HONDURAS SCENESETTER FOR ATTORNEY GENQL

UNCLAS TEGUCIGALPA 000139

SIPDIS

SENSITIVE
SIPDIS

DOJ FOR ATTORNEY GENERAL GONZALES
USARSO FOR BG KEEN
SOUTHCOM FOR GENERAL CRADDOCK
STATE FOR WHA, WHA/CEN, WHA/PPC, PM, INL, AND EB

E.O. 12958: N/A
TAGS: OVIP PREL PGOV ECON MOPS SNAR PTER KJUS HO
SUBJECT: HONDURAS SCENESETTER FOR ATTORNEY GENQL
GONZALES, DELEGATION HEAD TO PRESIDENT ZELAYA'S INAUGURATION



1. (U) Summary: New Honduran President, Jose Manuel "Mel"
Zelaya Rosales, will face a difficult task leading one of the
poorest countries in Latin America. There were national
elections for a new President, the unicameral Congress, and
all 298 municipalities on November 27, 2005; Congress will be
inaugurated on January 25 and the Presidential inauguration
will occur January 27. Bilateral relations between the U.S.
and Honduras are excellent. Honduras was the first country
in the Western Hemisphere to sign and ratify an ICC Article
98 Agreement with the United States and volunteered to be the
first country to host a U.S. Coast Guard port security
evaluation visit to inspect its ports. Honduras' support for
the Global War on Terrorism is steadfast and the Government
of Honduras (GOH) was among the group of nations that sent
troops to Iraq in support of Operation Iraqi Freedom (OIF),
although these troops have since returned. Honduras also
voted for the U.S.-drafted UN Commission on Human Rights
(UNCHR) resolution on Cuba, which passed in April 2005.


2. (SBU) 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, and the signing and ratification of the
U.S.-Central American Free Trade Agreement (CAFTA) with the
United States. In June 2005, the Millennium Challenge
Corporation (MCC) approved USD 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 first disbursement is expected in early
CY 2006. 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.
End Summary.

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Key Strategic Themes in Bilateral Relationship
-------------- -


3. (SBU) The key strategic themes in our bilateral diplomatic
efforts in Honduras are: the rule of law (including
democratic institutions),regional security (including
transnational crime),economic development to reduce poverty
(through trade and investment, and investment in human
resources),and assistance to American citizens and
businesses. Overarching these goals is an emphasis on good
governance and attacking corruption, a focus that Zelaya says
he shares, as fraud/waste/abuse and the ineffective
administration of justice hampers progress in all these
areas. The USG goals coincide with Zelaya's emphasis on
public security/rule of law, economic development, and
natural resources/environment (including the prevention of
natural disasters).

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What will a Zelaya Administration Mean for the USG?
-------------- --------------


4. (SBU) While Zelaya is a friend of the USG, his
personality, administration, and likely government plans
could make working with him an interesting challenge. The
future Zelaya administration provides many opportunities for
forward progress and will not likely result in any changes
that would have a significant negative impact on U.S.
interests. One thing is certain: his victory means a

complete upheaval of the GOH with Liberal Party political
appointees coming in to replace National Party political
appointees at senior, mid-level, and even lower level
positions. Zelaya is specifically interested in "Citizen
Power" and achieving a smaller central government with more
power at the local level. He is also in favor of government
transparency, and plans to sign into law at his inauguration
a transparency bill he hopes the new congress will pass soon
after being inaugurated January 25.


5. (SBU) Zelaya's long term international strategy is based
on the theme of economic and political integration with the
surrounding countries. Zelaya sees the integration of
Central America as the only viable means Honduras has to meet
the increasing demands of globalization. The unification of
Central America is not a new idea, dating back to Honduras'
independence from Spain. However, it has recently resurfaced
as an issue of increasing importance with CAFTA. Zelaya has
made clear that integration is an issue of prominence to him,
suggesting not only economic, but also political cooperation
in other areas. Short of integration and increased
cooperation with the countries directly surrounding Honduras,
Zelaya has specific intentions to develop and strengthen
relationships with countries both in the Western Hemisphere
and overseas seen by Zelaya as important to Honduras'
national interests.


6. (SBU) While Zelaya has not declared what specific public
security measures he will set in place, he has made clear
that he holds an entirely different approach to the gang
problem than did the Maduro Administration before him.
Instead of focusing on increasing punishments and penalties
for crimes, the Liberal Party's Government Plan provides
three areas where the administration will focus their
efforts: prevention, enforcement, and rehabilitation.

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Election
--------------


7. (U) Honduras' general elections were held November 27,
2005, and were judged to be generally democratic, peaceful,
and fair. USAID and other international donors provided
approximately $5.5 million to support the primary elections,
and about $3.4 million for the general elections.


8. (U) Honduras has two main parties, the Liberal Party and
the National Party, and three minority parties, the Christian
Democrat (CD),Innovation and National Unity (PINU),and
Democratic Unification (UD). President of the Congress
Porfirio "Pepe" Lobo was the National Party presidential
candidate, and agro-businessman and former Congressman Zelaya
ran on the Liberal Party ticket. Zelaya won the election
with 49.9 percent of the vote. Lobo received 46.17 percent,
UD received 1.51 percent, CD received 1.04 percent, and PINU
received 1.02 percent of the votes. While exit polls, a
Supreme Electoral Tribunal quick count, and an OAS Quick
Count immediately projected that Zelaya had won, Lobo did not
officially concede the election until December 7, 2005,
choosing to wait until the official vote count had been
tabulated.


9. (U) In the next Congress, the Liberals will have 62 of the
128 seats, the Nationals 55 seats, UD 5 seats, CD 4 seats,
and PINU 2 seats. The next President of Congress will be
Liberal Party Congressmen Roberto Micheletti.


10. (U) Of the 298 municipalities in Honduras, 165 mayoral
seats went to the Liberal Party, 130 to the National Party,
two to DC, and one to PINU. Within these municipalities, at
least 20 major cities were won by the Liberal Party.


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


11. (SBU) In recent years, the GOH has been very supportive
of U.S. foreign policy goals, including the reconstruction of
Iraq. In support of OIF, the GOH deployed 370 troops to the
vicinity of An Najaf as part of the Spanish Brigade operating
under the Polish Division. Secretary Powell, CJCS GEN Myers,
and Secretary Rumsfeld all visited Honduras in 2003 to thank
the GOH for its support of OIF. As in most of the region,
however, the general public overwhelmingly opposed the
Honduran deployment and in late April 2004, Honduras withdrew
its troops. The GOH stated this decision was based on a U.S.
request that Honduras consider expanding its troops' mandate
in Iraq to participate in offensive combat operations. The
GOH believed that the National Congress would not have
authorized such a change in the rules of engagement. The GOH
committed itself to deploying some troops to Haiti in support
of the UN peacekeeping operations there, possibly via the
Conference on Central American Armed Forces (CFAC),but has
yet to do so. Honduras is very supportive of the United
States 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.

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


12. (SBU) Honduras was the first country in the Western
Hemisphere to sign and ratify an ICC Article 98 Agreement
with the United States. Honduras has a civilian Minister of
Defense and a Chief of the Joint Staff who heads the Honduran
Armed Forces (HOAF). In January of 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 transnational threats, including
counterterrorism, arms and drug trafficking, and combating
international criminal organizations. The HOAF is interested
in establishing an ability to increase further its
participation in international peacekeeping operations and
the HOAF has been participating in numerous joint exercises
with U.S. forces. 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 regional 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. Honduras
hosted and participated in two combined U.S. Joint Chiefs of
Staff level special operation exercises in 2005: Gallant
Journey and Bold Warrior. Honduras also stands ready to
participate in a regional arms "rationalization" process, but
has said it will not negotiate on a bilateral basis.

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Counterterrorism Cooperation
--------------



13. (SBU) 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
counterterrorism conventions and protocols and has also been
aggressive in upgrading port security.

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Counternarcotics Issues
--------------


14. (SBU) GOH has cooperated with USG counternarcotics
efforts by facilitating USG use of La Ceiba by U.S. Customs
CHET aircraft to stage regional counternarcotics detection
and monitoring aircraft. However, the CHET aircraft does not
address maritime transit zone trafficking that most threatens
our interests. Expanding the site to include staging
maritime detection and monitoring aircraft should be our goal.


15. (SBU) Honduras' geography places it squarely in the
middle of a major illegal drug transshipment zone. Cocaine,
heroin, and marijuana transit Honduras, its airspace, and its
maritime waters. Due to increased efforts by Honduran, U.S.,
and regional counternarcotics forces, this trade has 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. The total slipped in
2005 to 261 kilos of cocaine. Additionally, there were five
Honduran-flagged vessels seized by the U.S. Coast Guard in
international waters carrying approximately 11,250 kilos of
cocaine and 53 kilos of heroin, as well as one
Honduran-flagged vessel seized by the Nicaraguan Navy
carrying 871 kilos of cocaine. Close USG-GOH cooperation,
thanks to a Bilateral Maritime Agreement, has allowed these
narcotraffickers and the drugs to be brought to the U.S. for
prosecution.

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Anti-corruption
--------------


16. (SBU) Honduras remains one of the most corrupt countries
in the Western Hemisphere and was recently ranked 107 (tied
with Nicaragua) out of 158 countries surveyed by Transparency
International (an NGO that tracks international corruption
issues,) with 158 being the most corrupt. Only Bolivia,
Ecuador, Guatemala, Guayana, Haiti, Paraguay, and Venezuela
scored lower in the Western Hemisphere. U.S. policy against
corruption has struck a nerve here, especially any mention of
our 212f visa revocation authority. The Director of
Immigration, Ramon Romero, was arrested on May 1, 2005, 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,
2005, 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. Procedural problems at the Public
Ministry (Attorney General and all prosecutors) and lack of
resources contribute to the GOH's limited ability to take
significant action against high-level corrupt individuals.
Given the scope of the problem, any public discussion about
the country's pervasive corruption is a positive development.

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Port Security
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17. (U) Puerto Cortes is the 37th 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
transit 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 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.


18. (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".


19. (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 DHS/CBP to move forward with CSI at
Cortes. A Declaration of Principles for the CSI program has
been signed and construction on CBP office space at Cortes
has already been completed.

--------------
Public Security/Human Rights
--------------


20. (SBU) Violent crime, particularly homicides and various
gang-related crimes, continues at a high rate. Public
support for forceful government actions remains strong,
although the military's enthusiasm for joint police/military
patrols has begun to erode, claiming the joint operations
have negatively affected military readiness. The U.S. is
helping to establish an anti-kidnapping unit, increase
intake/training of police recruits, 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.


21. (SBU) Extrajudicial killings, especially of
children/young adults since 1998, have been a source of
serious concern and only recently 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. There have been multiple large scale deaths in
the national penitentiaries in the last several years. While

many have been due to fires or other inmates, the GOH has
prosecuted some of its prison personnel and has been found
negligent in its responses and preventative measures.


22. (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/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, as Honduras has the highest rate of
HIV/AIDS in Central America.

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


23. (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, as Joint Task Force Bravo (JTF-B). JTF-B
has responsibility for interagency operations and supporting
contingency operations such as disaster relief, search and
rescue operations, 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 planned relocation of the Coronet Oak C-130
program from Puerto Rico to Soto Cano would increase the U.S.
footprint.

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


24. (SBU) Honduras has land border disputes with El Salvador,
Nicaragua, and some of its seven maritime neighbors. 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 technical assistance
to help them implement the non-disputed elements of the ICJ's
ruling.


25. (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. An ICJ
decision on the case is expected in 2006. 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.

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


26. (SBU) Honduras, with a per capita income of USD 950, is
the third poorest country in the Western Hemisphere, ahead of
only Nicaragua and Haiti. The economy grew at a rate of 4.5
percent in 2004, but over the past several decades has grown
at an average rate only slightly higher than population
growth. Social indicators are improving, but two-thirds of
all Hondurans live in poverty, and average education levels
are very low. In the past few years, low world coffee prices
have hit rural areas particularly hard (although they are now
rising somewhat),forcing major cutbacks in planting,
fertilizing, harvesting, and investment. While there has
been some agricultural diversification (melons, cultivated
shrimp, palm oil) there continues to be a large subsistence
farmer population with few economic opportunities (other than
illegal immigration to the U.S.). Remittances from Hondurans
living abroad, mostly in the United States, grew by 19
percent to USD 1.14 billion in 2004, and, at an estimated USD
1.4 billion in 2005, which is the equivalent of nearly 15
percent of Honduras' foreign exchange, will soon pass the
maquila sector as the country's largest source of foreign
exchange.


27. (SBU) The U.S. is Honduras' largest trading partner, with
two-way trade in goods of $6.6 billion dollars in 2004. The
roughly 150 U.S. companies that do business in Honduras
constitute the largest block of foreign direct investors.
One of the major magnets for foreign investment is the
apparel assembly (maquila) sector, which grew dramatically in
the 1990s, reaching then-peak employment in 2000 of about
120,000 people. Activity slowed due to increased competition
from Asia and also in response to the 2001-2002 U.S. economic
slowdown. The sector has been rebounding since 2003 and has
now exceeded pre-downturn levels, with employment now at
130,000 jobs.

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


28. (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.
All countries except for Costa Rica have now ratified the
agreement. 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 at least
one other ratifier is in compliance with the relevant terms
and conditions. 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 outgoing then-ruling National Party, but also by the
incoming then-opposition Liberal Party and two of the smaller
parties in Congress (PINU and CD) as well. Only one small

leftist political party (UD) voted against the agreement.
The agreement has also been opposed by some NGOs, labor
unions, and peasant (campesino) groups, who are concerned
that small-scale Honduran farmers will be unable to compete
with subsidized U.S. agricultural products.


29. (SBU) Zelaya'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 USD 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
--------------


30. (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,

2005. 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
--------------


31. (U) In February 2004, after almost two years of
negotiations, the Maduro Administration signed a Letter of
Intent with the International Monetary Fund for a new
three-year arrangement for Honduras under the Poverty
Reduction and Growth Facility. The first review of the
program was conducted in September 2004, and the IMF found
that Honduras' performance was strong. 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 pledged debt
relief from bilateral and multi-lateral donors, most of which
had been completed by December 2005. 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. Post is watchful for any signs that
these funds could be used to pay for unsustainable growth in

public sector teacher and doctor salaries (which the GOH has
committed to reining in by 2007).

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


32. (SBU) USAID's FY06 budget for Honduras is USD 44.9
million. The USAID Central America and Mexico 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 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
Presidential Initiative. USAID is also assisting GOH efforts
to develop quality education standards, testing, and
evaluation.


33. (U) USAID's Integrated Food Security program addresses
the multiple causes and effects of food shortages and
nutritional deficiencies in some of the poorest communities
in Honduras. It provides community-based maternal and child
health care, improved agricultural productivity and
marketing, construction of rural roads and water systems,
improved natural resource management, and increased
transparency and efficiency of municipal governments.

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Consular Issues
--------------


34. (U) The GOH estimates close to a one million Hondurans,
both legal and illegal, live in the U.S., a fact that places
immigration issues high on the bilateral agenda. (The
population of Honduras is approximately seven million.)
Combating alien smuggling and TIP are top priorities.
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, particularly
temporary work permit proposals. 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. (U) With approximately 15,000 American citizens residing
in Honduras (including American citizens that also hold
Honduran citizenship) and many thousands visiting Honduras
annually for tourism, missionary work, and business, American
Citizen Services are a key part of the Embassy's work. Since
1995, there have been 50 American Citizen victims of
homicide; 15 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. (The Honduran constitution bars the extradition of
Honduran nationals.)

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Embassy Tegucigalpa
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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 $44.9 million. The Mission maintains a Consular
Agent in Honduras' second largest city and industrial center,
San Pedro Sula.
Ford