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In Honduras, the political crisis is making that country even poorer than it was before. President Manuel Zelaya was ousted in a coup in June. The de-facto government is refusing international demands to reinstate him. Even before the coup, the country was squeezed by a significant drop in money sent home by Hondurans in the United States. And then it got hit hard by the global financial crisis.

Now, Honduras is losing hundreds of million of dollars in international assistance, as NPR's Jason Beaubien reports from Tegucigalpa.

JASON BEAUBIEN: The neighborhood of La Cuesta is tucked into a series of crevices in the steep, lush hills that ring the Honduran capital. It's a tough barrio, cement shacks, strung along deeply rutted dirt roads, many of the houses lack running water. As the Coca Cola delivery truck crawls through La Cuesta, a guard with a shotgun sits in the back, atop a stack of bottle crates.

The Atlanta-based aid group CARE runs several programs in the area. They help fund a shelter for sexually abused children. And they work with the local school to try to improve the level of education and keep the poorest of the poor from dropping out.

On this afternoon, two CARE employees are holding a class on conflict resolution. Two dozen girls, ranging in age from 10 to 14, are having a heated debate about who is to blame if a teacher gets one of his students pregnant.

The public schools in Honduras lack many things, and international aid groups assist with everything from classroom supplies to teacher training. Under the international sanctions tightening down on Honduras right now, the work CARE is doing at this school will continue, but the organization has been forced to shut down another program that was going to work with schools nationwide. And CARE isn't the only group that's had to suspend some activities. Juan Sheenan, runs Catholic Relief Services' operations in Honduras.

Mr. JUAN SHEENAN (Country Representative, Catholic Relief Services): Honduras is probably one of the poorest countries in the Western Hemisphere.

BEAUBIEN: CRS has shut down two programs as a result of the new U.S. sanctions.

Mr. SHEENAN: You know, some of the lowest indicators in literacy, education, health, access to health posts(ph), access to schools, these type of things.

BEAUBIEN: And the coup has just made conditions worse, Sheenan says. The U.S. has blocked millions of dollars in aid, much of which was going to build roads and develop the country agricultural sector. The World Bank froze almost $300 million in loans. Nicaragua and Guatemala temporarily closed their borders with Honduras. And the coup has been universally denounced throughout Latin America.

President ROBERTO MICHELETTI (Honduras): We find out it's very hard to rule a government alone, you know, alone.

BEAUBIEN: The De Facto president, Roberto Micheletti, is a big, feisty, grandfather of a man with a crushing handshake.

Pres. MICHELETTI: Nobody in the whole world believes us. But the Hondurans believe that the thing we did is correct.

BEAUBIEN: On June 28, the Honduran military seized President Manuel Zelaya, forced him onto a plane and deported him to Costa Rica in his pajamas. Micheletti insist that this was not a coup because Zelaya had violated the constitution. Micheletti was next in line to the presidency and he was quickly sworn into office. He says Zelaya was being controlled by Venezuelan President Hugo Chavez, who was plotting to impose a communist dictatorship in Honduras. Zelaya denies this. Zelaya has been trying unsuccessfully to return and reclaim power.

The ouster of Zelaya has exposed a deep fissure in Honduran society, with some people taking to the streets in support of the deposed president and others marching in favor of Micheletti. Asked how Hondurans resolve this conflict, Micheletti says the important thing was that Zelaya and his supporters had to be stopped.

Pres. MICHELETTI: The Zelaya people, they are our brothers, our sisters, you know. We love them. But we're going to let them to rule this country because they believe in communist and we are not. We are democratic people and we're going to sustain our democracy.

BEAUBIEN: Jose Rolando Bu is the head of Foprideh, a coalition of nonprofit development groups in Honduras.

Mr. JOSE ROLANDO BU (Head, Foprideh): (Foreign language spoken)

BEAUBIEN: He says Hondurans haven't seen results from democracy. Roughly two-thirds of the population still live in poverty. And his words, the country expels thousands of its young each year, who head north to the U.S. in search of economic opportunities. Corruption and impunity are rampant. And Bu says since the coup, Honduras has been in limbo. It's been unclear whether Zelaya is or is not going to return. Some families are split between the Zelaya and the Micheletti camps. Two groups that appear unable to reach common ground.

Mr. BU: (Foreign language spoken)

BEAUBIEN: Bu says the social conflict in Honduras right now is very strong.

Mr. BU: (Foreign language spoken)

BEAUBIEN: When the fabric of a society is ruptured, it's very complicated, Bu says. And he says fixing the deep political polarization in Honduras won't be easy. But he adds that in every social conflict, eventually the parties come to a point where they sit down and work out their differences. The problem in Honduras, however - and the military ouster of President Zelaya only underscored this - that the parties aren't yet ready to do that.

Jason Beaubien, NPR News, Tegucigalpa.

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