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Last Updated:[26-10-2009 07:38:28 EDT] Zoom in Zoom out Back to Tradenews

Honduran Economy Checkmated by Political Impasse

tradenews Since showing steady growth at 7 percent in the past few years, one of the most successful growths in the Latin America, Honduras is divided today between ousted President Manuel Zelaya and the interim government to push the country’s economy into deep crisis. The June 28 coup which expelled Zelaya regime has plunged Honduras into a political quandary besides deepening long-standing economic problems in one of the South America’s poorest countries.

The political instability of the country has already reflected on its exports by showing drastic decline post coup d'état. Mauricio Diaz Burdett, the co-ordinator of an NGO focuses on economic policy, poverty alleviation and corruption eradication, projected that the Honduran economy would shrink by 4.5 percent in 2009, while exports would diminish by $1bn - roughly a 15 percent drop from previous year. According to World Bank, Honduras is the third poorest country in the region behind Haiti and Nicaragua.

The country witnessed a huge slide in tourist traffic at major tourist destinations including Copan Ruins Archaeological Site, the famous Mayan site and the diving hot spots off the Bay Islands. In light of the crisis, the Copan Ruins Chamber of Commerce, Industry and Tourism has published under ‘Important Information’ in its official website that “All tourist services are working normally. And the large cities curfews are NOT affecting the Municipality (county) of Copan”.

Honduras, a predominant catholic state largely depends on its tourism industry, but the repeated listing it as unsafe through advisories by its potential countries of Honduran tourists have seriously impacted the industry as well as its subsidiaries. A local priest, Father Daniel Correa told Catholic News Service that the living standards had improved over the past decade due to increased tourism that provided employment in one of Honduras' most impoverished regions. However, he added that the current lack of visitors was creating economic hardships for many of his parishioners.

The Tegucigalpa-based Chamber of Commerce and Industry estimated that more than 100,000 jobs were lost nationwide from mid-July to mid-October. An editorial by the Tegucigalpa newspaper Diario Tiempo termed the situation "worse than Mitch," a reference to the 1998 hurricane that stormed through Central America which Honduras has yet to fully recover.

After the coup, for the past 4 months businesses suffered huge losses particularly due to curfews being clamped as protest erupted often in support and against the ousted leader. Analysts say the forthcoming elections in November are expected to bring political stability provided neutral observers from the international community are involved in the hustings to ensure free and fair elections.

By Jose Roy

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