Coup costs Honduras

The World Bank on Wednesday froze economic aid to Honduras following a coup which ousted President Manuel Zelaya.

The bank has been involved in 16 projects in the Central American nation.

“With regards to the existing portfolio of 16 projects, the World Bank decided to make a pause in its disbursements until there is a resolution of the present crisis,” Sergio Jellinek, a spokesman for the World Bank on Latin America and the Caribbean, said.

He said that $270-million (about R2-billion) of the $400-million allocated for the projects remains undisbursed.

Honduras is among the poorest counties in the region receiving no-interest loans and grants from the World Bank.

Jellinek said the bank was “closely following the decisions and actions” by the Organisation of American States (OAS), which gave the country 72 hours to reinstate Zelaya as president.

“We will wait 72 hours in order to continue with this process” in light of the OAS ultimatum, Zelaya told reporters in Washington one day before his planned return to his homeland Thursday.

The OAS in a communique said Honduras faces suspension from the organisation if it does not restore his presidency.

The organisation’s general assembly instructed Secretary General Jose Miguel Insulza to undertake “diplomatic initiatives aimed at… the reinstatement of President Jose Manuel Zelaya Rosales,” within the next three days.

If these efforts prove fruitless, Honduras will be barred from the OAS in keeping with the group’s charter, according to a communique issued ahead of a planned meeting in Washington between Zelaya and US officials.

Tensions have flared in Honduras since Zelaya was deposed in an army-backed coup on Sunday and swiftly flown out of the country.

The coup was the first in the major banana and coffee exporter in more than 20 years.


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