Thursday, November 05, 2009

The Effect of the Micheletti Regime on Honduran Businesses Big and Small

I've commented before on the impact that the Honduran coup and Micheletti regime's actions may have had on business elites, and how those business elites in turn may have played an important role in the negotiation of the end of the crisis. However, as the Christian Science Monitor reminds us, the Micheletti regime's actions also directly negatively affected small- and mid-sized businesses:

Doris Midence, a snack bar employee at La Tigra National Park outside the Honduran capital, Tegucigalpa, has the empty gaze of someone with too much time on her hands.

"Customers are down by half," she says, reorganizing gum and candy bars. "Between curfews and protests, people are not leaving their homes."

[...] But even if the curfews are being lifted, the economic ramifications of Latin America's worst crisis for decades could endure much longer.

Tourists who typically visit the northern Bay Islands, for example, are opting for other places in the Caribbean to scuba dive. Foreign investment has dropped. Cuts in aid have stalled construction of roads. And the nation's consumers, some facing their own unemployment or simply saving in the face of political instability, are no longer buying shoes or furniture or other non-essentials.

"Since June 28 demand has declined dramatically," says Jose Enrique Nuñez, the president of the country's national association of small and medium-sized businesses. "It has created chaos, and that chaos is causing us to collapse."

I think it's safe to say that one of the biggest long-term damages that the coup and Micheletti regime caused was economic. To be clear, I'm not some neo-Marxist who sees material struggle and economics as the source of all historical struggle or anything. However, the negotiation has theoretically returned Zelaya to office (though Honduras' Congress is moving particularly slowly in finalizing the act), and so (for now) world opposition to Honduras had faded away; what is more, with the elections (presumably) being held under Zelaya's watch, for now it appears that there won't be any long-term political blackballing of Congress in the international community.

However, the economic consequences of the military coup and Micheletti's actions both domestically and in the broader global economy are definitely going to continue to manifest themselves for years to come. Honduars was already struggling with the global economic crisis, losing hundreds of millions of dollars in trade and forecasting a shrinking GDP this year, according to the article. While wealth does not "trickle down," economic crisis often does, and this certainly is the case in Honduras. As foreign businesses and tourists have pulled out and looked for alternatives, the small- and mid-sized businesses have been adversely effected, too; financial loss has not just been the domain of major business leaders in the country.

And thanks to curfews and repression, small businesses have suffered doubly, as Hondurans were prevented or intimidated from going to the streets to buy basic goods from these businesses. The final part of the article really hammers this point home:

"The country is paralyzed," Mario Canahuati, a businessman and strategist for presidential contender Porfirio Lobo, said last month. He says that the poorest Hondurans suffer most. "The big companies will survive," he says.

The smaller ones might not. Mr. Nuñez says his business association generates about 30,000 jobs but since June 28, according to a survey of its members nationwide, 35 percent of those jobs have been lost. He says that intermittent curfews that force people into their homes, unemployment, and general anxiety are keeping people away from stores, which is having a ripple impact all the way down the chain. "No one is paying more for the crisis than small companies," he says.

While that seems dire, it also seems like a tragically accurate assessment, and really hits home just how reprehensible the Micheletti regime was. It wasn't just that it clamped down on basic civil rights, tried to perpetuate itself under the most illogical and falsest of "legal" excuses, and demonstrated a clear power-hungry tendency. It also managed wage open warfare on everyday Honduran citizens who protested the clear violation of democratic process in their country, and even as the regime (hopefully) comes to an end, those same everyday Hondurans who own or work for small- or mid-sized businesses will continue to feel the economic ramifications of Micheletti's actions for years to come. Micheletti may be out of office soon, but his ruinous legacy isn't going away anytime soon.