US embassy cable - 05TEGUCIGALPA1470

UNCLAS SECTION 01 OF 02 TEGUCIGALPA 001470 
 
SIPDIS 
 
DEPT. FOR WHA/PD; IIP/G/WHA DIPASQUALE; AND IIP/T/ES 
DEPT. FOR PM AND EB/TRA 
DEPT. FOR WHA/EPSC, WHA/PPC AND WHA/CEN 
 
E.O. 12958: N/A 
TAGS: OIIP, KPAO, PGOV, MASS, EAID, HO 
SUBJECT: MEDIA REACTION ON DEBT FORGIVENESS, ENEE AND MCC, 
JULY 14, 2005 
 
 
1. On 07/14 the Tegucigalpa-based moderate daily "El 
Heraldo" carried an editorial entitled "Reactions on Debt 
Forgiveness."  "Even though there is still a lot to clarify 
about real amounts, terms and new debts, the external debt 
forgiveness has brought hope again to the country and gave 
it the boost it needed to begin concrete actions against 
poverty." 
 
"We will never progress until we get out of the vicious 
circle that has us at a permanent starting point, returning 
every four years to the beginning." 
 
"The Poverty Reduction Strategy clearly establishes what 
must be done and also it is composed of an integrated 
organization of several Honduran representative sectors to 
guarantee its execution. It is politically understandable 
that President Maduro would want to improve his image but 
perhaps it is not the best way to do it. The ideal thing to 
do is to respect the Poverty Reduction Strategy and its 
Council. But we shouldn't walk back the path to start all 
over again." 
 
2. "El Heraldo" carried an op-ed by Sara Elisa Rosales 
entitled "Debt Forgiveness and Urgent Actions."  "The recent 
G-8 debt forgiveness plus IMF, World Bank and Paris Club's 
debt forgiveness represent 57% of the country's external 
debt, not including the new loans of the actual 
administration." 
 
"We have to recognize the risks that this financial process 
could bring, possibilities such as commercial balance and 
payment deficits and new unhealthy debt for the country.' 
 
"The urgent actions needed are the completion of the Poverty 
Reduction Strategy's Consultation Council and defining and 
approving a new debt policy. In conclusion, welcome debt 
forgiveness, but without corruption and unnecessary debt." 
 
3. Another op-ed by "El Heraldo" entitled "Debt Forgiveness 
and Capacities."  "The news is now official. Honduras is 
included in this special group of countries that, being 
poor, can't pay what they owe and are beneficiaries of an 
additional debt forgiveness approved by the G-8 but with the 
condition that the freed resources will be used to fight 
against poverty and the governments will apply neo-liberal 
political measures proposed by IMF and World Bank." 
 
"In the last decade we have weakened the national capacity 
that the military governments had promoted through educating 
and hiring foreign professionals in the 1970s without 
considering political affiliation. Now we have a democratic 
government. It is necessary to make the strengthening of the 
national and local capacities a priority again so we can 
create opportunities, propose and negotiate better options 
that the international community offers to the country." 
 
4. The San Pedro Sula-based liberal daily "Tiempo" carried 
an editorial entitled "Contract with ENEE [National Electric 
Energy Company]."  "The majority of the representatives are 
opposed to the ratification of the contract proposed by the 
government and the Stone and Webster Consortium to study the 
fiscal situation of the ENEE and restructure it into an 
economically viable entity." 
 
"The legislative assembly has justified its opposition by 
pointing out the high costs of services that would come to 
30 million Lempiras [USD USD.58 million] out of the 70 
million Lempiras [USD $ 3.68 million] put aside by the 
Millennium Challenge Account to strengthen productivity. 
This money would be applied to high salaries reaching up to 
16,000 Lempiras daily [USD $842.00]." 
 
"There is no doubt that ENEE needs to be restructured and 
for that the company must be thoroughly analyzed.  However, 
these investigations can be done by Honduran professionals - 
we have qualified ones - without the need to look outside 
the country for expensive help that rarely provides concrete 
and successful answers." 
 
"On this occasion, we understand the position of the 
majority in the legislature, although we do not cease to 
point out past occasions on which they consented for 
political, partisan, and personal motives in the highest 
levels of government to sanctioning shameful contracts like 
those of SEMEH (Honduras Electric Measurement Service) and 
the thermal power plants." 
 
5. The Tegucigalpa-based liberal daily "La Tribuna" 
published an editorial entitled "Agreements."  "Honduras has 
had to work hard to obtain debt relief.  All of it is part 
of a long process that started when the previous government 
was able to have the country included in the Initiative for 
the Highly Indebted Poor Countries.  Since the country was 
not initially eligible to participate, the Paris Club had to 
change terms and conditions for qualification and broaden 
participation in the Initiative." 
 
"Now the debate is about the investment, management, and 
destination of the funds.  It is logical that the current 
government wants to produce its own `agreement' to deal with 
this issue.  There is mistrust among the various political 
and social groups due to this administration's imminent end 
and current campaigning.  The new risk is that whatever is 
done now will be a waste because, as we said, the next 
government will want to create its own `agreement.'" 
 
"There would be continuity if administrations respected the 
permanent institutions that already exist to manage these 
affairs, such as the National Forum for Convergence (FONAC). 
If the country already has a Poverty Reduction Strategy 
approved by the International Community the best thing would 
be to refine that plan to make it fit current realities. 
That way, the country doesn't have to throwaway a complex 
plan every time there's a change of administration." 
Tuebner