Honduras, with 9.9 million inhabitants and an annual per capita income of $2,340 in 2020, remains the second poorest country in the Western Hemisphere after Haiti, with nearly one in six Hondurans living on less than $1.90 a day, according to a World Bank study.
The study of the World Bank Group “Diagnosis of the Private Sector in Honduras”, presented this Wednesday in Tegucigalpa with the International Finance Corporation (IFC), also indicates that the growth of annual per capita income has averaged only 1.2% since 1960.
PRIVATE SECTOR CAN ACCELERATE GROWTHRELATED
It adds that a heavy reliance on agriculture, a high rate of informality in all sectors, high vulnerability to external shocks, including natural disasters, combined with high rates of crime and violence, political instability, and a weak political and economic environment, slow down the economic growth and perpetuate structural poverty in Honduras.
Strong foreign investment has generated limited cross-sector spillovers, while inefficient public investment management and onerous regulatory requirements limit the development of new economic opportunities.
Furthermore, slow economic growth and a limited distribution of returns exacerbate crime and encourage migration, contributing to a vicious cycle of persistent poverty and underdevelopment.
Despite the difficulties, the World Bank Group (WB) report indicates that promoting the participation of the private sector can accelerate the growth of the Central American country.
The IFC’s manager for Central America, Sanaa Abouzaid, said that “the private sector can play an important role in the effort to promote inclusive economic growth.”
He added that the Private Sector Diagnosis “aims to offer tools to guide Honduras in how to better take advantage of key industries that can attract investment, diversify exports, create jobs and accelerate economic recovery.”
Abouzaid also highlighted the adversities that Honduras has suffered in the last two years due to tropical storms Eta and Iota and the COVID-19 pandemic that began to spread in March 2020.
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The resident representative of the World Bank for Honduras, Boris Weber, said that the Diagnosis of the Private Sector highlights the importance of reducing informality, improving productivity and increasing access to financing for small producers and medium and small industries to generate more jobs. and increase the income of workers, businesses and families.
In addition, “it focuses on supporting the private sector to enable more resilient and inclusive economic growth,” he added.
GREAT POTENTIAL FOR INVESTMENT
The Honduran Minister of Economic Development, Pedro Barquero, did not specify how much foreign investment currently amounts to in the country, but he assured Efe that the year could close with some 450 or 500 million dollars in the maquila sector (assembly industry). , and that “from 2014 to 2019 it fell from 1,400 million dollars, to less than 500 million dollars”.
The World Bank study highlights that Honduras has great investment potential, with ample productive resources, a solid industrial base, a market-oriented reform agenda, a strategic location with access to many international markets, and a growing labor force.
In addition, a variety of microclimates along its fertile plains produce various agricultural products, while clean lakes and coastal resources with fishing grounds on two oceans have made Honduras the world’s largest exporter of tilapia and the second largest exporter of tilapia. shrimp from Latin America.
It also indicates that a growing manufacturing sector contributes close to 20% of gross domestic product (GDP), and industrial production continues to diversify, supported by the creation of free trade and export processing zones.
Added to this are trade liberalization policies and other market-oriented reforms, and the Free Trade Agreement between Central America and the United States, among other favorable factors.
The Honduran Minister of the Presidency, Rodolfo Pastor, indicated that his country is today one of the poorest in the region and deeply unequal, with more than 70% living in poverty, a collapsed health system and a debt that has multiplied 7 times, with more than 50% of GDP.
He stressed that Honduras has unfortunately become a country of emigrants (mostly to the US) and that due to the many difficulties it needs the support of organizations such as the World Bank and private companies to seek development with many employment opportunities. , respecting the human rights of workers and natural resources.
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