Overview
With an average per capita income of approximately
$800 per year, Honduras is among the poorest countries
in Latin America. Add to that the lingering devastation
that remains from Hurricane Mitch in 1998, which killed
about 5,600 people and caused an estimated $2 billion
in damage.
By implementing imaginative incentives and exploiting
trade concessions in recent years, the Honduran government
is creating a niche as a manufacturing component in
the emerging textile business. The “Maquila”
factories, which now employ nearly one in three in the
country’s total industrial employment and accounted
for 6.5 percent of the gross domestic product in 2003,
have begun to attract work from brands such as Ralph
Lauren, Nautica and Jockey.
The model is expected to be tested in the months ahead
with the expiration of global textile quotas and the
projected implementation of the Central American Free
Trade Agreement, which Honduras signed onto earlier
this year.
These new opportunities come in the face of a relative
political stability for the past 20 years. This has
not always been the case. Since Honduras declared independence
from Spain in 1821, it has been plagued with nearly
300 internal rebellions, civil wars, and changes of
government -- more than half occurring during the 20th
century. After two and one-half decades of mostly military
rule in the late 1960’s through the 1970’s,
a freely elected civilian government came to power in
1982 and has persisted.
While neighbors Nicaragua, El Salvador and Guatemala
suffered through their internal armed wars and conflicts
in the 1980’s, Honduras’ democratic governments
remained secure, and in fact the country became a haven
for Central Americans, fleeing possible persecution
from Nicaragua’s Marxist regime or El Salvador’s
leftist government. In a similar vein, Cuban refugees
have increasingly begun to look to Honduras as an alternative
haven away from the Castro regime.
Current President Ricardo Maduro has been popular but
recently experienced a drop in confidence (59 percent
negative). He had committed 370 soldiers to serve in
Iraq in 2003 but last April announced plans to withdraw
them. His term ends on January 27, 2006.
The USAID program: USAID plans to
spend $37.3 million with a focus on increasing the responsiveness
and accountability of public institutions, especially
in addressing critical judicial reforms. USAID will
help Honduras maximize trade opportunities through CAFTA
and other agreements. USAID will also help to expand
access to education at the pre-school, middle school
and upper secondary levels using alternative systems,
as well as assist the government to develop quality
education standards, testing and evaluation
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