Military Role in Drug War at Stake in Honduras Presidential Vote

Hondurans will choose between competing strategies for lowering the world’s highest murder rate this weekend in presidential elections that include the wife of Manuel Zelaya, who was ousted in a 2009 coup.

The final opinion poll last month showed a statistical tie between Juan Orlando Hernandez, 45, of the ruling National Party and the Libre Party’s Xiomara Castro, 54, who rose to prominence by leading protests after her husband was forced out of the presidential palace at gunpoint. Hernandez had 28 percent support and Castro 27 percent in an Oct. 9-15 survey by CID-Gallup. The margin of error was 2.5 percentage points.

Violence in the Central American country of 8.3 million people has escalated in the coup’s wake as gangs tied to Mexican drug cartels use Honduras as a transit point between South America and the U.S. Hernandez backs President Porfirio Lobo’s strategy of deploying military police to curb crime, while Castro says the government has lost control of the streets.

“It comes down to the perspective on security,” said Enrique Reina, Castro’s vice presidential candidate, in a Nov. 18 phone interview. “The current strategy on security has failed. The military has been out in the streets since 2001 and crime rates have not gone down.”

In the eight-candidate race, the Liberal Party’s Mauricio Villeda, a lawyer and son of a former president, was third with 17 percent support. Whoever gets the most votes in the Nov. 24 election wins. There is no second round.

Drug Flights

Bordered by Nicaragua, El Salvador and Guatemala, Honduras has a murder rate of more than 80 per 100,000 inhabitants, the highest in the world, according to the United Nations. The U.S. State Department estimated that last year about 90 percent of all cocaine smuggling flights departing South America for the U.S. first land in Honduras, where illegal airstrips abound in poorly patrolled parts of the country.

Hernandez, who led the national assembly when Zelaya was ousted, backs Lobo’s plan to deploy 4,000 military police in the streets to reduce violence, as well as earlier efforts to introduce drug testing to the national police and justice system. The new military police would help compensate for one of the smallest police forces, and highest levels of private security forces, in Latin America, according to the United Nations Development Programme.

Messages left for Hernandez and his vice presidential candidate, Ricardo Alvarez, by Bloomberg News weren’t answered.

“It is essential to recuperate peace and tranquility,” Hernandez said in an interview with CNN’s Spanish-language channel this month. “Security is key and we are on top of it.”

Community Policing

Castro says the experience in Mexico, where members of an elite anti-drug force went on to form their own violent cartel, the Zetas, shows that such a plan can backfire. Instead, she says the government should foster smaller, community-based police groups.

In vying for her first elected office, Castro has rejected criticism from political opponents that she would be a puppet for her husband. Zelaya was forced into exile in 2009 after pushing a national referendum to change the constitution. He reached an accord with the government to return in 2011. A victory by Castro would make her the country’s first female president and end more than a century of rule by the National and Liberal parties.

“If the question is who is going to rule, the answer is the person who will be taking over the presidency, there is no doubt about it,” she said in a Nov. 7 interview with online channel CB24, wearing a white cowboy hat similar to the one for which her husband became known.

As difficult as the security situation is in Honduras, the economy is almost worse, said Eric Olson, the associate director of the Latin American Program at the Wilson Center in Washington.

Slower Growth

The $19 billion economy contracted 2.4 percent in 2009 as Zelaya’s ouster prompted international condemnation. Growth has averaged 3.2 percent per year since, less than the 5.7 percent average in the four years before the coup, according to IMF data. Economic activity rose 0.8 percent in September compared with a year earlier. About 61 percent of the population lives in poverty, according to the World Bank.

“Honduras is borrowing to pay for its bills and often times doesn’t have enough money to pay police, teachers or judges,” Olson said.

Investors wary of Zelaya’s former alliance with late Venezuelan President Hugo Chavez have fueled a rally in Honduran bonds since September as polls showed Hernandez gaining on Castro, who led earlier this year.

Honduras’s dollar bonds have returned 2.5 percent this month, compared with a 3.4 percent decline in Latin American debt over the same period, according to JPMorgan Chase & Co.’s EMBIG index.

IMF Assistance

Contrary to some investor expectations, Castro will work with the private sector to reduce government spending without risking economic growth, according to adviser and former central bank President Noe Pino.

“The government’s resources are very limited since the fiscal deficit is likely to end the year at 8 percent of GDP with domestic and external debt to mature in the next four years taking almost 20 percent of the national budget,” Pino said.

Castro’s support comes from a range of ideologies, including the business sector, and as president she would probably seek International Monetary Fund assistance to close financing gaps, said Jefferson Finch, a Latin America analyst at the Eurasia Group in New York.

“There is very little room for radical shifts in policy direction,” Finch wrote in a Nov. 19 report. “A Castro administration would be more moderate than pundits expect.”

To contact the reporters on this story: Isabella Cota in San Jose, Costa Rica at icota@bloomberg.net; Eric Sabo in Panama City at esabo1@bloomberg.net

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net; Andre Soliani at asoliani@bloomberg.net

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