[News] US-Backed Coup Regimes Trapped Honduras in Unpayable Odious Debt, Warns new President Xiomara Castro

[Anti-Imperialist News]

orinocotribune.com 
<https://orinocotribune.com/us-backed-coup-regimes-trapped-honduras-in-unpayable-odious-debt-warns-new-president-xiomara-castro/> 



  US-Backed Coup Regimes Trapped Honduras in Unpayable Odious Debt,
  Warns new President Xiomara Castro

By Bejamin Norton – Feb 1, 2022

*At the time of the 2009 US-backed coup, Honduras had $2.48 billion in 
external debt. Now it has $9.25 billion. New leftist President Xiomara 
Castro says this odious debt is unpayable. It already eats up 50% of the 
government budget.*

The new leftist administration in Honduras managed to win November 2021 
elections in a landslide and defeat an authoritarian coup regime, but 
now it faces a huge problem that will make it difficult to govern: 
odious debt.

When a US-sponsored military coup overthrew Honduras’ democratically 
elected left-wing President Manuel Zelaya in 2009, the country had $2.48 
billion in external debt.

By the end of 2021, after 12 years of rule by corrupt right-wing coup 
regimes, Honduras’ external debt had swelled to $9.25 billion – a 373% 
increase.

The Honduran state’s internal debt to private parties likewise 
skyrocketed from approximately $810 million in 2009 to roughly $7.3 
billion today.

Honduras’ GDP is only $23.8 billion, yet the country is saddled with 
more than $16.5 billion in debt – meaning its debt is nearly 70% of the 
size of its entire economy.

The Central American nation’s new leftist President Xiomara Castro, 
Honduras’ first democratic leader since the coup, has said this burden 
on the government is a form of odious debt, and is simply unpayable.

Castro declared in a speech at her inauguration on January 27 that the 
previous coup regimes had “submerged” the state in debt, leaving it in 
“bankruptcy” in an “economic catastrophe.”

Debt payments now eat up a staggering 50% of the government’s budget, 
Castro stressed.

This graph from Honduran media outlet La Prensa 
<https://www.laprensa.hn/premium/deuda-odiosa-nuevo-gobierno-honduras-xiomara-castro-EB5322633> shows 
how the debt skyrocketed after the US-backed coup.

Honduras external debt graphA graph of Honduras’ external debt

This graph does not include Honduras’ massive internal debt.

“After 12 years of dictatorship the amount of internal debt increased 
from 20 billion lempiras (USD $810 million) to 179 billion lempiras (USD 
$7.3 billion),” Castro said in her inauguration speech 
<https://www.elheraldo.hn/csp/mediapool/sites/dt.common.streams.StreamServer.cls?STREAMOID=fkp98EKEEbXH5pxM1neHK6aAJ_I4YTPrsH_w1iAJhcWu1aTiad54r1BzT8mOTc8TMy9ESXbVnj7vAs51Em1ji4dXYht$$1M7CmxsH2al$Qxx784MzalFL68CeR_oEp8EEruZhZc33bdVlquv9hiXTvH_WdzOPOFakr0csr$3lt_IbZ8PJNrJTQD_S2M9e4ifLzlLswjQ7I7SUGhgDw$Ydqz4TnICSOdq27jddi9B5FiQtC1aPTmD0L_56tDG8D_EtvgwKQ_wtgwu$Juo6lg_UTQrkF3bZhnI9dbApfELFiLlTdU5rDKHMZQ5qyDFYs9pHDcjzHnkjqn_sxMcrUIet1tGJxidt81qKZHpzHnRbBceqX_mguCnH7cNoNS5FsAONdbPwes833WrH7ocGSf2SMZMHxQsDJm_WPz6Swe1HZkTT_5e8GNq_yWUAIs2vpWEsRQiba3KakF56rUXCLuwiKCsJ8qb4XcOFh9ai$eiZx7$wICo$XEMAWhICARxLqRJ&CONTENTTYPE=application/pdf&CONTENTDISPOSITION=Discurso%20toma%20se%20posesi%C3%B3n%20Xiomara%20Castro.pdf>.

“With these figures it is clear that the state does not have the 
capacity to sustain the outrageous and shameful debt that we are 
inheriting,” the new Honduran president added. “It is practically 
impossible to meet the debt requirements.”

Castro said the only way to manage the debt is to renegotiate it with 
the creditors.

“My government will not continue the vortex of plunder that has 
condemned generations of youth to pay the debt they took on behind their 
backs,” she declared.

“The country should know what they did with the money and where are the 
$20 billion that they took out in loans.”

The new Honduran president warned that this “plunder” caused poverty to 
increase by 74%, “turning us into the poorest country in Latin America.”

“This statistic itself explains the [migrant] caravan of thousands of 
people looking for opportunities,” she said.

RELATED CONTENT: Honduras: Back After 12 Years 
<https://orinocotribune.com/honduras-back-after-12-years/>

*Debt traps ensnare Argentina, Puerto Rico, Greece
*Other countries in Latin America have been caught in these same kinds 
of debt traps.

In 2018, Argentina’s right-wing President Mauricio Macri took the 
largest loan in the history of the International Monetary Fund 
<https://www.theguardian.com/world/2018/sep/26/argentina-imf-biggest-loan> (IMF): 
$57.1 billion.

This enormous debt incurred by Macri pushed the subsequent center-left 
government of President Alberto Fernández into a debt spiral that has 
made it very difficult to spend on social programs.

The IMF, which is dominated by the United States, and is used as an 
economic weapon to advance Washington’s foreign-policy agenda 
<https://multipolarista.com/2021/10/19/super-imperialism-michael-hudson/>, 
has often trapped Global South nations in unpayable debt.

The IMF uses this debt as leverage to force countries to sell off their 
natural resources, privatize state-owned enterprises, slash social 
spending, and cut labor protections that challenge the interests of 
foreign corporations.

Puerto Rico, a US colony, also suffers from painful odious debt 
<https://academicworks.cuny.edu/clr/vol19/iss2/5/>. The US government 
used this debt burden to impose an unelected Financial Oversight and 
Management Board that controls Puerto Rico’s spending, and has imposed 
devastating austerity measures 
<https://www.youtube.com/watch?v=Nd8wRpVxTeU> on the Puerto Rican people.

Even Greece, a member of the European Union, has similarly been crushed 
under the weight of odious debt. While Greeks work the most hours in 
Europe 
<https://www.forbes.com/sites/niallmccarthy/2015/03/13/contrary-to-what-most-people-think-greeks-work-the-longest-hours-in-europe-infographic/?sh=1fb06ae2983d>, 
economics experts have said the country’s debt is impossible to pay off 
<https://www.forbes.com/sites/stevekeen/2015/07/18/wolfgang-schauble-the-trust-troll/?sh=42fc13a6407b>.



          Ben Norton

Ben Norton is a journalist and writer. He is a reporter for The 
Grayzone, and the producer of the Moderate Rebels podcast, which he 
co-hosts with Max Blumenthal. His website is BenNorton.com, and he 
tweets at @BenjaminNorton.
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