Corruption Is the 'Operating System' in Honduras: Report

A new report suggests that corruption in Honduras is not simply the product of malfeasance by individual actors, but rather comprises an institutionalized system that serves to benefit a tight circle of elites, mirroring other corrupt systems that have been uncovered in Latin America.

The report from the Carnegie Endowment for International Peace, titled “When Corruption is the Operating System: The Case of Honduras,” highlights how a combination of historical factors has paved the way for the current corrupt political economy in the country.

The report’s author, Sarah Chayes, argues that “Honduras offers a prime example of … intertwined, or ‘integrated,’ transnational kleptocratic networks.”

In other words, powerful international business interests as well as criminal organizations with transnational ties have corrupted government institutions at various levels, with little resistance from public officials, who have also benefitted from this graft.

As InSight Crime noted in its investigative series on elites and organized crime in Honduras, the country’s economic history differs from that of most of its neighbors in the sense that “the most powerful economic elites have emerged from the service, banking, media, and telecommunications sectors,” rather than land-based agricultural and industrial sectors.

These “transnational elites,” often descended from Eastern European and Middle Eastern immigrants, have used both their international business ties as well as graft to further their economic interests. Similarly, both the “traditional” land-based elite and the “bureaucratic elite” — consisting primarily of military families and regional politicians — have engaged in corruption in order to maintain their socioeconomic status.

Chayes stresses that the three “spheres” of the kleptocratic system in Honduras — the public sector, the private sector and criminal elements — “retain a degree of autonomy, and are often disrupted by internal rivalry.” But at times, their interests do overlap and there may be a degree of coordination between them.

Echoing the findings of InSight Crime’s investigation, the report states that over “the past decade or so, both the elite public- and private-sector circles have been establishing increasingly close connections with the out-and-out criminal networks that run the narcotics trade as well as other types of smuggling, such as trafficking in people.”

And while the private and public sectors of the kleptocratic network are not identical, they are bound together by what Chayes calls an “elite bargain” that perpetuates corruption.

SEE ALSO: Coverage of Elites and Organized Crime

Chayes says that this dynamic may be intensifying under the administration of President Juan Orlando Hernández, who took office in 2014 and is currently leading the field among contenders in the presidential election scheduled for November.

The report argues that Hernández has made a “strategic effort” to consolidate government power in the executive branch, thereby strenghtening a close-knit network of elites with ties to the public, private and criminal sectors that already wield disproportionate political and economic control.

As one person interviewed for the report put it, “The politicians are at the service of the economic elite.”

Prior to becoming president in 2014, Hernández served as the president of congress, which is in charge of all congressional proceedings. During this time, Chayes claims a “favorable legislative climate” was created by passing laws that benefitted “private sector network members.”

For example, in 2010, the creation of the Commission for the Promotion of Public Private Partnerships essentially funneled “public financing into private contracts via a nontransparent bidding process,” the report found.

Consequently, Chayes explains that this allows the president to “personally direct or approve” public-private projects, including terms and purchase guarantees. And when marginal improvements in oversight were proposed in 2014, officials resisted the measures.

As president of congress and eventually as head of state, Hernández also oversaw several other policy initiatives that bolstered the power of the executive branch while weakening congress, the judiciary and other institutions that could help put a brake on graft.

Hernández has strengthened the role of the military in internal security operations, packed the judiciary with top officials favorable to his pro-business agenda, and instituted a sweeping “secrecy law” that classifies as secret information “likely to produce ‘undesired institutional effects,’ or whose dissemination might be ‘counter to the effective development of state policy or normal functioning of public sector institutions,'” the report states.

According to the report, “The bulk of the actions or inactions of these agencies has served to facilitate or defend revenue maximization for the principal private-sector network members, or has provided siphoning opportunities for public officials.”

Honduran President Juan Orlando HernándezHonduran President Juan Orlando Hernández

InSight Crime Analysis

Sophisticated corruption schemes are nothing new in Latin America, and Honduras is not the only country where widespread graft has had negative consequences for society in terms of political representation, economic opportunity and human rights. However, corruption networks in different countries function in different ways. And understanding these differences is key to formulating effective solutions for rooting out graft.

The picture painted by Chayes’ report suggests that the dynamics of corruption in Honduras are more similar to those observed in Brazil, for example, than those seen in Guatemala.

Former Guatemalan President Otto Pérez Molina and former Vice President Roxana Baldetti created a “mafia state” system, in which Pérez and Baldetti acted as the bosses, overseeing various corruption schemes and taking a cut of all the graft occurring under their supervision. In Brazil, on the other hand, corruption is not as centralized; rather, it has become a “rule of the game” in business and politics.

The case of Honduras is more similar to that of Brazil in that there is no unified leadership of a grand corruption scheme, but rather a sort of “elite bargain” to play by the rules of a system that encourages and ensures impunity for engaging in graft.

This is perhaps best exemplified by elite resistance to establishing an internationally-backed anti-corruption body in Honduras, which eventually came into being early last year as the Support Mission Against Corruption and Impunity in Honduras (Misión de Apoyo Contra la Corrupción y la Impunidad en Honduras – MACCIH). This parallels Brazilian elites’ ongoing attempts to derail sweeping anti-corruption investigations targeting dozens of politicians, including the current president.

SEE ALSO: Honduras Elites and Organized Crime

The main similarity among all three cases — Honduras, Brazil and Guatemala — is that corruption was used to further concentrate power in the hands of an already powerful elite.

In Honduras, for instance, officials and contractors siphoned massive amounts of money from the national social security system and used some of the booty to fund political campaigns for members of Hernández’s National Party (Partido Nacional) — something the president himself has admitted.

Similarly, in Guatemala, Pérez Molina and Baldetti were elected in 2011 in part thanks to illicit campaign contributions from businesses and individuals that they then paid back once in power by awarding their donors state contracts.

And in Brazil, a portion of bribes and kickbacks related to public works contracts was funneled into political campaigns and vote-buying in Congress, serving to enrich both private business interests as well as government officials on the take, while simultaneously ensuring the perpetuation of corruption.

Chayes says that the model of corruption represented by Honduras — and in certain respects mirrored in Brazil and Guatemala — is not unique to Latin America.

“This corruption model, I would say, is something that applies to some 60 or 70 countries around the world,” Chayes told InSight Crime. “And it works in different ways in each of those countries. However, there are the same kinds of overlaps between the public and private sectors where government institutions are bent to serve network purposes.”

Chayes stresses that moving forward it is important to first recognize today’s corruption as the “intentional operating system of sophisticated and successful networks.”

Today’s corruption is not merely “cash in an envelope,” Chayes argues, but involves powerful, often international networks of corrupt actors “writing the rules governing political and economic activity to their own benefit.”

Ericsson Mobility Report Sees Growth in Data Traffic, VoLTE Subscriptions in India by 2022

HIGHLIGHTS

  • Ericsson unveiled its Mobility Report 2017 for India
  • Sees an uptake in data traffic driven by increased video consumption
  • 4G users nearly 1.5 times more satisfied than 3G users

As we enter a time where the most popular term in technology today is the Internet of Things, that is expected to surpass mobile phones as the largest category of connected devices by 2018, we now also see the beginnings of 5G network deployment that will look to support IoT, and a growing need for enhanced mobile broadband capabilities, according to a new report by Ericsson.

The recent approval of the Non-Standalone 5G New Radio (NR) that will enable early 5G deployment, will help achieve more than half a billion 5G subscriptions by 2022, according to the Ericsson Mobility Report 2017. Companies such as Verizon have begun 5G trials in the US, while Indian telecom operators are also expected to adopt 5G technology this year.

Ericsson Mobility Report Sees Growth in Data Traffic, VoLTE Subscriptions in India by 2022

But before 5G takes over, Ericsson sees 4G, or LTE, will overtake GSM by 2018 to become the dominant access technology, making it the fastest growing mobile technology in history, having already covered 2.5 billion people within five years.

Ericsson estimates around 29 billion connected devices by 2022, out of which 18 billion will be related to IoT. Furthermore, it sees over 1 million new mobile broadband subscribers being added each day to reach around 2.6 billion by 2022. Data growth is at its highest since 2013, thanks to a massive growth in India.

India specific growth
Ericsson on Wednesday released its Ericsson Mobility Report 2017, India Annexure, which reports specific trends in mobile traffic, subscriptions, consumer behavior, and technology uptake in the country. Mobile subscription base in India crossed 1.2 billion in Jan 2017 and is expected to increase by 4 percent, crossing 1.4 billion by 2022. One of the main reasons behind the uptick in subscriptions is the downpour of tariff offers by telcos, after Reliance Jio’s entry.

Lower tariff plans for higher data in recent months have also led to an increased amount of data consumption. According to the report, 1 exabyte (1 exabyte is 1 billion gigabytes) of traffic per month is consumed in India and is expected to grow to 8EB per month by 2022. Currently, an average of 4GB per month is consumed by an active Indian smartphone, but Ericsson sees the number rise to 11GB by 2022. 191 million cellular IoT devices by 2022.

 

Some of the other reasons driving data traffic includes and increased distribution, and consumption of video and multimedia services as well as growth in mobile banking transactions and digital payments, the latter of which can be credited in part to demonetisation.

Consumer behavior and VoLTE adoption in India
But data traffic and subscribers uptake mostly boil down to the performance of mobile broadband in India, and Ericsson says that consumers have four main indices on to measure and evaluate network performance: time taken to upload pictures to social media sites like Facebook and Instagram, time taken to open a web page, time taken for a video to buffer or load and download time for email attachments.

“As new apps continue to emerge and usage behavior evolves, network performance will play a more important role in determining smartphone users’ loyalty towards their operators in the future. In fact, mobile broadband experience in India is five times more effective in driving loyalty than tariff structure and pricing,” says Nitin Bansal, Head of Network Products, Ericsson India.

To put it down in numbers, Ericsson’s report expects smartphone subscriptions to reach 890 million by 2022 in India alone and will account for 60 percent of total mobile subscriptions in the country. As of 2016, 70 percent of all mobiles subscription are on GSM technology, and the report foresees that by the next five years, 85 percent will be on LTE and WCDMA/ HSPA technologies.

The increasing adoption of 4G will also drive VoLTE subscriptions, which is expected to reach 4.6 billion by 2022, out of which 370 million is expected to come from India. The report also reveals that 4G users are nearly 1.5 times more satisfied than 3G users, when it comes to data centric services such as video load times while streaming.

The report also highlights the benefits of VoLTE, which includes improved voice quality, high traffic capacity at lower cost, enhanced coverage, long battery life, video calling (ViLTE) from native dialer, among other things. “VoLTE represents a great opportunity for telecom operators in India who are looking to route voice calls over 4G LTE networks enabling lower cost per minute for voice calls as well as free up legacy spectrum bands for re-farming,” states Bansal.

Corruption Is the 'Operating System' in Honduras: Report

A new report suggests that corruption in Honduras is not simply the product of malfeasance by individual actors, but rather comprises an institutionalized system that serves to benefit a tight circle of elites, mirroring other corrupt systems that have been uncovered in Latin America.

The report from the Carnegie Endowment for International Peace, titled “When Corruption is the Operating System: The Case of Honduras,” highlights how a combination of historical factors has paved the way for the current corrupt political economy in the country.

The report’s author, Sarah Chayes, argues that “Honduras offers a prime example of … intertwined, or ‘integrated,’ transnational kleptocratic networks.”

In other words, powerful international business interests as well as criminal organizations with transnational ties have corrupted government institutions at various levels, with little resistance from public officials, who have also benefitted from this graft.

Image result for Corruption Is the 'Operating System' in Honduras: Report

As InSight Crime noted in its investigative series on elites and organized crime in Honduras, the country’s economic history differs from that of most of its neighbors in the sense that “the most powerful economic elites have emerged from the service, banking, media, and telecommunications sectors,” rather than land-based agricultural and industrial sectors.

These “transnational elites,” often descended from Eastern European and Middle Eastern immigrants, have used both their international business ties as well as graft to further their economic interests. Similarly, both the “traditional” land-based elite and the “bureaucratic elite” — consisting primarily of military families and regional politicians — have engaged in corruption in order to maintain their socioeconomic status.

Chayes stresses that the three “spheres” of the kleptocratic system in Honduras — the public sector, the private sector and criminal elements — “retain a degree of autonomy, and are often disrupted by internal rivalry.” But at times, their interests do overlap and there may be a degree of coordination between them.

Echoing the findings of InSight Crime’s investigation, the report states that over “the past decade or so, both the elite public- and private-sector circles have been establishing increasingly close connections with the out-and-out criminal networks that run the narcotics trade as well as other types of smuggling, such as trafficking in people.”

And while the private and public sectors of the kleptocratic network are not identical, they are bound together by what Chayes calls an “elite bargain” that perpetuates corruption.

SEE ALSO: Coverage of Elites and Organized Crime

Chayes says that this dynamic may be intensifying under the administration of President Juan Orlando Hernández, who took office in 2014 and is currently leading the field among contenders in the presidential election scheduled for November.

The report argues that Hernández has made a “strategic effort” to consolidate government power in the executive branch, thereby strenghtening a close-knit network of elites with ties to the public, private and criminal sectors that already wield disproportionate political and economic control.

As one person interviewed for the report put it, “The politicians are at the service of the economic elite.”

Prior to becoming president in 2014, Hernández served as the president of congress, which is in charge of all congressional proceedings. During this time, Chayes claims a “favorable legislative climate” was created by passing laws that benefitted “private sector network members.”

For example, in 2010, the creation of the Commission for the Promotion of Public Private Partnerships essentially funneled “public financing into private contracts via a nontransparent bidding process,” the report found.

Consequently, Chayes explains that this allows the president to “personally direct or approve” public-private projects, including terms and purchase guarantees. And when marginal improvements in oversight were proposed in 2014, officials resisted the measures.

As president of congress and eventually as head of state, Hernández also oversaw several other policy initiatives that bolstered the power of the executive branch while weakening congress, the judiciary and other institutions that could help put a brake on graft.

Hernández has strengthened the role of the military in internal security operations, packed the judiciary with top officials favorable to his pro-business agenda, and instituted a sweeping “secrecy law” that classifies as secret information “likely to produce ‘undesired institutional effects,’ or whose dissemination might be ‘counter to the effective development of state policy or normal functioning of public sector institutions,'” the report states.

According to the report, “The bulk of the actions or inactions of these agencies has served to facilitate or defend revenue maximization for the principal private-sector network members, or has provided siphoning opportunities for public officials.”

InSight Crime Analysis

Sophisticated corruption schemes are nothing new in Latin America, and Honduras is not the only country where widespread graft has had negative consequences for society in terms of political representation, economic opportunity and human rights. However, corruption networks in different countries function in different ways. And understanding these differences is key to formulating effective solutions for rooting out graft.

The picture painted by Chayes’ report suggests that the dynamics of corruption in Honduras are more similar to those observed in Brazil, for example, than those seen in Guatemala.

Former Guatemalan President Otto Pérez Molina and former Vice President Roxana Baldetti created a “mafia state” system, in which Pérez and Baldetti acted as the bosses, overseeing various corruption schemes and taking a cut of all the graft occurring under their supervision. In Brazil, on the other hand, corruption is not as centralized; rather, it has become a “rule of the game” in business and politics.

The case of Honduras is more similar to that of Brazil in that there is no unified leadership of a grand corruption scheme, but rather a sort of “elite bargain” to play by the rules of a system that encourages and ensures impunity for engaging in graft.

This is perhaps best exemplified by elite resistance to establishing an internationally-backed anti-corruption body in Honduras, which eventually came into being early last year as the Support Mission Against Corruption and Impunity in Honduras (Misión de Apoyo Contra la Corrupción y la Impunidad en Honduras – MACCIH). This parallels Brazilian elites’ ongoing attempts to derail sweeping anti-corruption investigations targeting dozens of politicians, including the current president.

SEE ALSO: Honduras Elites and Organized Crime

The main similarity among all three cases — Honduras, Brazil and Guatemala — is that corruption was used to further concentrate power in the hands of an already powerful elite.

In Honduras, for instance, officials and contractors siphoned massive amounts of money from the national social security system and used some of the booty to fund political campaigns for members of Hernández’s National Party (Partido Nacional) — something the president himself has admitted.

Similarly, in Guatemala, Pérez Molina and Baldetti were elected in 2011 in part thanks to illicit campaign contributions from businesses and individuals that they then paid back once in power by awarding their donors state contracts.

And in Brazil, a portion of bribes and kickbacks related to public works contracts was funneled into political campaigns and vote-buying in Congress, serving to enrich both private business interests as well as government officials on the take, while simultaneously ensuring the perpetuation of corruption.

Chayes says that the model of corruption represented by Honduras — and in certain respects mirrored in Brazil and Guatemala — is not unique to Latin America.

“This corruption model, I would say, is something that applies to some 60 or 70 countries around the world,” Chayes told InSight Crime. “And it works in different ways in each of those countries. However, there are the same kinds of overlaps between the public and private sectors where government institutions are bent to serve network purposes.”

Chayes stresses that moving forward it is important to first recognize today’s corruption as the “intentional operating system of sophisticated and successful networks.”

Today’s corruption is not merely “cash in an envelope,” Chayes argues, but involves powerful, often international networks of corrupt actors “writing the rules governing political and economic activity to their own benefit.”