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9 mars 2012 5 09 /03 /mars /2012 05:37

Growth and structure of the economy

After Honduras achieved independence from Spain in the early 19th century, its economic growth became closely related to its ability to develop attractive export products. Dell INSPIRON 4000 SERIES Battery,Dell INSPIRON 4100 SERIES Battery

During much of the 19th century, the Honduran economy languished; traditional cattle raising and subsistence agriculture produced no suitable major export. In the latter part of the century, economic activity quickened with the development of large-scale, preciousmetal mining. Dell INSPIRON 4150 SERIES Battery,Dell INSPIRON 500M SERIES Battery

The most important mines were located in the mountains near the capital of Tegucigalpa and were owned by the New York and Honduras Rosario Mining Company(NYHRMC). Silver was the principal metal extracted, accounting for about 55 percent of exports in the 1880s. Mining income stimulated commercial and ancillary enterprises, built some infrastructure, and reduced monetary restraints on trade. Dell INSPIRON 5100 Battery,Dell INSPIRON 6000 Battery

Other beneficial economic effects were few, however, because the mining industry was never well integrated into the rest of the Honduran economy. The foreign mining companies employed a small work force, provided little or no government revenue, and relied mostly on imported mining equipment. Dell INSPIRON 600M SERIES Battery,Dell Inspiron 630m Battery

Honduras's international economic activity surged in the early 20th century. Between 1913 and 1929, its agricultural exports rose from US$3 million (US$2 million from bananas) to US$25 million (US$21 million from bananas). These "golden" exports were supported by more than US$40 million of specialized banana company investment in the Honduran infrastructure and were safeguarded by United States pressure on the national government when the companies felt threatened. Dell Inspiron 6400 Battery,Dell Inspiron 640m Battery

The overall performance of the Honduran economy remained closely tied to banana prices and production from the 1920s until after the mid-century because other forms of commercial export agriculture were slow to emerge. In addition, until drastically reduced in the mid-1950s, the work force associated with banana cultivation represented a significant proportion of the wage earners in the country. Dell Inspiron 710m Battery,Dell INSPIRON 8000 SERIES Battery

Just before the banana industry's largest strike in 1954, approximately 35,000 workers held jobs on the banana plantations of the United Fruit Company (later United Brands Company, then Chiquita Brands International) or the Standard Fruit Company (later brought by Castle and Cook, then Dole Food Company). Dell INSPIRON 8100 SERIES Battery,Dell INSPIRON 8200 SERIES Battery

After 1950 Honduran governments encouraged agricultural modernization and export diversification by spending heavily on transportation and communications infrastructure, agricultural credit, and technical assistance. During the 1950s—as a result of these improvements and the strong international export prices—beef, cotton, and coffee became significant export products for the first time. Dell INSPIRON 8500M SERIES Battery,Dell INSPIRON 8600 Battery

Honduran sugar, timber, and tobacco also were exported, and by 1960 bananas had declined to a more modest share (45 percent) of total exports. During the 1960s, industrial growth was stimulated by the establishment of the Central American Common Market (CACM—see Appendix B). Dell INSPIRON 8600M SERIES Battery,Dell Inspiron 910 (all 8.9 series) Battery

As a result of the reduction of regional trade barriers and the construction of a high common external tariff, some Honduran manufactured products, such as soaps, sold successfully in other Central American countries. Because of the greater size and relative efficiency of the Salvadoran and Guatemalan industrial sectors, however, Dell INSPIRON 9200 Battery

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Honduras bought far more manufactured products from its neighbors than it sold to them. After the 1969 Soccer War with El Salvador, Honduras effectively withdrew from the CACM. Favorable bilateral trade arrangements between Honduras and the other former CACM partners were subsequently negotiated, however. Dell Inspiron 9400 Battery,Dell Inspiron E1505 Battery

A political shift in the 1980s had strong and unexpected repercussions on the country's economic condition. Beginning in late 1979, as insurgency spread in neighboring countries, Honduran military leaders enthusiastically came to support United States policies in the region. Dell Inspiron E1705 Battery,Dell Inspiron Mini 9 (all 8.9 series) Battery

This alignment resulted in financial support that benefited the civilian as well as the military ministries and agencies of Honduras. Honduran defense spending rose throughout the 1980s until it consumed 20 to 30 percent of the national budget. Before the military buildup began in fiscal year (FY) 1980, United States military assistance to Honduras was less than US$4 million. Dell Inspiron Mini 9N (all 8.9 series) Battery,Dell Inspiron XPS Gen 2 Battery

Military aid more than doubled to reach just under US$9 million by FY 1981, surged to more than US$31 million by FY 1982, and stood at US$48.3 million in FY 1983. Tiny Honduras soon became the tenth largest recipient of United States assistance aid; total economic and military aid rose to more than US$200 million in 1985 and remained at more than US$100 million for the rest of the 1980s. Dell Inspiron XPS M140 Battery,Dell Inspiron XPS M170 Battery

The increasing dependence of the Honduran economy on foreign aid was aggravated by a severe, regionwide economic decline during the 1980s. Private investment plummeted in 1980, and capital flight for that year was US$500 million. Dell Inspiron XPS M1710 Battery

To make matters worse, coffee prices plunged on the international market in the mid-1980s and remained low throughout the decade. In 1993 average annual per capita income remained depressingly low at about US$580, and 75 percent of the population was poor by internationally defined standards. Dell Inspiron Z100 Battery

Traditionally, Honduran economic hopes have been pinned on land and agricultural commodities. Despite those hopes, however, usable land has always been severely limited. Honduras's mostly mountainous terrain confines agriculturally exploitable land to narrow bands along the coasts and to some previously fertile but now largely depleted valleys. Dell Latitude 110L Battery

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The country's once abundant forest resources have also been dramatically reduced, and Honduras has not derived economically significant income from mineral resources since the 19th century. Similarly, Honduras's industrial sector never was fully developed. The heady days of the CACM (midto -late 1960s), which produced an industrial boom for El Salvador and Guatemala, Dell LATITUDE C500 Battery,Dell LATITUDE C510 Battery

barely touched the Honduran economy except to increase its imports because of the comparative advantages enjoyed by the Salvadoran and Guatemalan economies and Honduras's inability to compete.

Bananas and coffee have also proven unreliable sources of income. Although bananas are less subject to the vagaries of international markets than coffee, natural disasters such as Hurricane Fifi in 1974, Dell LATITUDE C540 Battery,Dell LATITUDE C600 Battery

drought, and disease have appeared with a regular, albeit random, frequency to take their economic toll through severely diminished harvests. Moreover, bananas are grown and marketed mostly by international corporations, which keep the bulk of wealth generated. Coffee exports, equally unreliable as a major source of economic support, Dell LATITUDE C610 Battery

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surpassed bananas in the mid1970s as Honduras's leading export income earner, but international price declines coupled with huge fiscal deficits underlined the vulnerability of coffee as an economic base.

As Honduras entered the 1990s, it did have some factors working in its favor—relative peace and a stronger civilian government with less military interference in the politics and economy of the country than in past years. Dell LATITUDE C800 Battery,Dell LATITUDE C810 Battery

The country was hobbled, however, by horrendous foreign debt, could claim only diminished natural resources, and had one of the fastest growing and urbanizing populations in the world. The government's daunting task then became how to create an economic base able to compensate for the withdrawal of much United States assistance without becoming solely dependent on traditional agricultural exports. Dell LATITUDE C840 Battery,Dell Latitude CP Battery

In the 1990s, bananas were booming again, particularly as new European trade agreements increased market size. Small bananaproducing cooperatives lined up in the 1990s to sell their land to the commercial giants, and the last banana-producing lands held by the government were privatized. Like most of Central America, Dell LATITUDE CP SERIES Battery


Honduras in the 1990s began to woo foreign investors, mostly Asian clothing assembly firms, and it held high hopes for revenue to be generated by privatizing national industries. With one of the most strikeprone labor forces in Central America, debt-burdened and aging industrial assets, and a dramatically underdeveloped infrastructure, Dell LATITUDE CPIC Battery

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Honduras, however, has distinct economic disadvantages relative to its Central American and Caribbean neighbors, who compete with Honduras in the same export markets.

Honduras - MACROECONOMIC TRENDS Recent Growth

Honduran president Rafael Leonardo Callejas Romero, elected in November 1989, Dell LATITUDE CPIR Battery,Dell LATITUDE CPIR400GT Battery

enjoyed little success in the early part of his administration as he attempted to adhere to a standard economic austerity package prescribed by the International Monetary Fund (IMF) and the World Bank. As the November 1993 presidential elections drew closer, the political fallout of austere economic measures made their implementation even less likely. Dell LATITUDE CPM Battery


Any hope for his party's winning the 1993 election was predicated on improving social programs, addressing employment needs, and appeasing a disgruntled, vocal public sector. However, reaching those goals required policies that moved away from balancing the budget, lowering inflation, and reducing the deficit and external debt to attract investment and stimulate economic growth. Dell LATITUDE CPTC Battery,Dell LATITUDE CPTS Battery

Callejas inherited an economic mess. The economy had deteriorated rapidly, starting in 1989, as the United States Agency for International Development (AID) pointedly interrupted disbursements of its grants to Honduras to signal displeasure with the economic policies of the old government and to push the new government to make economic reforms. Dell LATITUDE CPTV Battery


Nondisbursal of those funds greatly exacerbated the country's economic problems. Funds from the multilateral lending institutions, which eventually would help fill the gap left by the reduction of United States aid, were still under negotiation in 1989 and would be conditioned first on payment of arrears on the country's enormous external debt. Dell LATITUDE CPXH Battery


Between 1983 and 1985, the government of Honduras—pumped up by massive infusions of external borrowing—had introduced expensive, high-tech infrastructure projects. The construction of roads and dams, financed mostly by multilateral loans and grants, was intended to generate employment to compensate for the impact of the regionwide recession. Dell LATITUDE D400 SERIES Battery

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In reality, the development projects served to swell the ranks of public-sector employment and line the pockets of a small elite. The projects never sparked private-sector investment or created substantial private employment. Instead, per capita income continued to fall as Honduras's external debt doubled. Dell LATITUDE D505 SERIES Battery,Dell Latitude D510 Series Battery

Even greater injections of foreign assistance between 1985 and 1988 kept the economy afloat, but it soon became clear that the successive governments had been borrowing time as well as money.

Foreign aid between 1985 and 1989 represented about 4.6 percent of the gross domestic product (GDP). About 44 percent of the government's fiscal shortfall was financed through cash from foreign sources. Dell LATITUDE D600 SERIES Battery,Dell Latitude D610 Series Battery

Side effects of the cash infusion were that the national currency, the lempira became overvalued and the amount of exports dropped. A booming public sector, with its enhanced ability to import, was enough to keep the economy showing growth, based on private consumption and government spending. But the government did little to address the historical, Dell Latitude D620 Battery


underlying structural problems of the economy—its overdependence on too few traditional commodities and lack of investment. Unemployment mushroomed, and private investment withered.

By 1989 President Callejas's broad economic goal became to return Honduran economic growth to 1960-80 levels. Dell LATITUDE LS 400 Battery


During the decades of the 1960s and 1970s, the country's economy, spurred mostly by erratically fluctuating traditional agricultural commodities, nevertheless averaged real annual growth of between 4 and 5 percent. At the end of the 1980s, however, Callejas had few remaining vehicles with which to pull the country out of the deep regionwide recession of the 1980s. Dell Latitude LSH Battery


Real growth between 1989 and 1993 translated to mostly negative or small positive per capita changes in the GDP for a population that was growing at close to 4 percent annually.

President Callejas attempted to adhere to conditions of desperately needed new loans. Cutting the size of the public sector work force, Dell LATITUDE PP01 Battery

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lowering the deficit, and enhancing revenues from taxes—as mandated by the multilateral lending institutions—were consistently his biggest stumbling blocks. Despite his all-out effort to reduce the public-sector deficit, the overall ratio of fiscal deficit to the GDP in 1990 showed little change from that in 1989. Dell LATITUDE PP01X Battery,Dell LATITUDE PPL Battery

The total public-sector deficit actually grew to 8.6 percent of the GDP, or nearly L1 billion, in 1991. The 1993 deficit expanded to 10.6 percent of the GDP. The Honduran government's medium-term economic objectives, as dictated by the IMF, were to have generated real GDP growth of 3.5 percent by 1992 and 4 percent by 1993. Dell LATITUDE PPX Battery

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In fact, GDP growth was 3.3 percent in 1991, 5.6 percent in 1992, and an estimated 3.7 percent in 1993. The economy had operated so long on an ad hoc basis that it lacked the tools to implement coherent economic objectives. Solving the most immediate crisis frequently took precedence over long-term goals. InflationDell LATITUDE X200 Battery

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By 1991 President Callejas had achieved modest success in controlling inflation. Overall inflation for 1990 had reached 36.4 percent—not the hyperinflation experienced by some Latin American counties—but still the highest annual rate for Honduras in forty years. The Honduran government and the IMF had set an inflation target of 12 percent for 1992 and 8 percent for 1993. Dell LATITUDE X300 SERIES Battery,Dell M170 Battery

The actual figures were 8.8 percent in 1992 and an estimated 10.7 percent for 1993. Hondurans had been accustomed to low inflation (3.4 percent in 1985, rising to 4.5 percent by the end of 1986), partly because pegging the lempira to the dollar linked Honduras's inflation rate to inflation rates in developed countries. Dell PRCISION M60 MOBILE WORKSTATION Battery

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But the expectation for low inflation made the reality of high inflation that much worse and created additional pressures on the government for action when inflation soared in 1990.


Between 1980 and 1983, 20 percent of the work force was unemployed—double the percentage of the late 1970s. Dell Precision M20 Series Battery,Dell PRECISION M40 Battery

Job creation remained substantially behind the growth of the labor force throughout the 1980s. Unemployment grew to 25 percent by 1985, and combined unemployment and underemployment jumped to 40 percent in 1989. By 1993, 50 to 60 percent of the Honduran labor force was estimated to be either underemployed or unemployed. Dell PRECISION M50 Battery

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The government's acceptance of foreign aid during the 1980s, in lieu of economic growth sparked by private investment, allowed it to ignore the necessity of creating new jobs. Honduras's GDP showed reasonable growth throughout most of the 1980s, especially when compared to the rest of Latin America, but it was artificially buoyed by private consumption and public-sector spending. Dell Precision Mobile Workstation M20 Battery,Dell PRECISION WORKSTATION M50 Battery

Mainstay agricultural jobs became scarcer in the late 1970s. Coffee harvests and plantings in border area decreased because fighting in neighboring Nicaragua and El Salvador spilled over into Honduran. Other factors contributing to the job scarcity were limited land, a reluctance on the part of coffee growers to invest while wars destabilized the region, and a lack of credit. Dell SMART PC100N Battery,Dell Vostro 1400 Battery

Small farmers became increasingly unable to support themselves as their parcels of land diminished in size and productivity.

Problems in the agricultural sector have fueled urbanization. The Honduran population was 77 percent rural in 1960. Dell Vostro 1500 Battery

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By 1992 only 55 percent of the Honduran population continued to live in rural areas. Campesinos have flocked to the cities in search of work but found little there. Overall unemployment has been exacerbated by an influx of refugees from the wars in neighboring countries, attracted to Honduras, ironically, by its relatively low population density and relative peace. Dell Winbook N4 Battery

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In the agricultural sector (which in 1993 still accounted for approximately 60 percent of the labor force), unemployment has been estimated to be far worse than the figures for the total labor force.

Honduran urban employment in the early 1990s has been characterized by underemployment and marginal informal-sector jobs, as thousands of former agricultural workers and refugees have moved to the cities seeking better lives. Dell XPS M1210 Battery

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Few new jobs have been generated in the formal sector, however, because domestic private sector and foreign investment has dropped and coveted public-sector jobs have been reserved mostly for the small Honduran middle-class with political or military connections. Only one of ten Honduran workers was securely employed in the formal sector in 1991. Dell XPS M170 Battery

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In the mid-1980s, the World Bank reported that only 10,000 new jobs were created annually; the low rate of job creation resulted in 20,000 people being added to the ranks of the unemployed every year. The actual disparity between jobs needed for full employment and new jobs created exceeded that projection, however. Dell XPS M1530 Battery Battery

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For those with jobs, the buying power of their wages tumbled throughout the 1980s while the cost of basic goods, especially food, climbed precipitously.

Role of government

Throughout the 1960s and most of the 1970s, the military-led governments of Honduras ran a state-sponsored and state-financed economy. Sony VAIO VPCEA20 Battery

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The governments provided most guarantees for loans to a strong but patronage-dominated and somewhat corrupt public sector that included recipients of graft extracted from foreign and domestic investors, and to costly state-developed enterprises. By 1989 and the election of President Callejas, however, a heavy toll had been taken by regionwide economic recession, Sony VAIO VPCEB11FM/BI Battery,Sony VAIO VPCEB11FM/T Battery

civil war in neighboring countries, the drying up of most external credit, and capital flight equaling more than US$1.5 billion. Callejas began to shift economic policy toward privatizing government-owned enterprises, liberalizing trade and tariff regulations, and encouraging increased foreign investment through tax and other incentives. Sony VAIO VPCEB11FM/WI Battery,Sony VAIO VPCEB11FX Battery

The Callejas administration did not seek less government control. Rather it changed the government's objectives by focusing on reducing public-sector spending, the size of the public-sector work force, and the trade deficit. Overall economic planning became the responsibility of the National Superior Planning Council, directed by the minister of economy and commerce. Sony VAIO VPCEB11FX/BI Battery

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President Callejas, a United States-trained economist, brought new professionalism and technical skills to the central government as he began the arduous task of long-term economic reform. Monetary and Exchange-Rate Policies

The official exchange rate of the lempira, pegged at US$1=L2 since 1918, was dramatically devalued in 1990. Sony VAIO VPCEB11FX/WI Battery

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Exchange controls had been introduced in 1982, resulting in a parallel currency market (black market) and several confusing official exchange rates operating simultaneously. Some of those rates were legally recognized in 1990 when President Callejas introduced a major series of economic policy reforms, Sony VAIO VPCEB11GX/BI Battery

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which included reducing the maximum import tariff rate from 90 percent to 40 percent and getting rid of most surcharges and exemptions. The value of the lempira was adjusted to US$1=L4, with the exception of the rate for debt equity conversions, which remained at the old rate of US$1=L2. The official conversion rate of the lempira fell to US$1=L7.26 in December 1993. Sony VAIO VPCEB11GX/WI Battery

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The president also introduced temporary taxes on exports, which were intended to increase central government revenue. Additional price and trade liberalization measures and fewer government regulations became part of his ongoing reforms. Budget

Throughout the 1980s, the Honduran government was heavily financed by foreign assistance. Sony VAIO VPCEB12FX/BI Battery,Sony VAIO VPCEB12FX/BIC Battery

External financing—mostly bilateral credit from the United States—rose dramatically until it reached 87 percent of the public deficit in 1985, rising even further in subsequent years. By 1991 the public-sector deficit was entirely financed with net external credit. That financing permitted the government to reduce the demand for internal credit and, therefore, to maintain its established exchange rate. Sony VAIO VPCEB12FX/T Battery

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In 1991 President Callejas managed to give the appearance of having reduced the overall fiscal deficit, a requirement for new credit. The deficit decrease, however, was mostly an accounting device because it resulted from the postponement of external payments to the Paris Club debtors and eventually would be offset by pressure to raise public investment. During 1991, Sony VAIO VPCEB14FX/BI Battery,Sony VAIO VPCEB14FX/T Battery

loan negotiations with multilateral and bilateral lending institutions brought Honduras US$39.5 million in United States development assistance, US$70 million in balance-of-payments assistance in the form of cash grants, and US$18.8 million in food aid. The country also negotiated US$302.4 million in concessional loans from the multilateral lending institutions. Sony VAIO VPCEB14FX/WI Battery,Sony VAIO VPCEB15FM Battery

Total outstanding external debt as a percentage of GDP fell from 119 percent in 1990 to 114 percent in 1991 and to 112 percent in 1993. This drop was largely the result of debt forgiveness of US$448.4 million by the United States, Switzerland, and the Netherlands. Scheduled amortization payments of an average US$223.2 million per year, however, guaranteed that Honduras's gross funding requirements would remain large indefinitely. Sony VAIO VPCEB15FM/BI Battery,Sony VAIO VPCEB15FM/T Battery

The government of Honduras projected that overall tax revenues would increase from 13.2 percent of GDP in 1989 to about 15.7 percent in 1991. Adjustments for low coffee prices and the continuation of lax collection methods, however, undermined those goals. Despite these tax increases, compared to developed countries, Honduras has low tax rates with particularly low property taxes. Sony VAIO VPCEB15FM/WI Battery,Sony VAIO VPCEB15FX Battery

Labor force

Honduras suffers from an overabundance of unskilled and uneducated laborers. Most Honduran workers in 1993 continued to be employed in agriculture, which accounted for about 60 percent of the labor force. Sony VAIO VPCEB15FX/BI Battery

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More than half of the rural population, moreover, remains landless and heavily dependent on diminishing seasonal labor and low wages. Fifty-five percent of the farming population subsists on less than two hectares and earns less than US$70 per capita per year from those plots, mostly by growing subsistence food crops. Sony VAIO VPCEB15FX/WI Battery

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In 1993 only about 9 to 13 percent of the Honduran labor force was engaged in the country's tiny manufacturing sector—one of the smallest in Central America. Skilled laborers are scarce. Only 25,000 people per year, of which about 21 percent are industrial workers, graduate yearly from the National Institute of Professional Training (Instituto Nacional de Formación Profesional- -INFOP) established in 1972. Sony VAIO VPCEB16FX/B Battery

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Hundreds of small manufacturing firms, the traditional backbone of Honduran enterprise, began to go out of business beginning in the early 1990s, as import costs rose and competition through increasing wages for skilled labor from the mostly Asian-owned assembly industries strengthened. Sony VAIO VPCEB16FX/L Battery

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The small Honduran shops, most of which had manufactured clothing or food products for the domestic market, traditionally received little support in the form of credit from the government or the private sector and were more like artisans than conventional manufacturers. Asian-owned export assembly firms (maquiladoras), Sony VAIO VPCEB16FX/W Battery

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operating mostly in free zones established by the government on the Caribbean coast, attract thousands of job seekers and swell the populations of new city centers such as San Pedro Sula, Tela, and La Ceiba. Those firms employed approximately 16,000 workers in 1991.

About one-third of the Honduran labor force was estimated to be working in the service or "other" sector in 1993. Sony VAIO VPCEB17FX/B Battery

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That classification usually means that a person ekes out a precarious livelihood in the urban informal sector or as a poorly paid domestic. As unemployment soared throughout Central America in the 1980s, more and more people were forced to rely on their own ingenuity in order to simply exist on the fringes of Honduran society. Sony VAIO VPCEB17FX/L Battery

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Employment Indicators and Benefits

Honduran governments have set minimum wages since 1974, but enforcement has generally been lax. That laxity increased at the beginning of the 1980s. Traditionally, most Honduran workers have not been covered by social security, welfare, or minimum wages. Sony VAIO VPCEB17FX/W Battery,Sony VAIO VPCEB190X Battery

Multinational companies usually paid more than the standard minimum wage, but, overall, the Honduran wage earner has experienced a diminution of real wages and purchasing ability for more than a decade. When they occurred, minimum wage adjustments generally did not keep up with cost of living increases. Sony VAIO VPCEB19FX Battery

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After a major currency devaluation in 1990, average Honduran workers were among the most poorly paid workers in the Western Hemisphere. By contrast, the banana companies paid relatively high wages as early as the 1970s. Banana workers continued at the top of the wage scale in the 1990s; Sony VAIO VPCEB1AFX Battery


however, in the 1980s, as banana production became less laborintensive, the companies had decreased their investment and work force. Consequently, fewer workers were employed as relatively well-paid agricultural wage earners with related benefits.

President Callejas responded to the severe poverty by implementing a specially financed Honduran Social Investment Fund (Fondo Hondureño de Inversión Social—FHIS) in 1990. Sony VAIO VPCEB1AGX Battery,Sony VAIO VPCEB1AGX/BI Battery

The fund created public works programs such as road maintenance and provided United States surplus food to mothers and infants. Many Hondurans slipped through that fragile social safety net, however. As a continuing part of the social pact, and even more as the result of a fierce union-government battle, Sony VAIO VPCEB1BGX Battery


President Callejas announced in 1991 a 27.8 percent increase over a minimum wage that the government had earlier agreed upon. That increase was in addition to raises of 50 and 22 percent set, respectively, in January and September 1990. Sony VAIO VPCEB1CGX Battery

Despite those concessions, the minimum daily rate in 1991 was only US$1.75 for workers employed by small agricultural enterprises and US$3.15 for workers in the big exporting concerns; most workers did not earn the minimum wage. Labor Unions

Honduras has long been heavily unionized. Sony VAIO VPCEB1CGX/BI Battery


In 1993 approximately 15 to 20 percent of the overall formal work force was represented by some type of union, and about 40 percent of urban workers were union members. There were forty-eight strikes in the public sector alone in 1990, protesting the government's economic austerity program and layoffs of public-sector workers. Sony VAIO VPCEB1DGX/BI Battery


More than 4,000 public-sector employees from the Ministry of Communications, Public Works, and Transport were fired in 1990. About 70,000 unionized workers remained in the faltering public sector in the beginning of 1991. However, the government largely made good its pledge to trim that number by 8,000 to 10,000 throughout 1991 as part of its austerity program. Sony VAIO VPCEB1EGX/BI Battery,Sony VAIO VPCEB1FGX Battery

In the private sector, 1990 saw ninety-four strikes in sixtyfour firms as workers fought for wage increases to combat inflation. A forty-two-day strike at the Tela Railroad Company (owned by Chiquita Brands International—formerly United Brands and United Fruit Company) was unsuccessful, however, and that defeat temporarily ended union efforts at direct confrontation. Sony VAIO VPCEB1FGX/BI Battery


In 1993 Honduras had three major labor confederations: the Confederation of Honduran Workers (Confederación de Trabajadores de Honduras—CTH), claiming a membership of about 160,000 workers; the General Workers' Central (Central General de Trabajadores—CGT), claiming to represent 120,000 members; Sony VAIO VPCEB1GGX/BI Battery,Sony VAIO VPCEB1HGX Battery

and the Unitary Confederation of Honduran Workers (Confederación Unitaria de Trabajadores de Honduras—CUTH), a new confederation formed in May 1992, with an estimated membership of about 30,000. The three confederations included numerous trade union federations, individual unions, and peasant organizations. Sony VAIO VPCEB1HGX/BI Battery,Sony VAIO VPCEB1JFX Battery

The CTH, the nation's largest trade confederation, was formed in 1964 by the nation's largest peasant organization, the National Association of Honduran Peasants (Asociación Nacional de Campesinos de Honduras—Anach), and by Honduran unions affiliated with the Inter-American Regional Organization of Workers (Organización Regional Interamericana de Trabajadores—ORIT), Sony VAIO VPCEB1JFX/B Battery


a hemispheric labor organization with close ties to the American Federation of LaborCongress of Industrial Organization (AFL-CIO). In the early 1990s, the confederation had three major components: the 45,000-member Federation of Unions of National Workers of Honduras (Federación Sindical de Trabajadores Nacionales de Honduras—Fesitranh); Sony VAIO VPCEB1JFX/L Battery,Sony VAIO VPCEB1JFX/P Battery

the 22,000 member Central Federation of Honduran Free Trade Unions (Federación Central de Sindicatos Libres de Honduras); and the 2,200-member Federation of National Maritime Unions of Honduras (Federación de Sindicales Marítimas Nacionales de Honduras). In addition, Anach, claiming to represent between 60,000 and 80,000 members, was affiliated with Fesitranh. Sony VAIO VPCEB1JFX/W Battery,Sony VAIO VPCEB1KGX Battery

Fesitranh was by far the country's most powerful labor federation, with most of its unions located in San Pedro Sula and the Puerto Cortés Free Zone. The unions of the United States-owned banana companies and the United States-owned petroleum refinery also were affiliated with Fesitranh. Sony VAIO VPCEB1KGX/B Battery


The CTH received support from foreign labor organizations, including ORIT, the American Institute for Free Labor Development (AIFLD), and Germany's Friedreich Ebert Foundation and was an affiliate of the International Confederation of Free Trade Unions (ICFTU).

Although it was not legally recognized until 1982, Sony VAIO VPCEB1LFX Battery


the CGT was originally formed in 1970 by the Christian Democrats and received external support from the World Confederation of Labor (WCL) and the Latin American Workers Central (Central Latinoamericana de Trabajadores—CLAT), a regional organization supported by Christian Democratic parties.Sony VAIO VPCEB1LFX/WI Battery


In the late 1980s and early 1990s, however, the CGT leadership developed close ties to the National Party of Honduras (Partido Nacional de Honduaras—PNH), and several leaders served in the Callejas government. Another national peasant organization, the National Union of Peasants (Unión Nacional de Campesinos—UNC), claiming a membership of 40,000, was affiliated with the CGT for many years and was a principal force within the confederation. Sony VAIO VPCEB1MFX/BI Battery,Sony VAIO VPCEB1NFX Battery

The CUTH was formed in May 1992 by two principal labor federations, the Unitary Federation of Honduran Workers (Federación Unitaria de Trabajadores de Honduras—FUTH) and the Independent Federation of Honduran Workers (Federación Independiente de Trabajadores de Honduras—FITH), as well as several smaller labor groups, all critical of the Callejas government's neoliberal economic reform program. Sony VAIO VPCEB1NFX/B Battery,Sony VAIO VPCEB1NFX/L Battery

The Marxist FUTH, with an estimated 16,000 members in the early 1990s, was first organized in 1980 by three communist-influenced unions, but did not receive legal status until 1988. The federation had external ties with the World Federation of Trade Unions (WFTU), the Permanent Congress for Latin American Workers Trade Union Unity (Congreso Permanente de Unidad Sindical de Trabajadores de América Latina—CPUSTAL), Sony VAIO VPCEB1NFX/P Battery,Sony VAIO VPCEB1NFX/W Battery

and the Central American Committee of Trade Union Unity (Comité de Unidad Sindical de Centroamérica—CUSCA). Its affiliations included water utility, university, electricity company, brewery, and teacher unions, as well as several peasant organizations, including the National Central of Farm Workers (Central Nacional de Trabajadores del Campo—CNTC), formed in 1985 and active in land occupations in the early 1980s. Sony VAIO VPCEB1PFX Battery,Sony VAIO VPCEB1PFX/B Battery

FUTH also became affiliated with a number of leftist popular organizations in a group known as the Coordinating Committee of Popular Organizations (Comité Coordinadora de las Organizaciones Populares—CCOP) that was formed in 1984. Dissident FUTH member formed the FITH, which was granted legal status in 1988. Sony VAIO VPCEB1QGX Battery


The FITH consisted of fourteen unions claiming about 13,000 members in the early 1990s.

Agriculture and land use

The total land area of Honduras is 11.2 million hectares, of which a scant 1.7 million hectares (about 15 percent) are well suited for agriculture. Most land in Honduras is covered by mountains, giving rise to the country's nickname, "the Tibet of Central America." Sony VAIO VPCEB1RGX Battery,ny VAIO VPCEB1RGX/BI laptop battery" href="http://www.laptopbattery-pack.co.uk/original-sony-vaio-vpceb1rgx-bi-battery-12228.htm">Sony VAIO VPCEB1RGX/BI Battery

Nevertheless, the Honduran economy has always depended almost exclusively on agriculture, and in 1992 agriculture was still the largest sector of the economy, contributing 28 percent to the GDP. Less than half of Honduras's cultivable land was planted with crops as recently as the mid-1980s. Sony VAIO VPCW111XX/PC Battery

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The rest was used for pastures or was forested and was owned by the government or the banana corporations. Potential for additional productivity from fallow land was questionable, however, because much of Honduras's soil lacks the thick volcanic ash found elsewhere in Central America. Sony VAIO VPCW111XX/W Battery

In addition, by 1987 about 750,000 hectares of Honduran land had been seriously eroded as a result of misuse by cattle ranchers and slash-and-burn squatters who planted unsuitable food crops.

The Honduran government and two banana companies—Chiquita Brands International and Dole Food Company—owned approximately 60 percent of Honduras's cultivable land in 1993. Sony VAIO VPCW111XXP Battery,Sony VAIO VPCW111XXT Battery

The banana companies acquired most of their landholdings in the early 20th century in return for building the railroads used to transport bananas from the interior to the coast. Much of their land remained unused because it lacked irrigation. Only about 14 percent of cultivated land was irrigated in 1987. Most land under cultivation in 1992 was planted in bananas, coffee, and specialized export crops such as melons and winter vegetables. Sony VAIO VPCW111XXW Battery,Sony VAIO VPCW115XG Battery

Agricultural policy

The agricultural sector's output showed little or no growth between 1970 and 1985. As a result of favorable weather and market conditions beginning in 1995, however, the agricultural sector grew at a rate of 2.6 percent annually, slightly above the average for Latin America during that period. Production of basic grains and coffee increased; the export price of bananas was high; Sony VAIO VPCW115XGP Battery

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and pork, poultry, and milk produced for the domestic market increased. Nontraditional fruits and vegetables also increased in value.

Honduran agricultural production overall has tended to be low because the amount of crop yielded by a given amount of land has been low. Sony VAIO VPCW115XW/T Battery

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For example, Honduran chocolate yields historically have been only about half those of Costa Rica. Instead of using improved techniques to increase the productivity of the land, Honduran farmers have merely expanded the hectarage under cultivation to produce more crops—pushing their fields ever farther into the forests. Sony VAIO VPCW117XC/P Battery

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Given the limited amount of good quality agricultural land to begin with, that policy has resulted in continual deforestation and subsequent erosion. This reluctance to improve techniques, coupled with generally poor soil, a lack of credit, and poor infrastructure, has contributed to low production figures.Sony VAIO VPCW117XC/W Battery

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Land reform

The Honduran government nominally began to address inequitable land ownership in the early 1960s. Those efforts at reform focused on organizing rural cooperatives. About 1,500 hectares of government-owned land were distributed by the National Agrarian Institute (Instituto Nacional Agrario—INA) beginning in 1960. Sony VAIO VPCW119XJ/P Battery

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A military coup in 1963 resulted in an end to the land reform program. Lacking even modest government-directed land reforms, illegal squatting became the primary means for poor people to gain land throughout the early 1970s. These actions spurred the government to institute new agrarian reforms in 1972 and 1975. Sony VAIO VPCW11AXJ Battery

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