Honduran President Manuel Zelaya recently signed up to Chavez’s Pan-South American grouping the ‘Bolivarian Alternative to the Americas’; a collection of now sixth South American nations meant to offer an alternative to the United States created and strongly influenced ‘Organization of the American States’.

Now by the Spanish acronym ALBA, Honduras will join founder Venezuela, Bolivia, Cuba, Nicaragua, Dominica. Honduras is traditionally a strong American ally and the launch site of CIA-crafted coups in Guatemala and Nicaragua, so it might appear that the new alliance with Chavez would be a win for the ‘21 Century Socialist’ against the nation governed by the ‘Devil’.

Hardly, Honduras’ vice-president was quick to note that the nation still values a strong relationship with United States and that Honduras sees its membership in ALBA as being that of the first “non-aligned” member of the organization. Further, it is clear that many Hondurans do not favor the pact. The opposition abstained from the ratification vote in the Honduran Congress. And Mr. Zelaya’s approval rating dropped to 25% after the agreement.

So why?

Honduras in recent years has enjoyed 6% growth, but with the global slowdown the nation is facing some economic troubles. Its main export base in the United States and as Americans consumers rain in spending, exports will decrease. The trade deficit has widened. The U.S. is also a main source of tourists and remittances, both in decline or expected to. Global increases in food prices have also pushed up inflation. And so comes Mr. Chavez to the rescue.

As part of the agreement, Venezuela will buy $100 million worth of Honduran bonds that will finance the construction of low-income housing. It will also provide $30 million of farm credit, 100 tractors and 4 million low-energy light bulbs (which will be installed by Cuban technicians). The nation will also receive subsidized Venezuelan oil. Honduras, for its part, will only allow ALBA-run oil companies to engage in foreign exploration in its land and marine territory.

The generosity by Mr. Chavez would supposed stand in contrast to the lack of support offered by the United States; at least that is the conclusion one would draw from the words of vice-president Santos who stated that the United States is “indifferent” to the problems of Honduras.

But the U.S. has given Honduras $37 million last year alone; allows for 75,000 Hondurans who came to the United States after Hurricane Mitch to remain in the nation after Congress just renewed the right to stay (their salaries via remittances are a major source of capital for many Honduran family); and the nation pledged to aid Honduras with $215 over five years (rebuild roads, farm assistance, ect...) after it became the first nation to sign onto President Bush’s Millennium Challenge Account. Though the United States has recently cut back on funding due to its perception that Honduras was not done enough to fight corruption; nonetheless the U.S. still gave, as states, $37 million in 2007. Mr. Chavez naturally puts no corruption qualifiers on his donations.

“Non-aligned” or not, Honduras is official in an agreement. But will it last? A Honduran political analyst calls the pact an impulsive move by an impulsive president that will not survive the new administration after the 2009 election regardless who win.

In addition to domestic ambivalence, at best, to the agreement, as Mr. Chavez’s oil-induced dollar reserves decline with in decreasing price of petrol (Venezuela itself needs oil at $79 a barrel to balance its budget let alone engage in global welfare. Oil has already fallen below that threshold), he will no doubt become a less attractive regional partner.