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DE RUEHTG #0151/01 0492307
ZNR UUUUU ZZH
R 182307Z FEB 10
FM AMEMBASSY TEGUCIGALPA
TO RUEHC/SECSTATE WASHDC 1691
RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RUEKJCS/JOINT STAFF WASHDC
RHMFISS/CDR JTF-BRAVO
RHMFISS/COMSOCSOUTH
RUEIDN/DNI WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RUEKJCS/SECDEF WASHDC
RUMIAAA/USSOUTHCOM MIAMI FL

UNCLAS SECTION 01 OF 06 TEGUCIGALPA 000151 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR H AND WHA/CEN 
 
E.O. 12958: N/A 
TAGS: OREP PGOV PREL PHUM ASEC CASC ECON EAID MARR
KCRM, KDEM, MCC, HO 
SUBJECT: SCENESETTER FOR CODEL DODD 
 
REF: SECSTATE 12026 
 
¶1.  (SBU) Embassy Tegucigalpa warmly welcomes the February 
15-16 visit of Codel Dodd.  Your visit comes at a historic 
moment.  President Porfirio "Pepe" Lobo assumed office on 
January 27, 2010 as the chief executive elected with the 
greatest number of votes in Honduran history.  The United 
States maintained a consistently principled policy with 
regard to Honduras following the coup d'etat that took place 
on June 28, 2009.  We joined other nations in supporting 
resolutions in the United Nations and the Organization of 
American States condemning the coup and demanding the 
restoration of constitutional order.  We maintained a 
no-contact policy with the de facto regime that took power on 
June 28 and suspended military and non-humanitarian aid to 
Honduras, but avoided imposing devastating trade, investment, 
or financial sanctions.  We were also always mindful of the 
complexity of the situation leading to the coup, and 
President Zelaya's own responsibility in precipitating the 
political crisis, which is the reason we supported a 
negotiated solution.  Support for the general election held 
on November 29, 2009 was the complementary track of U.S. 
policy.  We believed in the legitimacy of the election 
process, a democratic mechanism that had been launched well 
before the coup and which was carried out by an autonomous 
body, the Supreme Electoral Tribunal and, therefore, 
maintained our technical elections assistance program. 
 
¶2.  (SBU) The government of President Lobo faces formidable 
challenges.  Many in the international community are not yet 
willing to recognize his government, waiting for it to 
demonstrate its commitment to the rule of law and human 
rights.  President Lobo has formed a government of national 
unity, with representatives of all political parties in his 
cabinet.  In his inaugural address, Lobo focused on national 
reconciliation and Honduras' reintegration into the community 
of nations.  He highlighted his commitment to the three 
pillars of his campaign plan: creating jobs and reducing 
poverty, expanding the reach and quality of education and 
health, and ensuring security.  On January 26, the congress 
passed a decree, which President Lobo signed as soon as he 
took office, granting amnesty to those who committed the 
political crimes of treason, crimes against the form of 
government, terrorism, and sedition between January 1, 2008 
and January 27, 2010.  The Honduran economy is in terrible 
shape due to both the global financial crisis and the 
political crisis resulting from coup.  Honduras is also 
facing a major assault on its sovereignty from Mexican and 
Colombian drug cartels that use it for the trafficking of 
drugs to the U.S.  Our challenge is to reengage with the new 
government, encourage other governments to do the same, and 
begin to confront these problems.  However, we need to 
reengage in a manner which reevaluates our past interaction 
with Honduras, working to ensure that a coup d'etat never 
happens again. 
 
------------------ 
Political Overview 
------------------ 
 
¶3.  (SBU) Honduras, which has an estimated population of 
almost 8 million, considered itself the foremost U.S. ally in 
Central America.  This close bilateral relationship was 
fractured in the aftermath of the coup d'etat that took place 
on June 28, 2009.  This was a coup d'etat with a difference, 
shrouded in its advocates' claims of adherence to the 
Honduran constitution and body of law.  The actions of 
President Jose Manuel "Mel" Zelaya before June 28 had 
polarized Honduran society and placed the institutions of 
governance under great stress.  The Honduran elite lacked 
sufficient confidence in the ability of their governments' 
institutions to address any illegal actions that President 
Zelaya might have taken and resorted to a coup d'etat.  Like 
every other country in the world, the United States did not 
recognize the de facto regime, led by Roberto Micheletti, 
which assumed power after the coup.  The Department of State 
suspended its direct assistance to the Government of Honduras 
immediately following the coup and announced the termination 
of a broad range of assistance on September 3. 
 
¶4.  (U) Negotiators for President Jose Manuel "Mel" Zelaya 
 
TEGUCIGALP 00000151  002 OF 006 
 
 
and Micheletti signed the Tegucigalpa-San Jose Accord on 
October 30, 2009.  Although there were difficulties related 
to its implementation, including President Zelaya's November 
6 decision to withdraw from its terms, the Accord provided 
the strategic framework negotiated and signed by Hondurans on 
both sides for the resolution of the Honduran crisis.  The 
Accord provided that the Congress, in consultation with the 
bodies that it deemed relevant, such as the Supreme Court, 
should issue a pronouncement in accordance with law on the 
reversion of the situation of the Executive Branch to its 
condition prior to June 28, until the end of the current 
governmental term on January 27, 2010.  The Congress voted 
111-14 on December 2 against the restitution to office of 
President Zelaya.  The Tegucigalpa-San Jose Accord also 
provides for establishment of a Truth Commission. 
 
¶5.  (SBU) A general election was held on November 29, 2009, 
which was credible and transparent.  The United States, while 
never abandoning its principled stance of calling for the 
restoration of the democratic and constitutional order, did 
not terminate its technical electoral assistance, despite the 
fact that the OAS, United Nations and the European Union 
suspended their electoral assistance programs.  The United 
States believed that Hondurans should not be deprived of the 
right to elect their future leaders since the electoral 
process had begun months before the coup and was not being 
conducted by the de facto regime, but by the Supreme 
Electoral Tribunal, an autonomous body. 
 
¶6.  (U) Porfirio "Pepe" Lobo, presidential candidate of the 
National Party, won a decisive victory, garnering 1,213,695 
votes out of a total of 2,146,012 valid votes cast, 56.56 
percent of the total.  There were 396,171 votes separating 
Lobo from Liberal Party presidential contender Elvin Santos 
who received 817,524 votes, 38.09 percent of the total.  The 
other three presidential candidates each received less than 
two percent of the vote. 
 
¶7.  (U) The two major parties are the slightly 
right-of-center National Party and the slightly 
left-of-center Liberal Party.  The three much smaller 
registered parties, the Christian Democratic Party, the 
Social Democratic Innovation and Unity Party (PINU), and the 
Democratic Unification Party have never come close to winning 
the presidency.   Lobo's National Party will hold a majority 
in the 128-seat one-chamber National Congress.  The National 
Party won 71 seats, the Liberal Party won 45 seats, the 
Christian Democratic Party won five seats, the Democratic 
Unification Party won four seats, and the Social Democratic 
Innovation and Unity Party (PINU) won three seats.  The 
National Party showing in the 298 mayoralty races was also 
strong, with victories in 191 of them.  The Liberal Party was 
victorious in 104 with the Christian Democratic Party winning 
in 2 and an independent candidate the victor in a third. 
 
¶8.  (U) President Lobo's plan for his government aims to 
achieve sustainable development that will improve the lives 
of his fellow citizens.  His plan is based on three pillars: 
creating jobs and reducing poverty, expanding the reach and 
quality of education, and ensuring security.  Lobo's foreign 
policy will be focused on the return of Honduras to the 
international community and will emphasize the country's 
development.  Lobo will seek to decentralize the government 
and improve access to quality education.  Lobo intends to 
introduce a new health care system based on universal 
coverage that will include the most vulnerable members of 
society who are currently excluded from health services. 
Lobo pledges to fight crime while guaranteeing respect for 
the constitution and international standards regarding human 
rights.  Lobo proposes to strengthen the capacity of the 
police and support measures to improve the efficiency of the 
judicial system.  Lobo plans to adopt a policy for youth to 
increase their employment and educational opportunities.  He 
also proposes to promote initiatives to keep the elderly in 
productive activities and promote legislation to protect 
emigrants. 
 
------------ 
Human Rights 
------------ 
 
 
TEGUCIGALP 00000151  003 OF 006 
 
 
¶9.  (SBU) There has been a significant deterioration in the 
human rights in Honduras in the wake of the rupture of the 
constitutional order.  Reported allegations of human rights 
abuses since June 28 include arbitrary arrests; 
disproportionate use of force such as beatings and incidences 
that have resulted in the loss of life; an erosion in what 
little protection there was before June 28 for the human 
rights of vulnerable communities in Honduras, including 
women, gay and lesbian, the indigenous, and the 
afro-indigenous; infringements of freedom of expression by 
individuals and media; and threats against journalists and 
opponents by the de facto regime.  A particularly troubling 
development was the de facto regime's use of decrees to 
severely limit fundamental civil rights, such as freedom of 
speech and association.  The government of President 
Lobo has pledged to respect human rights. 
 
----------------- 
Economic Overview 
----------------- 
 
¶10.  (U) Honduras, with a per capita Gross Domestic Product 
(GDP) of USD 1,845 in 2008, is one of the poorest countries 
in the Western Hemisphere, with about 70 percent of the 
population living in poverty.  The average adult Honduran has 
only a sixth-grade education.  GDP grew more than 6 percent a 
year 2004-2007 but slowed to about 4 percent in 2008.  GDP 
growth estimates for 2009 range from negative 2 percent to 
negative 4.4 percent.  Inflation surpassed 10 percent in 
2008, but fell to 3 percent in 2009 due to the fall in oil 
prices and a decline in consumption. 
 
¶11.  (U) Because of a strong commercial relationship with the 
U.S., Honduras has been feeling the effects of the recession, 
especially in the export-oriented maquila sector, where 
orders are estimated to be down about 40 percent and where 
about 30,000 have been laid off since August 2008 out of a 
pre-crisis workforce of about 145,000.  Commercial bank 
balance sheets remain healthy, but banks are being extremely 
conservative about lending, so businesses are 
credit-constrained. 
 
¶12.  (U) The Central American-Dominican Republic Free Trade 
Agreement (CAFTA-DR) entered into force for Honduras on April 
1, 2006.  Honduran imports from the U.S. have grown much 
faster under CAFTA-DR than Honduran exports to the U.S. 
Two-way trade with Honduras in 2008 was USD 8.9 billion, up 6 
percent from 8.4 billion in 2007.  Exports of non-traditional 
goods such as apparel and automobile parts now surpass 
traditional exports like coffee and bananas.  With the 
economic downturn, exports were down almost 14 percent in the 
first half of 2009.  From 2005 to 2008, the inflow of foreign 
direct investment to Honduras increased from USD 600 million 
to USD 877 million.  Foreign direct investment cash inflows 
for 2009 are estimated to have decreased by 6.3 percent 
compared to 2008.  According to business community 
representatives, new foreign investment came to a virtual 
halt following the coup d'etat. 
 
¶13.  (U) Roughly 200 U.S. companies operate in Honduras, and 
the U.S. is the largest principal investor, contributing 
almost 60 percent of total foreign direct investment.  In 
addition to the political crisis, obstacles to foreign 
investment include public insecurity, weak judicial 
protections of investor rights, corruption, and most 
recently, the political crisis. 
 
¶14.  (U) About one-third of the Honduran workforce was 
considered either unemployed or underemployed in 2009.  This 
does not include the roughly 1 million Hondurans who have 
migrated to the United States.  Remittance inflows from 
Hondurans living abroad, particularly in the U.S., are the 
largest source of foreign currency, totaling USD 2.41 billion in 
2009,down 11.1 percent from 2008 levels.  This is equivalent to 
about one-fifth of Honduras' GDP.  The Lobo administration 
will try to promote use of remittances into productive 
activities that will ensure the recipients a better future. 
 
¶15.  (U) The economic plan developed by President Lobo's team 
during his campaign covers an ambitious agenda, including 
small business development, energy, infrastructure, 
 
TEGUCIGALP 00000151  004 OF 006 
 
 
transportation, land-use planning, and tourism.  Lobo pledges 
to strengthen development in micro, small, and medium-sized 
businesses and to cultivate public-private partnerships. 
Renewable energy and climate change mitigation are high 
priorities.  The plan calls for improvements to the 
investment climate and the development of Honduras' potential 
as a tourist destination.  On the macroeconomic side, it 
pledges improved tax collection and debt management.  This 
ambitious agenda faces considerable obstacles, lack of 
financial resources foremost among them.  The Lobo 
administration's most urgent priority will be to attempt to 
restart multilateral and bilateral assistance. 
 
-------------------- 
Bilateral Assistance 
-------------------- 
 
¶16.  (U) The United States has historically been the largest 
bilateral donor to Honduras.  The Department of State 
suspended its assistance to the Government of Honduras 
immediately following the coup and announced the termination 
of a broad range of assistance on September 3. 
 
¶17.  (SBU) In the aftermath of the June 28 coup, USAID is 
analyzing ways to increase the effectiveness of its efforts 
in the area of support for the development of democratic 
institutions with a particular focus on developing a sense 
among ordinary Hondurans that the country's institutions 
belong to and are accountable to them. 
 
¶18.  (SBU) USAID will continue to focus on engaging the most 
marginalized and poorest populations in Honduras in the 
country's development through programs including basic 
education and skills training for at-risk youth and adults, 
increasing food security for the poorest sectors of society, 
and diversifying the agricultural sector into higher value, 
entrepreneurial, export oriented, non-traditional crops. 
 
--- 
MCC 
---- 
 
¶19.  (U) The Millennium Challenge Corporation (MCC) is a US 
foreign aid agency focused on reducing poverty through 
economic growth.  It bases its engagement with some of the 
poorest countries in the world on three key pillars: 
competitive selection of eligible countries, country-led 
solutions and country-led implementation.  MCC signed a 
five-year, USD 215 million compact with Honduras in June 2005 
aimed at reducing poverty by alleviating two key impediments 
to economic growth in the country: low agricultural 
productivity and high transportation costs.  Strategic 
investments in rural development and transportation are 
increasing the productivity and business skills of farmers 
and their employees who operate small-and medium-sized farms, 
and are reducing transportation costs between targeted 
production centers and national, regional, and global 
markets.  The MCC program is achieving significant results 
and is on track to achieve its main objectives.  The 
transportation investments are improving key portions of the 
country's main logistical corridor (CA-5 Highway) as well as 
key secondary highways.  The investments in rural development 
are training and increasing the income of nearly 6,000 small 
farmers by over USD 2000 per hectare, modernizing key 
portions of the financial agricultural sector, and improving 
nearly 500 kilometers of farm to market rural roads. 
 
¶20.  (U) In September 2009, MCC's Board decided to partially 
terminate its Compact in Honduras, ceasing to fund a vehicle 
weight control activity and that portion of the farm to 
market rural roads activity corresponding to the construction 
and improvement of approximately 93 kilometers of rural roads 
(total termination totaled USD 10 million).  In addition, 
MCC's Board placed a hold on approximately USD 4.5 million of 
MCC funding related to Section 1 of the CA-5 Highway.  The 
decisions were based on a determination by the MCC Board that 
actions by the Government of Honduras were inconsistent with 
MCC's eligibility criteria. 
 
-------- 
Security 
 
TEGUCIGALP 00000151  005 OF 006 
 
 
-------- 
 
¶21.  (SBU) Honduras is a transit country for drug 
trafficking.  In 2009, narcotics trafficking through Honduras 
increased significantly compared to 2008; this trend had 
begun well before the coup d'etat.  There has been a marked 
increased in the murder rate and a number of high-profile 
assassinations, most recently the December 8 killing of the 
director of the anti-narcotics operations, which have raised 
concerns over the effects of trafficking groups on overall 
security.  The country's high level of crime affects rich and 
poor alike and has led to a public outcry; ensuring security 
is a fundamental pillar of the plan of government of 
president-elect Lobo.  While accurate crime statistics are 
difficult to come by, violent crime has increased 
dramatically since 2004.  At 56.5 murders per 100,000 
inhabitants, Honduras has one of the highest murder rates in 
the world.  The rate of kidnappings more than doubled from 
2007 to 2009.  Corruption is ingrained throughout society and 
weakens citizens' confidence in government institutions. 
 
¶22.  (SBU) Honduras is a critical threat post for crime, the 
highest level possible within the Department of State. 
Widespread poverty and unemployment, along with significant 
gang and narco-trafficking activities have all contributed to 
the incredibly high crime rate.  An undermanned, poorly 
trained and poorly equipped police force, easily susceptible 
to corruption, can do little to deter criminal activity.  The 
weak judicial system and lack of will to enforce existing 
laws for fear of reprisal allows criminals to act with near 
impunity.  Kidnappings have been on the rise in recent years 
with large ransom demands being paid out and only a fraction 
of the kidnappers being caught by the Honduran police. 
 
------------------------------ 
Military to Military Relations 
------------------------------ 
 
¶23.  (SBU) The U.S. and Honduran militaries worked together 
for many years until the June 28 coup when assistance was 
suspended and subsequently terminated on September 3.  Joint 
Task Force Bravo, located at Enrique Soto Cano Air Base in 
Comayagua, is comprised of approximately 1,200 assigned 
personnel, of whom about 575 are military while the remainder 
includes both locally employed staff (LES) and civilian 
contractors who provide base support, communications services 
and helicopter maintenance.  JTF-Bravo forces maintain and 
operate an all-weather C-5 capable airfield and provide the 
U.S. with an agile response capability in Central America. 
Recent humanitarian assistance/disaster relief operations 
include flood relief and medical support in El Salvador in 
November 2009, earthquake relief in Costa Rica in January 
2009, flooding relief in Honduras, Costa Rica and Panama in 
November 2008, and search and rescue operations for American 
citizens missing off the coast of Honduras.  JTF-Bravo 
currently has a deployed medical element in Haiti as part of 
Unified Response. JTF-Bravo operations were suspended after 
June 28.  The traditionally strong relationship between the 
military forces of the U.S. and Honduras cannot simply be 
resumed with a "business as usual" approach after the 
restoration of constitutional order.  While we will need to 
cooperate in key areas such as combating narcotics 
trafficking, we will continue to signal our strong 
disapproval of the military's role in the removal of 
President Zelaya.  We will conduct a thorough review of our 
military programs to ensure that they advance our aim of 
developing a professional and non-political military in 
Honduras. 
 
------------------ 
American Citizens 
------------------ 
 
¶24.  (SBU) There are an estimated 25,000 Americans resident 
in Honduras, of whom 15,000 are registered with the Embassy. 
In addition, an estimated 500,000 tourists and missionaries 
visit Honduras each year.  The vast majority of the tourists 
arrive by cruise ship to the Bay Islands and spend only half 
a day in Honduras.  Crime is the biggest threat to the 
security of American citizens.  The Embassy's Consular 
Section works with the Public Ministry and police via a unit 
 
TEGUCIGALP 00000151  006 OF 006 
 
 
dedicated to crimes against foreigners to push for 
investigation and prosecution of crimes against Americans, 
while communicating with the American community via large 
town hall meetings, on-line web chats, and warden messages. 
 
¶25.  (SBU) In 2009, there were 180 Peace Corps Volunteers in 
Honduras working six types of projects including: municipal 
development, water and sanitation, protected area management, 
youth development, and health. 
 
--------- 
Schedule 
--------- 
 
¶26.  (SBU) Draft schedule for CODEL Dodd follows: 
 
Sunday, February 21 
12:30 Arrival at Soto Cano airbase via milair 
13:15 Arrival at Toncontin Airport, Tegucigalpa 
13:45 Meeting with President Porfirio Lobo 
15:00 Meeting with opposition leaders 
16:30 Meeting with business leaders 
17:30 Press conference with local and international media 
18:30 JTF-Bravo Briefing (Sen. Corker) 
19:45 Dinner hosted by the Ambassador 
RON Marriott Hotel, Tegucigalpa 
 
Monday, February 22 
05:15 Luggage Pickup 
05:35 Depart Hotel for Toncontin Airport 
06:15 Depart Toncontin Airport for Soto Cano airbase 
06:40 Arrival at Soto Cano airbase 
07:00 Depart Soto Cano airbase via milair ert Managua, Nicaragua 
 
LLORENS