*Mary Anastasia O’Grady
The tens of thousands of Hondurans, Guatemalans and Salvadorans making asylum claims at the southern U.S. border are swamping the immigration system. Congress can reduce the size of the problem in the short term by closing U.S.-asylum loopholes. But the long-term fix is all about economic development.
Human beings naturally search for better lives for themselves and their children. Migration carries risks but as in all economic decisions, one has to ask, “compared with what?”
Central America is the main corridor used by organized crime to get illegal narcotics to American consumers. The U.S. has been promising to reduce domestic demand for drugs for decades but has made little progress. Meanwhile, drug trafficking puts billions of dollars into criminals’ pockets, overwhelming the region’s weak law enforcement.
Yet this doesn’t absolve Central America’s political class from its failure to pass necessary political and economic reforms-or the U.S. for its role in supporting groups that work against progress.
As Honduran cabinet official Ebal Díaz was quick to point out last week, U.S. “aid” in his country is spent by U.S. agencies or nongovernmental organizations “dedicated to advancing the interests of the U.S. in Honduras.” Some of this is technical support for security initiatives, which have reduced violence in recent years. But across Central America much of it goes to contractors and nonprofits that work to advance the social and economic agenda of the American left and achieve little else.
Economic development requires a climate that welcomes investment. The Honduran record is dismal.
The country already had a weak rule of law in 2009 when leftist President Manuel Zelaya decided that he wanted a second term, which Honduras’s constitution prohibits. The military, charged with upholding the constitution, removed him from office and sent him out of the country to avoid violence.
Rather than support the rule of law, the Obama State Department, under Hillary Clinton, pressured Honduras to restore Mr. Zelaya to power. The effort failed, but U.S. support for it helped him launch a campaign in subsequent years to delegitimize the country’s frail institutions.
Confidence in leadership remains shaky under center-right President Juan Orlando Hernández. The November arrest of his brother in the U.S. on drug trafficking and weapons charges has damaged the president’s image, though he hasn’t been implicated in the matter.
Contrary to the left’s assertions, there is no evidence that Mr. Hernández did not win re-election in 2017. But his run for a second term skirted the same constitutional prohibition that Mr. Zelaya faced. This has further eroded respect for the law and reinforced the sense in the country that only fools follow the rules. Lack of judicial certainty trickles down into every corner of society.
In the World Bank’s Doing Business report, which measures the ease of entrepreneurship in 190 countries around the world, Honduras ranks a grim 121st. And in crucial benchmarks, even lower. In ease of “paying taxes” Honduras ranks 164th; in “resolving insolvency” it sits at 143rd. The country ranks 153rd in ease of “getting electricity,” largely because crony politics protect an entirely undependable energy infrastructure.
Power generation in Honduras is mostly in private hands, but transmission, distribution and the last mile belong to the state-owned National Electric Energy Enterprise, which performs dreadfully. Guillermo Peña, a Honduran entrepreneur and chairman of Fundación Eléutera, a public-policy think tank based in San Pedro Sula, told me that using the company’s own public announcements his organization counted 5,538 hours of rolling power outages in the country in 2018.
In the index measuring “reliability of supply and transparency of tariff,” which goes from zero to eight, Doing Business gives Honduras a big fat goose-egg. “The main problem with energy for businesses in Honduras is that we don’t know when we’re going to have it, how we’re getting charged for it, or if it will be stable enough to not ruin our equipment,” Mr. Peña says.
In 2013 the Honduran Congress passed legislation to open transmission and distribution to private investors and create a competitive market in electricity. But large parts of the law have never been implemented.
Doing Business doesn’t factor in the cost of energy, but Honduran prices are high. One reason is a government mandate that wind, solar and hydro get priority on the grid. The first two are expensive and unreliable. The third is scarce because environmentalists have blocked new projects and the state-owned electricity company is notoriously delinquent in paying power generators.
Don’t expect to enforce contracts easily in Honduras either. It ranks 152nd in this category, with the survey noting that settling a claim takes on average about 2½ years and costs about 35% of its value.
Instead of adding border guards and drug-sniffing dogs to stop migrants from entering the U.S., President Trump might want to pay more attention to improving economic freedom so they can stay in Central America.
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