Central American Development Bank Freezes Credits to Honduras

Central America’s development bank, the Central American Bank for Economic Integration, decided to freeze money headed to Honduras on Wednesday, potentially affecting infrastructure projects in the Central American country. The Bank’s governors met Wednesday and said the freeze was only “provisional.” They are still the process of deciding if a long term suspension of financing will occur. The AP reports that over the last five years the Bank has provided Honduras with some $971 million in development financing. Also Wednesday, the AP writes that the president of the Dominican Republic, Leonel Fernandez has proposed the suspension of Honduras from the U.S.-Central America-DR free trade agreement, CAFTA-DR. The Dominican President added that “to accept the coup reverses all the advances that have been achieved, returning the region to chaos and disorder.” Meanwhile, in Washington, the Sec. General of the OAS said he is still hopeful that a resolution to the Honduran crisis is achievable. Sec. General Insulza led a group of regional foreign ministers to Honduras on Monday but was unable to get any concessions from the Micheletti-led regime. “There’s still a climate for one final effort,” Insulza remarked at an OAS briefing on the Honduras situation. And, says the AP, Insulza, “noted some progress arising from the OAS delegation's meetings with senior lawmakers, ministers, presidential candidates and members of the judiciary, electoral commission, military and citizens.” However, the Sec. General also said attention, while not disappearing all together, will likely be diverted away from the reinstallation of Zelaya when the Honduran election season begins on Sept. 1. What is the early response by some Hondurans to new U.S. measures, cutting off the issuance of non-emergency visas to the U.S. in Tegucigalpa? AFP writes that both the business community and small/medium sized producers are worried that such a move could begin to affect the business and trade climate between Honduras and the United States. As the president of the Asociación Nacional de la Mediana y Pequeña Industria de Honduras (ANMPIH) tells AFP, “it will have a very negative impact, above all it affects the purchase of primary materials that are necessary for the operations of small and medium sized industry.” Finally, Marifeli Perez-Stable writes in the Miami Herald that both supporters and critics of Zelaya alike should be supportive of a legitimate electoral process, no later than November and the de facto regime in particular should give up its attempt to use the courts for “vengeance,” seeking national reconciliation instead.

In other news, Colombia issued a formal complaint to the OAS on Wednesday, claiming that Venezuela’s Hugo Chavez is guilty of meddling in its domestic affairs. The complaint came after Chavez labeled Colombia a “narco state,” and ordered an investigation of Colombian companies in Venezuela, reports Reuters. Chavez also urged his supporters to reach out to left leaning politicians in Colombia. Also, in Uruguay, the U.S. Undersecretary of State for Andean and Southern Cone Affairs, Christopher McMullen, said Mr. Chavez was irresponsible for talking about “the winds of war” when criticizing a new U.S. plan to expand military operations in Colombia. Chavez has also called the agreement between the U.S. and Colombia a “declaration of war.”

Finally, from Mexico and Central America, three reports this morning. On immigration, Reuters reports on a bust period for former “smuggling villages” along the U.S.-Mexico border in a period of economic recession. According to a DHS report last month, arrests on the southwest border dropped to 705,022 last year, their lowest level since the 1970s. Meanwhile, EFE writes that the movement of Central Americans to Mexico has fallen 50% over the last two years. A new report by the Instituto Nacional de Migracion (INM) also blames the economic crisis for much of this drop, in addition to changes in U.S. migration policy. But in Guatemala, there seems to be little change in the movement of illegal drugs. Reuters reports that drug runners (perhaps strapped for cash in a global economic downturn??) are paying hitmen with cocaine. In turn, a new local market for the drug has emerged and a new generation of addicts has been left in the drug trade’s wake, says the news agency. According to the head of Guatemala’s government commission on drugs “transferring large amounts of money is more difficult because it is easy for the authorities to detect.” The US DEA has said that about ¾ of the drugs which comes north from South America passes through Central America.