Honduran Coup Shows Business Elite Still in Charge of the Country

Honduran Coup Shows Business Elite Still in Charge

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Story By MORGAN LEE and ALEXANDRA OLSON, Associated Press Writers Morgan Lee And Alexandra Olson, Associated Press Writers

TEGUCIGALPA, Honduras – Honduran President Manuel Zelaya was ousted in a military coup after betraying his own kind: a small clique of families that dominates the economy. Now those same families stand as the greatest obstacle to the U.S.-backed drive to return him to power.

Elites across Latin America are watching the standoff closely, as they plot their own strategies to combat democratically elected presidents such as Venezuela's Hugo Chavez who have demonized the wealthy as they push for a more even distribution of income.

Washington has shunned the interim government so as not to legitimize it, while lobbying Honduras' business leaders in an effort to resolve the crisis. It's an acknowledgment of the tremendous sway those elites hold on the country.

The cadre of bankers, industrialists, hoteliers and media barons has responded with a mix of bafflement and infuriation, many of them unable to understand how the United States — where they attend universities, forge business ties and shop at malls — could support a president they see as an agent of Chavez.

Adolfo Facusse, whose family is in publishing and textiles, recalled that Zelaya grew up in the same rarified air as he did, and as president invited him on trips to Taiwan and the United States. But Facusse said the government's refusal to give his company leeway amid the economic downturn forced him to close a textile factory last year.

In an interview at his heavily guarded home — a Jaguar and two SUVs parked inside the gates — Facusse still described Zelaya as a friend.

"We don't see it as a fight against Mel Zelaya," said Facusse, a cheerful man wearing jeans and a scraggy beard. "Mel Zelaya is one of us and — well — it just got out of his control. But the people think that he is an instrument of Chavez and that the fight is with Chavez."

Facusse, the MIT-educated president of the National Association of Industries, is used to having the president's ear. His cousin, newspaper publisher Carlos Flores Facusse, was Honduras' president from 1998-2002.

Facusse shrugs off the suspension of millions of dollars of U.S. development aid and doubts the United States would impose trade sanctions.

"The attitude here is, 'So what?'" Facusse said. "At any rate there will be elections in November."

The international community is concerned about setting a precedent if Zelaya is not returned to power. Heather Berkman, a Central America expert with the Eurasia Group, said the elites in other Latin American countries could feel empowered to try to force out their own leaders.

"Zelaya rocked the boat," Berkman said, "and these people made him fall off."

Honduras inspired the term "banana republic" when U.S.-owned plantations of fruit, coffee and tobacco dominated the country. Homegrown capitalists acted as intermediaries for U.S. companies such as Standard Fruit, then diversified into fast-growing sectors of finance, textiles, tourism, construction and electricity.

Zelaya, the son of a ranching and timber baron, was part of that elite. But he increasingly locked horns with the business community as his presidency progressed.

Business leaders attacked Zelaya for imposing a 60 percent increase in the minimum wage amid the global economic crisis. Zelaya also refused to submit a budget to Congress in 2008, fueling concerns that the government was being run at the president's whim.

Last year, after complaining about not getting enough help from the United States to fund his social programs, he publicly aligned himself with Chavez.

Amilcar Bulnes, president of Honduras' largest private business council, said he and Zelaya's other friends warned him against moving into the Chavez camp.

"We told him not to do these things, and he ignored us," he said.

Bulnes said Zelaya's final days look like a close brush with Venezuelan-style socialism.

"Chavez had a goal. He had Honduras in his mouth. He was a cat with a mouse that got away," he said.

Victor Meza, who served as Zelaya's interior minister, acknowledged that the president miscalculated.

"The impression that stuck with the traditional political class and with the most conservative business leaders of the country was that Zelaya had taken a dangerous turn to the left, and therefore that their interests were in jeopardy," he said. "We underestimated the conservatism of the Honduran political class and the military leadership."

When Zelaya called a referendum on June 28 to ask the public to support a constitutional assembly, opponents accused him of trying to abolish term limits and extend his rule, like Chavez did in Venezuela. Zelaya denies that. Meza said he didn't want immediate re-election, though he hoped to lay the groundwork for a return to the presidency in 2012.

The morning of the referendum, soldiers arrested Zelaya and flew him into exile.

Zelaya still enjoys broad support in Honduras, especially among the working class. On Thursday, thousands of Zelaya supporters marched from towns across the country toward Tegucigalpa and San Pedro Sula, where they plan to converge Monday to demand their president's return.

But many supporters feel caught in the middle.

"You can't go against the businessmen," said seamstress Gladys Gomez, 48. "They're the ones that give us work."