opposed the closing of the border [sending] a very clear message that politics [shouldn't] be mixed with commerce," Daniel Facussé, president of the Honduran Textile Association (AHM), told Latin Business Chronicle in a phone interview from San Pedro Sula, Honduras' main business hub.

Following the June 28 ouster of Honduran president Manuel Zelaya, the governments of Guatemala, Nicaragua and El Salvador closed their borders to Honduras between Monday and Wednesday as a protest. However, that move was strongly opposed by the business association of Central America, the Dominican Republic and Panama (Fedepricap) as well as Honduran business leaders.

The closing slowed down business in Honduras, but affected even stronger its neighbors, Facussé says. "At the end of the day, when you take economic sanctions, the ones who suffer most are the neediest," he says.

However, after the border was re-opened, any lost business in Honduras was immediately picked up again, resulting in minimal damage to the country, according to Facussé.

Meanwhile, despite the international noise the past week, Honduras' business has largely continued as normal. "It's business as usual," he says. "Nothing has affected the business; nothing has affected the operations and local transactions."

Honduran exports of textiles to the United States have not been affected, Facussé says.


In fact, the ouster may even help boost business. "For the past…months, since our ex-president tried to change the constitution, everybody was nervous," says Juan M. Canahuati, president of Grupo Lovable, a major textile and apparel exporter and one of the largest employers in Honduras
“There was no more investing, no more business growth. Everybody was trying to see what would happen.”

The ouster Sunday came after Zelaya’s efforts to hold a referendum on whether he could run for re-election. Such a move was deemed illegal by the Supreme Court and the national assembly, but Zelaya planned to move ahead anyway.

Zelaya's policies were also increasingly hurting business. "He was against capitalism," Canahuati told Latin Business Chronicle in a telephone interview. But while Zalaya's rhetoric was in favor of the poor and against the elites, it was the private sector that actually created jobs and helped the poor, he points out. "We have been helping all the poor people," Canahuati says. "We have created in the maquila sector alone 130,000 jobs the past 18 years. Jobs - that's what this country needs."

Zelaya’s ouster was largely self-inflicted, he argues. “He used to be my friend,” Canahuati says. “But he committed the biggest mistake in his life. He followed advice from [Venezuelan president Hugo] Chavez [about changing the constitution and running for re-election]. We have lived for the past 30 years with our constitution and in peace. We don’t want people like him and Chavez to continue in power for the next 20 years.”


Both the temporary border closing and talks about possible U.S. sanctions against Honduras violate the spirit of Central American free trade and the Central American Free Trade Agreement (CAFTA), Facussé argues.

The border closing "goes against the spirit of Central American free trade," he says. "It made everyone aware that Central America is an integrated region and you can't work isolated country by country."

As for U.S. actions against Honduras, that would violate CAFTA, he points out. "CAFTA has nothing in it that ...would allow trade disruptions for any political reason," Facussé says. 

His views echoes that of Costa Rican commerce minister Marco Vinicio Ruiz, who told La Nacion that CAFTA guarantees free flow of trade. As a result, Costa Rica's government - which condemned the ouster of Zelaya - also denounced the two-day border closing, he said.

Canahuati says President Barack Obama and the United States were misinformed about events in Honduras, partly thanks to Zelaya’s representatives at the United Nations and the OAS, which he calls “Communists.”


However, the ouster of Zelaya - and lack of international recognition for the new government - will delay Central American negotiations with the European Union, EU officials have said.


Both Canahuati and Facussé doubt Zelaya will be able to return to the presidency, as the Organization of American States and several countries are pushing for.  Even before his ouster, Zelaya was widely unpopular, with less than 20 percent support and more than 80 percent against him, Canahuati says. "People will reject him,” he says. “They know he hurt the country. We don’t want a dictator.”

According to all legal procedures that took place, Zelaya will be disqualified from returning to power, Facussé adds.
Added to that is the fact that the new government of interim president Roberto Micheletti enjoys wide support, he adds. "Eighty-five percent of Hondurans support the new government," Facussé says.

Today, there was a massive rally in capital Tegucigalpa in favor of the government and against Zelaya, while a similar one was held yesterday in San Pedro Sula.  Some 50,000 people participated in the San Pedro Sula rally, according to La Prensa newspaper. Participants carried signs with slogans like "It's better to have six months of pressure than 20 years of repression," alluding to Zelaya's growing authoritarian style before he was ousted and his close ties with Cuba and Venezuela.

Micheletti has appointed Gabriela Núñez as finance minister. She served as finance minister in a previous government and as president of the Central Bank.

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