Honduras

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HONDURAS

LOCATION, SIZE, AND EXTENT
TOPOGRAPHY
CLIMATE
FLORA AND FAUNA
ENVIRONMENT
POPULATION
MIGRATION
ETHNIC GROUPS
LANGUAGES
RELIGIONS
TRANSPORTATION
HISTORY
GOVERNMENT
POLITICAL PARTIES
LOCAL GOVERNMENT
JUDICIAL SYSTEM
ARMED FORCES
INTERNATIONAL COOPERATION
ECONOMY
INCOME
LABOR
AGRICULTURE
ANIMAL HUSBANDRY
FISHING
FORESTRY
MINING
ENERGY AND POWER
INDUSTRY
SCIENCE AND TECHNOLOGY
DOMESTIC TRADE
FOREIGN TRADE
BALANCE OF PAYMENTS
BANKING AND SECURITIES
INSURANCE
PUBLIC FINANCE
TAXATION
CUSTOMS AND DUTIES
FOREIGN INVESTMENT
ECONOMIC DEVELOPMENT
SOCIAL DEVELOPMENT
HEALTH
HOUSING
EDUCATION
LIBRARIES AND MUSEUMS
MEDIA
ORGANIZATIONS
TOURISM, TRAVEL, AND RECREATION
FAMOUS HONDURANS
DEPENDENCIES
BIBLIOGRAPHY

Republic of Honduras
República de Honduras

CAPITAL: Tegucigalpa

FLAG: The national flag consists of a white horizontal stripe between two blue horizontal stripes, with five blue stars on the white stripe representing the five members of the former union of Central American provinces.

ANTHEM: Himno Nacional, beginning "Tu bandera es un lampo de cielo" ("Thy flag is a heavenly light").

MONETARY UNIT: The lempira (l), also known as the peso, is a paper currency of 100 centavos. There are coins of 1, 2, 5, 10, 20, and 50 centavos, and notes of 1, 2, 5, 10, 20, 50, and 100 lempiras. l1 = $0.05285 (or $1 = l18.92) as of 2005.

WEIGHTS AND MEASURES: The metric system is the legal standard; some old Spanish measures are still used.

HOLIDAYS: New Year's Day, 1 January; Day of the Americas, 14 April; Labor Day, 1 May; Independence Day, 15 September; Birthday of Francisco Morazán, 3 October; Columbus Day, 12 October; Army Day, 21 October; Christmas, 25 December. Movable religious holidays include Holy Thursday, Good Friday, and Holy Saturday.

TIME: 6 am = noon GMT.

LOCATION, SIZE, AND EXTENT

Situated in Central America, Honduras has a total area of 112,090 sq km (43,278 sq mi), with a length of 663 km (412 mi) enewsw and 317 km (197 mi) nnwsse. Comparatively, the area occupied by Honduras is slightly larger than the state of Tennessee. It is bounded on the n and e by the Caribbean Sea, on the s by Nicaragua and the Gulf of Fonseca, on the sw by El Salvador, and on the w by Guatemala, with a total boundary length of 2,340 km (1,454 mi), of which 820 km (509 mi) is coastline.

Under the terms of an arbitration award made by Alfonso XIII of Spain in 1906, Honduras received a portion of the Mosquito (Miskito) Coast, or La Mosquitia, north and west of the Coco (Segovia) River. Citing Honduras's failure to integrate the territory, Nicaragua renewed its claim to the entire Mosquito Coast in the 1950s and brought the case to the International Court of Justice (ICJ). In February 1957, Honduras created the new Department of Gracias a Dios, made up of the former Mosquitia territory. The ICJ determined in 1960 that Nicaragua was obligated to accept the 1906 arbitration ruling concerning that country's boundary with Honduras. The judges ruled, by a vote of 141, that once a valid arbitration award was made in an international dispute, it became effective, and remained so, despite any lapse of time in carrying it out.

The two tiny Swan Islands (Islas del Cisne), lying at 17°23 n and 83°56 w in the west Caribbean Sea some 177 km (110 mi) nne of Patuca Point, were officially ceded by the United States to Honduras on 20 November 1971. For administrative purposes, they are included under the Department of Islas de la Bahía, whose capital is Roatán on Roatán Island. The Swan Islands had been effectively held by the United States, which asserted a claim in 1863 to exploit guano, and had housed a weather station and an aviation post.

The capital city of Honduras, Tegucigalpa, is located in the south central part of the country.

TOPOGRAPHY

Honduras is mountainous, with the exception of the northern Ulúa and Aguán river valleys on the Caribbean Sea and the southern coastal area. There are four main topographic regions: the eastern lowlands and lower mountain slopes, with 20% of the land area and no more than 5% of the population; the northern coastal plains and mountain slopes, with 13% of the land and about 20% of the population; the central highlands, with 65% of the area and 70% of the population; and the Pacific lowlands and their adjacent lower mountain slopes, with 2% of the area and 5% of the population.

The width of the Caribbean coastal plain varies from practically no shore to about 120 km (75 mi), and the coastal plain of the Gulf of Fonseca is generally narrow. The highest elevations are in the northwest (almost 3,000 m/10,000 ft) and in the south (over 2,400 m/8,000 ft). Many intermontane valleys, at elevations of 910 to 1,370 m (3,000 to 4,500 ft), are settled. The old capital city, Comayagua, lies in a deep rift that cuts the country from north to south. Tegucigalpa, the modern capital, is situated in the southern high-lands at about 910 m (3,000 ft). There are two large rivers in the north, the Patuca and the Ulúa. Other important features include the Choluteca, Nacaome, and Goascorán rivers in the south, Lake Yojoa in the west, and Caratasca Lagoon in the northeast.

CLIMATE

The northern Caribbean area and the southern coastal plain have a wet, tropical climate, but the interior is drier and cooler. Temperature varies with altitude. The coastal lowlands average 31°c (88°f); from 300 to 760 m (1,000 to 2,500 ft) above sea level the average is 29°c (84°f); and above 760 m (2,500 ft) the average temperature is 23°c (73°f). There are two seasons: a rainy period, from May through October, and a dry season, from November through April. Average annual rainfall varies from over 240 cm (95 in) along the northern coast to about 84 cm (33 in) around Tegucigalpa in the south. The northwest coast is vulnerable to hurricanes, of which the most destructive, Hurricane Fifi in September 1974, claimed some 12,000 lives, caused $200 million in property damage, and devastated the banana plantations.

FLORA AND FAUNA

Honduras has a rich and varied flora and fauna. Tropical trees, ferns, moss, and orchids abound, especially in the rain forest areas. Mammal life includes the anteater, armadillo, coyote, deer, fox, peccary, pocket gopher, porcupine, puma, tapir, and monkeys in several varieties. Fish and turtles are numerous in both fresh water and marine varieties. Among the reptiles are the bushmaster, coral snake, fer-de-lance, horned viper, rattlesnake, and whip snake, caiman, crocodile, and iguana. Birds include the black robin, hummingbird, macaw, nightingale, thrush, partridge, quail, quetzal, toucanet, wren, and many others. As of 2002, there were at least 173 species of mammals, 232 species of birds, and over 5,600 species of plants throughout the country.

ENVIRONMENT

The major environmental problems are soil erosion and loss of soil fertility (in part because of traditional slash-and-burn cultivation) and rapid depletion of forests for lumber, firewood, and land cultivation. From 199095, the annual rate of deforestation was at about 2.34%. In 2000, about 48% of the total land area was forested.

Enforcement of antipollution laws has been weak, and Honduras also lacks an integrated economic development and land-use policy. Rivers and streams in Honduras are threatened by pollution from mining chemicals. The nation has 96 cu km of renewable water resources with 91% used in farming activities. About 99% of city dwellers and 82% of people living in rural areas have access to pure drinking water. Air pollution results from a lack of pollution control equipment for industries and automobiles. The Secretariat of Planning, Coordination, and Budget (Secretaría de Planificación, Coordinación, y PresupuestoSECPLAN), the Ministry of Natural Resources, and several other agencies are vested with environmental responsibilities.

In 2003, 6.4% of the total land area in Honduras was protected. The Río Plátano Biosphere Reserve is a natural UNESCO World Heritage Site and there are six Ramsar wetland sites. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 10 types of mammals, 6 species of birds, 10 types of reptiles, 53 species of amphibians, 14 species of fish, 2 species of invertebrates, and 111 species of plants. Endangered or extinct species in Honduras included the tundra peregrine falcon, jaguar, three species of turtle (green sea, hawksbill, and olive ridley), and three species of crocodile (spectacled caiman, American, and Morelet's). The Caribbean monk seal, the Lago Yojoa palm, and the Swan Island hutia have become extinct.

POPULATION

The population of Honduras in 2005 was estimated by the United Nations (UN) at 7,212,000, which placed it at number 96 in population among the 193 nations of the world. In 2005, approximately 4% of the population was over 65 years of age, with another 41% of the population under 15 years of age. There were 102 males for every 100 females in the country. According to the UN, the annual population rate of change for 200510 was expected to be 2.8%, a rate the government viewed as too high. Of particular concern was the high rate of adolescent pregnancy, with 50% of the population under 19 years of age. The projected population for the year 2025 was 10,700,000. The population density was 64 per sq km (167 per sq mi), with the majority of the population living in the western portion of the country.

The UN estimated that 47% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 2.99%. The capital city, Tegucigalpa, had a population of 1,007,000 in that year. San Pedro Sula, the second-largest city, had an estimated population of 486,000; La Ceiba, 250,000; and El Progreso, 115,000.

Honduras has the highest number of HIV/AIDS cases in Central America, with the rate of infection increasing rapidly among women and those under age 19. In 2003 Honduras began receiving monies from the Global Fund for Aids, Tuberculosis, and Malaria to address its HIV/AIDS situation.

MIGRATION

Before 1969 there was a steady flow of immigrants from El Salvador. The steps taken by the Honduran government in 1969 to curb this influx were a contributing cause of the war with El Salvador during the same year. When the Sandinistas took over in Nicaragua in 1979, former National Guard members began to arrive in Honduras, and by 1983 there were 5,00010,000 of them along the border. In addition, at least 25,000 Miskito Amerindians from Nicaragua and about 21,000 Salvadorans had fled to Honduras by the end of 1986. Many of them later returned. By the end of 1992 about 100,000 citizens of Central American nations had taken refuge in Honduras.

As a result of the Central American refugee problem of the 1990s, Honduras has adopted a restrictive policy toward refugees. There were very few refugees among the 44,000 migrants living in Honduras in 2000. In 2004 worker remittances were $1,134 million. In 2005, the net migration rate was estimated as -1.95 migrants per 1,000 population. The government viewed the migration levels as satisfactory.

ETHNIC GROUPS

The vast majority (90%) of the Honduran people are mestizo, a mixture of European and Amerindian. About 7% of the population is purely Amerindian, the largest proportion being in the Copán area near the Guatemalan border. Africans, about 2% of the population, live mostly along the north coast. About 1% of the population is European, chiefly of Spanish origin.

LANGUAGES

The official language is Spanish. However, English is used widely, especially in northern Honduras. The more important Amerindian languages include Miskito, Zambo, Paya, and Xicaque.

RELIGIONS

The Roman Catholic Church reports a membership that comprises slightly more than 80% of the country's total population. However, according to estimates based on a 2002 poll of citizens 18 or older, only 63% of the population identify themselves as Roman Catholic. Approximately 23% report themselves to be evangelical Christians, and 14% designate themselves as belonging to other religious groups. The remainder were either "others" or provided no answer. The primary religious groups include Roman Catholics, Jews, Greek Orthodox, Episcopalians, Lutherans, Jehovah's Witnesses, Mennonites, the Church of Jesus Christ of Latter-Day Saints (Mormons), the Union Church, and about 300 evangelical Protestant churches (including the Abundant Life, Living Love, and the Grand Commission church). There are small numbers of Muslims and Jews.

Religious freedom is guaranteed by the constitution of 1982. Though there is no state religion, many consult with the Roman Catholic Church and some Catholic leaders have been appointed to semiofficial commissions on key political and social issues. Certain Christian holidays are celebrated as public holidays.

TRANSPORTATION

In 2002 there were 13,603 km (8,461 mi) of highways, about 2,775 km (1,726 mi) of which were paved. Of the 112,300 registered vehicles in 2003, only 25,000 were passenger cars, while commercial vehicles totaled 87,300. The Pan American Highway virtually bypasses Honduras, entering from El Salvador and running to the eastern Nicaraguan border. The 362-km (225-mi) Inter-Ocean Highway is the only surface connection between the Pacific and the Caribbean that includes in its path both Tegucigalpa and San Pedro Sula. In 1971, a paved highway was opened between Tegucigalpa and San Pedro Sula and west to the Guatemalan border. Tegucigalpa is served by secondary roads to the north and east, while San Pedro Sula is connected both to the important Caribbean ports of Puerto Cortés, Tela, and Trujillo and to the western Mayan shrine site of Copán. Road improvements near the Nicaraguan border were undertaken with US military aid beginning in 1983.

Rail service exists only in the north, connecting the industrial and banana-growing northeastern coastal zone with the principal ports and cities. As of 2004, National Railway of Honduras, owned and operated by the government, maintains all 699 km (435 mi) of narrow gauge track.

Four principal portsPuerto Cortés, Tela, La Ceiba, and Puer- to Castillaserve the country on the Caribbean side. Another Caribbean port, Roatán, is offshore, in the Bay Islands, and Puerto de Henecán, on the Pacific coast, opened in 1979, replacing Amapala as a port facility, although the latter retains a naval base. La Ceiba and Tela are primarily banana-trade ports. Puerto Castilla (completed in 1980) serves the Olancho forestry project; and Puerto Cortés and Puerto de Henecán handle general traffic. River traffic is negligible, with only 465 km (289 mi) accessible and only to small craft, as of 2004. In 2005, the Honduran merchant fleet comprised 137 vessels of 1,000 GRT or more, totaling 598,600 GRT.

Air service is important in the transportation of passengers and cargo. In 2004 there were an estimated 115 airports in Honduras, 11 of which had paved runways as of 2005. The two principal airports are Ramon Villeda, at San Pedro Sula, and Toncontín, about 6.4 km (4 mi) from Tegucigalpa. Toncontín is served by Transportes Aéros Nacionales de Honduras/Servicio Aéreo de Honduras (TAN/SAHSA), Líneas Aéreas Costarricenses (LACSA), Challenge, and TACA airlines and the domestic carrier Lineas Aéreas Nacionales (LANSA). TAN/SAHSA flies to the United States, Mexico, and other Central American countries and also provides domestic passenger service. In 2001, San Pedro Sula International Airport serviced 510,000 passengers on scheduled domestic and international flights.

HISTORY

Before the Spaniards entered the land now called Honduras, the region was inhabited by the war-like Lencas and Jicaques, Mexican Amerindian traders, and Paya hunters and fishermen. The Mayan ceremonial center at Copán in western Honduras flourished about the 8th century ad but was in ruins when Columbus reached the mainland on his fourth voyage in 1502. He named the region Honduras, meaning "depths."

Colonization began in 1524 under Gil González de Ávila. In 1536, Pedro de Alvarado, who came from Guatemala at the bidding of Hernán Cortés in Mexico, founded San Pedro Sula, and another faction founded Comayagua in 1537. After the treacherous murder by the Spaniards of an Amerindian chieftain named Lempira in 1539, his followers were subjugated. In that year, Honduras was made part of the captaincy-general of Guatemala, and for most of the period until 1821, it was divided into two provinces, Comayagua and Tegucigalpa. Some silver was produced in the mines of Tegucigalpa, but the area was otherwise ignored by the Spanish empire.

Honduras joined other provinces of Central America in declaring independence from Spain in 1821. It came under the Mexican empire of Agustín de Iturbide in 182223. Honduras was a member of the United Provinces of Central America from 1824 to 1838. During that time, a liberal Honduran, Francisco Morazán, became president and struggled unsuccessfully to hold the federation together. He was exiled in 1840 and assassinated in 1842.

After Honduras declared itself independent on 26 October 1838, conservatives and liberals fought for political control. From 1840 to 1876, conservative leaders held power either as presidents or as army leaders. The second half of the 19th century brought the development, by US companies, of banana growing in northern Honduras. During the administration of liberal president Marco Aurelio Soto (187683), there was a "golden age" in Honduran letters and education.

US corporate interests, especially the United Fruit Co. (now Chiquita Brands International Inc.) and military dictators, dominated Honduran economic life during the first half of the 20th century. Honduran politics was dominated by the conservative Gen. Tiburcio Carías Andino (193248). In 1948, his handpicked successor, Juan Manuel Gálvez, took office. Gálvez proved to be more than a mere puppet, but was conservative nonetheless. When the election of 1954 produced no presidential candidate with a majority vote, he transferred the presidency to the vice president, Julio Lozano Díaz, who governed for almost two years. After an abortive attempt to have himself elected president, Díaz was deposed in 1956 by high army officers, who set up a junta. Democratic elections were held in 1957, and José Ramón Villeda Morales of the Liberal Party was elected president.

In 1963, just before completing the final months of his six-year term, Villeda was turned out of office by a coup. The liberal government was succeeded by a conservative coalition of military, Nationalist Party, and Liberal Party leaders under an air force officer, Col. Oswaldo López Arellano. This government was legalized almost two years later by an elected constituent assembly, which adopted a new constitution and proclaimed López president in June 1965.

During López's second term, a bitter and destructive four-day war broke out in July 1969 between Honduras and El Salvador. Although the immediate cause of the war was animosity arising from a World Cup elimination-round soccer match between the two countries, the underlying causes were a long-standing border dispute and the long-term migration of some 300,000 Salvadorans in search of land, which the Honduran government made it illegal for Salvadoran immigrants to own. Salvadoran troops won the ground war, but Honduran planes controlled the air. Out of this stalemate and with the help of the OAS, a compromise ceasefire was arranged. In June 1970, the two nations accepted a sevenpoint peace plan, creating a "no-man's-land" demilitarized zone along their common frontier. In the fall of 1973, Honduras and El Salvador began bilateral talks to resolve their differences. Progress was slow, and it was not until October 1980 that Honduras and El Salvador signed a treaty settling the dispute.

In the 1970s, López and the military continued to dominate Honduran politics. A civilian, Ramón Ernesto Cruz Uclés, was elected president in 1971, but lasted only briefly. By 1972, General López was back in power. General López assumed the title of chief of state, and suspended the National Congress and all political party activities. It was later discovered that in 1974 officials in the López administration had accepted a $1.25-million bribe from United Brands (formerly United Fruit and now Chiquita) in exchange for a 50% reduction in the banana tax. A Honduran investigative commission insisted on examining López's Swiss bank account, and the scandal came to be known as "Bananagate" in the United States. Finally, in April 1974, López was overthrown by a group of lieutenant colonels.

This military group was something of a reformist group, seeking social reforms and the removal of the senior officer corps. Political activity continued to be banned following the coup of 1975. Meanwhile, a significant grassroots movement, the National Front of United Peasants, had come to the fore and was pressuring the successive military governments to enact a program of large-scale land redistribution.

There followed two more military governments led by Col. Juan Alberto Melgar Castro (197578) and Gen. Policarpo Paz García (197883). This period saw strong economic growth and the building of a modern infrastructure for Honduras. At the same time, there was a gradual movement toward the democratization of the system.

Elections to a constituent assembly took place in April 1980, followed by general elections in November 1981. Under a new constitution in 1982, Roberto Suazo Córdova of the Liberal Party became president. The armed forces retained broad powers, including veto power over cabinet appointments and responsibility for national security. The military continued to grow in response to domestic instability and the fighting in neighboring Nicaragua and El Salvador. By 1983, several thousand anti-Sandinista guerrillas (popularly known as "contras") in Honduras were working for the overthrow of the Sandinista government, while the Honduran army, backed by the United States, was helping Salvadoran government forces in their fight against leftist guerrillas.

This stability became apparent in November 1985, when Hondurans elected José Simón Azcona Hoyo to the presidency in the first peaceful transfer of power between elected executives in half a century. Azcona was elected with only 27% of the vote, due to a peculiarity of Honduran electoral laws. Azcona attempted to distance himself from the United States in foreign policy and was critical of US contra policy. He signed the Central American peace plan outlined by President Oscar Arias Sánchez of Costa Rica; however, he did not move to close down contra bases as promised. The Suazo government worked closely with the United States on matters of domestic and foreign policy. US military presence in Honduras grew rapidly. Several joint military maneuvers took place during 198387, and the US CIA used Honduras during that time as a base for covert activities against the Sandinista regime. In exchange, the United States sent large amounts of economic aid to Honduras. Suazo also worked closely with the Honduran military, allowing it to pursue its anticommunist agenda freely. This arrangement led to an unprecedented political stabilization in Honduras.

In 1989, Rafael Leonardo Callejas of the National (conservative) Party was elected. With the Nicaraguan issue fading after the Sandinistas' electoral loss, Callejas focused on domestic issues, applying a dose of both conservative economics and IMF austerity measures to the Honduran economy. Callejas moved to reduce the deficit and allow for a set of market adjustments, which in the short term produced a good deal of dislocation but led to higher rates of growth thereafter. Most significantly, Callejas maintained good relations with the military. In an unprecedented show of restraint, the military sat on the sidelines as voters went to the polls in November 1993.

The voters themselves showed a good deal of resentment toward the Callejas reforms. The Liberal Party returned to power in the person of Carlos Roberto Reina. While it was unlikely that its economic problems would be solved quickly, Honduras nevertheless had achieved a level of political stability that few could have anticipated in decades past. Reina, known for his support of human rights and clean government, called for a "moral revolution" to combat crime, poverty, and widespread corruption in both the public and private sectors. In late 1994, corruption charges were filed against former president Callejas and other top government officials. Reina also took steps to further reduce the influence of Honduras's powerful military, most notably the abolition of the draft, including the notorious press-gang conscription by which young men were seized off the streets and forced into military service. The liberal administration also dismantled the military-controlled Public Security Forces (FUSEP), replacing them with a new civilian force.

Reina proved less successful in dealing with the economic problems of his nation, long considered the poorest in Central America. An already difficult situation was exacerbated by the 1994 drought that slashed production of hydroelectric power, creating an energy crisis that drove up food and fuel prices and caused chronic power outages. The struggle to improve economic conditions continued through 1996, with the government caught between an international financial community demanding tough structural reforms and a beleaguered population unwilling to tolerate the sacrifices entailed by such programs. In November of 1997, Carlos Rober- to Flores of the Liberal Party won the presidential elections with 52.8%. His party also won 62 out of 128 seats in the unicameral National Assembly. But the fury of Hurricane Mitch in October 1998 destroyed Honduras's economy and placed an even heavier burden on President Flores' challenges. The subsequent economic crisis of 1999 further worsened the economic situation.

Discontent with the government helped opposition candidate Ricardo Maduro win the 2001 presidential election with 52.2% of the vote. His National Party also came ahead in the legislative election with 46% of the vote, but it only gained 61 seats in the 128-seat assembly, forcing Maduro to seek the support of the smaller centrist parties to pass his legislative initiatives. The economy has continued to perform poorly. More than 50% of Hondurans live in poverty. In March 2005, the Honduran Congress ratified the Central American Free Trade Agreement (CAFTA) with the United States.

Crime and violence are significant problems in Honduras. Youth gangs known as maras are thought to have tens of thousands of members, and use threats and violence to control poorer areas in the main urban centers. In December 2004, gang members massacred 28 bus passengers in the northern city of Chamalecon. At the same time, police officers have been implicated in high-profile crimes; in January 2001, the Honduran Committee for the Defense of Human Rights reported that more than 1,000 street children had been murdered in 2000 by death squads backed by the police. Also, former military and security personnel, along with right wing paramilitary groups, are thought to be behind the murder of members of indigenous minority rights groups.

Presidential and legislative elections were held on 27 November 2005. Although National Party presidential candidate Porfirio Lobo Sosawho came in second place behind Liberal Party candidate José Manuel Zelaya Rosalescontested the results of the election, the National Party after 10 days conceded the election to Zelaya. Zelaya took 49.9% of the vote to Lobo's 46.2%. In the elections for the National Congress, the Liberal Party won 62 of 128 seats, with the National Party winning 55. The Democratic Unification Party won 5 seats, followed by the Christian Democratic Party with 4 and the Innovation and Unity Party-Social-Democracy with 2.

GOVERNMENT

The constitution of 1965, suspended following the 1972 coup, was superseded by a governing document adopted in November 1982 (amended in 1995). It defines Honduras as a democratic republic headed by a president who must be a native-born civilian. The president is elected by direct popular vote for a four-year term. The executive branch also includes a cabinet of 14 ministers. A constitutional change approved by the legislature in November 1982 deprived the president of the title of commander-in-chief of the armed forces, transferring that responsibility to the army chief of staff.

The 1982 constitution provides for the popular election of deputies to the unicameral National Congress, consisting of 128 deputies. The deputies, who are directly elected for four-year terms, must be natives or residents of the constituencies they represent. Voting is compulsory for all men and women 18 years of age and older.

POLITICAL PARTIES

The two major parties in Honduras are the Liberal Party (Partido LiberalPL) and the National Party (Partido NacionalPN). Both descend from the old Liberal and Conservative Parties from the 19th century. Although generally the National Party remains more conservative in nature, the two parties are very close ideologically.

The National Party was in power from 1932 to 1954 under Carías and Gálvez. In 1965, a PN-backed constituent assembly promulgated a new constitution, designated its membership as the National Congress for a six-year term, and proclaimed Gen. Oswaldo López Arellano as president. In the 1971 elections, the PN candidate, Gen. Ramón Ernesto Cruz, received about 52% of the vote and was elected president. Their most recent success came in 1989 when Rafael Leonardo Callejas became president. In the 1997 elections, its presidential candidate was Alba Gunera, the first woman to seek Honduras's presidency. She gained 42% of the vote. The National Party won 54 seats in the National Assembly in 1997, but it benefited from Ricardo Maduro's victory in 2001 and increased its parliamentary representation to 61 seats.

The Liberals rely on their following in urban areas and among the laboring classes and have had some successes over the last half-century. In 1957, José Ramón Villeda Morales was elected to the presidency, and governed until 1963, when he was removed by a coup. The next successes came in 1981 with the election of Suazo, and then in 1985 with the election of José Simón Azcona Hoyo, in 1993 with Carlos Roberto Reina and in 1997 with Carlos Flores, who became president with 52% of the vote. The Liberal Party also won 67 out of the 128 seats in the National Assembly, but its support fell in 2001 when it captured only 40.8% of the vote and clinched 55 seats.

Two minor parties occupy mildly leftist positions: the Christian Democratic Party, under Marco Orlandi, and the National Innovation and Unity Party, led by Olban Valladares. Each of those parties won three and four seats respectively in the National Assembly in 2001. In 1997, a Social Democratic party made its debut. The Partido de Inovación y Unidad-Social Democracia (Party for Innovation and Unity-Social Democracy) won five seats in the National Assembly in 1997 and four seats in 2001.

In the December 1996 primaries preceding the November 1997 presidential elections, the Liberal Party nominated Carlos Rober- to Flores. Nora Gúnera de Melgar won the National Party nomination. Flores went on to win the election and his party won 62 of 128 seats in the National Assembly. In 2001, Ricardo Maduro became the National Party candidate and won the presidential election. His party captured 61 of the 128 seats in the Assembly.

In 2005, Liberal Party presidential candidate José Manuel Zelaya Rosales beat National Party candidate Porfirio Lobo Sosa. Zelaya took 49.9% of the vote to Lobo's 46.2%. In the elections for the National Congress, the Liberal Party won 62 of 128 seats, with the National Party winning 55. The Democratic Unification Party won 5 seats, followed by the Christian Democratic Party with 4 and the Innovation and Unity Party-Social-Democracy with 2.

LOCAL GOVERNMENT

Honduras is divided into 18 departments, each with a governor popularly elected for a two-year term. Departments are divided into municipalities (298 in 2005) governed by popularly elected councils. Localities with populations between 500 and 1,000 have a mayor, a legal representative, and a council member. A council member is added for each additional 1,000 residents, but the total is not to exceed seven. A special law governs the Central District of Tegucigalpa and Comayagüela.

Under the jurisdiction of the local government, municipal land is granted or lent to peasants in the district in sections known as ejidos. The ejido system is designed to aid landless peasants and has become an important function of local administration.

JUDICIAL SYSTEM

Judicial power is exercised by the nine-member Supreme Court (with seven substitutes) and courts of appeal, as well as by courts of first instance, justices of the peace, and courts of limited jurisdiction. The Supreme Court appoints the judges of the courts of appeal and the courts of first instance, who, in turn, appoint local justices of the peace. The justices of the Supreme Court are elected by the National Assembly and serve for seven-year terms. The Supreme Court has the power to declare laws unconstitutional.

There is a military court of first instance from which appeals can be taken to the civilian judicial system. In practice, the civilian courts are not independent. Because of underfunding and corruption, the formal resolution of legal disputes in courts is often the product of influence and political pressure.

The constitution provides for an independent judiciary and the right to a fair trial. A public defender program provides services to indigent defendants.

Honduras accepts the jurisdiction of the International Court of Justice with reservations.

ARMED FORCES

The Honduran military as of 2005 had an active force of 12,000 personnel with 60,000 registered as reservists. As of that year, there were 8,300 personnel in the Army, 2,300 in the Air Force, and 1,400 in the Navy, which included 830 Marines. The Army's major armament included 12 light tanks, 57 reconnaissance vehicles, and over 118 artillery pieces. Naval equipment consisted of 31 patrol/coastal vessels and one amphibious landing craft. The Air Force had 18 combat capable aircraft made up of 8 fighters and 10 operating fighter ground attack aircraft. Paramilitary forces consisted of an 8,000 member Public Security Force. The defense budget in 2005 was $52.4 million.

INTERNATIONAL COOPERATION

Honduras is a charter member of the United Nations, having joined on 17 December 1945; it is part of ECLAC and serves in several specialized agencies, such as FAO, IFC, UNESCO, UNIDO, ILO, IMF, WHO, and the World Bank. Honduras served on the UN Security Council from 199596. It is one of five members of the Central American Bank for Economic Integration (BCIE) and the Central American Common Market (CACM). In 2004, Honduras, the United States, Costa Rica, El Salvador, Guatemala, Nicaragua, and the Dominican Republic signed the USCentral America Free Trade Agreement (CAFTA). The agreement must be ratified by all participating countries before it enters into force.

Honduras is also part of G-77, the Latin American Economic System (LAES), the OAS, the Association of Caribbean States (ACS), and the Río Group. Honduras has observer status with the Latin American Integration Association (LAIA) and belongs to the Central American Parliament (PARLACEN), the Central American Integration System (SICA), and the Central American Security Commission (CASC). The country is a signatory of the 1947 Río Treaty, an inter-American security agreement.

Honduras is a member of the Agency for the Prohibition of Nuclear Weapons in Latin America and the Caribbean (OPANAL) and is a signatory to the Organization for the Prohibition of Chemical Weapons. In environmental cooperation, Honduras is part of the Basel Convention, the Convention on Biological Diversity, Ramsar, CITES, the London Convention, International Tropical Timber Agreements, the Kyoto Protocol, the Montréal Protocol, MARPOL, the Nuclear Test Ban Treaty, and the UN Conventions on the Law of the Sea, Climate Change, and Desertification. Honduras is also part of the Central American-US Joint Declaration (CONCAUSA).

ECONOMY

Honduras is one of the poorest and least developed countries in Latin America. The economy has been based mostly on agriculture, and over a third of the labor force in 2001 were still involved in this sector. However, agriculture's contribution to the overall GDP fell from 27% in 1998 to 18% in 2000 mainly due to the damage done to export crops by Hurricane Mitch in October 1998. About 16% of the land is arable, located mostly along the coastal plains. Coffee and bananas account for 65% of total Honduran export revenues. The vast majority of banana holdings are controlled by two US companies, United Brands and Standard Fruit, and most other profitable agricultural enterprises are owned by a small number of private citizens. With its economy enormously dependent on banana production, the country is vulnerable to weather and world market price variations. Honduras also has extensive forest, marine, and mineral resources, although widespread slash-and-burn agricultural methods continue to destroy forests. Hondurans, however, are becoming more concerned about protecting their environmental patrimony, in part because of the benefits of ecotourism.

In 1995, the Honduran economy rebounded from the severe recession experienced in 1994. Real GDP growth in 1995 was 3.6%. It was led by a solid expansion in agricultural production spurred by soaring world coffee prices, excellent basic grains harvests, and a resurrected banana industry as well as a growing maquila (Free Trade Zone of assembly plants) sector that employed 65,000 people by year's end. Honduras also received abundant rainfall which replenished the nation's dams and enabled the country to generate adequate hydroelectric energy, thus avoiding the drought-related power cuts which adversely affected economic performance in 1994. In 1996, Honduran GDP grew about 3.5%. However, inflation for 1996 reached 24.9%, well above the government's target of 16%. End of period inflation declined to 12.8% in 1997.

The economy, however, has still not recovered from the devastation left by Hurricane Mitch in late 1998, a Category Five Hurricane, rated the worst in 200 years, with winds reaching 200-mph and dumping unprecedented amounts of rain in their wake. The dead were officially counted at almost 6,000, but the total number buried in the mud slides will likely never be known. Hurricane Mitch destroyed 2080% of the 1998 coffee and banana crops, and caused an estimated $3 billion in damages, equal to half of the annual GDP. End of period inflation rose to 15.9%. In 1999 the Paris Club creditor countries extended a three-year moratorium on debt repayments by Honduras and wrote-off about two-thirds of its $1.7 billion external debt contingent on the implementation of austerity, liberalization, and privatization program under the IMF's Poverty Reduction and Growth Facility (PRGF). In February 1999, a man-made disaster, a fire at the El Cajón hydroelectric plant, shut down 60% of the country's electricity until May. In all, GDP in 1999 fell 1.9% as the fall in production and export revenues was offset by increases in construction under the National Reconstruction and Transformation Plan presented by the government in May. Inflation was held to 10.9%, but the country's trade deficit, which had amounted to 10.7% of GDP in 1997, more than doubled as a proportion of GDP, to 23.8% in 1999.

In 2000, GDP growth rose to 5% as the reconstruction program continued, although the trade deficit remained high21.1% of GDP. Inflation dipped slightly to 10.1% and Honduras qualified for debt forgiveness and restructuring under the Highly Indebted Poor Countries (HIPC) initiative which included adhering to a program of civil service reform that meant large layoffs in the public sector. Honduras joined Guatemala and El Salvador in a free trade agreement with Mexico, but ended up placing trade sanctions on Nicaragua over border and fishing rights disputes. In 2001, though reconstruction continued, Honduras was hit by a serious drought that helped reduce GDP growth to 3.5%. The trade deficit increased slightly as a percent of the GDP to 23% as exports were further depressed by a declining external demand. Inflation fell to 10%. In 2002, GDP grew about 1.4% and inflation fell to 7.7%, although the IMF withheld further disbursement of debt relief under the HIPC because the targets under the PRGF program had not been sufficiently met. The trade deficit remained inordinately high, amounting to about 25% of GDP.

The economy expanded by 5.0% in 2004, up from 3.0% in 2003; in 2005, the GDP growth rate was estimated at 4.0%, while the GDP per capita, at purchasing power parity, reached $2,900. The inflation rate was fairly stable and at 8.1% in 2004 it did not pose a major problem to the economy. The unemployment rate however, was, at 28%, very high and, together with the unequal distribution of income, represented one of the main concerns of the government. Honduras remains one of the poorest countries in the Western hemisphere and is dependent on the economy of the United States, its largest trading partner.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Honduras's gross domestic product (GDP) was estimated at $20.6 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $2,900. The annual growth rate of GDP was estimated at 4%. The average inflation rate in 2005 was 9.2%. It was estimated that agriculture accounted for 12.7% of GDP, industry 31.2%, and services 56.1%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $867 million or about $124 per capita and accounted for approximately 12.6% of GDP. Foreign aid receipts amounted to $389 million or about $56 per capita and accounted for approximately 5.7% of the gross national income (GNI).

The World Bank reports that in 2003 household consumption in Honduras totaled $5.13 billion or about $736 per capita based on a GDP of $6.9 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption grew at an average annual rate of 3.1%. It was estimated that in 1993 about 53% of the population had incomes below the poverty line.

LABOR

In 2005, the Honduran workforce totaled an estimated 2.54 million (excluding the armed forces). In 2002, agriculture accounted for 37.4% of the labor force, with services at 41.2%, and industry at 21.4%. The unemployment rate in 2005 was estimated at 28%.

Honduras did not have effective labor legislation until 1954. It joined the ILO in 1955 and subsequently adopted several labor codes, most notably that of 1959, which established the Ministry of Labor. The code also provided for union organization, collective bargaining, arbitration, social security, and fair labor standards. The principal labor organizations in 2002 were the Confederation of Honduran Workers (CTH), the General Workers' Central (CGT), and the Unitary Confederation of Honduran Workers (CUTH). Although retribution against union activity is prohibited by law, it frequently occurs. Only 14% of the workforce was unionized in 2002.

The law sets the maximum at an 8-hour day, a 44-hour week, and a 24-hour rest period each week. Because of high unemployment and a lack of government enforcement, however, these regulations are often not enforced. The labor code disallows children under 16 from working; however, in actuality, economic necessity and a lack of government enforcement mean that many children do work, especially on small farms in rural areas and as street vendors in cities. As of 2002, the daily minimum wage ranged from $2.25 to $4.08.

AGRICULTURE

Over 16% of the national territory is agriculturally productive; because of the uneconomical system of land use, much arable land has not been exploited. Agriculture is the primary sector of the economy, accounting for about 13% of GDP and 32% of employment in 2003. Farming methods are inefficient, and crop yields and qualities are low. The principal export crops are bananas and coffee; the major subsistence crops are corn, sorghum, beans, and rice. In 200204, crop production was 11% higher than during 19992001. The trade surplus in agricultural products totaled $173.7 million in 2004. Crop production for 2004 included: sugarcane, 5,363,000 tons; bananas, 965,000 tons; sorghum, 52,500 tons; dry beans, 69,900 tons; rice, 29,100 tons.

Since 1972, agrarian reform has been an announced priority of the national government. In January 1975, plans were made for the distribution of 600,000 hectares (1,483,000 acres) of land among 100,000 families over a five-year period. The program was suspended in 1979 because of lack of funds and pressure from landowners; by that time, only about one-third of the goal had been met. The reform program was revived in the early 1980s, and in 1982, lands totaling 27,960 hectares (69,090 acres) were distributed to 4,000 peasant families. By 1986, however, land reform was at a virtual standstill; peasant groups, demanding immediate land distribution, staged "land invasions" and seized the offices of the National Agrarian Institute in San Pedro Sula. The agricultural modernization law eliminated subsidized credit to small farmers, while high commercial interest rates squeezed small farmers from the credit market.

ANIMAL HUSBANDRY

Honduran consumption of milk and meat is traditionally low. However, pastures account for 13.8% of the total land area. Poor transportation facilities are a barrier to the development of stock raising and dairying, two potentially profitable economic activities. Honduras has nearly 100,000 livestock operations, mostly small or medium-sized producers. About 50% of all cattle ranches are 50 hectares (124 acres) or smaller, and 95% of all ranches have less than 100 head. In 2005, the cattle population was estimated at 2,500,000 head; hogs, 490,000; horses and mules, 250,600; and chickens, 18,700,000. That year, 1,761,950 tons of raw milk and 40,900 tons of eggs were produced. During 200204, livestock and poultry production had increased 6% since 19992001.

FISHING

There is commercial fishing in Puerto Cortés, and other areas are served by local fishermen. A small local company operates a cannery for the domestic market on the Gulf of Fonseca. There is a commercial fishing concern on the island of Guanaja, and a large refrigeration-factory ship is engaged in freezing shrimp and lobster near Caratasca. In 2003, the total catch was 30,835 tons. Shrimp accounted for about 65% of the total catch, taken mostly from southern shrimp farms. Exports of fish products amounted to $46.3 million in 2003.

FORESTRY

About 48% of Honduras is covered by forests, including stands of longleaf pine and such valuable hardwoods as cedar, ebony, mahogany, and walnut. Total roundwood production in 2004 amounted to 9.5 million cu m (335 million cu ft), and forest products exports were valued at $43.1 million. The National Corporation for Forestry Development (Corporación Hondureña de Desarrollo Forestal), established in 1974, is charged with the overall preservation, exploitation, and exportation of Honduran forest resources. The privatization of government-owned woodlands is expected to intensify the use of forestry resources. A restriction on the export of raw wood also is causing growth in the woodworking industry for semifinished wood products.

MINING

The mineral resources of Honduras consisted of cadmium, cement, gold, gypsum, iron oxide pigments, lead, limestone, marble, pozzolan, rhyolite, salt, silver, and zinc, a leading export commodity. However, inadequate transportation continued to hamper full development of the country's mineral resources. In the mid-1990s, the El Mochito Mine, in Santa Bárbara, was the country's only large operating base metal mine. By the end of 2002, the mine's proven and probable reserves stood at 3.2 million tons at an average grade of 6.8% zinc, 1.9% lead, and 78 grams per ton of silver. Estimated and indicated reserves were placed at 4.3 million tons, with inferred reserves at 2.4 million tons. Lead and zinc concentrates from the mine contributed less than 2% to GDP, which grew 5% in 2001, with the completion of reconstruction from Hurricane Mitch. Under 0.3% of the Honduran labor force was employed in the mining sector.

In 2003, production of mined zinc was estimated at 46,500 metric tons, up from 46,339 metric tons in 2002. Lead mine output in 2003 was estimated at 8,000 metric tons. Silver and gold production in 2003 totaled 2,040 kg and 3,029 kg, respectively in 2003. Limestone output that same year was estimated at 1.23 million metric tons, unchanged from 2001 and 2002.

ENERGY AND POWER

Honduras has no known proven reserves of oil, natural gas, coal or refining capacity. Therefore, it must import all the refined petroleum products natural gas or coal that it consumes. However, it is nearly self-sufficient for its own electricity needs. In 2002, imports and consumption of refined oil products averaged 38,710 barrels per day and 38,340 barrels per day, respectively. Coal was also imported that year, amounting to 186,000 short tons of hard coal, of which consumption came to 155,000 short tons. There were no imports or consumption of natural gas in 2002.

Honduras's electric power sector is heavily reliant upon fossil fueled plants and hydropower. However, the country is facing increasing demand for electric power and the possibility of power shortages due to underperforming hydroelectric facilities. In 1998, for example, a drought induced by El Niño forced the government to declare an energy emergency. Since then, the government has sought to diversify its sources of electric power via the construction of thermal power plants. In 2002, electric power generating capacity was 0.923 million kW, with hydropower accounting for 0.435 million kW and conventional thermal plants 0.488 million kW. In the same year, consumption of electricity totaled 3.371 billion kWh, while output came to 3.195 billion kWh, with hydropower accounting for 1.594 billion kWh, and 1.601 billion kWh from conventional thermal plants.

INDUSTRY

Industry as a whole supplied 32% of Honduras's GDP in 2000 and employed 21% of the work force. Manufacturing has traditionally been limited to small-scale light industry supplying domestic requirements.

Assembly plant operations developed in the 1970s, especially after a free-trade zone was established in Puerto Cortes in 1975. San Pedro Sula is the center for matches, cigars, cigarettes, cement, meatpacking, sugar, beer and soft drinks, fats and oils, processed foods, shoes, and candles. Tegucigalpa has plants for the manufacture of plastics, furniture, candles, cotton textiles, and leather. The country has also established a well-known apparel assembly industry in the maquiladora sector, which employed over 125,000 workers in 2001. As of 2002, Honduras was the second-largest exporter of maquiladora items to the US market.

Production in the manufacturing industry, mainly of nondurable goods, has realized significant growth in the late 1990s and into the 2000s. The largest growth has been seen in the construction sector, which rebounded after the destruction wrought by Hurricane Mitch in 1998. The electric, gas, and water sectors gained almost 9%. However, in 1999 a fire temporarily closed the Cajon hydroelectric plant that had supplied 40% of the country's electricity. The electronic distribution system was privatized in 2000.

The industrial production growth rate in 2003 was 7.7%, higher than the overall GDP growth rate, and an indicator that industry was an economic growth engine. In 2005, industry accounted for 31.2% of the GDP and it employed around 21% of the labor force. Services were by far the largest sector, with a 56.1% share of the economy, while agriculture was the smallest one, with a 12.7% share.

SCIENCE AND TECHNOLOGY

The Honduran Academy (founded in 1949), the Honduran Coffee Institute, and the National Agriculture Institute are all located in Tegucigalpa. The José Cecilio del Valle University (founded in 1978) has engineering and computer science departments, and the National Autonomous University of Honduras (founded in 1847) has faculties of medicine, pharmacy, dentistry, and engineering. The Pan-American Agricultural School (founded in 1942) has students from 20 Latin American countries. The National Museum in Tegucigalpa has natural history exhibits. In 198797, science and engineering students accounted for 24% of college and university enrollments.

In 2000, there were 74 researchers and 261 technicians per million people who were actively engaged in research and development (R&D) activities. For that same year, R&D spending by Honduras totaled $8.346 million, or 0.05% of GDP. In 2002, high technology exports by Honduras totaled $5 million, accounting for 2% of that country's manufactured exports.

DOMESTIC TRADE

The principal distribution centers include Puerto Cortes and San Pedro Sula, the latter of which is the commercial and industrial capital on the nation. Tegucigalpa is a leading center of retail trade. In major cities, shops are comparable to those in Central American towns. In the countryside, small markets and stores supply staple needs. As of 2002, there were about 55 foreign franchise companies present in the country. That number is expected to rise rapidly as local business managers become interested in franchise agreements. Foreign investment is encouraged, but in certain industries, the law requires that majority ownership be by Hondurans. The government maintains a certain degree of price management and controls over some items, including coffee, medicine, gasoline, milk, and sugar. A 12% sales tax applies to many goods and services, with the exception of staple food items and certain health and educational expenses.

Business hours are generally from 8 am to noon and 1:30 or 2 to 5 or 6 pm on weekdays and 8 to 11 am on Saturdays. Banks in Tegucigalpa are open from 9 am to 3 pm, Monday through Friday.

FOREIGN TRADE

Honduras remains at the forefront of Central American economic integration efforts. In May 1992, Honduras signed several trade agreements with its neighbors, including Free Trade Agreements with Guatemala and El Salvador, and a Honduran/Salvadoran/Guatemalan Northern Triangle Accord, with the intent of accelerating regional integration. Honduras is also a member of the WTO and the CACM. Free trade agreements were under discussion with Chile, Panama, Mexico, the Andean Community, Taiwan, and the Dominican Republic in 1999.

The most important export from Honduras is coffee (33%), followed by printed matter (13%), and the cultivation of fruits and nuts (10%). Other major exports include shrimp and lobster (3.5%), wood and logging products, including paper (4.1%), and tobacco (2.4%).

In 2005, exports reached $1.7 billion (FOBFree on Board), while imports grew to $4.1 billion (FOB). In 2004, the bulk of exports went to the United States (54.4%), El Salvador (8.1%), Germany (5.9%), and Guatemala (5.4%). Imports included manufactures

CountryExportsImportsBalance
World961.83,105.3-2,143.5
United States448.91,210.7-761.8
El Salvador138.7171.7-33.0
Guatemala63.3261.6-198.3
Germany53.638.515.1
Netherlands27.115.112.0
Belgium23.423.6-0.2
Costa Rica22.1149.9-127.8
Japan17.4168.4-151.0
Nicaragua16.548.9-32.4
Jamaica15.115.1
() data not available or not significant.

and industrial raw materials, machinery and transport equipment, minerals and fuels, and food and animal products, and mainly came from the United States (37.5%), Guatemala (6.9%), Mexico (5.4%), Costa Rica (4.3%), and El Salvador (4%).

BALANCE OF PAYMENTS

Since 1973, trade balances have been negative. Investment income repatriated by foreign companies in Honduras is an endemic burden on the local economy. The Honduran authorities have generally adhered to the policies of fiscal and monetary restraint that were introduced early in 1959, following a period of exceptional strain on the country's international reserves. The fall in reserves resulted from a decline in income from the banana industry and reduced international prices for other major exports. Political instability in the region in the late 1970s to the mid-1980s, together with low commodity prices and high oil prices, had an adverse effect on the balance of payments. The 1990s brought a continuation of the negative trade balance (averaging 7% of GDP), especially after the increase of imports after Hurricane Mitch. However, increases in agricultural and clothes exports are forecast to improve the balance of payments situation. International reserves reached $700 million in 1999 due, in part, to increased remittances from abroad, and international aid following the hurricane ($300 million from the United States alone).

The US Central Intelligence Agency (CIA) reported that in 2001 the purchasing power parity of Honduras's exports was $2 billion while imports totaled $2.7 billion, resulting in a trade deficit of $700 million.

The International Monetary Fund (IMF) reported that in 2001 Honduras had exports of goods totaling $1.93 billion and imports totaling $2.81 billion. The services credit totaled $481 million and debit $653 million.

Exports of goods reached $1.6 billion in 2004, up from $1.4 billion in 2003. Imports increased from $3.1 billion in 2003, to $3.7

Current Account-279.2
   Balance on goods-987.2
     Imports-3,065.4
     Exports2,078.2
   Balance on services-77.0
   Balance on income-183.3
   Current transfers968.2
Capital Account21.0
Financial Account-20.0
   Direct investment abroad
   Direct investment in Honduras198.0
   Portfolio investment assets-4.1
   Portfolio investment liabilities
   Financial derivatives
   Other investment assets-77.6
   Other investment liabilities-136.3
Net Errors and Omissions76.1
Reserves and Related Items202.1
() data not available or not significant.

billion in 2004. The resource balance was consequently negative in both years, deteriorating from -$1.7 billion in 2003, to -$2.1 billion in 2004. The current account balance followed a similar path, worsening from -$292 million in 2003, to -$391 million in 2004. Foreign exchange reserves (including gold) reached $2.2 billion in 2005, covering more than six months of imports.

BANKING AND SECURITIES

In 1950, the Central Bank of Honduras (Banco Central de Honduras), the sole bank of issue, was established to centralize national financial operations and to replace foreign currencies then in circulation. In 2002, there were 22 commercial banks in Honduras with an estimated $3.4 billion in assets. In addition, there are some 150 nonbank financial institutions, many of them associated with the major banks. The Banco Atlántida, the most important commercial bank, accounts for over one-half of the total assets of private banks. US banks play a significant role in the commercial system: the Atlántida is affiliated with Chase Manhattan, and the second-largest commercial bank, the Banco de Honduras, is affiliated with Citibank of New York.

The government-controlled banks, including the National Development Bank, the National Agricultural Development Bank, and the Municipal Bank, provide credit for development projects. The National Development Bank extends agricultural and other creditmainly to the tobacco, coffee, and livestock industriesand furnishes technical and financial assistance and other services to national economic interests. The Municipal Bank gives assistance at the local level.

In 1990, the Central Bank devalued the lempira and let it float freely until 1994, when a currency auction was created. The year of 1995 saw the Financial Sector Reform Law, which created a modern Banking Commission. Elements of Central Bank reforms in 1997 included the abolition of the government's right to borrow at below-market rates of interest. The International Monetary Fund reports that in 2001, currency and demand depositsan aggregate commonly known as M1were equal to $800.6 million. In that same year, M2an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual fundswas $3.3 billion.

In 1990, a stock exchange opened in San Pedro Sula to raise short-term bond finance for local businesses.

INSURANCE

The oldest insurance company in Honduras is Honduras Savings (Ahorro Hondureño), established in 1917. Five other companies deal with life insurance and other types of policies. The number and the role of foreign companies in the insurance sector have decreased because of government incentives to domestic underwriters. In 2002, direct premiums written totaled $190 million, of which the largest portion, $142 million, was nonlife premiums. In 2003, the top nonlife insurer was Ahorro, with gross written nonlife premiums of $19.3 million. In that same year, the country's leading life insurer was Palic, with gross written life insurance premiums of $16.5 million.

PUBLIC FINANCE

The US Central Intelligence Agency (CIA) estimated that in 2005 Honduras's central government took in revenues of approximately $1.6 billion and had expenditures of $1.9 billion. Revenues minus expenditures totaled approximately -$245 million. Public debt in 2005 amounted to 70.5% of GDP. Total external debt was $4.675 billion.

TAXATION

Personal income in Honduras is taxed according to a progressive schedule with rates running from 1025%. In 2001, the personal exemption level equaled six times the average income in Honduras whereas the threshold for the 25% bracket was 36 times the average income (down from over 100 times the average in 1997). Social security taxes are also collected. No distinction is made for tax purposes between individuals and businesses. Agricultural activities and industries classified as "basic" receive favorable depreciation rates. The corporate tax rate is 25%, with a 5% solidarity tax added. Profits from branch operations are taxed at 15%. The main indirect tax is a value-added tax (VAT) with a standard rate of 12%. An increased rate of 15% is applied to some items. Excise taxes are imposed mainly on beer and cigarettes, but also on imported matches, soft drinks, imported sugar, and new motor vehicles. New industries are exempted from income and production taxes and import duties for up to 10 years.

District and municipal governments obtain their revenues from taxes on amusements and livestock consumption, and from permits, licenses, registrations, certifications, storage charges, transfers of real estate, and fines.

CUSTOMS AND DUTIES

Most imports from outside the CACM are subject to a common external tariff (CET) ranging from 020%. Duties are levied ad valorem over the cost, insurance, and freight (CIF) value of goods. Honduras also imposes a sales tax (12% on most goods, 15% for alcohol and tobacco) and consumption tax on selected imports: 20% on alcoholic beverages, 35% on motor vehicles, and 55% on cigarettes. Capital goods are admitted at a tariff rate of only 1%.

In June 1992, the Central Bank of Honduras eliminated the need for most import permits and foreign exchange authorizations.

FOREIGN INVESTMENT

Traditionally, the Honduran attitude toward foreign enterprise has been favorable. Foreign capital is treated in the same way as domestic capital; however, firms in the distribution, health services, telecommunications, fishing and hunting, mining, insurance and financial services, or lumber business must have 51% Honduran ownership. Honduran economic development has been powerfully influenced by foreign investment in agriculture, industry, commerce, and other economic sectors.

Since 1910, the Standard and Fruit and Steamship Co. and United Brands (formerly the United Fruit Company) have developed railroads, ports, plantations, cattle farms, lumber yards, breweries, electric power, housing, and education. All contracts, aside from commodity exports, were canceled on 15 September 1975; plans to convert banana-marketing operations into a joint venture fell through, however, and in 1976, the government instead expropriated large tracts of land from the banana producers. Mines have been developed by the New York and Honduras Rosario Mining Co.

In 1998, annual foreign direct investment (FDI) inflows into Honduras totaled almost $100 million, down from $128 million in 1997. Annual FDI inflows more than doubled from 1999 to 2001, averaging $238 million.

The United States has historically been, and remains today, Honduras's largest investor, accounting for at least three-quarters FDI in Honduras. More than 100 American companies operate there. About 75% of those companies produce apparel, but the largest US investments in Honduras have been in the agribusiness sector. Other important sectors include petroleum products, marketing, electric power generation, banking, insurance, and tobacco.

US franchises have substantially increased their presence in recent years, mostly in the fast food sector. Other major investors include Japan, El Salvador, Korea, Hong Kong, and Taiwan. Total capital inflows reached $198 million in 2003 (or 3.0% of the GDP), up from $172 billion in 2002, but still far from the 2000 historical high of $282 million.

ECONOMIC DEVELOPMENT

During the administration of President Callejas, between 1990 and 1993, economic policy was mostly based on neoliberal ideas. This included a move from an inward-oriented policy to an export-oriented one. In addition, privatization was deeply emphasized. During that period, GDP was characterized by consistent growth. At the same time the country's galloping inflation was reduced to single digits. Government corruption, however, prompted citizens to vote Callejas out of office.

The November 1993 elections gave birth to a new political era in Honduras. President Reina of the Liberal Party was expected to slow down the pace of market-oriented reforms, but to continue privatization. Strong growth in nontraditional exports and the prospects for an improvement in coffee prices helped to finance the current account deficit. The continuation of foreign aid and investment was essential to closing the Honduras trade gap.

Reforms in the late 1990s were focused on alleviating the lot of the poorest citizens in Honduras, and improving international competitiveness. Hurricane Mitch in 1998 damaged the economy (particularly banana exports), as did low world coffee prices in the early 2000s, and cold weather and heavy rains in 200203 harmed the harvest (coffee revenues were down to $161 million in 2001, from $340 million in 2000). The garment-manufacturing industry, the third-largest in the world, turned in a strong performance in early 2003. In 2000, Honduras became eligible under the International Monetary Fund (IMF)/World Bank Heavily Indebted Poor Countries (HIPC) Initiative for $900 million in debt service relief.

The economic growth of 2005 was mainly led by an increase in consumption and exports. However, consumption levels are expected to grow slower than the overall economic growth (despite a rise in remittances from abroad) due to the impact on wages of above-target inflation. Maquilas and tourism, as well as major public development projects, will likely benefit the economy in coming years, although they can also lead to high levels of indebtedness.

SOCIAL DEVELOPMENT

The social insurance program covers accidents, illness, maternity, old age, occupational disease, unemployment, disability, death, and other circumstances affecting the capacity to work. Social security services are furnished and administered by the Honduran Social Security Institute and financed by contributions from employees, employers, and the government. Workers contribute 1% of their earnings toward retirement, disability, and survivor insurance, while employers paid 2% of their payroll. Retirement is set at age 65 for men and age 60 for women. These programs exclude domestic, temporary and some agricultural workers. Workers' medical benefits include medical care and surgery, hospitalization and medications, and appliances.

Violence against women remains widespread although the penal code classifies domestic violence and sexual harassment as crimes. These laws are not effectively enforced. Cultural attitudes toward women limit career opportunities, and women mostly work in low status jobs. Women are treated equally under the law in divorce cases. There is a growing problem of child abuse, and trafficking in children continues.

The government's human rights record has improved since 1995, but serious abuses still occur, including torture and killing by the police. Human rights groups have challenged the existence of organized death squads.

HEALTH

Health conditions in Honduras are among the worst in the Western Hemisphere. There are an estimated 83 physicians, 25 nurses, and 1 dentist per 100,000 people. The Inter-American Cooperative Public Health Service, created in 1942 under the joint sponsorship of Honduras and the United States, has contributed to public health through malaria control, construction of water systems and sewage disposal plants, personnel training, and the establishment of a national tuberculosis sanatorium. US Peace Corps volunteers help train personnel for urban and rural clinics. Nearly 39% of children under five years of age were considered malnourished as of 2000. Honduras started fortifying sugar with vitamin A in 1996. Health care expenditure was relatively high, estimated at 8.6% of GDP.

Major causes of illness and death are diseases of the digestive tract, intestinal parasites, accidents, suicides, influenza, pneumonia, cancer, and infant diseases. Malnutrition, impure water, poor sewage disposal, and inadequate housing are the major health problems. In 2000, 90% of the population had access to safe drinking water and 77% had adequate sanitation. In 1995, there were 4,717 cases of cholera, of which 77 turned fatal. In 1995, there were 1,022 malaria cases per 100,000 people. Honduras has been hard hit by AIDS. The HIV/AIDS prevalence was 1.80 per 100 adults in 2003. As of 2004, there were approximately 63,000 people living with HIV/AIDS in the country. There were an estimated 4,100 deaths from AIDS in 2003. Immunization rates for children up to one year old were as follows: tuberculosis, 99%; diphtheria, pertussis, and tetanus, 94%; polio, 93%; and measles, 89%. The government pays 79% of routine immunization bills. As of 2002, the birth rate was estimated at 31 per 1,000 people and the general mortality rate at 5 per 1,000 people. About 50% of married women (ages 15 to 49) were using contraception. In 2000 the total fertility rate was 3.9 children per mother during her childbearing years. The infant mortality rate in 2005 was 26.47 per 1,000 live births. Life expectancy in the same year was an average of 69.30 years.

HOUSING

Housing shortages and lack of access to basic utilities in existing housing units has been an ongoing problem throughout most of the country. In recent years, the government has initiated and participated in several programs focusing on low-income housing construction. These have included a $30-million low-cost housing program sponsored by the Housing Finance Corp. and a $19-million venture undertaken by the National Housing Institute.

As of 2000, about 90% of the population had access to improved water sources; 77% of the population had access to improved sanitation systems. As of the 2001 census, there were about 1,487,319 housing units in the nation. The vast majority of housing units are individual homes, about 66% of which are considered to be deficient. Many homes are simply made of cardboard or plastic structures that house from 4 to 10 people in a single room.

EDUCATION

Public education is free and compulsory for six years (ages 6 to 12). After these six years of primary education, students take three years of lower secondary school and two years of upper secondary school. In the upper level, students choose between literary or scientific tracks. Students may also choose to attend a three-year technical school at the upper level. The academic year runs from February to November.

In 2001, about 21% of children between the ages of four and six were enrolled in some type of preschool program. It is estimated that about 79% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 34:1 in 2003. As of 1998, there were 169,430 students enrolled in secondary schools.

The major university is the National Autonomous University of Honduras, founded at Tegucigalpa in 1847, with branches at San Pedro Sula and La Ceiba. There are several other universities, as well as technical and agricultural schools. In 2001, about 15% of the tertiary age population were enrolled in some type of higher education program. The adult literacy rate for 2004 was estimated at about 80%.

As of 2003, public expenditure on education was estimated at 4% of GDP.

LIBRARIES AND MUSEUMS

Although the National Archive and Library of Honduras was established in 1880 to conserve and maintain the records of the republic, no great attention has been shown to government documents and other records in modern times. The National Archive and Library (40,000 volumes) includes land titles dating from 1580, historical documents dating from the 17th century, a newspaper collection from 1880 onward, a civil registry, and a collection of laws since 1880. The Ministry of Education has charge of the National Archive, as well as of other libraries and museums. The National University's library in Tegucigalpa contains over 200,000 volumes.

In Tegucigalpa, the National Museum exhibits historical and archeological works and the Miguel Paz Baraona Historical Museum highlights the personal effects of the national hero as well as the country's history. Also in Tegucigalpa are the National Art Gallery, the Museum of Natural History, and the Museum of Military History. The Museum of Anthropology in San Pedro Sula covers regional history from 1500 bc to present day and houses an impressive collection of Mayan artifacts. The Mayan Museum of Sculpture is in Copan. A Colonial Museum in Comayagua contains a collection of religious art and artifacts.

MEDIA

The government owns and operates postal, telephone, and telegraph services. Tegucigalpa and San Pedro Sula are linked by a multiplex radio relay network. The Tropical Radio Co. provides international radiotelegraph and radiotelephone service. In 2003, there were an estimated 48 mainline telephones for every 1,000 people; about 342,200 people were on a waiting list for telephone service installation. The same year, there were approximately 49 mobile phones in use for every 1,000 people.

As of 1998, Honduras had 241 AM and 53 FM radio stations. In 1997, there were 11 television stations. In 2003, there were an estimated 411 radios and 119 television sets for every 1,000 people. About 21.6 of every 1,000 people were cable subscribers. Also in 2003, there were 13.6 personal computers for every 1,000 people and 25 of every 1,000 people had access to the Internet. There were 31 secure Internet servers in the country in 2004.

The country's principal newspapers (with 2004 circulation) were El Heraldo (30,000), Tiempo (30,000), and La Tribuna (20,000), all published in Tegucigalpa, and La Prensa (62,000), published in San Pedro Sula. La Tribuna is owned by President Flores.

The constitution provides for freedom of speech and press, and the government is said to generally respect these rights. The media itself, however, is said to be subject to a high degree of politicization and corruption.

ORGANIZATIONS

The Chamber of Commerce and Industries has its headquarters in Tegucigalpa; chambers of commerce also function in San Pedro Sula, La Ceiba, and other towns. Business and industry organizations include the Federation of Agricultural Producers and Exporters, the Honduran Manufacturers Association, and the Honduran Association of Sugar Producers. Various professional associations are also active.

The National Federation of University Students of Honduras is an active student movement. Other national youth organizations include scouting and YMCA/YWCA programs. There are several sports associations promoting amateur competition in such pastimes as tennis, football (soccer), badminton, tae kwon do, and baseball. There are also active branches of the Special Olympics.

Volunteer service organizations, such as the Lions Clubs International, are present. There are national chapters of the Red Cross, Habitat for Humanity, Caritas, and CARE.

TOURISM, TRAVEL, AND RECREATION

The main tourist attraction is the restoration at Copán, the second-largest city of the ancient Mayan Empire. There are many beaches on the northern and southern coasts where there is vibrant underwater life. Fishing is popular in Trujillo Bay and Lake Yojoa. A valid passport is needed for entry, and all visitors need visas except for nationals of the United States, and of the countries of Central and South America. Evidence of vaccination against yellow fever is required if traveling from an infected country.

Approximately 610,535 tourists visited Honduras in 2003, an 11% increase from 2002. About 57% of the visitors came from Central America. There were 18,590 hotel rooms with 26,897 beds that same year. The average length of stay was estimated at 10 nights. Gross tourism expenditures totaled $341 million.

In 2004, the US Department of State estimated the cost of staying in Tegucigalpa at $173 per day. Daily costs in San Pedro Sula were estimated at $163 in 2002.

FAMOUS HONDURANS

José Cecilio del Valle (17801834), a member of the French Academy of Sciences, was an intellectual, a political leader, and the author of the Central American declaration of independence. Francisco Morazán (17991842) was the last president of the United Provinces of Central America, which lasted from 1823 to 1839. Father José Trinidad Reyes (17971855) founded an institute in 1847 that became the National University. Outstanding literary figures were Marco Aurelio Soto (18461908), an essayist and liberal president; Ramón Rosa (184893), an essayist and biographer; Policarpo Bonilla (18581926), a politician and author of political works; Alberto Membreño (18591921), a philologist; Juan Ramón Molina (18751908), a modernist poet; Froilán Turcios (18751943), a novelist and writer of fantastic tales; Rafael Heliodoro Valle (18911959), a historian and biographer; and Ramón Amaya Amador (19161966), a journalist and left wing political figure. Contemporary writers include Eduardo Bähr (b.1940), Roberto Sosa (b.1930), Amanda Castro (b.1962), Javier Abril Espinoza (b.1967), and Roberto Quesada (b.1962).

DEPENDENCIES

Honduras has no territories or colonies.

BIBLIOGRAPHY

Binns, Jack R. The United States in Honduras, 19801981: An Ambassador's Memoir. Jefferson, N.C.: McFarland and Co., 2000.

Calvert, Peter. A Political and Economic Dictionary of Latin America. Philadelphia: Routledge/Taylor and Francis, 2004.

D and B's Export Guide to Honduras. Parsippany, N.J.: Dun and Bradstreet, 1999.

Euraque, Dar'io A. Reinterpreting the Banana Republic: Region and State in Honduras, 18701972. Chapel Hill: University of North Carolina Press, 1996.

Health in the Americas, 2002 edition. Washington, D.C.: Pan American Health Organization, Pan American Sanitary Bureau, Regional Office of the World Health Organization, 2002.

Kelly, Joyce. An Archaeological Guide to Northern Central America: Belize, Guatemala, Honduras, and El Salvador. Norman, Okla.: University of Oklahoma Press, 1996.

Meyer, Harvey Kessler. Historical Dictionary of Honduras. 2nd ed. Metuchen, N.J.: Scarecrow Press, 1994.

Honduras

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HONDURAS

Compiled from the December 2005 Background Note and supplemented with additional information from the State Department and the editors of this volume. See the introduction to this set for explanatory notes.

Official Name:
Republic of Honduras


PROFILE

Geography

Area:

112,090 sq. km. (43,278 sq. mi.); about the size of Louisiana.

Cities:

Capital—Tegucigalpa (1,150,000); San Pedro Sula (800,000-900,000).

Terrain:

Mountainous.

Climate:

Tropical to subtropical, depending on elevation.

People

Nationality:

Noun and adjective—Honduran(s).

Population (2004 est.):

6.8 million.

Growth rate (2004 est.):

2.24%.

Ethnic groups:

90% mestizo (mixed Indian and European); others of European, Arab, African, or Asian ancestry; and indigenous Indians.

Religion:

Roman Catholic, Protestant minority.

Language:

Spanish.

Education:

Years compulsory—6. Attendance—88% overall, 31% at junior high level. Literacy—76.2%.

Health:

Infant mortality rate—29.64/1,000. Life expectancy—66.2 yrs.

Work force:

Services—42.2%; natural resources/agriculture—35.9%; manufacturing—16.3%; construction/housing—5.6%.

Government

Type:

Democratic constitutional republic.

Independence:

September 15, 1821.

Constitution:

1982; amended 1999.

Branches:

Executive—president, directly elected to 4-year term. Legislative—unicameral National Congress, elected for 4-year term. Judicial—Supreme Court of Justice (appointed by Congress and confirmed by the president); several lower courts.

Political parties:

National Party, Liberal Party, Innovation and National Unity Party, Christian Democratic Party, and the Democratic Unification Party.

Suffrage:

Universal and compulsory at age 18.

Administrative subdivisions:

18 departments.

Economy (2003)

GDP:

$17.46 billion.

Growth rate:

2.5%.

Per capita GDP:

$2,600.

Natural resources:

Arable land, forests, minerals, and fisheries.

Agriculture (11% of GDP):

Products—coffee, bananas, shrimp and lobster, sugar, fruits, basic grains, and livestock.

Manufacturing (18% of GDP):

Types—textiles and apparel, cement, wood products, cigars, and foodstuffs.

Trade:

Exports—$1.37 billion: apparel, coffee, shrimp, bananas, palm oil, gold, zinc/lead concentrates, soap/detergents, melons, lobster, pineapple, lumber, sugar, and tobacco. Major market—U.S. (69%). Imports—$3.11 billion: fabrics, yarn, machinery, chemicals, petroleum, vehicles, processed foods, metals, agricultural products, plastic articles, and paper articles. Major source—U.S. (53%).


PEOPLE

About 90% of the population is mestizo. There also are small minorities of European, African, Asian, Arab, and indigenous Indian descent. Most Hondurans are Roman Catholic, but Protestant churches are growing in number. While Spanish is the predominant language, some English is spoken along the northern coast and is prevalent on the Caribbean Bay Islands. Several indigenous Indian languages and Garífuna (a mixture of Afro-indigenous languages) are also spoken. The restored Mayan ruins near the Guatemalan border in Copan reflect the great Mayan culture that flourished there for hundreds of years until the early 9th century. Columbus landed at mainland Honduras (Trujillo) in 1502. He named the area "Honduras" (meaning "depths") for the deep water off the coast. Spaniard Hernan Cortes arrived in 1524. The Spanish founded several settlements along the coast, and Honduras formed part of the colonial era Captaincy General of Guatemala. The cities of Comayagua and Tegucigalpa developed as early mining centers.


HISTORY

Independence

Honduras, along with many other Central American provinces, gained independence from Spain in 1821. The country was then briefly annexed to the Mexican Empire. In 1823, Honduras joined the newly formed United Provinces of Central America. Social and economic differences between Honduras and its regional neighbors exacerbated harsh partisan strife among Central American leaders and brought on the federation's collapse in 1838. Gen. Francisco Morazan—a Honduran national hero—led unsuccessful efforts to maintain the federation, and restoring Central American unity remained the chief aim of Honduran foreign policy until after World War I.

Since independence, Honduras has been plagued with nearly 300 incidents of unrest, including internal rebellions, civil wars, and changes of government—more than half of which occurred during the 20th century. The country traditionally lacked both an economic infrastructure and social and political integration. Its agriculture-based economy was dominated in the 1900s by U.S. companies that established vast banana plantations along the north coast.