UNCLAS TEGUCIGALPA 001727

SIPDIS

STATE FOR WHA/CEN, WHA/EPSC
STATE FOR EB/IFD/OMA (AWONG)
STATE PASS AID FOR LAC/CAM
TREASURY FOR DDOUGLASS
GUATEMALA ALSO FOR COMATT:MLARSEN

E.O. 12958: N/A
TAGS: EFIN ECON KTIA HO
SUBJECT: HONDURAS: DRAFT BILATERAL IMPLEMENTATION OF THE
2005 PARIS CLUB DEBT FORGIVENESS AGREEMENT DELIVERED

REF: A. A) STATE 149880


B. B) WONG/DUNN EMAIL OF 081505


1. On August 16, EconChief met with Minister of Finance
William Chong Wong and Director of Public Credit Orlando
Garner to deliver the draft bilateral debt forgiveness
agreement (ref B) based on the Agreed Minute on the Debt
Reduction of the Republic of Honduras, signed on May 12,

2005. Copies in both English and Spanish were delivered and
will be followed by electronic copies. Pursuant to
instruction contained in ref A, EconChief explained that the
documents can be signed only after the final language has
been agreed and all necessary implementing actions have been
taken by the GOH.


2. Chong replied that there are no implementing requirements
save notifying Congress, since new legislation has granted
him the right to negotiate and sign debt reduction
agreements. Chong will provide a written certification to
this effect prior to signing the document.


3. Concerning timing: Chong expects that it will take his
Ministry and the Central Bank two to three weeks to review
and approve the draft document. Garner, who glanced through
the document during the meeting, said he thought there would
likely be few or no changes, considering that the draft is
based on the Paris Club Minute. (He half-jokingly offered to
sign it on the spot.) Post will follow up with Garner and
Chong and will pass any comments or questions about the draft
agreement to the Department immediately.


4. Concerning venue: Chong would prefer to hold the signing
ceremony here in Honduras, "since the last debt forgiveness
agreement was signed in Washington." As an alternative, he
would be willing to sign the document on the margins of the
International Monetary Fund (IMF) meetings in Washington,
where Honduran President Ricardo Maduro could also be a
witness.


5. Comment: Post remains without an Ambassador pending the
confirmation hearings for Ambassador-designate Charles Ford,
hopefully in September. The two to three weeks the GOH have
requested will delay signature of this agreement until early
September at the earliest. Therefore, to best conform to GOH
wishes for a signing ceremony in Honduras and to offer the
new Ambassador a high-profile deliverable early in his
tenure, Post recommends seeking to schedule a signing
ceremony in late September. End Comment.

Williard
Williard