Honduras: Land of Promise at the Heart of Central America

Despite dominating world headlines after being ravaged by Hurricane Mitch in 1998, Honduras remains an obscure land to most Europeans. This country at the heart of Central America has a rich cultural heritage and wide human and tourism potential. Former Honduran Foreign Minister, H.E. Mario Carias, the Ambassador of Honduras to France, shares his thoughts on the challenges his country must overcome to begin pushing forward towards successful development.

The Diplomatic Letter: Mr. Ambassador, 2005 will be the last year in office for President Ricardo Maduro, elected back in November 2001. Could you summarize his biggest achievements for our readers? The Honduran democratic system has made great strides in the past twenty-two years. Would you describe some of the ways President Maduro’s administration has changed government practices, with special focus on the anti-corrupion battle?

H.E. Mario Carias: President Maduro’s administration has successfully concentrated its efforts on three main areas. First, it has worked to strengthen state institutions and the rule of law in Honduras. Looking ahead to the upcoming legislative elections (through proportional suffrage), the government has focused on the need to bring candidates closer to voters, and on shortening the electoral campaign. In the judicial arena, a new Supreme Court of Justice has been created with justices appointed by a civilian commission. Our administrative monitoring system has been reformed, with the creation of a new Accounting Tribunal. I would also like to underscore the fact that freedom of the press and freedom of association are safeguarded and widely respected in our country. The government has also tackled, with great determination, the budget problems that have plagued our education system. After bitter negotiations, it managed to strike a deal with teachers. They can now begin working together to turn around our failing education system – which has denied the opportunities spurred by economic growth to broad segments of the population – and to improve the overall quality of our education system.
We expect to see sustained growth in the economic arena in coming years, thanks to the strengthening of the basic framework of the Honduran economy. We have managed to overcome the problems caused by the devastating Hurricane Mitch in 1998. This led to the signing of a letter of intent with the International Monetary Fund at the beginning of 2004, and the
successful conclusion of our negotiations with the Paris Club in April of this year.
As for the safety of persons and possessions, Honduran officials have taken a firm “zero tolerance” stance towards crime, with wide support from the Honduran people. Public authorities realize that new forms of organized crime are becoming increasingly common in Honduras, with grave consequences on the residents of large cities. We have begun to overhaul our police services and are working with our international partners to counter the growing violence sparked by the youth gangs known as “maras”, and by the criminal gangs who take people hostage and run the drug trade.
To fight this trend, we are trying to improve coordination between our various judicial bodies, especially between the state ministry and law enforcement agencies. We have put together an extensive project to build police stations in neighborhoods that still lack them. We have also launched reinsertion programs for juvenile delinquents, as well as prevention programs designed to strengthen the family unit.
Finally, as regards the battle to wipe out corruption, the government has taken several measures designed to tighten administrative and judicial control. Our goal is to make the tendering process more transparent, for both goods and services, by turning it over to the United Nations Development Program (UNDP). These measures are already producing results. Government employees in two key sectors – law enforcement and customs – were recently suspended after coming under grave suspicion. We cannot, however, judge the outcome of their trials in advance.

T.D.L.: The International Monetary Fund rewarded Honduras’ efforts to implement structural reforms by approving a new Poverty Reduction and Growth Facility (PRGF) in February 2004. According to the UNDP, 65% of your fellow citizens live below the poverty threshold. How are Honduran authorities going to balance the need to enact reforms with the pressing needs in the health, education and employment sectors?

H.E.M.C.: On 14 April 2004, the government of Honduras and Paris Club creditors agreed to restructure Honduras’ external debt with the organization's member countries. We hope to reach the completion point in this process in early 2005, under the IMF’s Heavily Indebted Poor Countries (HIPC) initiative. These advances, along with our new debt agreements, should make it easier for Honduras to negotiate new loans that could be used to finance infrastructure projects and social programs. They should also help free up internal savings and draw greater foreign investment to productive projects.
At present, we are working to implement projects drawn up under the Poverty Reduction Strategy (PRS), focusing on the education and health sectors and doing our best to create new jobs. The PRS is widely supported by the Honduran people. The international community will also help us implement it, no matter the political persuasion of the government elected to serve in 2006-2010.
60% of our country's pockets of poverty are located in rural areas. Most can be found in central western Honduras, where families produce very few food stuffs, and education, health and transport services are still precarious. The Honduran middle class, concentrated in Tegucigalpa and in cities along the northern Caribbean coast, enjoys a standard of living comparable to that of other countries in the region.
The PRS lays out the following goals for the 10-year 2005-2015 period:
– cutting the poverty and extreme poverty rates by 24 points;
– ensuring that 95% of our youth complete the first two cycles of primary school and that 70% finish the third cycle, so that 50% of our new labor force holds a secondary school degree;
– cutting in half the infant morality rate and the childbirth death rate;
– providing water and sanitation services to 95% of the population;
– raising the human development indicators for both men and women to 20%.
Finally, this strategy includes new policies and programs designed to get the Honduran economy growing at a steady rate, foster a decrease in the number of pockets of poverty in rural and urban zones, increase investments in the country’s human capital, and strengthen the social welfare system for carefully targeted segments of the population.
While the Honduran government is already allocating significant budget resources to social outlays, we need an estimated USD 2 billion to implement the programs laid out in the PRS. They will be financed by own resources along with resources freed up by the initiative to reduce and even cancel the country’s external debt within the framework of the IMF’s HIPC program.

T.D.L.: In the 1990s Honduras posted one of the world’s highest rates of population increase (2.8%/year). What steps are being taken to counter this great challenge? Agriculture still plays a vital role in the Honduran economy. Could you describe what is being done to help impoverished landless farmers and overhaul the latifundium model?

H.E.M.C.: With 60% of its population under the age of 30, Honduras is a country populated almost entirely by young people. It is hence of urgent and vital importance to do everything in our power to ensure that all Honduran children attend school and that our university students and technicians receive better training. We must work at the same time to expand the job market. This is the area where we are encountering the most problems. There are still not enough jobs, despite joint efforts by the government and private sector agents. With no jobs, thousands of our young people chose to emigrate to Mexico or the United States. A certain number of them even chose a life of crime.
This depopulation trend has had a particularly strong impact on the agricultural sector. People looking to leave the country swell the ranks of marginalized Hondurans in large cities, despite the creation of jobs for women in “maquilas.” To add to the problem, Honduras’ rural zone was particularly hard hit by Hurricane Mitch, which rendered a good deal of farming land useless for over a decade. The countryside has also been hurt by low coffee and sugar prices, and European restrictions on banana exports.
To solve these problems and try to prevent long years of future desperation, the Honduran government continues to make land grants and loans to farming families, especially to the women who head them. This approach is designed to strengthen social harmony in rural zones. Coffee production, for instance, is now in the hands of over 50,000 growers. The biggest challenge will be creating a structured tie between family-sized production units and food export companies, so that as many Hondurans as possible benefit from these economic growth opportunities and we can take full advantage of our economic potential. There is still a great deal of room to significantly increase our output of corn, beans, rice and beef, along with our pork and poultry production, to meet demand in the country’s urban centers and neighboring countries like El Salvador and Guatemala. But we will not be able to meet these goals unless we make our trade circuits more stable and establish conditions favorable to production loans, which have yet to be renegotiated because of the losses caused by Hurricane Mitch.
Let me add that we are seeing an increase in the volume of exports of farmed and ocean shrimp, several varieties of vegetables, fresh and canned fruits, tobacco, and wood products. Mineral resources such as lead, silver and zinc are also posting slight increases, which shows the wide diversity of Honduran products. This is an excellent sign for our economy, and we do all we can to reinforce it.

T.D.L.: After being crippled by Hurricane Mitch in 1998, the Honduran economy began showing signs of recovery in 2003. Your country has a liberal market economy oriented towards foreign investment. What other production sectors could be reinforced, aside from agriculture? Is it fair to say that the maquiladora industry, which assembles textiles for export, has limited growth potential? What is being done to improve the business climate in Honduras?

H.E.M.C.: The Honduran economy has indeed entered a period of revitalized growth. We expect to post a 4% growth rate for the third consecutive year. Subcontracting and agriculture are two of the most important sectors in terms of incoming currency, along with the more than half a million Hondurans working in the United States who send home money. The tourism industry is expected to become another key economic force over the next decade, with the creation of new tourism infrastructure near the Copan Ruins, the coastal region, the Caribbean coral reef and the colonial villages along the roads to our national park areas.
“Maquilas” have been the driving force behind the creation of new jobs over the past twenty years. In view of the important economic role they play, the Honduran government is working hard to gain even better access to the North American and European markets, expanding the system of preferences. Honduras adopted this industrialization model when the U.S. government launched the Caribbean Basin Initiative (CBI). Working through the CBI, in compliance with WTO regulations, we have become the world’s leading producer of various categories of apparel. In order to remain competitive in the face of stiff global competition, we will obviously have to do our utmost to enhance the quality of our textile products and diversify our production to include the electronics and wood industries.
What’s more, greater legal security and ongoing efforts to simplify administrative procedures have created a high-quality business climate on the Honduran market. As I’ve already mentioned, the UNDP now handles the tendering for contracts and services. The Central American Bank for Economic Integration (BCIE), which has its headquarters in Tegucigalpa, and the Inter-American Development Bank (IDB) are excellent tools for identifying and developing potential short-term investment opportunities in our country, especially as regards port, road and telecommunications infrastructures, hydroelectric production, and water treatment.
As our economy begins to turn around, I would like to reiterate our debt of gratitude to the governments that have been faithful friends to Honduras, and to friendly governments and international institutions of the Stockholm Group that enabled us to rebuild the bridges and roads damaged by Hurricane Mitch and helped us overcome a number of fiscal hurdles in 2000-2002.

T.D.L.: Long a champion of regional integration and a pivotal player on the Central American isthmus, Honduras created a three-way customs union with Guatemala and El Salvador in April 2004. What is your country doing to help harmonize the region’s economies? Have any major projects been launched to that end? In light of ongoing reforms to SICA (Central American Integration System) institutions, most notably by Par lacen, what role would you like to see Honduras play in the regional integration process?

H.E.M.C.: Honduras claimed independence in 1821, separating itself from the Spanish crown to integrate the Federal Republic of Central America along with Guatemala, El Salvador, Nicaragua, and Costa Rica. Two great statesmen from Honduras played a key role in this process. Jose Cecilio del Valle wrote the Declaration of Independence, then briefly held the post of Secretary of Foreign Relations in the Mexican Empire when it annexed Central America in 1822, before being elected President of Central America in 1834 (but died before he could take up office). De Valle’s trailblazing writings on Pan-Americanism make him, along with Bolivar, one of the Hispanic-American greatest thinkers.
Francisco Morazan, for his part, took up arms to fight abuses of power by the federal authorities that had invaded Honduras in 1827. He served as President of Central America from 1828 to 1838, when he was overthrown by the Guatemalan Rafael Carrera, which led to the breakup of the federation. He worked to build a liberal state founded on strong Republican institutions and open trade. This long involvement over the course of history probably explains the deep and long-standing desire to integrate the region, which Honduras has championed while continuing to foster its own national identity and culture.
More recently, our country has been working with its regional partners since 1958 to set up institutions and promote policies designed to make the Central American Common Market an effective tool for spurring the economic and social development of the peoples in this group. We first joined forces with Guatemala and El Salvador, then later with Nicaragua and Costa Rica. Forty-five years later, we have made great strides towards overcoming our problems and the considerable delays caused by the civil wars that rocked the region in the 1980s, even if we have had to retool the integration instruments now and again.
The strengthening of democratic values throughout the region reactivated the regional integration project in 1990. The 1991 signing of the Tegucigalpa protocol created the Central American Integration System (CAIS), which incorporated the economic, political and social realms into the institutional framework. We have entered a brand-new stage in the integration process, with four Central American countries poised to form a customs union in 2005, with only Costa Rica not taking part.
On a broader level, considerable headway has been made in seven key areas:
– «Common customs administration»: We have adopted a unique terminology and a standardized customs procedures manual. There are now Honduran and Salvadoran customs offices at the Guatemala-Mexico border, offices from all three countries at the Nicaragua-Costa Rica border, and Salvadoran offices at the major Guatemalan, Honduran and Nicaraguan ports.
– « Harmonization of customs duties»: We have harmonized 93% of the 6,194 export posts, excluding vehicles. We are working on other posts, with the WTO set to negotiate the issue of agricultural products.
– «Free movement of goods and services»: A free trade system is now in place for all goods coming out of Central American countries, with the exception of sugar, unroasted coffee, petroleum bi-products, and alcoholic beverages. We still have to reach a final deal on goods originating outside the region.
– «Harmonization of the allotment, collection and distribution of funds»: The Economy Ministry is currently studying the best way to implement the new mechanism approved in July 2004.
– « Registries»: all parties recognize the others’ national registries for food, beverages, pharmaceuticals and ancillary products, but do not yet recognize their agricultural product registries. We have also made headway towards harmonizing our registries for hydrocarbon importers and distributors, approving health measures and pesticide regulations, and harmonizing standardization measures.
– «Patent rights»: We are negotiating a Central American agreement that will set up a common regime for name brands and distinctive marks, along with other commercial instruments such as patents and industrial designs, varieties of vegetables, intellectual property, and unfair competition.
– «Trade policy »: after successfully signing a free trade treaty with the United States, we are now working to standardize our WTO commitments, adapt Central American trade regulations to the new customs union framework, and create mechanisms to be used by all four union members in their trade negotiations with third countries or regional groupings, starting with the European Union.

T.D.L.: In addition to enhancing regional economic integration, Honduras has reconfirmed its desire to cooperate with its Central American partners in the fight against organized crime, drug trafficking, and the trafficking of weapons and persons. How is this cooperation being organized? Has it begun to produce results? How do you explain the upsurge in “maras,” Honduras’ youth gangs?

H.E.M.C.: It is true that Honduras has seen a sharp increase in crime since the mid 1990s. This is due in part to the end of the civil wars that raged across Central America, which put a large quantity of weapons into circulation and led to looser vigilance at borders after peace was restored. This upsurge has been characterized by the appearance of powerful criminal gangs that are involved in drug dealing, organized crime, kidnappings, and smuggling people into the United States. It has also prompted the creation of youth gangs whose main activity is attacking haulage vehicles and running protection rackets against small businesses and school children in poor neighborhoods of large cities.
Each country has implemented its own crime-fighting measures. But there can be no doubt that we must work closely with legal and law enforcement bodies in neighboring countries to fight this menace to social peace, which has become a crossborder problem. We also need strong technical and financial support from the international community.
We have established close regional ties in this arena, thanks to frequent meetings between the various national organizations leading the fight against organized crime in Central America. This has led, for instance, to the confiscation of stolen vehicles outside our territory, reciprocal detention and extradition of criminals, and joint initiatives to fight the laundering of drug trafficking profits.
Shortly after taking office, President Maduro made the fight against crime a key priority on his political agenda, while continuing to promote social programs and public awareness campaigns designed to get Honduran youth into the job market. He has worked to increase police inspections, with eventual support from military units. Investigative police agents are also being given better technical training. We have seized large quantities of drugs over the past decade, especially along the Atlantic coast.
The main gangs – or “maras” – operating in Honduras are «Mara 18» and «Mara Salvatrucha.» Salvatrucha was first formed in Los Angeles, California, and has branched out to Guatemala, El Salvador and Honduras. After being convicted of multiple offenses in the United States, gang members are deported to their country of origin, where they create new gangs and go back to their criminal activities. This trends appears to be fading, however, thanks to massive support from Honduran citizens in fighting these new forms of crime.
Our efforts in the law enforcement and judicial arenas are bolstered by youth training programs and rehabilitation programs for «mareros» (gang members). We start by removing the tattoos that identify them as members of a given gang, and try to get them right back into the job market. There is a shortage of penal institutions in Honduras, and the few we do have are not equipped to house juvenile delinquents. Honduran authorities are working with NGOs to resolve this problem, trying to create “reinsertion farms” to handle delinquents.
Let me close by saying that Honduras lays great hope in the younger generation. We are betting on the future by expanding access to education to the entire population, and enhancing opportunities for income creation in the most underprivileged segments of the population.

T.D.L.: In late 2003, Honduras and four other Central American countries signed a free-trade agreement with the United States (CAFTA). What do you hope to gain from this accord? What type of long-term impact will the establishment of the Free Trade Area of the Americas (FTAA) have on the Honduran economy, which will be placed in direct competition with other countries on the continent? What is your reaction to the negative impact of the customs exemptions the United States has granted other Latin American countries?

H.E.M.C.: The free-trade agreement between Central America and the United States has already been signed, but has yet to be ratified by the legislative branches of the Central American nations and the USA. Honduras hopes to see this happen soon, so the pact can be put into effect in 2005. The stakes are crucial for Honduras, as the accord will give our products better access to the world’s most dynamic market, greatly enhance our supply given our closeness to this same market, increase the inflow of investments in goods that will be exported to this market, and improve our services, starting with inter-oceanic communication.
The only long-term concern raised by this treaty is agricultural trade, since the Mexican experience has been less than positive. But this accord only goes into full effect after a waiting period has expired, and also includes safety clauses. We are convinced that the Honduran economy will have been overhauled and will be fully competitive when that time comes.
This treaty, along with the one we signed with Mexico, opens the way for the creation of an economic space with modernized production sectors and increased trade, which will lead to a real improvement in our citizens’ standard of living.
Looking at several of the ongoing triangular trade operations, we have come to believe that future negotiations between the U.S. and the countries of South America will not affect us in any way. Moreover, the competitiveness of the various economies will continue to come into play. Honduras already have good relations with the countries of the Caribbean and with Panama, Colombia and Venezuela in the aera of the Greater Caribbean. This economic relations will strengthen even further, to the great benefit of all.
When all is said and done, I, for one, do not believe that the Free Trade Area of the Americas (FTAA) will fall into place within the coming ten years. I believe, along with several analysts, that we are entering a phase where this process will be put on hold, as we consolidate the strides made in liberalizing trade and enable the various inter-country blocs to firm up and complete their integration projects before taking any new steps.
For the time being, Honduras must finish honoring an array of far-reaching commitments, as we look ahead to ratifying CAFTA and making improvements to the Central American Customs Union.

T.D.L.: Sending military troops to help rebuild Iraq reaffirmed Honduras’ long-standing alliance with the United States, while confirming its desire to play a greater role in world affairs. What are the main motives behind Honduras’ involvement in this conflict? Could your country play a greater role in easing tensions on the American continent? How would you gauge the current terrorist risk in Central America, and inside your own country?

H.E.M.C.: In 1990, the Honduran government took the decision to have small, specially trained military contingents start participating in peacekeeping operations, with special focus on pacification operations. Lacking the means to undertake large-scale actions, we would like instead to help stabilize post-conflict situations, working under an international mandate. We helped to do this in Haiti with the OAS. Honduran military units also took part in the United Nations mission in the former “Spanish Sahara” (MINURSO). Then for one and a half years we helped to rebuild Iraq, until deteriorating security conditions prompted us to pull out.
Honduras has long been an advocate of the peaceful resolution of conflicts. In an attempt to delineate our borders with neighboring countries, we went before an arbitrage court once, and called upon the International Court of Justice in The Hague on three separate occasions. We believe very strongly in the Inter-American principle which holds that territorial rights cannot be won through the use of force. All our efforts thus promote dialogue and finding political solutions to ongoing conflicts on the American continent and around the globe.
With the great risks posed by nuclear proliferation, I think that the Mideast conflict is the other major problem at this time. We have embassies in both Tel Aviv and Cairo. We are in favor off an Arab-Israeli reconciliation, the creation of a Palestinian state alongside Israel, and honoring the principles of mutual respect and secured and acknowledged border with neighboring states.
In an effort to counter international terrorism, Central American governments have stepped up their judicial cooperation and are monitoring migration more closely throughout the region. They are doing this in much the same way they are working together to fight organized crime and drug trafficking, with essential support from the international community.
A good deal of the tension in Latin America springs from social movements that are, in my view, at times exacerbated by leaders looking to seize power through means other than the voting urns. When this happens, it naturally falls within the internal competence of each state to ease these tensions. Unfortunately, the upsurge in these incidences is eating away at the cornerstones of democracy and good governance in the region. That said, our citizens’ disenchantment and impatience are also tied to very real frustrations, spurred by economic adjustement models that exact a high social cost and have yet to improve the standard of living that has worsened over the past decade. There are many different ways to resolve these problems. Still, I believe that the most important thing is to steadfastly reaffirm the viability of our representative and democratic institutions, because liberty is the only thing that can ensure the continued development of Latin America in the 21st century.

T.D.L.: The U.S. market currently purchases 50% of Honduran exports. Diversifying market outlets is key to your country’s future development. In what other geographic areas is Honduras looking to widen its trade ties?

H.E.M.C.: Honduran exports grew 17.4% in 2004, compared to 2003 figures. And yet they did not generate substantial income, because the price of bananas and coffee was low, prices for sugar, shrimp and vegetables remained stable, and the price of minerals rose only slightly. While Honduras does conduct 50% of its foreign trade with the United States, it is beginning to significantly increase its volume of trade with the countries of Europe as well as Japan.
Bolstered by this trend, we would do well to preserve and further diversify our economic and trade ties. Honduras still has a trade deficit with Japan, Korea and Taiwan, despite the fact that all three countries have implemented extensive cooperation programs with our country. They remain our leading trade partners in Asia, as we have established relatively few contacts with the Republic of China and have yet to come upon any great opportunities with other Asian countries.

T.D.L.: Honduras has had conflictual ties with the European Union for many years, due to the EU’s preferential treatment of other developing countries. ACP quotas will be lifted in 2006, helping to improve bilateral relations. Aside from the trade arena, does the EU play a significant role in your country’s foreign policy?

H.E.M.C.: The European Union and the majority of its member countries have had very friendly and cooperative relations with Honduras for a good many years. We direct nearly 30% of our trade towards Europe. Countries such as Spain, France, Germany, Great Britain and Italy, and more recently Sweden, have established a very active presence in our country, both as investors and cooperation partners. The volume of this trade, however, is still lower than we would like.
For all these reasons, our diplomatic ties with Europe are of vital importance to us. They are founded on very strong cultural, historical and economic bonds. And while the number of Honduran students attending European universities has unfortunately dropped, there are other ways we can improve our university exchange programs. We will continue, for our part, to do our utmost to bring Hondurans to Europe to study.
Europe’s strong political presence in Central America is an outgrowth of the launching of the “San Jose Dialogue” in 1984, which brought together foreign affairs ministers and secretaries of state from both sides. These efforts were vital in helping the Contadora group prevent the war from spreading across the region. After the 1987 Central American Accords, the Dialogue helped to make and then consolidate peace in Nicaragua, El Salvador and Guatemala.
As regards our economic ties, Central America is opening negotiations with the European Union with a view to fulfilling the “common strategic objective” of signing an association agreement. The accord will set up a free trade zone and will help to reinforce the Central American economic integration process. Honduras, like other countries in this zone, is working to boost its exports to Europe, over and above the already familiar products. It is focusing on nontraditional products, including certain categories of fruits and manufactured goods. We are working within the System of Generalized Preferences and making use of advantages granted to help consolidate peace in the region and accelerate its development.
There are naturally problems that remain to be overcome, such as giving our bananas greater access to the European market, which enforces restrictions that have greatly limited our potential on a market that is vitally important to Honduras. The current system
– which by the way does not comply with WTO norms – must be overhauled. We hope that the European Union will fail to win acceptance for an agreement that institutes high tariffs. We believe there is a market for fruit of all different qualities, especially in the enlarged European space.

T.D.L.: Despite its relatively weak ties with our country, Honduras has very positive feelings towards France, especially its culture. Has mutual appreciation between our countries grown since President Chirac visited Tegucigalpa in November 1998? Is Honduras launching programs to help enhance the country's image, which has remained quite low-key despite its rich cultural and tourism assets? French firms are showing growing interest in Latin American markets. In which sectors does Honduras offer them the widest opportunities?

H.E.M.C.: Honduras and France share a long history of friendship. While we would like to see these historical and cultural ties strengthened even further, they have held steady up until now. Perhaps the most lively expression of this friendship is the use of French, which is taught at the Franco-Honduran High School. There are two Alliance francaise schools in Honduras, in Tegucigalpa and San Pedro Sula. Their invaluable support for the arts and Honduran culture is widely appreciated.
All the same, we must increase exchanges between Honduran students and experts and French universities and technical centers, which have fallen off significantly over the past twenty years. We must also bolster European Union programs, in which France plays a key role.
President Chirac’s visit to Honduras, just two weeks after Hurricane Mitch ravaged our country, was a moving expression of France’s solidarity with our people, one we will never forget. France is also standing firmly at our side in several international forums, supporting our efforts to reduce or cancel the external debt of the world’s poorest emerging countries. In the Paris Club, in particular, France has been extremely helpful in this area.
Now that Honduras has overcome the worst effects of the Mitch disaster, we are working hard to interest French companies in the great advantages offered by the Honduran economy and Central America as a whole. To start, there are wide opportunities in helping to build infrastructures such as ports and highways, or building new dams to produce hydroelectric power and setting up badly needed irrigation systems. In this arena, our country shares the stance taken by the French government at the Earth Summit in Johannesburg, when it stressed that the international community must make the use of the planet’s water resources a top priority. Secondly, the Honduran economy is now closely linked to the U.S. and Mexican markets, which opens up opportunities for French companies looking to export manufactured or farm products to these markets along with the five Central American countries.
What’s more, there are already a number of French firms working in Honduras, such as Lafarge, which has a cement plant, and Elf Gaz, which distributes household gas, and Alcatel, which provides telecommunications systems. Other companies have gone to work there as well, like carmakers Peugeot and Renault, pharmaceutical laboratories Aventis and Sanofi, and firms like Degremont, which has been furnishing Honduras with water supply pipes for years. And let’s not forget small- and medium-sized businesses (SMEs). Honduran SME representatives traveled to Paris in September 2002, with support from UNIDO and the National Center for Foreign Trade (CNCE), as part of the Europalia Program.
I think France should take the decision to became a member of the Central American Bank for Economic Integration (BCIE), which is headquartered in Tegucigalpa. It should also pay closer attention to the recommendations made in several studies carried out by the Inter-American Development Bank (IDB) concerning various regional projects. Central America is a highly strategic zone. It serves as a bridge between the Pacific and Atlantic oceans and offers inter-ocean highway links – other than the Panama Canal – between Pacific and Caribbean ports, starting with the top quality Honduran ports of Puerto Cortes and Puerto Castilla. All of these assets hold out very clear investment opportunities, as part of the globalization process that is revolutionizing world trade.
Finally, let me say that the tourism sector is the area where Honduras can offer the most short-term investment opportunities to French companies, as well as leisure opportunities for French citizens. We have one of the world’s biggest and most beautiful coral reefs, a great treasure for scuba divers. Our beaches are the perfect spot to relax, along with the islands of Roatan, Utila and Guanaja, and mainland places like Omoa, Tela, La Ceiba and Trujillo. These cities, which lie on the country’s northern coast, can be easily reached thanks to their proximity to San Pedro Sula International Airport and the roads leading to Guatemala and El Salvador. Honduras also has numerous national parks located near our colonial cities and the Copan Ruins, an archeological site that holds with other sites the vestiges of the magnificent Mayan civilization and is a source of great pride to the Honduran people.