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Honduras
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Situation and Cooperation
Development in Honduras is being hampered by difficult political and social conditions. Formally, Honduras is a democracy based on the rule of law. President Porfirio Lobo Sosa's government, which has been in office since 2010, officially pursues a pro-development policy. Shortly after entering power, it presented a government development plan for the next 28 years. However, the country suffers from significant democracy and governance deficits. Significant players in the government, parliament, and judiciary have informally been pursuing clientelist policies, thus preventing changes in the political, social and economic environment.
Power rests de facto with the traditional political and economic elite. Many influential politicians are at the same time entrepreneurs, large landowners, bankers, or media proprietors. They pursue their personal interests. As a result, reforms are being blocked for long periods of time, sometimes for years. The system is characterised by abuse of power, nepotism, inadequate separation of powers, a deficient legal system, corruption, and entanglement with organised crime. Government institutions are not very effective, and their enforcement capacity is weak. Their staff is poorly trained. The institutions lack funds and professional equipment. Civil society organisations are too weak to act as a watchdog or to assert their claim to participation in government decision-making processes.
Human rights and public safety
Human rights, while formally acknowledged in Honduras, are often not a reality on the ground. After the 2009 coup, numerous human rights violations were committed. Among other things, human rights defenders and members of women's organisations received threats. Freedom of the press and freedom of assembly were restricted. Most of the crimes from that time have not been solved to this day.
Public safety has deteriorated in recent years. In particular, gang-related crime in cities and organised crime (drug, arms and human trafficking) have risen. Honduras has one of the highest murder rates per capita worldwide. Violent youth gangs are presenting a growing challenge. According to World Bank reports, more than 40,000 young people have now joined such gangs. Capacities for investigating crime, and prosecuting and convicting the perpetrators, are inadequate.
While the constitution prescribes equal rights for women and indigenous people, these groups often in reality face discrimination, for example when it comes to access to health services and education.
Poverty
Honduras is one of the least developed countries in Latin America. While the number of poor people has declined considerably over the past 20 years, a survey undertaken by the Honduran Statistics Institute in May 2010 showed that 60 per cent of all households must be considered poor or extremely poor. Of the country's workforce of 3.4 million, 43 per cent is unemployed or underemployed. Rural areas are especially affected by poverty and unemployment.
The Human Development Index (HDI, 2010) ranks Honduras 106th out of 169 countries. One of the problems is the generally low standard of education in Honduras, which also explains the low levels of productivity in Honduran businesses. Every year, tens of thousands of young Hondurans leave their country to work, legally or illegally, in the United States.
Economy
Honduras, which is heavily dependent on foreign markets, has been hard hit by the impacts of the global economic crisis. The outlook for 2011 is positive, with a projected growth rate of 3.5 per cent. The country's main export markets are the United States, Central America and Europe. Its most important export products are textiles, coffee, bananas, seafood and farmed fish, tropical timber and palm oil. Honduras' economic development depends greatly on the demand and world market prices for these products. Other major sources of income are tourism and remittances from Hondurans living abroad. In 2009, they sent 2.5 billion US dollars to their families in Honduras – the equivalent of the budget of Honduras' national government.
The country's industrial sector is poorly developed, and the economy is largely based on agriculture. However, the production of staple foods is being neglected for the benefit of export products. As a result, Honduras is only able to meet its domestic demand for food through imports, whose prices have been rising sharply recently. Twelve per cent of the population is undernourished. In view of the high level of population growth, the United Nations warned Honduras in early 2011 that it might be facing a food security crisis soon.
Environment
On the American continent, Honduras is one of the countries with the greatest biodiversity. Rainforests cover large swathes of the country. Coral reefs around the Caribbean islands off the Honduran coast are home to a vast diversity of marine organisms. However, Honduras' ecosystems are at risk: every year, around three per cent of forest land is cleared, mainly though uncontrolled and illegal logging. Overfishing, marine pollution and increasing levels of diving tourism are contributing to the destruction of the coral reefs.
As for agricultural land, permanent soil damage is being caused by extensive livestock farming and high fertiliser and pesticide inputs. Chemicals used for open-pit mining are posing a threat to drinking water reserves. Honduras' largest inland lake is being polluted as a result of the unchecked expansion of fish farming.
The situation in Honduras' large cities is also alarming: largely unregulated construction activities, the lack of waste management and wastewater management and the establishment of air- and water-polluting industrial facilities are putting a great strain on the environment and jeopardising human health.
Development potential
Potential for growth exists especially in agriculture, which needs to be diversified and modernised, and in the "maquiladora" sector (which repairs, processes, converts or adapts goods from industrialised countries). With its free port schemes, liberal capital transfer regime and tariff and tax concessions, Honduras has attracted investors from the United States, Taiwan and Korea.
In some parts of the country there is still potential for development in the tourism sector and in renewable energy production. At present two thirds of the country's power is generated in power plants operating using imported oil. Only about one third of power is obtained from hydropower plants.
Honduras is rich in natural resources, which could be used sustainably. The subsistence farming sector is of the utmost importance to combating poverty, and its huge potential could be realised if issues of land tenure were settled. Indigenous communities in particular are disadvantaged when it comes to land rights. Due to the poor justice system, they are rarely able to enforce their traditional use rights.
Priority areas of German development cooperation
In addition to Spain and the United States, the Federal Republic of Germany is an important bilateral donor to Honduras. At the government negotiations in January 2011, Germany committed 30 million euros for the years 2011 and 2012, of which 20 million euros was for Financial Cooperation and 10 million euros for Technical Cooperation.
Germany also contributes to the development cooperation of international organisations (World Bank, Inter-American Development Bank) and the European Union with Honduras. In order to coordinate their activities, most donors in Honduras have joined the G16 group.
Honduras and Germany have agreed on the following priority areas of cooperation:
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Environmental and resource protection
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Education
In addition, the two sides agreed to pursue a public financial management project. It is intended to help build administrative capacity in Honduras and increase the tax ratio.
Together with its Central American neighbours, Honduras also takes part in regional projects relating to sustainable economic development, environmental and resource protection, renewable energy / energy efficiency, prevention of youth violence, and HIV/AIDS prevention.
Environmental and resource protection
Forests – mainly conifers – cover more than 40 per cent of the total area of Honduras. Forests have an influence on the microclimate and on the region's hydrology and, thus, on people's drinking water supply. However, in the past 30 years, around one third of Honduras' forests have been destroyed. There are many reasons behind this illegal logging, including short-term business interests, the expansion of cattle breeding and agriculture, widespread poverty and the weakness of state monitoring bodies.
Resource conservation must be aligned with the interest which the population has in resource use. Within the framework of development cooperation, Germany is therefore advising Honduras on the development of a sustainable system of forest management. Other areas of activity are the delivery of management support for water catchments and nature reserves and the development of strategies for community-based forest management and regional rural development.
In 2007 the Honduran parliament passed a new law on the conservation of its tropical forest. The law strengthens the role of the public forest supervisory authority and provides a sound basis for its financing. It gives communities a greater say in forest control and provides for the clarification of indigenous communities' land rights. The law also introduced severe sanctions for illegal logging. Germany contributed to the drafting of the law, and is now supporting its implementation.
Education
Half of Honduras' population consists of children, teenagers and young adults. Improving education, especially at primary level, is key to the future development of Honduras. The school system has many weaknesses: schools are in very poor condition and many teachers have not received sufficient training. Teachers' salaries are a recurrent topic of debate. The education system is suffering because of frequent strikes.
The poor standard of education acts as a constraint on labour productivity and the development potential of the people, and thus of the country too. Administrative bodies cannot recruit educated officials, and companies cannot find managers or skilled workers. The education ministry has therefore initiated a reform of primary education, which is being supported by Germany. The focus is on improving teacher training and curricula.
Germany is also involved in the international Education for All – Fast Track Initiative for primary education, which was launched in 2002. By 2015 the aim is to expand the education system to the extent that all children in Honduras can attend school for at least six years. Germany is contributing to a fund dedicated to this purpose together with other donors, implementing advisory measures and helping to improve school infrastructure.
Debt relief
Honduras was heavily indebted and participated in the enhanced HIPC Initiative. In March 2000, Honduras submitted an interim Poverty Reduction Strategy Paper (PRSP). Its final PRSP was completed in September 2001 and accepted by the World Bank and the IMF. The country reached completion point in April 2005. To date, debt relief totalling 3.7 billion US dollars has been extended to Honduras. The German share of this relief amounts to around 116 million euros. As a result, Honduras' national indebtedness was successfully reduced from 68 per cent of gross domestic product in 2004 to 24 per cent in 2009. The funds freed up by this debt relief are to be used to combat poverty sustainably.
Information
Publications
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Latin America Dossier
German Development Cooperation with Latin America and the Caribbean
Topics 184
(PDF 5 MB, accessible) -
German Development Cooperation in the Forest Sector
(PDF 249 KB, accessible) -
Capacity Development for Education for All: Putting Policy into Practice
Special 152
(PDF 894 KB, accessible)
