Honduras

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Development Challenge The USAID Program Other Program Elements Other Donors Program Data Sheets Summary Tables USAID Search: Honduras Previous Years' Activities 2002, 2001, 2000, 1999, 1998, 1997 Last updated: 34     THE DEVELOPMENT CHALLENGE: Honduras is one of the poorest countries in Latin America. Economic growth over the last decade only slightly exceeded population growth and had little effect on poverty reduction. Average per capita annual income is less than $600 and approximately two-thirds of Honduran households live in poverty. Along with the rest of Central America, Honduras is suffering from a long-term economic crisis both in its agricultural and manufacturing sectors. The socioeconomic circumstances, i.e. lack of employment, More and more Hondurans are migrating to the U.S. for economic reasons. It is estimated that over 600,000 Honduran immigrants live in the U.S., most of whom are illegal. insufficient policing, etc., have lead to increased crime and personal security problems in Honduras. The increasing crime rate also stems from a rising prevalence of gangs in Honduras, as well as organized gangs in Honduran immigrant groups in the United States. This dramatically deteriorating security situation is another serious disincentive to investment. Furthermore, the influence of special interests represents a direct challenge to the application of the rule of law and limits the public's confidence in the democratic system and the notion of equal protection under the law. Combined with chronic shortcomings in the provision of adequate education and health services, these daunting and persistent challenges contribute to the growing disappointment felt by many Hondurans that democracy has failed to deliver on its economic and social expectations. Honduras has the largest concentration of HIV/AIDS in Central America. A new presidential administration, under the Nationalist Party leadership of Ricardo Maduro, entered office on January 27th, 2002. Maduro, a successful businessman and former president of the Central Bank of Honduras, was elected primarily on his promises to transform Honduras into a safer and more prosperous country in which to live, work, invest, and visit. His strategy is based on the following seven pillars: 1) personal security and secure property rights; 2) democratic reform; 3) economic growth with equity; 4) human resource development; 5) combating corruption; 6) environmental sustainability; and 7) a just foreign policy. These pillars are similar to the Stockholm Principles announced by the donor community in responding to Hurricane Mitch devastation in May 1999, and echoed nearly two years later in the white paper on transformation delivered by the U.S. Ambassador on behalf of the highly successful Donors' Follow-up Group (now the G-15). The incoming government will benefit greatly from the post-Hurricane Mitch reconstruction program of the past three years and successful negotiation with the International Monetary Fund (IMF) of the third-year Poverty Reduction Growth Facility (PRGF) in October 2001. Approximately two-thirds of the $2.7 billion that the international donor community pledged in Stockholm in May 1999 has been disbursed and most of the critical public infrastructure that was destroyed by Hurricane Mitch has not only been replaced, but has been built back better. Along with approving the third year of the PRGF and disbursing $136.5 million in the last quarter of 2001, the International Financial Institutions also approved Honduras's Poverty Reduction Strategy Paper, which entitles Honduras to greater interim debt relief next year and eligibility to receive full Heavily Indebted Poor Country (HIPC) debt relief in October 2002 if it complies with PRGF program conditionality. Honduras's total debt burden is $4.1 billion, the equivalent of 76% of its GDP. THE USAID PROGRAM: FY 2002 Estimate: $33.147 million FY 2003 Request: $40.286 million The Program Data Sheets provided below cover the six ongoing objectives for which USAID is requesting FY 2002 and FY 2003 funds. These six objectives concentrate on economic reactivation to meet the needs of the poor, sustainable and integrated management of water resources, improvements in family health, strengthened rule of law and respect for human rights, improved access to basic education and skills, and more responsive and effective municipal governments. USAID is currently preparing its follow-on strategy with strong links to the Honduran Poverty Reduction Strategy Paper and a focus on the long-term transformation issues critical to Honduras' social, economic, and political development. The new strategy will be designed to ensure that its programs maximize the combined impact of its initiatives on the pressing needs for economic growth, transparency, and decentralization and fundamental reforms in the judicial, health, and education sectors. It should also be noted that the activities identified herein complement the areas of emphasis included under the new Partnership for Prosperity initiative, including, but not limited to, efforts to assist small farmers in producing non-traditional crops and improving their competitiveness through improved technologies and marketing; improving trade and investment policies; promoting financial sector reforms; continued strengthening of disaster mitigation capabilities at the national and local levels; improved education and youth employment; and assistance for anti-corruption initiatives. ONGOING PROGRAMS FOR WHICH NO NEW FY 2002 OR FY 2003 FUNDING IS REQUESTED: Number: Title: Last Notified: Planned Completion: 522-005 Critical Hurricane Reconstruction Needs Met FY02 CBJ, p.340 FY 2002 OTHER PROGRAM ELEMENTS: With funding from the Central America Regional Program (G-CAP) trade negotiators and administrators are trained in trade, labor, and energy policies in order to prepare for Honduran integration into hemispheric markets. G-CAP's regional environmental program focuses on border areas and supports implementation of the Central America - U.S. Agreement's (CONCAUSA) commitments to biodiversity conservation and environmental legislation. G-CAP's regional HIV/AIDS program increases the capacity of local organizations to deliver HIV/AIDS services and information. Honduras has benefited from programs managed by USAID's Office of Regional Sustainable Development (LAC/RSD) to strengthen regional mechanisms to promote human rights, fortify government accountability, and promote decentralization and local governance. Through its farmer-to farmer program, the Office of Private and Voluntary Cooperation (DCHA/PVC) funds short-term, U.S. volunteer technical assistance to increase farm and agribusiness productivity and incomes. The Office of Women in Development (EGAT/WID) is funding a study in Honduras to determine the impact of women's integrated literacy programs on social and economic development indicators. In 2000, the Office of American Schools and Hospitals Abroad (DCHA/ASHA) provided funds to the Pan-American Agricultural School (Zamorano) to repair Hurricane Mitch-related damage. Overall development assistance to Honduras totaled about $300 million, excluding debt relief, in 2001. OTHER DONORS: Through the Stockholm follow-up effort, the highly successful G-15 donors group has been working together closely to ensure the full application of the Stockholm Principles of poverty alleviation, environmental protection, accountability and transparency, civil society participation, and democracy. The U.S. has been the largest bilateral donor during the three years following Hurricane Mitch. Other major bilateral donors include: Japan (roads, bridges, agriculture, disaster mitigation); Sweden (bridges, housing, health, statistics); Germany (housing, education, agriculture, forestry); and Spain (municipal infrastructure, justice, education). USAID is coordinating closely with other donors on municipal infrastructure projects, as well as social sector projects such as education, health, justice, transparency, environment, and poverty reduction. The major multilateral lenders in Honduras are the Inter-American Development Bank (public infrastructure, government reform, rural development, education, and health), the World Bank (public infrastructure, government reform, anti-corruption, and education), the IMF (PRGF support), the European Union (municipal and rural infrastructure), and the Central American Bank for Economic Integration (public infrastructure, private sector). Program Data Sheets 522-001  Economic reactivation meeting the needs of the poor 522-002  Improved Management of Watersheds, Forests, and Protected Areas 522-003 Sustainable improvements in family health 522-004  Strengthened Rule of Law and Respect for Human Rights 522-006  Improved Opportunity to Obtain Basic Education and Vocational Skills 522-007  More responsive and effective municipal government Country Background Information Resources     CIA Factbook Library of Congress National Geographic Country Maps State Dept. Country Information

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