The Piecemeal Sale of Honduras

So what's all the fuss about the Ley de Promoción del Desarrollo y Reconversión de la Deuda Pública (Law for the Promotion of Development and Reconversion of the Public Debt), which was approved the National Congress of Honduras a couple of weeks ago with little or no public debate. The new law, submitted by the administration of President Porfirio Lobo, allows the Honduran government to grant value titles on real estate and natural resources owned by the State which would permit an investor or a foreign country to lend a certain amount of money to the government and, in doing so, automatically guarantee a concession to the land or resource and be able to derive income produced by the concession in the future.

In other words, the law gives the Honduran government the right to offer national territory and the resources within it as collateral to obtain credit, which the government can use to help pay off its debt -- estimated at $3 billion internally and US$4 billion externally. The collateral can then be put to use by creditors to earn income for themselves.

Clever, huh? No. More like stupid. The problem is that the law was hastily approved -- as are most controversial laws in Honduras. And it was done so out of desperation, because the Lobo administration has not figured out how to pay off its financial obligations to its creditors and public employees. Also, the details of the law have not been made public, and so there are a lot of unanswered questions as to how it would be implemented.

The law has already created a furor in Honduras, sparking new accusations that the government is essentially moving to sell off Honduras in piecemeal fashion (like with the "Model Cities" initiative), and that those who would benefit would not be the Honduran people but rather a few well-positioned officials who would undoubtedly line their pockets with millions of dollars in bribes and commissions. The country would remain indebted, as it currently is (or more). In the meantime, it would open itself for additional exploitation (some might use the word "rape") by foreigners. The losers? Yeah.