TEGUCIGALPA — It’s not a controversial argument that the November 24 general election is the most important Central American election of the year, if not the most important since 2009, for the region.  But it’s certainly of vital importance for US foreign policy — and much more than the three additional upcoming elections next spring in Central America (Costa Rica, El Salvador and Panamá).

The coup that overthrew former president Manuel Zelaya in June 2009 was in many ways the first important foreign policy crisis for the administration of US president Barack Obama.  Views differ incredibly as to whether Obama and US secretary of state Hillary Clinton succeeded in handling the crisis.  Though the US government joined virtually the entire international community in condemning the coup and voicing support for Zelaya’s return to office, the United States ultimately backed down on threats to refuse to recognize the November 2009 election, despite threatening not to recognize those elections in talks with Honduras’s interim president between June 2009 and January 2010, Roberto Micheletti.

It was clear that top US policymakers weren’t happy with Zelaya’s increasing turn toward stridently anti-American leftist regimes, including Venezuela, which was then under the leadership of Hugo Chávez, and Zelaya’s decision to join the Alianza Bolivariana para los Pueblos de Nuestra América (ALBA, Bolivarian Alliance of the Americas) was a turn away from the United States and toward Venezuela, Bolivia, Cuba and others in the region.  While Zelaya would be a fool to turn away the favorable terms of Chávez’s Petrocaribe scheme that subsidizes fuel (50% down, 50% to be paid far off in the future), and even his conservative successor continued to accept Petrocaribe fuel, he pulled Honduras far closer to the hardcore left than it had ever been in its history.

As the subsequent post-Zelaya elections approached, however, it was clear that the United States was more comfortable with the impending victory of Porfirio Lobo Sosa, the candidate of the Partido Nacional (PN, National Party).  When Lobo Sosa (pictured above with Obama) won that election, US-Honduran relations went back to business as usual — and then some.

Honduras is, in many ways, the key to US policy in Central America.  Its Soto Cano air force base is a key military transport point between the United States and the rest of Latin America — the air base itself came into modern existence in 1981, when the US government used Honduras as a staging point for Contra incursions against the Soviet-backed Sandinista forces in Nicaragua.  Don’t let its relatively small size fool you, either.  If you think a country with a population of just eight million people can’t be relevant to US foreign policy, just look at Israel — it’s a country with just six million.

Four years after the mixed US response to the coup, Hondurans are preparing to elect a new president and all 128 members of the Congreso Nacional (National Congress), and the consequences couldn’t be greater for US-Honduran relations.

Current polls show that it’s a three person-race, with the National Party’s Juan Orlando Hernández, the president of the National Congress, essentially tied with Xiomara Castro de Zelaya, the wife of the former president.  Castro de Zelaya is running as the candidate of a broad leftist movement, the Frente Nacional de Resistencia Popular (FNRP, National Popular Resistance Front), which is now organized as a full political party, the Partido Libertad y Refundación (LIBRE, Liberty and Refoundation Party).  Lagging behind is attorney Mauricio Villeda, the candidate of Zelaya’s former party, the Partido Liberal (PL, Liberal Party) and the son of a former social democratic Liberal president in the late 1950s and early 1960s.

Though Castro de Zelaya isn’t going out of her way to disparage the United States, and the United States hasn’t endorsed Hernández directly, US-Honduran relations will be much trickier if Castro de Zelaya wins the election.

But that doesn’t mean relations will necessarily be worse for the Honduran people.  

That’s because right now, critics in both the United States and Honduras argue that US military aid has helped destabilize Honduras, while US officials have turned a blind eye to the human rights abuses of the Lobo Sosa administration at it pursues a security policy driven by ‘drug war’ techniques that have exacerbated violence in Latin America from Colombia to México over the past three decades.

To cite a statistic that’s now become a tragic cliché, Honduras has the world’s highest homicide rate — the latest available figures pit it at around 90 per 100,000.  That’s to some degree due to widespread drug trafficking, because Honduras has become an increasingly choice location as a pit stop between the origin of drugs in South America and their final market — the United States.  Moreover, Honduras has imported gang violence from Los Angeles and San Salvador, all of which has contributed to the growth of the maras (the most well-known are the Mara Salvatrucha and Calle 18), street gangs that rule parts of the capital, Tegucigalpa, and the second-largest city, San Pedro Sula.  Yet the macabre joke in Honduras is that the police are more dangerous here than the gangs, and the police (to say nothing of other officials, judges, prosecutors and politicians) are throughly corrupted by everyone’s estimation.  That the United States contributes so much in police and military aid, ostensibly to fight the drug war (depressingly, after decades of failure to win that war in any conventional sense of the word), has only fueled more corruption, more drug trade and, most sadly, more violence.

Moreover, the coup interrupted what had been 28 years of growing democratic institutions and peaceful transfers of power, and it only facilitated the general sense of a breakdown in the rule of law — though violent crime was on the rise well before 2009, it has only continued during the Lobo Sosa administration.  Corruption is even worse than it was today than during the Zelaya years, when it was worse than during the administration of his predecessor, the National Party’s Ricardo Maduro.  Even beyond allegations of ties to traffickers and corruption, the Lobo Sosa administration (and the interim Micheletti administration before it) has a spotty record on human rights — dozens of journalists, labor organizers, LGBT activists and leftists who protested the validity of the 2009 elections have all been murdered.  Hernández has taken the lead in introducing a controversial ‘military police’ force that critics believe will result in more abuses; Castro de Zelaya advocates a community policing approach.

Dana Frank, a professor of history at the University of Southern California-Santa Cruz, has written forcefully about the negative role that increasing US military aid is playing in Honduras:

The United States, meanwhile, is pouring funds into both Honduran security forces, countenancing a militarization of the Honduran police that has long been illegal here at home, while dismissing Congressional pushback about human rights issues in Honduras…

As Honduras hurtles toward its elections, the State Department has yet to denounce the military takeover of policing. U.S. funding for the Honduran police and military has in fact increased every year since the coup. The U.S. Embassy has yet to speak publicly about the killing of at 16 LIBRE activists and candidates since June 2012, or the concerted pattern of repression of the political opposition since the coup.

But the economic consequences couldn’t be greater, either — about 30% of the Honduran economy involves export trade with the United States and another 20% of Honduran GDP comes from remittances from relatives who work in the United States.  So the Honduran economy is largely tied to the larger U.S. economy — it has grown at around 3.5% for the past three years after contracting by around 2% in 2009.  With a gross domestic product (on a PPP basis) of $37.67 billion, Honduran GDP per capita (again on a PPP basis) is just $4,600, lower than any other country in Central America except for Nicaragua, and about one-half the per-capita income of regional stars like Panamá and Costa Rica.

Those numbers, furthermore, hide the fact that 60% of the population lives below the poverty line and Honduras now has the highest Gini coefficient in Central America (57), with many of the gains of the Honduran economy flowing to a small elite.  That’s especially the case in light of the newly enacted Central American Free Trade Agreement (CAFTA) among various Central American countries (and the Dominican Republic) and the United States.  While that has benefitted the large-scale maquila industry that assembles clothing for export and while it has probably also benefitted individual Honduran customers on a marginal scale, it has also made the goods of smaller-scale artisans invariably less competitive as cheaper goods from the United States and Central America flood the Honduran domestic market.  Not only has the Honduran government been unable to address those who have lost out from free trade, it can’t even pay its current bills — even with a 4% budget deficit in 2012 (and a public debt load of around 40% of GDP), teachers, nurses and other officials regularly go without consistent paychecks.

Again, context is crucial to understanding the US-Honduran economic relationship.  To quote yet another cliché, Honduras was the original ‘banana republic,’ as United Fruit and Standard Fruit, starting in 1899, increasingly captured Honduran government, influencing policy with both conservative and liberal elites to the point where US-run banana companies enjoyed wide control of land and transportation as well as concessions from successive Honduran governments for favorable tax and regulatory treatment.  Bananas went from comprising 11% of Honduran exports in 1892 to a peak of 80% in 1929, with little of those proceeds finding their way back to the Honduran treasury. (For the record, bananas today amount to just 3.5% of Honduran exports, far outpaced by coffee, 10% of exports, and textiles and clothing, about 40% of exports).

In Reinterpreting the Banana Republic: Region & State in Honduras 1870 – 1972, Darío Euraque quotes a US State Department official as follows in a 1919 memo, typical of both governmental and commercial US attitudes toward Honduras at the time:

There is, in my opinion, one and only one logical way to prevent a very serious outbreak in Honduras between now and the end of October, viz: for the US government to say politely but firmly to President [Francisco] Bertrand that we put him where he is, that we expected certain things of him, that he is not meeting these expectations and that we, therefore, want him to step down and out for the obvious good of his country.

Euraque points to findings by Pedro Rovelo Landa that between 1927 and 1935, Honduras collected around $5.5 million annually, but failed to collect over $8 million more due to concessions to foreign corporations.

Critics of a recent proposal, championed by several members of the Lobo Sosa administration and New York University economist Paul Romer, to establish a ‘charter city’ in Honduras with an entirely new set of institutions, laws and economic structure, argued that the ‘model city’ idea was yet another way to deliver special concessions to foreign (largely US) interests.  Even in its best light, in which a Honduran model city could lead the way for a more prosperous Honduras in the future, it’s easy to understand why Hondurans might oppose it. (NPR’s This American Life has a great segment on the collapse of Romer’s involvement in the project).

Although the Honduran constitutional court ruled against the laws that would have paved the way for the model city proposal, the Región Especial de Arrollo (RED), Hernández has championed a new version of the concept and has amended the laws to push through the National Congress again.  Castro de Zelaya is almost certain not to pursue the RED legislation if she’s elected.

The US State Department today doesn’t discuss the Honduran government in the same terms as it did in the early 20th century, but there’s nonetheless a sense that Honduras returned to form under Lobo Sosa as a country where US influence is at a maximum — and that the return of a Zelaya to power could lead to chillier relations.