Higher credit rating no help to the people of Honduras

Ever wonder about the purpose of those international “credit rating agencies” such as Moody’s, Standard and Poor’s and Fitch? Those are the people who have assigned themselves the task of raising and lowering the credit ratings of entire nations, including the United States, and thus greatly affecting the ability of those nations to sell bonds at reasonable rates?

Well, now you can see for yourself.  Standard and Poor’s just announced that it is raising the credit rating for the Central American nation of Honduras, from B/B to B+/B (for long term sovereign and local currency sovereignty credit), while leaving the short term rating at B.

This should make it slightly easier for Honduras to borrow money at lower rates. But there are extreme costs to the Honduran people for this kind of “stability.”

What was the reason for this little gift? “Stability” has been improving in Honduras, according to the gnomes at Standard and Poors, meaning since the overthrow of the legally elected president, Manuel Zelaya, in 2009, and the very dodgy election in the fall of 2010. That election, carried out with troops on the street repressing the left-wing opposition, brought the conservative president, Pepe Lobo, to power, and he has enjoyed full support from the U.S. since then.

How does this stability manifest itself? By all accounts, in a greatly increased level of drug smuggling and the violence connected thereunto, under the conservative presidency of Pepe Lobo. Another sign of the kind of “stability” that Standard and Poor’s likes is massive lawlessness and repression, directed at labor, peasant and social justice activists, the press (26 reporters murdered in 2 years), lesbians and gays, and national minorities.

Oh, yes, there have been improvements. According to Standard and Poor’s, one of them is the “reform” of the government pension plan for teachers, INPREMA. No mention of the repression of unionized teachers in Honduras, of course. Standard and Poor’s says that they think they can maintain this enhanced credit rating until after the next elections, scheduled for November 2013, but warn that if the government makes any concessions to the masses in the election setting that involve increased taxes or more social spending, it could lead to a revision downward.

As in other countries, Standard and Poor’s sees the situation for investment improving when the situation of survival for workers, poor farmers and ordinary people is declining, sometimes catastrophically.  The only danger they see comes from the Honduran working class and masses defending themselves, and perhaps winning the 2013 elections. According to the credit rating people, such things will not go unpunished.

Standard and Poor’s, Fitch and Moody’s are not objective analysts of the fiscal condition of nations like Honduras, Greece or the United States. They are watchdogs of international finance capital.

Old mayor Richard J. Daley of Chicago once inspired much unintended mirth by explaining to Walter Cronkite, after the police riot at the Democratic National Convention in Chicago in 1968, that “The policeman isn’t there to create disorder, the policeman is there to preserve disorder.” This is the kind of police function to which Standard and Poor’s and the rest of rthe credit rating agencies are dedicated.

As for the kind of stability they foment, I close by quoting Rosa Luxembourg, penned after the authorities had restored order (i.e. stability) to the German capital after the failed Spartacist revolt of January 1919, and shortly before she was murdered:

“‘Order prevails in Berlin!’ You foolish lackeys! Your ‘order’ is built on sand. Tomorrow, the revolution will ‘rise up again, clashing its weapons, and to your horror it will proclaim, with trumpets blazing:

“I was, I am, I shall be!'”

Photo: “Credit rating agencies give new right-wing government a higher credit rating than they gave Zelaya (pictured), so as to encourage the Right’s current policies of austerity.”   Ed Betz/AP


Emile Schepers
Emile Schepers

Emile Schepers is a veteran civil and immigrant rights activist. Born in South Africa, he has a doctorate in cultural anthropology from Northwestern University. He is active in the struggle for immigrant rights, in solidarity with the Cuban Revolution and a number of other issues. He writes from Northern Virginia.