Honduras can't pay its bills, neglects services

By Alberto Arce

Associated Press

Published: Thursday, Jan. 24 2013 9:11 p.m. MST

In this Jan. 17, 2013 photo, political activist Frank Mejia, better known as "Commander Maya," reads a manifest in support of teachers protesting to demand months of unpaid salaries outside Congress in Tegucigalpa, Honduras. Teachers have been demonstrating almost every day because they haven?t been paid in six months, while doctors complain about the shortage of essential medicines, gauze, needles and latex gloves. This Central American country has been on the brink of bankruptcy for months, as lawmakers put off passing a government budget necessary to pay for basic government services. (AP Photo/Alberto Arce)

Associated Press

TEGUCIGALPA, Honduras — Street surveillance cameras in one of the world's most dangerous cities were turned off last week because Honduras' government hasn't paid millions of dollars it owes. The operator that runs them is now threatening to suspend police radio service as well.

Teachers have been demonstrating almost every day because they haven't been paid in six months, while doctors complain about the shortage of essential medicines, gauze, needles and latex gloves.

This Central American country has been on the brink of bankruptcy for months, as lawmakers put off passing a budget necessary to pay for basic government services. Honduras is also grappling with $5 billion in foreign debt, a figure equivalent to last year's entire government budget.

"There are definitely patients who haven't been able to get better because of this problem," said Dr. Lilian Discua, a pediatrician. "An epileptic who doesn't take his medicine will have a crisis. This is happening."

The financial problems add to a general sense that Honduras is a country in meltdown, as homicides soar, drug trafficking overruns cities and coasts and the nation's highest court has been embattled in a constitutional fight with the Congress.

Many streets are riddled with potholes, and cities aren't replacing stolen manhole covers. Soldiers aren't receiving their regular salaries, while the education secretary says 96 percent of schools close several days every week or month because of teacher strikes.

Experts say a mix of government corruption, election-year politics and a struggling economy has fueled the crisis.

The local chapter of the international watchdog group Transparency International issued a study in December that alleged some lawmakers had spent money on plane tickets to a tennis tournament in Spain, Mother's Day gifts and other personal expenses, the report found.

The study's author, Ludin Ayala, said the country's Congress is the most expensive in Central America, although Honduras is the poorest country the region.

Former presidential candidate and legislator Olban Valladares charged that much of the public money has gone into campaigns ahead of November's elections, in which the president, mayors and 128 congressional representatives will be elected.

Although Congress goes on recess Friday, lawmakers have only partially passed a budget to pay some of state employees and contractors. That leaves undecided the budgets of autonomous institutions such as utilities and the port authority.

Instead, lawmakers are discussing proposals already declared unconstitutional by the Supreme Court and don't deal with the immediate financial problems. On Tuesday, for example, Congress approved a law that would allow any elected official to be impeached.

Hugo Noe Pino, an economist at Honduras' Central American Institute for Fiscal Studies, noted that Congress approved the sale of an additional $750 million in bonds last November without resolving any of the core budget issues.

"In this political year, the state resources can be used for political campaigns," Pino said. "If they haven't discussed the budget, why are they approving the financing (through bonds) of a budget that doesn't exist?"

Financial fraud isn't limited to the government. Tax evasion, for example, is widespread, with the government missing out on an estimated 43 percent of revenue due, said Mario Lopez Steiner, Honduras's tax director.

"The culture of tax evasion is incredible in Honduras," he said.

The institutional paralysis has also spread to the justice system. The Constitutional Chamber of the Supreme Court has not met for a month and a half because President Porfirio Lobo accused the magistrates of being part of a conspiracy to overthrow him.

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