Money

The Honduran Institute for Coffee (IHCAFE) on Wednesday announced that coffee exports from Honduras declined by 49 percent in August to 85,812 60-kilogram bags, as compared to 169,515 bags in August 2009. Coffee exports during the current season, which began in September 2009 and runs through October 2010, have totaled 3.14 million bags, compared to 2.97 million bags a year ago. Despite the drop in exports, attributed to bad whether and the political crisis prompted by the overthrow of President Manuel Zelaya last summer, Honduras is poised to surpass Guatemala and become the sixth largest coffee exporter in the world. Guatemala's coffee crop has been hurt by heavy rainfall and the eruption of the Pacayo volcano in May. The value of Honduran coffee exports is pegged at about US$700 million annually by IHCAFE. Most of Honduras' coffee is grown on small- to medium-size farms. Some 98 percent of the crop is cultivated by about 100,000 families who each own no more than 17.3 acres of land. (9/3/10) (photo courtesy Sustainable Harvest)

The World Bank (WB) on Monday signed an agreement with the government of Honduras to loan US$40 million in support of the Family Allowance Program (PRAF), which provides cash transfers -- the "Bono 10,000" -- to the poorest families to foster basic human capital formation through investments in education, healthcare, and nutrition. "Through this project, we hope to reach sixty thousand of the families that live in the most extreme poverty conditions and provide benefits of about US$44 per month for each family," said Laura Friganti of the World Bank. The interest-free loan is scheduled for repayment within 20 years, with a grace period of ten years before payments must commence. (8/3/10) (photo courtesy Andrea Peer/World Vision)

The United States Export-Import Bank (Eximbank) and Central American Bank for Economic Integration (CABEI) will finance the construction of the 102-megawatt Cerra de Hula wind farm in the municipalities of Santa Ana and San Buenaventura, 20 kilometers south of Tegucigalpa. The turnkey project, contracted by Mesoamérica Energy, is being undertaken by a consortium made up of Gamesa (76 percent) and Iberdrola Ingeniería y Construcción (24 percent) of Spain. It is expected to be completed by the end of 2011. The farm, which will consist of c51 Gamesa G87-2 MW wind turbines, will have a 20-year power purchase agreement with the National Electric Power Company (ENEE). (8/2/10) (photo courtesy Internet)

In advance of next week's meeting in Tegucigalpa with representatives of the International Monetary Fund (IMF), Honduran Minister of Finance William Chong Wong on Thursday characterized Honduras' financial situation as "chaotic". The Honduran government, which has been hampered by a severe shortage of operating capital and a public debt of US$2 billion left by the previous adminsitration, is seeking monetary support for its national budget from the IMF. Mr. Chong Wong noted that while Honduras is starting to show signs of economic growth, "the financial situation is chaotic; we are broke." He added, "We are not able to meet our immediate debt obligations." One of the main problems cited by Mr. Chong Wong is tax evasion by companies in Honduras. "I cannot tell you exactly how much the government is losing, but it a lot," said Mr. Chong Wong. "The [level of tax] evasion is very high."(7/30/10)

The Central American Bank for Economic Integration (CABEI) on Tuesday extended a US$288 million credit to the government Honduras to fund social programs. The loan was announced yesterday by Minister of the Presidency María Antonieta Guillén de Bográn. Of the total amount, US$150 million will be allocated for education, health, and nutrition programs; US$85 million for the daily lunch program for public school students; US$12.2 million for food security related efforts; and US$30 million for miscellaneous social projects. The funds were approved one week after member governments of the Central American Integration System (SICA) expressed support for the Honduran government and called for the reincorporation of Honduras into the Organization of American States (OAS). The OAS voted on July 5, 2009 to suspend Honduras in response to the ousting of President Zelaya on June 28, 2009. (7/29/10)

Inter-Mac International, LLC of the United States will provide US$100 million in financing to the government of Honduras for construction of low-cost housing. According to the company's president, Xavier Arguello, the loan agreement will be signed in Tegucigalpa on Wednesday by President Porfirio Lobo. The signing will coincide with the delivery of 100 completed homes to low-income families in the northern city Choloma. The homes were also financed through a loan from Inter-Mac. A total of 3,500 housing units are planned for the project in Choloma, which is also envisioned to include paved roads, green areas, and potable water and electrical power systems. Families receiving homes, valued at about US$10,000 each, will pay an initial sum of US$240, and then monthly payments of US$100 over 25 years. (7/25/10)

The Honduran government is negotiating the possible export of cattle to Egypt. According to Honduras' Vice-Minister for Agriculture, Juan Carlos Ordóñez, and the president of the country's National Federation of Farmers and Ranchers (Fenagh), Leopoldo Durán, the government of Egypt has expressed interest in purchasing 3,000 head of cattle from Honduras every three months. One of the main issues under discussion is whether the shipments to Egypt should be in the form of live cattle or slaughtered beef, which would determine if the method of transport would be aircraft or refrigerated ships. Honduras' cattle industry employs approximately 300,000 workers. It accounts for some 3 million head of cattle -- down from 4 million a decade ago. New exports to Egypt, as well as El Salvador and Nicaragua, signal a possible upturn in business prospect for the industry. (7/25/10) (photo courtesy Internet)

The Inter-American Development Bank (IDB) yesterday signed an agreement to loan US$96 million to the government of Honduras. Of the total funds, US$77 million are allocated for a program to improve the transport of passengers and cargo in the agricultural corridor between Tegucigalpa and Puerto Castilla. The remaining US$19 million will be spent on a project to help prevent and mitigate the risk of natural disasters. "We know that all the work undertaken by the government, civil society, and the private sector [in Honduras] can be destroyed in a matter of seconds whenever there is a natural disaster, and so now this loan will allow for prevention and mitigation projects at the local level and also strengthen early-warning systems," said Gina Montiel of the IDB. (7/16/10)

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The amount of money sent to Honduras by Honduran nationals living abroad rose by 3.2 percent through August 27. According to the Central Bank of Honduras, remittances for January-August totaled US$1.547 billion, compared to US$1.499 billion for the same period in 2009. The increase represents good news for Honduras, as remittances are the primary generator of revenue for the country, easily surpassing the maquila, tourism, and agriculture sectors. In 2009, remittances to Honduras accounted for US$2.408 billion in income -- a decline from the previous year due to the world financial crisis and, to a lesser degree, the rise in deportations of undocumented Hondurans from the United States. The Central Bank has been tracking these money transfers for many years. In 2001, remittances were estimated at US$460 million; in 2002, US$770 million; in 2003, US$862 million; in 2004, US$1.134 billion; in 2005, US$1.763 billion; in 2006; US$2.359 billion; in 2007, US$2.512 billion; and in 2008, US$2.707 billion. (8/28/10) (photo courtesy Internet)

The United States government has established an initial fund of US$100 million for Honduras to help pay for emergency response needs related to tropical storm Agatha that has caused severe flooding throughout Central America during the past two days. The governments of Honduras, El Salvador, and Guatemala are working under declared states of emergency to facilitate the distribution of aid to affected areas. According to Honduras' emergency management agency, COPECO, at least 17 people have died in the country as a result of the storm. In addition, approximately 12,257 people have either been evacuated or have lost crops, 3,120 people have been taken to temporary shelters, and 539 families have been left homeless. COPECO maintains red alert situations in the departments of Choluteca and Valle in the south, Francisco Morazán in the central region, and Cortés and Yoro in the north. (6/1/10)