•Press Release Latin America and the Caribbean World
November 6, 2013
Contrary to Media Reports, Honduras’ Next President “Will Have Plenty of Fiscal Space to Return to Economic Policies that Reduce Poverty”
For Immediate Release: November 6, 2013
Contact: Dan Beeton, 202-239-1460
Washington, D.C.– A new paper from the Center for Economic and Policy Research examines Honduras’ economy and finds that much of the economic and social progress experienced from 2006 – 2009 has been reversed in the years since. The paper, “Honduras Since the Coup: Economic and Social Outcomes” by researchers Jake Johnston and Stephan Lefebvre, shows that economic inequality in Honduras has increased dramatically since 2010, while poverty has worsened, unemployment has increased and underemployment has risen dramatically, with many more workers receiving less than the minimum wage. While some of the decline was initially due to the global recession that began in 2008, much of it is a result of policy choices, including a decrease in social spending.
The paper also notes that whoever wins the next election will have ample room to pursue expansionary fiscal policies, increase employment, and invest in infrastructure, education and development — despite a significant increase in debt levels in recent years. That is because the country’s debt burden is still relatively low, with interest payments on the debt totaling less than 1.7 percent, and much of the debt is internal and denominated in domestic currency.
“This paper shows that there were important economic and social gains under the Zelaya administration that were cut short by the 2009 coup d’etat,” Research Associate and paper co-author Jake Johnston said. “Unfortunately, these gains have largely been reversed in the years since, partly due to policy choices of the current government.”
The paper’s key findings include:
“Considering the rapid increase in poverty and inequality since the coup, it is no wonder that economic issues rated high among voters’ concerns in recent polls,” Johnston said. “Hondurans are clearly much worse off than they were four years ago.”