On the Brink of Bankruptcy, Honduras Suspends Public Services

Honduras on brink of bankruptcy, suspends public services

January 25, 2013

stratrisks.com - Street surveillance cameras in one of the world’s most dangerous cities have been turned off because the government of Honduras has not paid millions of pounds it owes.

The operator which runs them in the capital Tegucigalpa is now threatening to suspend police radio services as well.

Teachers have been demonstrating almost every day as they have not been paid in six months, while doctors complain about the shortage of essential medicines, gauze, needles and latex gloves.

The Central American country has been on the brink of bankruptcy for months, as politicians put off passing a budget necessary to pay for basic government services. Honduras is also grappling with five billion dollars (£3.16 billion) in foreign debt, a figure equivalent to last year’s entire government budget.

“There are definitely patients who haven’t been able to get better because of this problem,” said Dr Lilian Discua, a paediatrician. “An epileptic who doesn’t take his medicine will have a crisis. This is happening.”

The financial problems add to a general sense that Honduras is a country in meltdown, as murders soar, drug trafficking overruns cities and coasts and the nation’s highest court has been embattled in a constitutional fight with the congress. Many streets are riddled with potholes, and cities are not replacing stolen manhole covers.

Soldiers are not receiving their regular salaries, while the education secretary says 96% of schools close several days every week or month because of teacher strikes. Experts say a mix of government corruption, election-year politics and a struggling economy has fuelled the crisis.

The local branch of the international watchdog group Transparency International issued a study last month that alleged some politicians had spent money on plane tickets to a tennis tournament in Spain, Mother’s Day gifts and other personal expenses. The study’s author, Ludin Ayala, said the country’s congress is the most expensive in Central America, although Honduras is the poorest country in the region.

Former presidential candidate Olban Valladares claimed that much of the public money has gone into campaigns ahead of November’s elections, in which the president, mayors and 128 congressional representatives will be elected. Mr Valladares said:

“Sadly, we have a great number of candidates who are state officials and their tendency is to abuse state resources that they control to fund their campaigns.”