On October 25, 2022, U.S. Ambassador to Honduras Laura Dogu gave a speech attacking key economic policies of the Honduran government that aim to reform some of the most corrupt and destructive plundering of the country institutionalized during the post-coup era. Ambassador Dogu’s comments come on the heels of other actions that make clear the U.S. is attempting to thwart even the most basic of reforms of the Castro Administration.
In particular, the U.S. Ambassador took aim at Honduras’ energy sector reforms which have sought to re-negotiate the inflated prices at which Honduras purchases energy. Following the coup, many of the country’s powerful economic actors were awarded concessions for natural resources with lucrative contracts to sell energy to the government. The Jesuit Center for Reflection, Investigation, and Communication (ERIC) found the Honduran government pays six times as much to purchase energy from private companies as it costs the government to produce it itself. Before it was ousted by the Hernandez regime, even the U.S.-backed Organization of Americas States anti-corruption mission expressed concern about corruption in the contracts governing the prices at which the Honduran government purchases energy.
The U.S. Ambassador also criticized the Honduran Congress’ repeal of the post-coup hourly employment law. This law was opposed by unions and workers rights groups as it created a class of temporary workers without many of the rights guaranteed by Honduras’ Labor Code. Notably, the construction workers building the new U.S. Embassy went on strike over their working conditions, criticizing in particular their exploitation under the hourly employment law.
Furthermore, the Ambassador’s critique comes on the heels of a letter by U.S. Senators Cardin (D-MD) and Hagerty (R-TN) criticizing the Castro administration’s reforms as threatening to U.S. investment interests. Senators Cardin and Hagerty sided with one of the most criticized policies of the post-coup era, the creation of Economic Development and Employment Zones (ZEDES), often referred to as model or charter cities. ZEDES are not subject to many of Honduras’ laws as they establish their own legal and taxation systems to benefit corporations. They have been widely criticized by social movements and others in Honduras as a clear violation of the country’s sovereignty. Notably, Honduras’ Supreme Court initially declared charter cities to be unconstitutional until Juan Orlando Hernandez – who is now in jail in New York facing drug trafficking charges – led a judicial coup to remove the judges who voted that way.
Repealing the ZEDES was a key campaign promise of current Honduran President Castro. Earlier this year, Honduras’ Congress unanimously voted to repeal the law establishing ZEDES. The Castro administration offered to incorporate the businesses in existing ZEDES into Honduras’ other special corporate structures, such as free trade zones. This would enable the companies not to lose their investments, benefit from business incentives, while incorporating them into Honduras’ legal framework.
Despite this reasonable proposal, U.S. Senators Cardin and Hagerty promote ZEDES as a “uniquely attractive platform for incoming U.S. investment” and indicate that any “direct or indirect expropriation of U.S. investments in Honduran Economic Development and Employment Zones would be regarded as a direct assault on the guarantees of CAFTA-DR.” Furthermore, the Senators threaten to propose “enhancements” to the Hickenlooper Amendment, which restricts U.S. aid to any country that expropriates the property of any U.S. citizen or corporation.
Senators Cardin and Hagerty’s letter makes clear that a key U.S. interest in Honduras is having the country serve as a giant factory to produce goods for U.S. supply chains with the weakest possible labor and environmental standards – essentially a modern incarnation of the banana republic. Known as “nearshoring,” this concept is promoted in Washington these days to reduce U.S. reliance on Chinese manufacturing. U.S. support for ZEDES, where the Honduran labor code would not apply, and the U.S. Ambassador’s criticism of the Castro Administration’s attempts to improve labor rights are part of U.S. efforts to ensure corporations access to an exploitable workforce with few rights.
Ironically, Ambassador Dogu and Senators Cardin and Hagerty couched their statements in the narrative of addressing migration. However, if the U.S. actually had any interest in addressing the root causes of migration, it would be supporting living wages and labor rights. Supporting weak labor laws and opposing the Castro administration’s efforts to reform the most egregious policies implemented in the post-coup era will not curb migration. To the contrary, the disastrous economic policies implemented in the post-coup period increased poverty, displaced communities, and dramatically increased the number of Hondurans fleeing the country.
The statements by U.S. Ambassador Dogu and U.S. Senators Cardin and Hagerty show, once again, that the U.S. has absolutely no respect for democracy in Honduras. After years of supporting a narco-dictator who used fraudulent elections to stay in power, the U.S. is now taking aim at the basic reforms of a President who won in a landslide victory and which have been approved by Honduras’ democratically elected National Congress.