TFHO1:AMCHAM BOARD SAYS POLITICAL CRISIS IS

C O N F I D E N T I A L SECTION 01 OF 02 TEGUCIGALPA 000954

SIPDIS

DEPARTMENT FOR WHA/CEN, CA/VO

E.O. 12958: DECL: 09/22/2019
TAGS: BBSR CASC CVIS EAGR ECON ETRD PGOV PHUM PREL
HO
SUBJECT: TFHO1:AMCHAM BOARD SAYS POLITICAL CRISIS IS
HARMING ECONOMY

REF: TEGUCIGALPA 565

Classified By: AMBASSADOR HUGO LLORENS FOR REASONS 1.4 B & D.


1. (C) Summary: Members of the Honduran American Chamber of
Commerce (AmCham Honduras) said that the political crisis is
seriously affecting their businesses and the economy as a
whole, at a September 17 meeting with Embassy economic
officers. One company has barred American employees from
traveling to Honduras, which has hurt operations, according
to a board member. The board members noted that AmCham is
apolitical but personally expressed disagreement with the
U.S. government's support for the return of President Zelaya.
EconCouns argued that the U.S. government believed that the
San Jose Accords represented the best mechanism for a return
to long-term political and economic stability, but board
members were unconvinced that the accords would include
safeguards strong enough to prevent violence and abuse of
power by President Zelaya. End summary.


2. (U) EconCouns and EconOff met with members of the board
of directors of the Honduran American
Chamber of Commerce (AmCham Honduras) on September 17. The
following members, all Honduran nationals, were present: Juan
Manuel Moya of Tigo (President),Daisy Pastor Fasquelle of
Seaboard Marine (Vice President),Patricia Lopez (Executive
Director),Jose Eduardo Atala of John Deere (Director),and
Luis Quilico of CCS de Honduras (Director).


3. (C) Although AmCham Honduras does not take official
positions on political issues, the board members made it
clear that they personally disagreed with U.S. support for
the return of President Zelaya. They expressed concern that
the crisis was doing economic damage to Honduras. EconCouns
said that the San Jose Accords represents the best path to
long-term political stability and economic growth, and that
elections in the absence of political consensus were unlikely
to restore confidence of international investors.


4. (SBU) One AmCham board member said that there had been
no new investment in Honduras since the crisis began. Board
members urged the State Department to consider revising its
travel warning advising American citizens against
non-essential travel to Honduras. They pointed out that, in
spite of the continued regular protests in Tegucigalpa, there
has not been widespread violence. They believe that the
travel warning is hampering bilateral trade as U.S. business
travelers are heeding the message to defer travel to
Honduras. Atala, who is the local John Deere representative,
said that it had become more difficult to sell commercial
tractors imported from the U.S. because John Deere will not
send people to train local mechanics in light of the travel
warning. In addition, he said, the delivery of the largest
tractor the company has ever sold in Honduras has been
delayed because the American company employee who had been
planning to accompany the equipment was not authorized to
travel to Honduras.


5. (C) Pastor said that Hondurans feel that they are being
punished for actions of the country's politicians for whom
they have no responsibility for or control over. She
complained about "economic sanctions," and when EconCouns
noted that no such sanctions have in fact been applied, she
said that the withdrawal of international aid and the
suspension of non-immigrant visa processing have had the same
effect. Many Hondurans, she noted, go to the U.S. to shop
and resell goods in Honduras. Since the closing of the
Embassy's visa section, this informal market was paralyzed,
cargo consolidations have decreased, and ship containers
destined for Honduras were emptier. Additionally, firms,
both international and domestic, were afraid to invest in
capital equipment due to uncertainty about the future. Since
Honduran exports are starting to recover, she described the
USG's actions as more harmful to American than to Honduran
businesses.


6. (C) Atala said that he personally approved of the San
Jose process, but shared the fears of many Hondurans about
the possibility that Zelaya would not adhere to the accords

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and that his return would spur widespread violence. He said
that he understood that the USG wants the business community
to lobby the de facto regime on the San Jose Accords, but
that he believed it difficult for people such as himself to
do so. He felt that there might be greater support for the
process if interlocutors clarified how the restraints on
Zelaya would be enforced. EconCouns responded that the USG
takes such concerns seriously and would welcome suggestions
regarding what enforcement measures would be acceptable.


7. (C) Comment: None of the AmCham representatives seemed
inclined to urge the de facto regime to sign the San Jose
Accords despite the pressures imposed on the regime by the
international community. Their claim that they had no
ability to influence the de facto regime is false; they
simply did not wish to do so. They remained unpersuaded that
San Jose was viable, particularly with regard to whether
effective confidence-building measures could be built into
the accord.
LLORENS