Aid freeze in post-coup Honduras hurting poor

Soup kitchens close, medicines scarce after aid cut

* Honduras heavily dependent on foreign donors

By Robin Emmott

TEGUCIGALPA, Nov 12 (Reuters) - Poor Hondurans are going hungry and their sick children cannot obtain medicines as donors cut aid to the country following a June coup that deposed President Manuel Zelaya, doctors and aid workers say.

Soup kitchens have closed, medicines have become scarce, foreign doctors have canceled trips to Honduras and funding for the poor to run small businesses have dried up, increasing unemployment.

With Honduras already suffering from the global economic crisis, international development banks, the European Union and Venezuelan President Hugo Chavez, a close Zelaya ally, froze donor programs after the army-backed coup on June 28.

Honduras relied on around $1 billion a year in foreign loans, humanitarian aid and subsidized fuel from Venezuela, some 20 percent of the national budget.

The United States is still providing humanitarian help, but the European Union has suspended about $97 million in aid and the World Bank in July halted $270 million in loans. The Inter-American Development Bank has held back $50 million.

Zelaya's finance minister Rebeca Santos says about $450 million in credits and assistance is frozen.

"There are no medicines for the parasites in my little boy's stomach, there are no antibiotics, the doctor doesn't even have syringes," said Marlyn Cerrato as she took her pale and silent seven-year-old son to a public clinic in a gang-ridden shantytown above Tegucigalpa.

Funds from Europe for the clinic have been reduced. Shelves once full of bottles and pills stand empty and doctors say they are helpless to combat a rise in dengue and swine flu in the country, where around half of the 7 million population live on $2 or less a day.

The United Nations says the political crisis is "significantly affecting" the country's 3.5 million children.

"At least nine people have died from dengue in Tegucigalpa because they didn't have access to medicine. We are working with our bare hands," said doctor Maria Isabel Villars. She blames the aid cuts for a lack of medicine to fight dengue, a tropical disease transmitted by mosquitoes.

The politically isolated de facto government of Roberto Micheletti, who took power after the army sent leftist Zelaya into exile, denies any impact from the suspension of foreign aid. It says only educational projects have been hurt.

But Santos said a major shock was inevitable because 70 percent of money destined for social programs this year was from foreign donors. "Practically all the public investment was suspended after the coup. They are programs focused on the country's most vulnerable," Santos said from Mexico City.

"SUFFERING FOR ZELAYA"

Dozens of soup kitchens providing a daily meal have closed in Tegucigalpa's tin- and wooden-shack shantytowns, where sewage collects in the gutters and stray dogs and gangs roam.

"Malnourished children have started coming to us looking for food and we're doing our best to feed them," said cook Lucila Garcia, in one of the few kitchens still open and relying on French funds transferred before the coup.

Many aid workers say the cash freeze is too harsh and it punishes the poor in one of Latin America's poorest countries.

Foreign governments are seeking to pressure Micheletti into reinstating Zelaya, who came back to Honduras in September and took refuge in the Brazilian embassy. [ID:nN07201333]

Garcia, a supporter of Zelaya, supports sanctions but is determined to keep her kitchen open, holding raffles to raise cash. "We are suffering but it is our sacrifice for Mel," she said as she stirred a huge pot of pasta and sausages on a wood fire, referring to Zelaya's nickname.

Few in Honduras see a quick return of foreign aid even if the Nov. 29 presidential election resolves the political crisis because many local aid organizations have been unable to lobby European and U.S. donors for new funds for 2010.

Local charities say bans on visits to Honduras by foreign aid workers have hurt their contact with donors and limit their ability to fight for the limited amount of aid on offer.

With a sense that much of Honduras is on hold until the political crisis is resolved, European-backed, microcredit programs are also collapsing as the Honduran economy suffers. Small businesses that rely on small loans cannot make their interest payments, which typically help fund new loans to other businesses.

"There's so much fear in the country right now and people aren't out spending so I can't pay back my loan and that's going to affect others," said hairdresser Orfa Ortiz in her one room salon, a business that relies on microcredit from Spain and Norway. (Additional reporting by Adriana Barrera in Mexico City; Editing by Kieran Murray)

Source:reuters.com