Scenesetter for Secretary Gutierrez Visit to

UNCLAS SECTION 01 OF 09 TEGUCIGALPA 002086

SIPDIS

SENSITIVE

COMMERCE FOR SECRETARY GUTIERREZ
COMMERCE FOR EXIM, OPIC, SBA, TDA, AND USED FOR IADB
STATE FOR WHA/CEN, EB, INL, DRL, CA, AND PM
STATE PASS USAID FOR LAC/CAM

E.O. 12958: N/A
TAGS: OVIP PREL ETRD ECON PGOV SNAR EAID KJUS HO
SUBJECT: Scenesetter for Secretary Gutierrez Visit to
Honduras October 18-20



1. (U) Summary: Post welcomes the visit of Secretary
Gutierrez to San Pedro Sula, Honduras, on October 18-20.
Honduran President Ricardo Maduro, with less than four
months remaining in his constitutionally-mandated single
four-year term, faces a difficult task leading one of the
poorest countries in Latin America. There will be national
elections for a new President, the unicameral Congress, and
all 298 municipalities on November 27. The election season
is already in full swing with the two major parties'
candidates, Porfirio "Pepe" Lobo, the President of the
current Congress, and Manuel "Mel" Zelaya, a former Economic
Development Minister, having won primary elections in
February.


2. (U) Honduras faces many challenges, including corruption,
unemployment, high levels of violent crime, a highly skewed
distribution of income, and a weak judicial system. Despite
these challenges, there were several positive economic
developments in 2004 and 2005, including: continued fiscal
restraint under an agreement with the IMF; reaching the
Heavily Indebted Poor Countries (HIPC) completion point in
late March 2005; the negotiation of up to USD 2.8 billion of
debt forgiveness from Paris Club and G-8 creditors; the
signing and ratification of the U.S.-Central American Free
Trade Agreement (CAFTA) with the United States; and
Honduras' selection as a grantee for a USD 215 million
program by the Millennium Challenge Corporation. Despite
historically high energy prices in 2005, Honduras also
maintained single-digit inflation rates and an estimated 4.5
percent growth in GDP in 2004 and early 2005.


3. (SBU) Bilateral relations between the U.S. and Honduras
are excellent. Honduras' support for the Global War on
Terrorism is steadfast, and the Government of Honduras (GOH)
is among the group of nations that sent troops to Iraq in
support of Operation Iraqi Freedom, although these troops
have since returned. Honduras was the first country in the
Western Hemisphere to sign and ratify an ICC Article 98
Agreement with the United States. Honduras voted for the
U.S.-drafted UN Commission on Human Rights (UNCHR)
resolution on Cuba, which passed in April. End Summary.

--------------
Economic Overview
--------------


4. (U) Honduras, with a per capita income of $950, is the
third poorest country in the Western Hemisphere, ahead of
only Nicaragua and Haiti. The economy grew by 3.2 percent
in 2003, and by an estimated 4.5 percent in 2004. However,
over the past decade, the rate of economic growth has been
only slightly faster than the rate of population growth,
which is 2.7 percent per year. The currency (the Lempira)
is loosely pegged to the U.S. dollar, devaluing against the
dollar 4.4 percent in 2004 to a rate of 18.9:1. Inflation
remains relatively tame, though above target, at 9.6
percent. Government securities yield approximately 11.5
percent, and interest rates on commercially available credit
range from 19 to 22 percent for premier clients. Social
indicators in Honduras are gradually improving, but nearly
two-thirds of all Hondurans still live in poverty, and
average education levels are very low (estimated at five
years education, based on semi-annual household surveys
conducted by the National Statistics Institute).


5. (U) Historically, the Honduran economy was long dependent
on exports of coffee and bananas. In the past fifteen
years, however, the economy has diversified, with the
development of non-traditional exports such as shrimp and
melons, an increase in tourism, and the establishment of a
strong "maquila" (light assembly) industry (primarily
textiles and assembly of apparel for re-export). Investment
incentives aimed at attracting foreign capital in export
industries have been introduced. In recent years, the
coffee industry has suffered from low world prices, and the
banana industry was severely damaged by Hurricane Mitch in

1998. Banana production has yet to reach pre-Mitch levels,
and coffee and bananas now account for less than 15 percent
of Honduran export earnings.


6. (SBU) Despite the recent economic diversification, there
continues to be a large subsistence farmer population with
few economic opportunities (other than illegal immigration
to the U.S.). Furthermore, the Honduran government's desire
to attract new types of foreign investment has been hindered
by a wide range of investment climate and competitiveness
problems, including public insecurity, weak judicial
protections of investor rights, and corruption.


7. (U) Family remittances from Hondurans living abroad,
particularly the U.S., grew by 19 percent to USD 1,135
million in 2004, and, is estimated to be 1.4 billion in
2005, will soon pass the maquila sector as the country's
largest source of foreign exchange. The U.S. is Honduras'
largest trading partner, and the roughly 150 U.S. companies
that do business in Honduras constitute the largest block of
foreign direct investors.

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The Importance of CAFTA
--------------


8. (SBU) On March 3, 2005, the Honduran Congress approved
the U.S.-Central American Free Trade Agreement (CAFTA) by an
overwhelming margin. The agreement was negotiated in 2003
and 2004 among the United States, Honduras, Guatemala, El
Salvador, Nicaragua, Costa Rica, and the Dominican Republic,
and has also been approved by El Salvador, Guatemala, and
the Dominican Republic. The agreement was ratified by the
United States on July 27, 2005, but will not enter into
force until a U.S. Presidential proclamation is issued
certifying that all ratifiers are in compliance with the
relevant terms and conditions.


9. (SBU) In Honduras, CAFTA is strongly supported by most of
the private sector, especially the textile and apparel
industry. While the agreement was approved by voice-vote
only and an exact count is therefore not available,
witnesses reported that, of the 128-member Congress, there
were more than a hundred votes in favor, and only four
against. CAFTA therefore was supported by not only the
ruling National Party, but also by the opposition Liberal
Party and two of the smaller parties in Congress as well.
Only one small leftist political party voted against the
agreement. The agreement has also been opposed by some
NGOs, labor unions, and campesino groups, who are concerned
that small-scale Honduran farmers will be unable to compete
with subsidized U.S. agricultural products.


10. (SBU) President Maduro's team hopes that CAFTA, once in
effect, will lead to faster economic growth and serve as a
catalyst for regional economic cooperation and integration.
The agreement is considered to be absolutely vital to the
survival of the textile and apparel sector in Honduras now
that worldwide quotas have been eliminated. It is estimated
that in 2004 Honduras received at least $200 million in new
foreign investment, most of it from the United States, as a
result of the anticipated benefits of CAFTA. The
agreement's agricultural chapter will liberalize
agricultural trade gradually while protecting Honduran
farmers from sudden disruptions caused by subsidized
imports. The agreement also will spur modernization in
government procurement and services and will help lock in
the GOH's structural reforms in areas such as
telecommunications.

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Millennium Challenge Account Proposal
--------------


11. (SBU) In 2004, Honduras was chosen as one of sixteen
countries eligible (out of 75 considered) to apply for
assistance under the $2.2 billion Millennium Challenge
Account (MCA). Countries were selected based upon past and
current policy performance in the areas of governing justly,
investing in their own people, and promoting economic
freedom. In June 2005, the Millennium Challenge Corporation
(MCC) approved $215 million in funding over five years for a
Honduran-drafted proposal focusing on highway infrastructure
and integrated rural development. Honduras was one of the
first countries in the world to sign an MCC Compact, and
continues to demonstrate the requisite political will to
implement the program as soon as possible. Legislation
establishing MCA-Honduras (the local body that will oversee
and implement the project) was approved by Congress and the
first official meeting of MCA-Honduras was held September

29. Legal and technical discussions continue, as do
selection processes for senior MCA-Honduras officials and
publication of bid documents for oversight and procurement
services. First disbursement is expected in early CY 2006.

--------------
IMF Agreement and Debt Relief
--------------


12. (U) In February 2004, after almost two years of
negotiations, the Maduro Administration signed a Letter of
Intent with the International Monetary Fund, which was later
approved by the IMF's Executive Board, for a new three-year
arrangement for Honduras under the Poverty Reduction and
Growth Facility (PRGF). In April 2004, Honduras reached
agreement with Paris Club creditors on the immediate
cancellation of $147 million in debt payments and the
restructuring of over $200 million more. Honduras has
committed to devote resources freed by this treatment to
priority areas outlined in the country's poverty reduction
strategy. The first review of the PRGF program was
conducted in September 2004, and the IMF found that
Honduras' performance was strong. The IMF and the World
Bank announced in April 2005 that the GOH had reached its
Heavily Indebted Poor Countries (HIPC) completion point due
to good PRGF implementation.


13. (SBU) Having obtained Completion Point, Honduras
approached the Paris Club (international group of bilateral
and multilateral creditors) and the Group of Eight
industrialized countries, seeking forgiveness or
restructuring of an estimated USD 1.2 billion in external
debt. In July 2005, Honduras announced it had received a
combined total of $2.8 billion in debt relief from bilateral
and multi-lateral donors. The GOH estimates this will
eliminate debt service payments of $212 million per year.
The GOH has committed to applying these funds to poverty
alleviation, as laid out in the existing Poverty Reduction
Strategy. The USG and other donors remain vigilant that
these funds not be stolen or diverted to off-budget items,
non-poverty-reducing activities, or recurrent budget
expenses. In particular, Post is watchful for any signs
that these funds could be used to fund the 2005 Presidential
campaigns, or to pay for unsustainable growth in teachers
and medical salaries (which the GOH has committed to reining
in by 2007).

--------------
Political/Military Issues
--------------


14. (SBU) President Maduro is a solid supporter of the U.S.
on the Global War on Terrorism. The GOH has responded
quickly to all USG requests regarding terrorist threats and
financing, although to date, no terrorist assets have been
found in Honduran financial institutions. Honduras is a
party to all UN and OAS counter-terrorism conventions and
protocols and has also been aggressive in upgrading port
security. Honduras was also the first country in the
Western Hemisphere to sign and ratify an International
Criminal Court (ICC) Article 98 Agreement with the United
States.


15. (U) Honduras has a civilian Minister of Defense and a
Chief of the Joint Staff who heads the Honduran Armed Forces
(HOAF). In January 1999, the constitution was amended to
abolish the position of military commander-in-chief of HOAF,
thus codifying civilian authority over the military.
Civilian control over the HOAF is complete, and
civil/military relations are good. This transition has
resulted in greater transparency and fiscal accountability.
The HOAF has a new focus on trans-national threats,
including counter-terrorism, drug trafficking, and combating
international criminal organizations. The HOAF is
interested in establishing an ability to further increase
its participation in international peacekeeping operations.
Honduras also stands ready to participate in a regional arms
"rationalization" process but has announced that it will not
negotiate on a bilateral basis.


16. (SBU) Honduras has taken the lead in a number of
regional initiatives to enhance cooperative security against
emerging transnational threats. Within the past year,
Honduras has hosted a "round-up" of maritime forces to
conduct combined training and operations; the Honduran Air
Force hosted a Central American air security conference that
resulted in agreements for improving cross-border/regional
communications and coordination in addressing illegal
flights; during a recent Central American summit, the
presidents unanimously agreed to the Honduran call for the
establishment of a regional rapid reaction force to deal
with the rise of narco-terrorism in Central America.
Additionally, Honduras has hosted and participated in two
combined U.S. Joint Chiefs of Staff (JCS) level special
operation exercises in 2005: Gallant Journey and Bold
Warrior.

--------------
Election Season Underway
--------------


17. (U) Honduras' open primary election for national and
local races took place February 20, with general elections
set for November 27. Under a new Electoral law reform
passed early in 2004, Honduran voters select candidates for
the National Congress based not only on their names but also
on their photographs, a process without precedent in
Honduras. This new method for the direct election of
congressional members contrasts with the old system whereby
candidates were elected on party rank-ordered congressional
lists. Only the National and Liberal Parties participated
in the primary election - the other three small parties will
join the two larger parties in the general election. USAID
and other international donors provided approximately $5.5
million to support the primary elections, and presently,
about $3.4 million is available from international donors to
support the general elections in November. A Supreme
Electoral Tribunal, managed by political party appointees,
has national authority to run the elections.


18. (SBU) In the race for presidential nomination on the
Nationalist's side, President of Congress Porfirio "Pepe"
Lobo defeated Tegucigalpa Mayor Miguel Pastor. On the
Liberal side, politician Mel Zelaya won a majority over a
crowded eight-candidate pack. Lobo, for all intents and
purposes, was the current administration's candidate
(although the GOH did not say so publicly or in private),
and had the support of the traditional National Party
machine. Both Lobo and Zelaya support CAFTA and have made
it clear that the U.S. is the key partner for Honduras. The
race is a toss-up at this point, with polls showing the two
fighting for the lead.

-------------- --
Iraq, Haiti, and Other Key Foreign Policy Goals
-------------- --


19. (SBU) The GOH is very supportive of U.S. foreign policy
goals, including the reconstruction of Iraq. In support of
Operation Iraqi Freedom (OIF),the GOH deployed two 370-men
task forces to the vicinity of An Najaf as part of the
Spanish Brigade operating under the Polish Division.
However, following Spain's decision to withdraw its troops
in April 2004, Honduras did likewise, although Honduras'
withdrawal was not linked to the Spanish decision.
Previously, Secretary Powell, Chairman of the JCS GEN Myers,
and Secretary Rumsfeld all visited Honduras in 2003 to thank
the GOH for its support of OIF. Their visits were well
received and provided important political support for
Maduro's Iraq policy. As in most of the region, the general
public overwhelmingly opposed the Honduran deployment.
While Honduras has left Iraq, the GOH is considering
deploying troops to Haiti in support of UN peacekeeping
operations there. Honduras is also very supportive at the
UN, sharing our views on resolutions covering such key
issues as human rights, human cloning, and the Middle East.
Honduras introduced a UN Commission on Human Rights (UNCHR)
resolution on Cuba, which passed in April 2004, and voted
for the U.S.-drafted UNCHR resolution on Cuba, which passed
in April 2005.

--------------
Soto Cano Air Base - Joint Task Force Bravo
--------------


20. (SBU) Approximately 570 U.S. service men and women, 14
civilian DOD employees, and 63 Locally Employed Staff
(Hondurans) are currently stationed at Honduras' Soto Cano
Air Base under the command of the Combatant Commander, U.S.
Southern Command (SOUTHCOM),as Joint Task Force Bravo, with
the responsibility for disaster relief, joint and combined
training exercises, and counternarcotics missions in the
assigned geographical area. In 1954, the USG and GOH signed
a Bilateral Military Assistance Agreement that set forth
their intention to work closely together to foster peace and
security in the western hemisphere. The ICC Article 98
Agreement with Honduras is therefore a particularly
important accomplishment and enables our military forces to
continue to work with the Honduran military and government.

--------------
Counternarcotics
--------------


21. (U) Honduras' geography places it squarely in the middle
of a major illegal drug trans-shipment zone, and the trans-
shipment of cocaine through Honduras by air, land, and
maritime routes continues. However, this trade has now
begun to face significant disruptions. In 2003, overall
seizures in Honduras of approximately 6,000 kilos were
higher than the past five years combined, and in 2004,
Honduras seized approximately 3,869 kilos of cocaine. Thus
far in 2005, the GOH has seized 208 kilos of cocaine and
$374,440 in drug money. These seizure figures do not count
thousands of kilos of cocaine seized by the U.S. Coast Guard
off Honduran-flagged vessels operating in international
waters. Close USG-GOH cooperation, thanks to a Maritime
Agreement, has allowed these narcotraffickers and the drugs
to be brought to the U.S. for prosecution.


22. (SBU) Corruption within the police, Public Ministry
(prosecutors),and the judiciary remains a primary
impediment to successful law enforcement cooperation.
Previously, the National Council for the Fight Against Drug
Trafficking (CNCN) was active in leading the country's
counternarcotics efforts. Available funds to implement a
government approved master counternarcotics plan, though,
remain severely limited.

--------------
Border Relations
--------------


23. (SBU) Honduras has land border disputes with El Salvador
and Nicaragua and some of its seven maritime neighbors.
Maduro has been personally engaged with his Presidential
counterparts in addressing these issues. The Gulf of
Fonseca on the Pacific coast has been a particularly
difficult area. A 1992 International Court of Justice (ICJ)
ruling laid out a shared area of control in the Gulf of
Fonseca and established the land border between Honduras and
El Salvador, although El Salvador has been slow to implement
the ruling. In September 2002, El Salvador requested a
revision of the 1992 ICJ ruling. In December 2003, the ICJ
ruled against the Salvadoran appeal, bringing an end to the
case. The Organization of American States (as a neutral
third party) is providing both nations with technical
assistance to help them implement the non-disputed elements
of the ICJ's ruling.


24. (SBU) On the Caribbean coast, Honduras and Nicaragua
have a long-standing maritime border dispute over the 15th
parallel. In the past, the dispute has threatened to derail
trilateral counternarcotics operations. In 1999, Honduras
provoked Nicaraguan retaliation when it signed a maritime
treaty with Colombia recognizing the 15th parallel as its
maritime border. Nicaragua subsequently filed an ICJ case
over the maritime border and, more importantly, in 1999
slapped a punitive 35 percent tariff on Honduran goods.
This tariff remained in place until April 2003, despite a
Central American Court of Justice ruling that it was
illegal. Only after Honduras responded with a retaliatory
tariff, threatening Nicaraguan exports, did Managua rescind
the tax. Nicaraguan naval forces recently seized eight
Honduran fishing boats in disputed waters. Tensions flared
recently over possible oil exploration in the disputed area.
Cuba suspended negotiations with Honduras over a maritime
boundary agreement near completion due to the GOH's
introduction of the UNCHR resolution on Cuba in 2004. The
agreement has yet to be finalized.

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Port Security
--------------


25. (U) Puerto Cortes is the 37 largest trading port with
the U.S. by volume, according to U.S. Customs and Border
Patrol (CBP). Approximately 41 percent of all Honduran
exports are destined for the U.S. (75 percent of which
transits Puerto Cortes),and significant import-for-re-
export containerized traffic also occurs, largely to feed
the booming Honduran maquila sector. The GOH has taken a
very pro-active stance in addressing port security issues,
and met the International Maritime Organization's (IMO) July
1, 2004, deadline to certify its ports as meeting the new,
more stringent port security standards under the
International Ship and Port Facility Security Code (ISPS)
and Maritime Transportation Security Act of 2002. Puerto
Cortes is the largest port on the Caribbean side of the
Central American isthmus and currently provides container
service to the U.S. market, not just for Honduran exports,
but also for goods from Guatemala, El Salvador, and
Nicaragua.


26. (U) The GOH hosted a successful visit (the first in the
Western Hemisphere) of a U.S. Coast Guard (USCG) port
security program team in June 2004. The team came to assess
Honduras' implementation of the ISPS. It reviewed security
practices at five national ports, met with the national
commission on port security, and discussed Honduran port
security regulations with the newly created (per the ISPS)
national port security authority. The USCG team reported
that it had identified several very innovative and efficient
security practices that it would carry back to the port
facilities in the U.S. as "best security practices".


27. (U) Puerto Cortes' volume of trade with the U.S. earned
it a place on the Container Security Initiative (CSI) short-
list. However, it was GOH unilateral efforts to improve the
port - notably including completing a successful U.S. Coast
Guard review in June 2004 and the December 2004 GOH decision
to install gamma-ray scanning devices at the port - that
convinced CBP to move forward with CSI at Cortes.
Negotiations are ongoing between the GOH and CBP over the
functioning, composition, vetting, and duties of the bi-
national customs team that would enforce CSI. Construction
on CBP office space at Cortes has already commenced and
should finish in Fall 2005. The office will be staffed by
three to five officers of the CBP, pending the negotiation
and signing of a Declaration of Principles. Throughout this
process the GOH team has been very responsive and results-
oriented. GOH political will to see CSI implemented is
unquestioned.

--------------
Public Security and Human Rights
--------------


28. (SBU) Upon taking office in January 2002, President
Maduro's first act was to fulfill his main campaign promise
-- a zero tolerance campaign against the country's
intolerably high crime situation. He deployed more than
5,000 soldiers to the streets to support the police. The
public responded enthusiastically. However, after initial
success of establishing a visible police presence, violent
crime, particularly homicides, continued at a high rate. On
December 23, 2004, gunmen killed 28 people and wounded an
equal number on a bus in Chamelecon (near San Pedro Sula in
northern Honduras). Police believe that the Mara
Salvatrucha (MS-13) gang was responsible for the massacre.
The U.S. is helping the Maduro government establish an anti-
kidnapping unit, increase intake/training of police
recruits, create a model tourist police force, boost its
counternarcotics efforts, expand the Frontier Police, and
improve prosecutorial and forensic capacities. The
country's geographic position makes it an obvious strategic
transit point for narcotics trafficking, alien smuggling
operations, trafficking in persons, and other organized
crime activities.


29. (SBU) Extrajudicial killings, especially of children and
young adults since 1998, have been a source of serious
concern, and only since 2002 has the GOH begun to take steps
to investigate the hundreds of unsolved cases. Human rights
groups regularly accuse former security force officials and
the business community of colluding to organize "death
squads" to commit these summary and arbitrary executions.
In April 2003, 68 persons, 61 of them Mara 18 gang members,
were killed in a violent incident at El Porvenir prison near
La Ceiba. Reports produced by the Public Ministry, a
Special Commission of the Honduran National Council for
Internal Security (CONASIN),and the Human Rights
Commissioner put the blame for the vast majority of deaths
on government security forces (police and military under
police command) and non-gang member inmate trusties. In May
2004, the Public Ministry filed criminal charges against 51
people for alleged involvement in the deaths. The Deputy
Warden, who was in charge at the time of the incident, was
convicted in December 2004 of murder and attempted murder
and sentenced in February 2005 to 19 years in prison. In a
separate incident in May 2004, a fire at the Granja Penal
prison in San Pedro Sula claimed the lives of 107 MS-13 gang
members. Although it appears GOH authorities were not
complicit in this event, timely assistance to inmates that
could have prevented many deaths was withheld due to
security concerns.


30. (SBU) While Honduran labor law is deficient in some
areas with respect to International Labor Organization core
conventions, the main issue for the protection of labor
rights, including freedom of association and collective
bargaining, is the effective enforcement of existing laws.
There are serious problems with child labor in several
industries, particularly melon, coffee, and sugar cane (but
not in the maquila sector),as well as in the informal
economy, and trafficking in persons of women and children
for commercial sexual exploitation in the U.S., Central
America, and Mexico. USAID and Peace Corps have both been
involved in HIV/AIDS prevention.

--------------
Corruption and Rule of Law
--------------


31. (SBU) Honduras remains one of the most corrupt countries
in the Western Hemisphere and was recently ranked 114 out of
146 countries surveyed by Transparency International, an NGO
that tracks international corruption issues. Only Bolivia,
Guatemala, Haiti, and Paraguay scored lower in the Western
Hemisphere. U.S. policy to combat endemic corruption has
struck a nerve in Honduras, especially any mention of our
visa revocation authorities. The Director of Immigration,
Ramon Romero, was arrested on May 1 for his alleged role in
a corruption/fraud scandal involving the illegal sale of
valid Honduran passports, visas, and residency documents to
third country nationals. On May 2, the Minister of
Government and Justice fired 71 Immigration employees and
transferred another 37. However, the problem within
immigration and the control over Honduran identity documents
is still a major concern, and the GOH has not taken proper
action to address the pervasive corruption. This is most
evident in the ongoing judicial proceeding regarding ex-
director Romero, which continues to proceed at an
agonizingly slow pace.


32. (SBU) Maduro has stated he is willing to address
corruption, even if it will cost him political support
within his party, but real achievements to date have been
few. Of particular concern are individual judges and
prosecutors who solicit and/or remain open to offers of
bribes. The Attorney General's office has been unwilling,
or unable, to prosecute high-profile cases, with the notable
exception of several sitting congressmen recently accused of
drug trafficking and other offenses. Until recently,
immunity from prosecution for government officials precluded
action against senior officials. Given the scope of the
problem, any public discussion about the country's pervasive
corruption is a positive development.

--------------
USAID Programs
--------------


33. (SBU) The USAID Central America and Mexico (CAM)
Regional Strategy focuses bilateral and regional USAID
investment on the three performance arenas of Ruling Justly,
Economic Freedom, and Investing in People and is closely
aligned with the goals of the Millennium Challenge
Corporation (MCC). USAID supports the Ruling Justly
objective by increasing the responsiveness and
accountability of public institutions, while also building
on successful municipal development programs to create
better models for governance, justice reforms, and
transparency and participation. In the arena of Economic
Freedom, there is a concerted focus on trade policy and
preparations to ready Honduras' participation in the CAFTA
and FTAA. USAID strives to bridge agricultural production
in rural areas with relatively higher value processing and
marketing enterprises in urban centers. The integrated
natural resource management program emphasizes sustainable
land and water-use, biodiversity, and reduced disaster
vulnerability. Also, to support the Investing in People
objective, the health program aims toward improving
reproductive health, family planning, child survival,
prevention of HIV/AIDS and other infectious diseases, and
household food security. Seeking a better-educated Honduran
work force through expanded access at the pre-school, middle
school, and upper secondary levels (grades 10-11) is done
using alternative delivery systems and implementing the
Centers for Excellence in Teacher Training (CETT)
Presidential Initiative. USAID is also assisting GOH
efforts to develop quality education standards, testing, and
evaluation.

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Consular/Immigration Issues
--------------


34. (SBU) An estimated 800,000 Hondurans live in the U.S.,
both legally and illegally, a fact that places immigration
issues high on the bilateral agenda. (The population of
Honduras is approximately 7 million.) Approximately 82,000
of these Hondurans currently enjoy Temporary Protected
Status (TPS),which was granted to certain Hondurans who
were in the United States illegally at the time of Hurricane
Mitch in 1998. In October 2004, the Department of Homeland
Security extended TPS for these Hondurans until July 2006, a
move that the GOH deeply appreciated. The GOH is also very
interested in any possible U.S. Congressional action on
immigration reform. The GOH is currently working closely
with the USG to expedite the issuance of travel documents to
facilitate the deportations of Hondurans who have illegally
entered the U.S. As part of this cooperation the GOH is
planning to expand permission for Justice Prisoner and Alien
Transport System (JPATS) deportation flights to land in San
Pedro Sula in addition to Tegucigalpa.


35. (SBU) With approximately 11,000 American citizens
residing in Honduras (this includes American citizens that
also hold Honduran citizenship) and many thousands visiting
Honduras annually for tourism and business, American Citizen
Services are a key part of the Embassy's work. Since 1995,
46 American citizens have been murdered in Honduras; ten of
these have occurred in the past year. There was not much
progress on most of these cases until 2003, but there have
now been 27 convictions in 14 cases, and six cases have been
closed. Better coordination among the investigative police,
prosecutors, and the Embassy has revived investigations into
several previously cold cases. Some progress has been made
on extradition cases involving American citizens residing in
Honduras who are wanted for felonies in the United States.
In September 2005, the USG extradited a Honduran wanted for
major financial fraud in Honduras.

--------------
Embassy Tegucigalpa
--------------

36. (SBU) Embassy Tegucigalpa is a medium-sized post,
employing approximately 119 U.S. citizens and 344 Locally
Employed Staff (mostly Hondurans) among 14 USG agencies.
The Peace Corps program, with approximately 192 volunteers,
is one of the world's largest, and the USAID mission has a
FY06 budget of $45 million. The Mission maintains a
Consular Agent in Honduras' second largest city and
industrial center, San Pedro Sula.

Williard