The Financial Times has an article discussing Honduras’s relations with the US, Taiwan and China. As is usually the case with this respected publication, the tone of the article is quite serious. It is only when you begin to think about what you are reading that doubts creep in.
Honduras is also strategically important to the US, as it hosts the Joint Task Force Bravo air base, Washington’s most important military unit for fighting Latin American drug networks.
That sounds pretty serious, but what does it actually mean? Is the US military “fighting” drug lords or is it facilitating their business?
Let’s back up and ask why drugs lords earn enormous profits. Most agricultural products are not particularly profitable, why are drugs different? The best answer is that unlike with corn or wheat, coca leaf producers have the US military fighting against them. That makes their product extremely expensive, and this causes the profits to be extremely high. Of course these are just accounting profits; adjusted for risk of death or imprisonment the drug trade is not unusually profitable. Nonetheless, the US military helps insure enormous dollar profits for drug lords. Drug lords would be horrified if we ended the drug war.
“Of course, US influence is waning and China’s increasing,” said Antonio Hsiang, a Taiwanese professor at the National Academy of Political and Strategic Studies in Chile and editor of a new book on Taiwan’s relations with Latin America. “Even though the US is a major aid donor to Honduras, corruption is so severe that the Honduran people do not see much of that.”
Honduras is one of the poorest countries in the Western hemisphere. So at first glance it sounds good that the US provides lots of foreign aid. But notice that the public sees very little of that aid. So where does all the money go? The article suggests that it doesn’t go to “the Honduran people” due to “corruption”; so perhaps the money is going to corrupt officials in the government?
So now we have a US military that is enriching “drug lords” and a US Treasury that is financing corruption in Honduras.
Xiomara Castro, the leftist politician elected president of the central American country last week, pledged during her campaign to establish diplomatic relations with China, which would reduce Taipei’s diplomatic allies to just 14. . . .
But since El Salvador made the switch in 2018, the US has pushed back. Washington recalled its ambassador and put Salvadoran officials it accused of corrupt and undemocratic practices in support of Beijing on a sanctions list. Some analysts believe the US will do anything to keep Honduras from getting close with China.
So what’s wrong with pressuring our aid recipients to take our side on foreign policy questions? In the past, I’ve criticized the US for bullying smaller countries. Thus we threatened trade sanction against Ecuador when they disagreed with the US on an obscure UN resolution on breast-feeding. (No, I’m not joking.)
But let’s say I’m wrong. Suppose it is only natural for big countries to pressure smaller countries to take their side on important foreign policy questions. In that case, what possible objection could I have to US policy toward Honduras?
Here’s the problem. Those 14 countries that have formal diplomatic relations with Taiwan do not include the US. Indeed, in 1979 the US recognized Beijing as the sole legitimate government of China. This is often called our “one China policy”. We are not bullying Honduras to agree with our official policy on China, we are bullying Honduras to disagree with our official policy on China.
Of course the US does favor Taiwan over China in an unofficial sense, and perhaps for good reason. Taiwan’s government is far superior to the government in Mainland China, by any reasonable criterion. You might say that we are bullying Honduras to support Taiwan because we are too cowardly to do so ourselves. We are afraid of angering China, but not afraid of angering Honduras. That’s just how the world works. Do as we say, not as we do.
But did the FT explain the grotesque irony of the US position? Not that I can see—the article didn’t even mention that we were trying to force Honduras to do adopt a policy that is the exact opposite of our own policy.
“The US will not let Honduras go because it is crucial for homeland security,” said Antonio Yang, a Taiwanese Latin America expert and honorary professor at the National Defence University in Tegucigalpa.
“Crucial” is an interesting adjective. Germany is a crucial European ally to the US. Japan is a crucial East Asian ally. Canada is a crucial North American ally. You might even argue that Panama is a crucial Central American ally. Honduras? Hmm . . .
Luis Larach, who has businesses in tourism, energy and real estate, thinks Honduras should focus on nearshoring — trying to attract US companies to move factories to the region from Asia — to drive economic growth.
“You don’t need to have a lot of information to figure out that our big potential for development is with the United States,” he said. “The historic diplomatic relations with Taiwan have been good for our country and our region and, I think, should continue.”
The FT is a serious newspaper, much like the NYT or WSJ. It’s not “The Onion”. But the more I think about what I’m reading, the more confused I get. Honduras has a per capita GDP of $2500, very poor even by Central American standards. They just elected a left wing leader who plans to shut down the charter city project. What do they mean by “potential for development”? In what sense does Honduras have any potential at all? Vietnam has potential. Bangladesh has potential. But Honduras? And how have diplomatic relations with Taiwan been good for Honduras? Perhaps they received some foreign aid, but wouldn’t Mainland China also provide foreign aid? The US does lots of trade with Taiwan despite its decision to shift diplomatic recognition to Beijing.
When I was young, I assumed that the foreign policy experts I saw on TV must know what they are talking about. (Especially when they had central European accents.) But as I got older and saw one US foreign policy fiasco after another, I began to wonder. Is foreign policy expertise actually a thing? How would we know?
If I’m tired and read this FT article quickly, it all seems quite reasonable, quite respectable. But if I slow down and start to think about what I’m reading, then I feel like I’m in a madhouse—none of it makes any sense at all.
READER COMMENTS
BC
Dec 7 2021 at 9:44pm
Foreign policy is still policy. Does foreign policy make any more less sense than domestic policy, say ethanol subsidies, the latest infrastructure bill, and the myriad vetoes that various interests groups have over building infrastructure?
One difference between foreign and domestic policy is that foreign policy is almost the exclusive domain of the President, with exceptions for formal war declarations and perhaps Congressional approvals of certain spending. Domestic policymaking powers are shared among the President and executive agencies, Congress, the Courts, and state and local governments. Some people claim that concentrating power in fewer entities/people allows for decisive, bold action; diminution of special interest groups’ influence; and ability of the empowered entities to act in the public interest. If true, our foreign policy should be far superior to our domestic policy. It’s not obvious to me that it is.
Scott Sumner
Dec 8 2021 at 1:25am
“If true, our foreign policy should be far superior to our domestic policy. It’s not obvious to me that it is.”
Good point.
Phil H
Dec 8 2021 at 3:37am
Quite a lot of policy seems to be just: let nothing change, better the devil you know.
I don’t think this is a terrible thing, but I do see it as a good reason not to be a conservative. Conservatism isn’t a bad idea, but it’s kind of built in for free in the form of institutional inertia. In terms of personal politics, you don’t have to add any extra conservatism on top.
Mark Z
Dec 8 2021 at 1:44pm
Your point on drugs isn’t the ‘dunk’ you think it is. Of course prosecuting the war on drugs makes drug lords rich, at least until they almost inevitably get incarcerated or murdered; the goal of opponents of drugs is not to minimize the median profit of currently living drug dealers; it’s to minimize the flow of drugs into the US. Standard economic theory would predict that a legal, competitive drug market would lead to lower average profits and more drug production and consumption. The latter is what people actually care about. I don’t think anyone would take seriously the argument that we should legalize human trafficking because it’ll reduce human traffickers’ profit margin.
andy
Dec 10 2021 at 4:21pm
Drug dealership is mostly victimless crime; human trafficking is not. However, you could make an analogy e.g. with the mexican border and proposing an open-border strategy. Opening the borders would likely bring other problems but it seems quite clear it would be a win for those who try to cross the border (the ‘victims’) and loss for the mafias who try to move them through the tunnels.
There are more questions to the standard economic theory. Given that we see such a rise in price, it seems likely that the demand is rather inelastic. That means, that legalizing the whole thing would lead to more drug production and consumption, but likely not much; so we get to see higher production but significantly reduced side-effects (dirty drugs, gangs, shootings, corruption…).
Also, not all drugs are the same. This can be seen with alcoohol consumption; prohibition often leads to preference for stringer drinks. In the end, drug legalization could very well lead to higher pruduction of ‘soft’ drugs and lower production of ‘hard’ drugs.
Mark Z
Dec 11 2021 at 1:53am
I’m not arguing that drug legalization is bad; rather, I’m arguing that the enrichment of drug dealers is not evidence that the policy of outlawing drugs is counterproductive, and that, generally, even (perhaps especially) if a policy of prohibition is working as intended, it will enrich the producers of it.
E. Harding
Dec 12 2021 at 9:04pm
“But Honduras?”
Honduras’s GDP has been growing at a steady clip since 2003:
https://fred.stlouisfed.org/series/PCAGDPHNA646NWDB
It should be much closer to Mexico than it currently is. So, yes, Honduras does have potential for development.
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