Note: This document may not always reflect the actual appropriations determined by Congress. Final budget allocations for USAID's programs are not determined until after passage of an appropriations bill and preparation of the Operating Year Budget (OYB).
HONDURAS
FY 1997 FY 1998 FY 1999 Actuals Estimate Request Development Assistance.............. $11,668,000 $10,085,000 $15,345,000 Child Survival and Disease.......... $9,983,000 $7,600,000 $6,540,000 P.L. 480 Title II........................... $3,723,000 $5,097,000 $4,403,000 Introduction
Foreign aid supports U.S. interests in Honduras which are driven by its proximity to the United States and include: a desire for a stable democracy with protection of human rights; expanding trade and investment opportunities; high levels of illegal immigration, narcotics transit, global environmental and health threats; and Honduran support for U.S. positions in international fora. Honduras recently completed its fifth consecutive open and fair election and is undertaking broad judicial reforms, thus rapidly deepening its democratic processes and respect for human rights. Honduran cooperation in curtailing both alien smuggling and drug transit has been excellent. Recent reforms are stimulating economic growth, expanding employment, reducing illegal migration, and opening markets for U.S. exports and investment. Foreign aid is also addressing such U.S. global interests as destruction of biodiversity and tropical rain forests, high levels of HIV/AIDS, and rapid population growth.
The Development Challenge
Honduras faces daunting development challenges: severe poverty, protectionist economic tendencies, archaic judicial practices, inadequate education and health care systems, and widespread environmental degradation. While the challenges are enormous, Honduras is making very impressive progress due in part to USAID, but continued aid is needed. Graduation from U.S. assistance is not expected in the near-term. U.S. and other debt relief efforts in 1997 helped reduce the external debt to $3.8 billion (177% of exports). Honduras is not in the World Bank-IMF group of "heavily indebted poor countries."
Honduras is the fourth poorest country in Latin America with per capita annual income below $750 and a poverty rate above 65%. Expanded efforts are needed to stimulate rapid economic growth and provide small entrepreneurs and farmers with adequate access to land, technology, financial services, markets, and basic education (e.g., farmers lose when: the Government of Honduras (GOH) controls markets to keep urban food prices low; secondary and vocational schools can accommodate only 35% of the children graduating from primary school; and the vast pine forest resource is not being harvested efficiently or sustainably). USAID strategy involves policy reforms to remove remaining detrimental state interventions (such as price, trade, and regulatory controls), and awareness campaigns to expand the culture of open markets and competitiveness. It also involves targetted activities to: improve economic access; expand financial services to microenterprises; promote sustainable management of commercial pine forests and environmental protected areas; and enhance basic and vocational education. Recent USAID results include: over 25,000 land titles issued; 95,000 microenterprise loans; 9,000 youth completing alternative basic education programs; 70% of children now completing grade six; and 600,000 hectares of commercial pine forest under effective management. While progress is encouraging, continued strong GOH commitment and donor support is needed.
Honduran democratic institutions must be strengthened. A major problem is an archaic, inefficient, unfair inquisitional court system (e.g., 80% of prisoners have not been tried or sentenced). The overly centralized government is not responsive to public needs. USAID strategy is to strengthen rule of law and respect for human rights, and develop more responsive and effective municipal government. Recent Honduran successes to which USAID programs and policy dialogue have contributed include prosecutions of corrupt officials, some of whom are now incarcerated, and a seven-fold increase since 1994 in prosecutions for corruption and crimes against women, minorities and the environment. Local
government is far more effective and responsive; budgets are up; public services are much better; and civic participation is accelerating. While public enthusiasm is strong, some groups still resist judicial reforms and decentralization of the central government power to local municipalities.
Basic health care is weak in Honduras, a poor country struggling to meet the needs of a population growing at 2.7% a year. Infant mortality remains at 40 deaths per 1000 live births, and over 25% of the surviving infants are seriously malnourished during the second year. Recent progress, while impressive, is not sustainable without continued donor aid; thus sustainability constitutes an important challenge. USAID's strategy for sustainable improvements in family health focuses on reducing fertility, infant and maternal mortality, malnutrition, and the spread of HIV/AIDS by improving delivery and increasing use of health care services. USAID assisted results include vaccination of 94% of children against childhood diseases; halving infant mortality since 1979; slowing the spread of HIV/AIDS, and increasing couple-years contraception protection by 19% in the past year. Environmental abuse is destroying biodiversity and ruining key fresh water, soil, forest, and marine resources, but is still not a high government or public priority. USAID's strategy supports NGO activities and has expanded environmental protection to 192,000 hectares in 1997 compared to only 5,000 hectares in 1993. Continued progress is highly dependent on continued foreign aid.
Other Donors
Based on 1995 ODA data, the top five donors are: World Bank (18% of total aid - government reform, education); Japan (18% - health, agriculture); USAID (11%); IMF (8% - structural adjustment); and IDB (7% - government reform, education). USAID coordinates closely with other donors.
FY 1999 Program
FY 1999 funds are needed to achieve development results by the end of the current strategy (2003) in the areas of broad-based economic growth, improved family health, democracy, and sustainable environmental management. We expect to consolidate economic policy reforms, institutionalize accessible financial services for small and microenterprises, expand the culture of open markets and entrepreneurship, and open markets and economic access to microenterprises and the poor. In target secondary cities, farmers and other entrepreneurs will have better access to inputs, production technology, credit, and markets; incomes will rise generating more economic growth through multipliers as rising incomes and employment create greater demand for goods and services. Virtually all commercially viable pine forest areas will be under sustainable management plans almost doubling economic return and generating 100,000 new jobs. About 2.6% of Honduras' total area will be under improved management as protected areas. In five years, sixth grade graduates will increase 20% and successful participation in the alternative basic education program will double to 110,000 per year. Annually, 3,000 new vocational schools graduates will be employed augmenting their pre-training salaries by $1,000 per year (a total of $3 million/year).
The FY 1999 budget will contribute to efforts to improve greatly the sustainability of health care systems, while improving health care delivery. By 2003, maternal mortality and malnutrition of children 1-2 years old to decline by 30%, while infant mortality will decrease by 16%. Fertility rates will decline from 4.9 children per women to 4.1. HIV/AIDS seroprevalence rates will be checked. Funding of private and public health care will rely much more on domestic resources and much less on donor aid. Funds are also requested to continue USAID efforts to strengthen rule of law and respect for human rights, and develop more responsive and effective municipal government. Expected results include the replacement of current written, inquisitional justice system with a new oral, adversarial system, which will be far more transparent and fair. We also expect significant improvements in administrative efficiency of both the court system and local government. Municipal governments will be more responsive to their constituents, will have increased authorities, will be generating greater revenues, and will ensure better provision of public services such as water, sewers, and refuse collection.
HONDURAS
FY 1999 PROGRAM SUMMARY
($000s)
USAID
Strategic and Special
ObjectivesEconomic Growth and Agriculture Population and Health Environ-ment Democracy Human Capacity Develop-ment Human-itarian Assistance
TotalS.O. 1
Enhanced Economic Participation
- DA
- CSD
2,909
1,550
2,500
4,459
2,500S.O. 3
Improved Family Health
- DA
- CSD
- P.L. 480/II
5,236
3,490
4,403
5,236
3,490
4,403S.O. 4
More Responsive Democratic Processes
- DA
- CSD
550
4,600
4,600
550Sp.O. 1
Improved Management of the Envi-ronment
- DA
1,050
1,050
Totals
- DA
- CSD
- P.L. 480/II
2,909
5,236
4,040
2,600
4,600
2,500
4,403
15,345
6,540
4,403
USAID Mission Director: Elena L. Brineman
ACTIVITY DATA SHEET PROGRAM: HONDURAS
TITLE AND NUMBER: Expanded and Equitable Access to Productive Resources and Markets, 522-SO01
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $4,459,000 DA; $2,500,000 CSD
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2003
Purpose: To reduce poverty and stimulate economic growth by opening the economy and providing opportunities to the vast majority of Hondurans who currently are living in poverty. This will be achieved through a four-pronged approach: (1) improved policy environment conducive to poverty reduction through economic growth, (2) improved market access and competitiveness by the poor, (3) increased educational attainment, and (4) increased practice of sustainable pine forest management.
Broad-based economic growth in Honduras is directly dependent on enhanced economic participation, higher productivity, and increased incomes for the over 65% of Hondurans currently living below the poverty line. Access to land, credit, technology, markets, and basic education is essential to break the poverty cycle and enable all Hondurans to achieve their full economic potential. Widespread achievement of this potential will stimulate self-sustaining growth for the economy as a whole. The GOH is committed to this objective and is removing important constraints to its achievement by undertaking reforms to liberalize markets, to provide land titles to small farmers, to support credit programs for small farmers and entrepreneurs, to rationalize timber sales, and to sustainably manage commercial pine forests, a major economic resource. Recent experience indicates that low income groups, with proper assistance programs, can take advantage of such reforms, increase incomes, and contribute to economic growth.
USAID Role and Achievements to Date: USAID provides analytical leadership to Government of Honduras (GOH) policy reform efforts, technical assistance, training, and some capital assistance to NGO and GOH programs. The poverty rate declined 3% in 1997 to 66%. In 1997, USAID-supported NGOs made 95,000 loans to micro and small entrepreneurs, 86% to women. The productivity of these loan programs is evidenced by strong demand for the loans and high repayment rates by borrowers. The GOH increased its monthly issuance of individual land titles from 350 in 1994 to over 2,000 in 1997; a quarter of the titles are issued to women. The GOH maintained the movement toward liberalized trade and price policies. As a result, investment in agriculture has increased by 27% and total employment by 4.1%. The number of hectares of commercial pine forest under sustainable management increased from 24,000 in 1992 to 600,000 in 1997. A total of 362,000 cubic meters of timber were sold through a transparent auction system in 1997, compared to a target of 150,000. Since 1986, the number of primary school graduates increased 63% while the proportion of children completing primary school increased from 50% to 70%; standardized test scores for grades 1-6 increased by an average of nearly 40%. USAID-assisted improvements to primary education since the 1980s are increasing Honduran incomes by an estimated $85 million annually. Over 90% of 30,000 graduates from USAID-supported vocational training programs, 35% of them women, are employed with annual incomes increased by about $1,000 per graduate, for a total of $27 million per year.
Description: USAID-supported programs are improving the access and opportunities of low-income Hondurans to resources that increase their productivity and income. The policy program is increasing incomes and investment by implementing appropriate policies for agricultural prices, trade, land-tenure, and forestry management. The small farmer export development program transfers production technology and marketing skills to small farmers. Microenterprises, small farmers, and small businesses are receiving improved financial services from agricultural cooperatives, farmer-owned enterprises, and a network of NGOs under the USAID small farmer agribusiness and small business programs. Forestry activities demonstrate sound forest management planning in the most important forest districts in Honduras and extend proven approaches nationwide. USAID supports alternative
basic education and NGO vocational training programs which target low-income, out-of-school youth and adults. Also contributing to the strategic objective are related USAID activities directed toward strengthened rule of law and improved management of the environment.
Host Country and Other Donors: Through its economic reforms and ongoing education and agriculture programs, the GOH is the main contributor to this objective. In pursuing economic reforms, USAID collaborates closely with the multinational financial institutions and with the GOH economic and social policy analysis unit (UDAPE). USAID-supported land titling program is coordinated with the World Bank cadastral registration activity. Forestry activities are coordinated closely with the multilateral banks, Canada, Finland, and Germany. In education, USAID coordinates closely with Germany and the World Bank as they replace USAID's assistance to formal primary education while USAID, along with the Inter-American Development Bank (IDB), expand efforts in alternative basic and vocational education.
Beneficiaries: Primary beneficiaries are the more than 3.5 million Hondurans who are currently below the poverty line, the more than one million school children seeking to achieve their full economic potential as adults, and out-of-school youth and young adults needing alternative basic and vocational education in order to improve their productivity and income.
Principal Contractors, Grantees, or Agencies: U.S. organizations: The U.S. Forest Service, Management Systems International, Finance Company for Agricultural Cooperatives, Chemonics International, and Accion International. Honduran organizations: Honduran Council for the Private Business, Jose María Covelo Foundation, Honduran Agricultural Research Foundation, National Foundation for Honduran Development, and Advisory Council for Human Resource Development.
Major Results Indicators: Baseline Target Improved Wall Street Journal Index of Economic Freedom 3.15 (1996) 3.00 (2000) Private Sector Employment in Total (1990) 1,094,200 1,500,000 (2000) Agric., Industrial, and Services Female 262,608 475,000 (1998) Number of Loans to Small Total (1993) 28,538 115,000 (1999) and Microenterprises Female 19,120 93,400 Annual Number of Land Titles Issued Total (1993) 1,999 20,000 (1999) Female 394 5,000 Pine Forest Effectively Managed (hectares) 24,000 (1992) 1,100,000 (2000) Number of Youth Passing Alternative Total (1996) 43,000 110,000 (2003) Basic Education Programs Female 22,400 55,000 Percent of Children Completing Total (1996) 71.4% 80.0% (2003) Primary School (grade 6) Female 72.0% 80.5% Graduates from PVO and Municipal Total (1994) 1,202 3,400 (2004) Training Centers Employed Female 366 1,020
ACTIVITY DATA SHEET PROGRAM: HONDURAS
TITLE AND NUMBER: Sustainable Improvements in Family Health, 522-SO03
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $5,236,000 DA; $3,490,000 CSD; $4,403,000 P.L. 480 Title II
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2003
Purpose: To make sustainable improvements in family health in terms of reduced infant and maternal mortality, malnutrition, and fertility, and stabilized HIV seroprevalence. This will be achieved by: increasing the use of reproductive health services, including family planning, sustaining the use of child survival services via health reform, increasing the use of practices to prevent sexually transmitted infections including HIV/AIDS, and improving household food security in Title II target areas. Improved family health is vital to the well-being of Honduras, a poor country struggling to address the basic health needs of a population growing at 2.7% per year. The GOH is committed to a series of quality and efficiency improvement measures in a decentralized health care system. Family planning has been a major factor in reducing infant and maternal mortality; however, efforts are constrained, by lack of an official Government of Honduras (GOH) policy on reproductive health and by negative publicity and unfounded press statements by strong and vocal opposition groups.
USAID Role and Achievements to Date: USAID plays a lead role in the sector, engaging in policy dialogue and providing technical assistance, training, and capital assistance. USAID activities include technical assistance, training and limited commodity support to the Ministry of Health (MOH), assistance to private family planning agencies, a rural water and sanitation program, and a P.L. 480 Title II food security program. Infant mortality declined from 85 per 1,000 live births in 1979 to 42 in 1993. With vaccination rates for children under one year exceeding 94%, Honduras has the best record in Latin America. Children aged 12-23 months, who are seriously malnourished, declined from 30% in 1987 to 27% in 1996. Recent data indicate that the spread of HIV/AIDS has started to slow. The total fertility rate declined from 5.1 children per women in 1991 to 4.9 in 1993-95; while couple-years of contraception protection increased from 311,724 in 1996 to 371,760 in 1997. Total contraceptive prevalence in women increased from 47% in 1991 to 50% in 1996. The use of modern methods of contraception increased from 35% in 1991/92 to 41% in 1996.
Description: USAID supports a variety of interventions, including vaccination programs, oral rehydration therapy, maternal health care, reproductive health, and targeted nutrition programs. Particular attention is given to achieving sustainable delivery of services. Under a new health reform activity in 1999, USAID will assist the GOH to: a) improve the quality and efficiency of its public sector primary health services; b) improve health policy to increase equitable access to primary health care; and c) increase public and private sector resources for primary health care. The national AIDS prevention program promotes preventive practices, including condom use. USAID grants support AIDS prevention activities of Honduran NGOs and the MOH. The P.L. 480 Title II program implemented through CARE focuses on improving nutritional status and food security in the neediest regions of the country. USAID's family planning activities with the MOH and the private sector Honduran Family Planning Association are expanding access to and quality of services, with the goals of increased use of modern family planning methods and greater financial self-sufficiency of the Association. Related USAID activities, which increase incomes and education levels of the poor, contribute directly to improved family health.
Host Country and Other Donors: Despite its austere financial reform program, the GOH is committed to providing high-quality, health services for its citizens. Weak management systems and inadequate sources of financial support within the MOH remain a challenge to an effective and sustainable public health system which is able to keep pace with growing needs and demands for services. USAID
coordinates with the IDB on AIDS prevention assistance and interventions, and with the cooperative programs of Japan, Sweden, United Nations Children's Fund, the Pan American Health Organization, the European Union, and the Spanish Technical Cooperation on child survival interventions.
Beneficiaries: Primary beneficiaries are the over two million women and children in low-income Honduran families, which currently lack access to quality reproductive health, child survival, and family planning services. Approximately 128,000 children and adults receive nutrition supplements. Beneficiaries of the AIDS prevention program are the high-risk groups, including female factory workers in major cities and the Garífuna ethnic group (of African heritage).
Principal Contractors, Grantees, or Agencies: U.S. organizations: CARE, Management Sciences for Health, Family Health International, Population Council, University Research Corporation and Center for Human Services, Abt. Associates, John Snow Inc., Futures Group, Johns Hopkins University, Centers for Disease Control and Prevention (CDC), Partnership for Child Health, and Save the Children. Honduran organizations: Honduran Family Planning Association (ASHONPLAFA), Health Promotion Foundation (FFS), and the Program for the Development of Women and Children (PRODIM).
Major Results Indicators: Baseline Target Infant mortality per 1,000 life births (direct estimates) 45 (1986-90) 30 (2001-05) Maternal mortality ratio per 100,000 live births 221 (1989) 125 (2003) Malnutrition among children 12-23 months of age 30% (1987) 19% (2003) Total fertility rate (average number of live births per women) 5.6 (1987) 4.1 (2002-04)
ACTIVITY DATA SHEET
PROGRAM: HONDURAS
TITLE AND NUMBER: More Responsive Democratic Processes With Greater Citizen Participation, 522-SO04
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $4,600,000 DA; $550,000 CSD
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETED DATE: FY 2003
Purpose: To strengthen rule of law and respect for human rights, and to develop more responsive and effective municipal government. In the past, corruption, nonresponsive and centralized government, weak judiciary, and lack of citizen participation plagued Honduran development efforts and discouraged investment. However, the situation is improving rapidly. Continued strong U.S. assistance is a crucial factor to the success of this process. Principal constraints are resistance of some groups to judiciary reform and reluctance by central government agencies to relinquish power to municipalities.
USAID Role and Achievements to Date: USAID engages in policy dialogue and provides technical assistance, training, and capital assistance. Achievements to date are impressive. The Public Ministry, established in 1993, is recognized as an effective force against corruption and impunity. Cases adjudicated by the courts involve, for the first time, accusations against high-level civilian and military officials, some of whom have been incarcerated. The number of cases prosecuted for corruption and crimes against women, minorities, and the environment has increased seven-fold since 1994, while adjudication of these cases has increased by eight-fold since 1995. Sanctions against dishonest court officials during the first nine months of 1997 increased by 11% compared to the same period in 1996. Average participation at open town meetings grew from zero in 1990 to 137 individuals per meeting by 1997. Local government is becoming more responsive to citizens' needs. For example, the proportion of municipal budgets going to capital projects increased from 15% in 1991 to 48% in 1997. As a result, municipal population simultaneously provided with water, sewerage and refuse collection increased from 17% in 1991 to 31% in 1997.
Description: The rule of law program supports the Public Ministry, justice sector reforms, strengthening of Supreme Court and lower courts, and public participation in the justice system. The municipal development program is increasing citizen participation in local government decision-making, improving municipal administration, and enhancing local governments' ability to respond to constituents' needs. Related USAID activities which improve the income, education and health of the poor also enable them to participate more effectively in democratic processes. P.L. 480 Title II food-for-work activities provide roads, markets and other infrastructure as well as addressing food security constraints in the poorest municipalities in the country.
Host Country and Other Donors: USAID coordinates administration of justice programs with international donors such as the IDB, Spanish cooperation, and UNDP, as well as with Honduran agencies such as the Judiciary and Public Ministry who provide in excess of 25% counterpart financing for most justice sector programs. In supporting municipal water and sanitation activities, host country organizations include municipal governments, the Honduran Association of Municipalities, the Foundation for Municipal Development, and the Honduran Social Investment Fund, which also receives support from IDB and Spain.
Beneficiaries: All Hondurans benefit, especially the politically, socially, and economically disadvantaged and those who historically have suffered from a corrupt and ineffectual justice system. USAID provides assistance to 35 to 40 municipalities.
Principal Contractors, Grantees, or Agencies: U.S. organizations: National Center for State Courts, DPK Consulting, and one more U.S. institutional contractor to be determined. Honduran organizations: Honduran Association of Municipalities, Foundation for Municipal Development, Central American Technological University, National Autonomous University of Honduras, and University of San Pedro Sula.
Major Results Indicators: Baseline Target(1999) Criminal cases prosecuted by the Public Ministry 275 (1994) 4,865 Criminal cases adjudicated by the Courts 258 (1995) 2,585 Court officials investigated by Court Inspector General and sanctioned by the Court: Investigated 258 (1994) 550 Sanctioned 46 (1994) 80 Real municipal income increase over 1997 levels Larger municipalities 0% (1997) +20% Smaller municipalities 0% (1997) +20% Increased municipal coverage of public services (water, sewerage, refuse collection): Larger municipalities 17% (1991) 33% Smaller municipalities 3% (1996) 17% Increased community attendance to town meetings in participating municipalities: Larger municipalities 20 people (1991) 215 Smaller municipalities 97 people (1996) 135 Increased number of small municipalities incorporated into the municipal development program 0 (1997) 6
ACTIVITY DATA SHEET
PROGRAM: HONDURAS
TITLE AND NUMBER: Improved Management of the Natural Environment, 522-SpO1
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY 1999: $1,050,000 DA
INITIAL OBLIGATION: FY 1995 ESTIMATED COMPLETION DATE: FY 2003
Purpose: To improve sustainable management of the natural environment and protection of biodiversity. The most serious environmental problems are destruction of forests, watersheds, marine resources, and biodiversity; hillside erosion from farming; and health problems tied to poor sanitation and pollution. Experience with sustainable environmental management is limited. There are few trained professionals. Hillside farmers and foresters are not familiar with soil and water conservation methods. Environmental groups are few and relatively weak, though their number and strength are growing. The Government of Honduras (GOH) is taking some steps; for example, numerous "protected areas" have been declared, but budget to actually "protect" these is lacking because environmental protection is still a low government priority.
USAID Role and Achievements to Date: USAID provides technical and financial assistance to strengthen Honduran institutions and finances sub-grants for environmental protection. With USAID help, protected areas under improved environmental management have increased from one covering 5,000 hectares in 1993 to 15 areas covering 192,000 hectares in 1997.
Description: Sub-grants, which give priority to conservation of ecosystems/biodiversity and sustainable management of watersheds, are developing improved management plans for protected areas within the Honduran National System of Protected Areas. Improved management includes definition of areal limits, legalization, demarcation of boundaries, assignment of institutional responsibilities, preparation of management plans, and infrastructure development. Sustained implementation involves mobilizing public and private resources and economic incentives for wise resource use. Related USAID activities include aid for family planning, sanitation, solid waste, and the special GOH prosecutor for environment.
Host Country and Other Donors: Close technical cooperation between USAID, UNDP, other donors, and environmental NGOs is helping the GOH to fulfill its proper role as a guardian of Honduran environmental patrimony.
Beneficiaries: Primary beneficiaries are the next generation of Hondurans who must depend upon the country's natural resource base for its future economic well-being.
Principal Contractors, Grantees, or Agencies: U.S. organizations: Department of the Interior, Peace Corps, The Nature Conservancy, Global Village, Katalysis, Tropical Forest Management Trust, Rare Center for Tropical Conservation, Wildlife Conservation Society, and World Wildlife Fund. Honduran organizations: Honduran Environmental and Development Foundation.
Major Results Indicators: Baseline Target Number of areas under effective environmental protection 1 (1994) 28 (2003) Area under effective environmental protection (hectares) 5,000 (1990) 335,164 (2003)
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