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Wednesday, August 8, 2012

Honduran-U.S. Relations

Peter J. Meyer
Analyst in Latin American Affairs

Porfirio Lobo was inaugurated president of Honduras in January 2010, assuming power after seven months of domestic political crisis and international isolation that had resulted from the June 2009 ouster of President Manuel Zelaya. While the strength of Lobo’s National Party in the legislature has enabled his administration to pass much of its policy agenda, Lobo has had limited success in resolving the many challenges facing Honduras. Efforts to foster political reconciliation, for example, have helped Honduras secure international recognition but have only partially diminished domestic polarization. Lobo is relatively unpopular over halfway through his four-year term with 59% of Hondurans disapproving of his performance in office in May 2012.

The poor security and human rights situation in Honduras has continued to deteriorate under President Lobo. Honduras has one of the highest homicide rates in the world, and common crime remains widespread. Moreover, human rights abuses—which increased significantly in the aftermath of Zelaya’s ouster—have persisted. A number of inter-related factors have likely contributed to this situation, including the increasing presence of organized crime, weak government institutions, and widespread corruption. Although the government has adopted a number of policy reforms designed to address these challenges, conditions have yet to improve.

Lobo also inherited a weak economy with high levels of poverty and inequality. Honduras suffered an economic contraction of 2.1% in 2009 as a result of the combined impact of the global financial crisis and domestic political crisis. Since taking office, Lobo has secured much needed support from the international financial institutions, and has pushed a number of structural reforms through Congress designed to restore macroeconomic stability and strengthen public finances. Despite the government’s tight fiscal policies, the economy grew by 3.7% in 2011 and is expected to grow 4.1% in 2012. In an attempt to improve social conditions, Lobo has begun implementing a new conditional cash transfer program. Considerable development challenges remain, however, as over two-thirds of Honduras’ 7.8 million citizens live in poverty.

Although relations were strained during the political crisis, the United States has traditionally had a close relationship with Honduras. Broad U.S. policy goals in the country include a strengthened democracy with an effective justice system that protects human rights and promotes the rule of law, and the promotion of sustainable economic growth with a more open economy and improved living conditions. To advance these policy objectives, the United States provides Honduras with foreign assistance, maintains significant security and commercial ties, and engages on transnational issues such as migration and human trafficking.

The 112th Congress has expressed considerable interest in Honduras, particularly with regards to the state of democracy, human rights abuses, security challenges, and the treatment of U.S. businesses. In December 2011, Congress adopted the Consolidated Appropriations Act of 2012, P.L. 112-74, which contains a provision requiring the State Department to withhold 20% of the aid appropriated for the Honduran security forces until certain human rights conditions are met. The appropriations committees in both houses of Congress have included similar provisions in their FY2013 appropriations bills for the State Department, Foreign Operations, and Related Programs, H.R. 5857 and S. 3241. Additional legislation introduced in June 2011, H.R. 2200, would limit U.S. assistance to Honduras unless the President certifies that the Government of Honduras has settled all outstanding expropriation claims brought by U.S. companies.

This report examines current conditions in Honduras as well as issues in U.S-Honduran relations.

Date of Report: July 25, 2012
Number of Pages: 33
Order Number: RL34027
Price: $29.95

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