However, current putsch regime is facing expulsion for its failures

Nearly five months after the ruling aristocracy of Honduras used that nation’s military to oust the president of the country, Manuel Zelaya, from power and send him into exile, a “de facto” government, headed by a former leader of the Honduran Congress, Roberto Micheletti, remains firmly entrenched in power — with national elections only weeks away.

Any pretense that the upcoming elections will be free and fair can only be supported by an equal pretense that the current “de facto” government is somehow a legitimate alternative to the democratically elected and now deposed Zelaya administration.

For the critics of the coup d'état, who see it for what it was, a power grab by Honduras’ business-class elite to preserve a corrupt status quo, the pretense is transparent.

But for those who continue to argue that the coup was somehow legitimate, a necessary means to unseat Zelaya — a Hugo Chavez wannabe in their eyes who was pulling Honduras into the clutches of a demonic socialism — the pretense continues, until today, when they will be confronted with hard evidence undercutting their bogus assertions on that front.

The MCC Scorecard

The U.S. taxpayer-funded agency called the Millennium Challenge Corporation (MCC), which oversees a multi-billion dollar foreign-aid fund, was established in 2004 under the Bush administration to help spur development in poor nations through programs injected with a strong dose of neo-liberal economic theology.

MCC is currently in the final year of a five-year $215 million aid program for Honduras. The MCC Honduras program is designed to fund agricultural and transportation projects that “will increase the productivity and business skills of farmers and their employees who operate small- and medium-sized farms, and will reduce transportation costs between targeted production centers and national, regional, and global markets,” according to the MCC’s description of the aid compact.

Each year, as part of its assessment of countries participating, or seeking to participate, in its aid programs, MCC issues what it calls country “scorecards” that assess the economic and political conditions in those nations based on a comparison to other nations with similar per-capita incomes [how much each individual in a nation earns annually, on average].

A score above the median (the middle point) in that comparison is considered a passing grade by MCC, for the purposes of assessing performance, while a score below the median is considered a failing grade.

The scorecard is developed from a range of data and reports prepared by a variety of organizations (none of them socialist in leanings), such as the World Bank, Freedom House, UNESCO and the Heritage Foundation.

The results of the scorecard assessment are released annually, but because of the dated nature of the data, the scorecard largely represents a trailing assessment; in other words, the scorecard released this year represents, in large measure, an assessment of a nation’s performance in 2008. The scorecards grade across three major categories, which are defined as “ruling justly,” “economic freedom,” and “investing in people.”

The most recent MCC scorecards, released earlier this month, seemingly were completely overlooked by the mainstream press, particularly the U.S. media outlets who continue to print propaganda promoting the justness of the Honduran coup based on the pretense that Zelaya was a wild-eyed socialist who was leading Honduras to ruin.

And there might be a good reason for the media silence with respect to the scorecard for Honduras.

The most recent scorecard for that Central American nation (the fiscal year 2010 report released on Nov. 9) shows that during the period covered, primarily 2008, when Zelaya was still in power, Honduras received passing grades on every measure of “economic freedom,” save one.

In fact, some of those grades were near the top of the class with respect to similarly situated nations. For example, Honduras in the most recent MCC scorecard, ranked in the the 89th percentile with respect to is regulatory quality and in the 98th percentile in terms of its trade policy

(The trade policy data is more current and does reflect conditions in 2009, including the first six months of the year when Zelaya was in power. Honduras’ score in 2008 for that indicator put it in the 83rd percentile, up from the 65th percentile in 2006 — the year Zelaya took office.)

In addition, under Zelaya, in the measure of how easy it is to start a business, Honduras showed continuous improvement since he took office in 2006 — raising that mark from a failing score in the 49th percentile in 2006 to a well-above passing grade in the 64th percentile in 2008 — and into the 68th percentile in 2009.

The lone “economic freedom” category in which Honduras received a failing grade on the MCC scorecard was in the measure of “fiscal policy,” which essentially is a measure of the nation’s debt performance and is an area in which Honduras has failed to make the grade for years, predating Zelaya’s administration. (Honduras’ decision in December 2007 to join the Venezuela-sponsored Petrocaribe S.A., which offers participating nations the ability to purchase oil under preferential terms, can actually be viewed as a way to address the nation’s “fiscal policy” woes, even though Zelaya opponents point to it as evidence of his dangerous alliance with their perceived Latin American boogeyman, Hugo Chavez.)

Social Justice

Now, Zelaya accomplished the impressive scorecard showing on the “economic freedom” front while also turning in a stellar performance in the area of “investing in people.” In that category, according to the most recent MCC scorecard, Honduras under Zelaya received passing grades across the spectrum, including healthy scores in immunization rates (80th percentile), health expenditures (75th percentile) and girls’ primary education completion (85th percentile).

So it seems Zelaya, to a largely successful degree, found a way to balance free-market economic progress and social investment and appears to have been moving a large swath of the nation in a forward direction when he was abruptly interrupted by a coup backed by that nation’s elites — who apparently were not enamored of the social investment side of Zelaya’s agenda.

That leads us to the third category of assessment in the MCC scorecard, “ruling justly.”

Before we get to that, however, it’s worth noting what MCC has to say with respect to its analysis of the latest scorecard for Honduras.

From an MCC spokesperson, who asked not to be named:

According to MCC’s collection of data from third-party independent sources, Honduras does not perform above the median on the Control of Corruption indicator, MCC’s one hard hurdle.

Honduras does perform above the median in relation to its income level peers in the lower income category on at least half of the indicators in the Ruling Justly and Encouraging Economic Freedom categories and above the median on the indicators in the Investing in People category for fiscal year 2010. The indicators on the fiscal year 2010 scorecards largely reflect the events and conditions of calendar year 2008.

For the record, on the fiscal year 2010 scorecard (released in early November) Honduras scored above the median on five of the six measures in the “economic freedom” category and in all five measures in the “investing in people” category.

With respect to the “ruling justly” category, however, Honduras received a passing grade on only four of the six measures on its recent scorecard. One of those failing grades was in the area of “rule of law,” which “rates countries on the extent to which the public has confidence in and abides by the rules of society; the incidence of violent and non-violent crime; the effectiveness, inde­pendence, and predictability of the judiciary; and the enforceability of contracts,” according to MCC.

The “rule of law” indicator has long been a problem for Honduras. The nation has failed to earn a passing grade on that measure dating back to at least 2001, according to MCC reports. So the blame for that shortcoming cannot be placed solely on Zelaya — and, in fact, has more to do with the failure of the nation’s judiciary and law enforcement systems.

The other failing grade, as pointed out by the MCC spokesperson, was in the measure of “control of corruption” — which, according to MCC, is an “index of surveys and expert assessments that rates countries on the frequency of ‘additional payments to get things done’; the effects of corruption on the business environment; ‘grand corruption’ in the political arena; and the tendency of elites to engage in ‘state capture’” — the latter a term essentially equivalent to crony capitalism.

For the sake of context, it is worth pointing out that although Honduras received a failing grade in the “control of corruption” measure on the current scorecard (covering the year 2008), the nation actually made progress in that area between 2006 and 2007 — moving from a failing to a passing score. The fact that the score slid back to failing in 2008 demonstrates the resiliency of the “grand corruption” and “state capture” in Honduras.

And so, the two areas where Zelaya’s administration received failing grades with respect to the rule of law on the most recent MCC scorecard involve precisely the forces that arguably conspired to throw him from office.

The coup was carried out with the complicity of the nation’s judiciary and also represented the ultimate act of “state capture” by the Honduran elites who were behind the putsch.

Honduras’ failure to make the grade in those two measures (“rule of law” and “control of corruption”) can be seen, then, in hindsight, as a red flag pointing to the fact that conditions were primed for a coup in Honduras — and until those areas are addressed going forward, any hope for ensuring real democracy in the nation may be ultimately doomed.

In fact, MCC itself seems to support that premise in a letter delivered to the U.S. Congress this past September announcing the aid agency’s intention to terminate a portion of its funding to Honduras as a direct result of the coup.

From MCC’s Sept. 17 Congressional notification:

On June 13, 2005, MCC signed a $215 million Millennium Challenge Compact (the "Compact") with the Government of Honduras. Funding for the Compact was obligated in full when the Compact entered into force on September 29, 2005.

As set forth in the accompanying report, on June 28, 2009, Honduras's democratically elected leader, President Manuel Zelaya, was removed from office. A de facto government, headed by the former president of congress Roberto Micheletti, is currently in place. This undemocratic transfer of power involved the participation of the civilian institutions of the Honduran government as well as the military….

… On September 9, 2009, MCC's Board of Directors decided to terminate funding for certain projects and activities under the Compact and authorized the Acting Chief Executive Officer of MCC to take the necessary actions to carry out the termination….

MCC has determined that the manner of the removal of President Zelaya on June 28 and the failure to reestablish the democratic order in Honduras are contrary to sound performance on MCC's Ruling Justly criteria. MCC expects that the impact of these events will be most directly observed in three indicators: Political Rights; Civil Liberties; and Voice and Accountability. Data lags will delay the impact of these events from appearing on Honduras's next MCC scorecard, which is due to be released in November 2009. If, however, there is no restoration of democratic and constitutional governance in Honduras, MCC would expect to see declines in these indicators in future years.

MCC's eligibility criteria include a commitment to "just and democratic governance." The pattern of actions taken by Honduras beginning on June 28, 2009, is inconsistent with this commitment and MCC's eligibility criteria.

For the record, under the Zelaya administration, according to the MCC fiscal year 2010 scorecard, Honduras turned in grades well above passing with respect to “political rights,” “civil liberties” and “voice and accountability” — the latter, described by MCC, as “the ability of institutions to protect civil liberties; the extent to which citizens of a country are able to participate in the selection of governments; and the independence of the media.”

So, it seems even MCC, based on evidence submitted by very mainstream, pro-capitalistic sources (Freedom House, the Heritage Foundation, the World Bank, etc.) concludes that Zelaya was better for Honduras (in terms of economic freedom, social justice and democratic rule) than Micheletti and his illegal regime, which pretty much blows apart any credible argument that Zelaya was a wild-eyed radical and reckless leader of his nation who had no respect for the rule of law.

Stripped of that pretense, what do the coup plotters, and their paid lobbyists and media sympathizers, now advance as evidence of the justness of Micheletti’s illegal occupation of the seat of Honduran government, the resulting and continuing corruption of the nation’s democracy and, according to MCC, its degenerative effect on the future of Honduras?

Stay tuned ...