Blue & White v. Red

On a flag-draped platform in the main square of La Ceiba, a banana port that has seen better days, President Ramon Villeda Morales of Honduras put democratic principles to personal test. A Communist speaker had just told a labor rally that Honduras had betrayed Latin America by breaking relations with Castro's Cuba.* Answered Villeda Morales: "The speaker who preceded me was exercising his right of free speech. But I ask you to choose between Communism and democracy, between the blue and white flag of Honduras and the red flag of Russia." So saying, he stepped down and strode away. All but a handful of the banana-worker crowd followed him, cheering.

If the constitution of Honduras permitted, Villeda Morales, 52, could probably keep the workers with him for the rest of his natural life. Once the nation's leading pediatrician, Villeda in his 3 1/2 years as President has forged an independent democracy that neither bows to nor automatically defies the U.S. He is a popular, intuitive democrat who mixes freely with his 1,950,000 people. Right-wingers rumble but are no threat. The left, which has been trying to tag Villeda as an opportunist, was itself highly pleased when the International Development Association in Washington last week granted Honduras a $9,000.000 (50 years, interest-free) loan for highways, the first granted by the new agency, known as the "soft-term window" of the "hard-term" World Bank.

For all its political stability, Honduras is a long way from being a democratic showcase. Villeda Morales calls it "the country of the four 705--70% illiteracy, 70% illegitimacy, 70% rural population, 70% avoidable deaths." The original "banana republic," Honduras is being driven out of that depressed market by murderous competition from Ecuador, and by plant-rotting Panama disease in its own crops. Both United Fruit Co. and Standard Fruit have cut payrolls, and United Fruit is selling its holdings. Meanwhile, government dollar reserves have slipped to $9,900,000; tax revenues are down to $38 million annually, while the government's budget calls for increased spending to $45 million.

The U.S. will probably be called upon, as so often is the case, to help make up the difference. But as is not so often the case, the money will probably be well spent. One major deficit item in Villeda Morales' budget is 200 new rural schools costing $5,000 apiece. Another is Honduras' biggest development project, the Rio Lindo-Lake Yojoa hydroelectric plant, which will eventually deliver 165,000 kw., enough to treble the nation's electricity, and bring hopeful new industry to the tiny towns sitting forlornly in the untilled savannas and tropical rain forests.

* The ninth Latin American nation to do so.

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