BUSINESS & ECONOMICS

Corn Vs Wheat: The Grain Debate

By JAMES STEVENSON

Corn flour and wheat flour are two very important ingredients in the recipe of every Honduran's life. It could be argued that corn represents the traditional ways and wheat flour flavors the new, more modern North American style of living which is spreading across the entire world.

Honduras has a long history of trade with the United States. The United States is Honduras' chief trading partner. In 2003 it supplied 53% of its imports and purchased 69% of its exports. U.S direct investment in Honduras is valued at $601 million, about 44% of the total foreign direct investment (FDI) in the country of $1.37 billion. There are a large number of U.S franchises which operate in Honduras, these operate mainly in the catering industry.

The United States donates a lot of aid to Honduras. The USAID budget for Honduras is $45 million in fiscal year 2004. After hurricane Mitch in 1998, the United States provided $461 million in disaster aid. In November 1998, as a response to the destruction of crops, the United States announced a donation of 10,000 metric tons of wheat flour and wheat products to Honduras. Dan Glickman, the then U.S Agriculture Secretary said at the time: "In addition to many deaths, the storm displaced hundreds of thousands of people and inflicted major crop losses. Food supplies are seriously disrupted in rural and urban areas alike, and people are desperate for the help that American farmers are ready to provide through USDA donations."

Seven years after Hurricane Mitch, the U.S continues to donate wheat to Honduras. In February 2004 the U.S donated 33,000 tons of wheat to Honduras. The wheat, worth an estimated $5 million, will be sold commercially in Honduras to raise money for rural development projects which would be implemented jointly with small- to medium-sized agricultural producers in Comayagua, Cortes, Colon, Olancho, Atlantida, Choluteca, El Paraiso, Intibuca, Francisco Morazan, Siguatepeque, and La Paz.

These donations of wheat do come at a price. Wheat flour is most commonly used in U.S baking techniques, whereas traditionally corn flour is used in Honduran cooking. To effectively use the wheat flour, Hondurans must purchase U.S baking machinery and adopt U.S methods in preparing the food, therefore by donating wheat to Honduras the U.S is starting a cycle of dependency where to use the kind donations they must purchase American products and put money back into the U.S economy. Not only does this hurt the economy of Honduras, it also paves the way for American franchises to invade Honduras and therefore increase the U.S stranglehold on the people of Honduras. These new U.S owned businesses do provide more jobs and training and allow locals to work their way out of poverty, but at the price of being dependent on the United States.

Corn rather than wheat has always been traditionally used in Honduran cuisine due to the simply fact that it is easier to grow in Honduras and wheat is quite difficult to grow. From a nutritional aspect there is not much difference between corn and wheat. For example, corn has a higher percentage of vitamin A while wheat contains more iron and calcium.

CORN

Serving size 1 cup (125g)

Calories: 472 Calories From Fat: 15
Daily Value %
Total Fat: 2g 3%
Saturated Fat: 0g 1%
Cholesterol: 0mg 0%
Sodium: 1mg 0%
Total Carbohydrate:104g 35%
Dietary Fibre: 2g 10%
Sugars: 1g
Protein: 7g
Vitamin A 5%
Vitamin C 0%
Calcium 0%
Iron 6%

WHEAT

Serving size 1 cup (125g)

Calories: 455 Calories from Fat: 10
Daily Value %
Total Fat: 1g 2%
Saturated Fat: 0g 1%
Cholesterol: 0g 1%
Sodium: 2mg 0%
Total Carbohydrate: 95g 32%
Dietary Fibre: 3g 14%
Sugars: 0g
Protein: 13g
Vitamin A 0%
Vitamin C 0%
Calcium 2%
Iron 8%

By using wheat over corn in food production Honduras will slowly start to loose its traditional cooking techniques and unique cultural flavors and gradually become more like the United States. Honduras is not a wealthy country and cannot afford to refuse donations of aid from the U.S, even if those donations do come with hidden conditions attached. Honduras' dependency on the U.S is so great it may be now impossible for the country to survive without the U.S. Not only does it still need the donations of aid, Honduran people now rely on the American franchises for jobs.

Perhaps it may be possible for locally grown corn to find its way back into the Honduran market. Not only is it easier to grow and cheaper, but it will help the people in the long term to help themselves and their country and not be so dependent on the United States.

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New Financial Law will Make it Harder for Bankruptcies

The National Congress approved the new Law of Financial Institutions, which will assure, even more, the deposits of the account owners.

The law contains measures related to the operations of the banks, their administration, functioning, the products they offer and regulates the save and loan associations, the financial societies and their way of governing.

It also contemplates new regulations about negotiations with "of shur" entities (founded by Hondurans that operate out of the country) and a new regime of stricter sanctions.

Ana Cristina Mejía, president of the National Commission of Banks and Insurance Companies, pointed out that the most important about this instrument is that it represents a change and a different focus on the banking supervision.

The New Regime

"It is becoming into a preventive supervision, instead of the curative supervision it has been up till now," she said.

Mejía explained that it creates a new regime if liquidation for troubled institutions and eliminates the special laws, under which BANHCAFE and BANFFAA were created.

The only institution left with a special regime is the Worker's Bank (Banco de los Trabajadores), and this is because their board of directives is formed by representatives of the workers, who are elected by worker assemblies and not actionists.

Nonetheless, the rest of the banking system has been adjusted to the new Law of the Financial System.

Early Alert

"With the imposing of the new law, an early alert system is created to detect troubles and weaknesses earlier in the institutions," she said.

"In other words, it is a system of indicators that are built parting from the balances and financial states of the institutions and operates with deviations related to the average," explained Mejía.

The functionary explained that if the deviations mark a yellow light, an intervention has to occur before the problem becomes chronic and can drive the institution to a state of insolvency.

She also declared that the new law states that from now on, for the foundation a bank, an amount of at least 200 million Lempiras is required. La Tribuna

By RUSSELL S. BROWN

Traders were able to breathe a sigh of relief today as oil prices dipped as fears of disruptions to the oil supplies from the Gulf of Mexico, home to around one quarter of US oil and gas production, were dispelled.

Earlier in the week energy companies evacuated thousands of offshore workers and shut down some production in the region as Hurricane Ivan continued its path of destruction across the Caribbean. Anglo-Dutch oil group Shell halted more than 272,000 barrels per day (bpd) of oil output and main rivals ChevronTexaco, ExxonMobil and French oil giant Total soon followed suite.

The news left traders nervous about the prospect of any disruptions to the supply chain. For now at least, any worries have proved to be largely unfounded. Analysts say that fears that offshore oil output and onshore refining would be severely hit by the recent storms were overdone and any threats to production were already factored into world prices.

Over the past couple of months the threat of disruptions to the supply of oil in Iraq and Russia drove US crude prices to a 21-year high, just short of $50 a barrel. The recent attack on an oil pipeline in Iraq, halting more than 200,000 bpd of crude exports from the oilfields of Kirkuk to the Turkish Mediterranean port of Ceyhan, acted to exacerbate the situation prompting worries that higher energy costs would slow global economic growth.

Key exporter Saudi Arabia said on Tuesday that it was keen to keep crude prices below $40 a barrel, and would maintain supply at 9.6 million bpd in October in an attempt to cool the market. OPEC also announced on Wednesday that they had agreed to raise its production quota by one million barrels a day although due to current over-production this is unlikely to result in any extra barrels in the market.

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THE GOVERNMENT NEEDS TO BECOME FREE FROM THE CARIBBEAN PRICES

Tegucigalpa. "To pay prices of the Caribbean, at this moment, is craziness, pure and simple", said the Costa Rican technician José Luis Sáenz, an expert on fuel biddings.

The expert was invited by the government and by the Commission of Conciliation of Fuels to perform an exposition about Costa Rica's experience on direct purchase of petroleum derivatives, which is an essay that has given positive results in terms of prices.

The Commission of Conciliation of Fuels recommended President Maduro direct purchase of fuels through a system of open bidding and to immediately change the reference market of the Caribbean to that of the Gulf.

Maduro accepted to practice with those recommendations, however, it all depends on the analysis done by Chilean technicians, who were brought to analyze the pros and cons of this mysterious and entangled negotiation of energetics.

On the exposition about this theme, the representative from Costa Rica, while Maduro was listening, expressed that terms to lower fuel prices must be applied immediately. "Mr. President, you are having the way ahead, because you understand the essence of the matter. You definitely need to become free from the Caribbean prices. To pay prices of the Caribbean, at this moment, is craziness, pure and simple", said Sáenz.

He was very clear in letting know the Honduran governor that by changing the reference market to the Honduras Gulf he would save up a great amount of money. "You have an excellent weapon of negotiation, because there is no justification for a product as fuel", he added.

Maduro's arguments
President Maduro, in his exposition, had set as a possible obstacle on direct purchase of fuels, the lack of money on arcs of the State.

"For a direct purchase, Honduras would have to turn to international financing and since it's a beneficiated country with the initiative HIPC (Highly Indebted Poor Country) it can only obtain loans under conciliating conditions."

"Besides", continued the Honduran governor, "a direct purchase would represent for the state "creating the institution, personnel, having storage capacity and finance the product itself"."

Money is not essential
Sáenz made it clear to Maduro that he doesn't necessarily has to have the money in his hands to dive in the direct purchase.

"There are many ways (of payments of fuel). Once you have unreliable data, how much it's worth at the international market, it could be possible that all the Republic of Honduras needs is the guarantee", said the technician.

"For example", he added, "you negotiate with transnationals and say: we proportionate the guarantee, you pay and the boat, when it arrives at the port (with the fuels) you distributes them".
"I think at this moment, a nationalization of foreign actives does not go through your mind, I don't think it would be cautious. North Americans are a little delicate. So, the first phase is for you to have the information", he said. La Tribuna

Banco Cuscatlan's Directors sign operating licence

By RUSSELL S. BROWN

After a long nine months of circum navigating the bureaucracy and red tape of the Honduran banking world, Banco Cuscatlan were finally granted a license to operate by the Honduran Banking Commission on Thursday morning. In a lavish ceremony at the Banco Centroamericano de Integracion Economica (BCIE), the directors signed the agreement which forms part of the Bank's $16million takeover of ten Lloyds TSB branches, six of which are here in Tegucigalpa.

The move comes as part of the banks broader strategic mission to integrate and unify the Central American region. Mauricio Samayoa, the President of Banco Cuscatlan's stockholders, remarked that they "must start working as a region; drawing from the synergies afforded by such a vast network".

Elaborating on the banks strategy, Mr. Samayoa noted that rather than just exporting the basic 'formula' of Banco Cuscatlan, they will build an entirely new bank that both draws from group synergies and is supported by a system of strong local support. Fernando Paiz, president of the Paiz supermarket chain in Honduras and Guatemala and a stockholder of Banco Cuscatlan, welcomed the deal saying that it is a safe investment, with an enormous amount of opportunity.

With well-established holdings in Panama, Costa Rica, El Salvador and Guatamala, Banco Cuscatlan's late entry into the Honduran market is a product of opportunity over anything, leaving Nicaragua as the only country in the region where they have yet to establish any operations. With over five thousand employees and $4.5billion of assets, the acquisition of Lloyds TSB in Honduras is marginal but both directors and stockholders alike are optimistic about the venture as a precursor to further expansion in the Honduran market.

For Lloyds TSB the deal marks the final stage of their withdrawal from the Central and South American regions. The sale of their operations in Panama and Guatemala, both to Banco Cuscatlan, were finalized earlier in the year and from 1st October the ten Lloyds TSB branches in Honduras will shut to reopen as Banco Cuscatlan on the 5th, marking the end of a relationship stretching back to the late 1950's. Talking to Honduras this Week, Christopher Legg, the General Manager for Lloyds TSB in Honduras, spoke sentimentally about the bank's past, saying that the decision to withdraw from the region was made in order to better concentrate on the their operation in the United Kingdom.

Businesses Inspired by Tourism Boom

Spa visions; Joaquín Caraballo at the site of his Pavana project

This month Tegucigalpa will see the opening of its first ever environmentally friendly, community-building tourism centre. In Plaza General San Martin visitors will soon be able to chill out and read books; enjoy art, food and internet access while also being able to find information about sights around Honduras. But as the doors of the centre opens, the men behind the business are already planning their next project - a spa in Pavana. Malin Rising talks to two visionary entrepreneurs in Honduras' growing tourism industry.

On first account, it is hard to make any sense of Joaquín Caraballo. Sentences containing words such as hammocks, wireless internet access and thermal pools are bubbling out of his mouth like the boiling water out of his plot of land in Pavana. But as we are walking these desolate grounds together with his business partner Jesus Chong, the geniality of his words become evident. Here is a man who sees the possible in the impossible and who has a great passion for developing sustainable projects in the rural communities.

His first brainchild, however was the tourism centre in Tegucigalpa, due to open on the first of October. Using materials bought off farmers to make a rustic environment, Caraballo has created a laid back meeting point for international visitors. Apart from providing internet access and postal boxes, the centre also has a chill out area with hammocks and a shop selling art and leather goods.

An experienced traveler himself, Caraballo saw the need for this kind of meeting place while staying in various hotels around the city. "I stayed in Plaza San Martin for a long time and saw people walking around in the lobby with nothing to do because they are afraid of going out. Right now there are over a hundred international organizations in Tegucigalpa and their workers don´t have much to do," he says.

The focus on activity is the number one key element of the Caraballo-Chong developments and the reason why they stand out amongst other tourism entrepreneurs. For Caraballo it is simple, he says: "Usually the tourism industry is concentrated on providing rooms and restaurants. But besides the rooms and the restaurants you have to provide attractions; things to see, things to do and things to buy."

The second unique aspect of the Caraballo-Chong enterprise is their sustainable and socially aware approach to the industry. Together they are determined to develop projects which benefit the rural communities and are created from natural resources. Local artists are invited to exhibit or sell their work in the centers and all interiors are bought off Honduran craftsmen. "The plan to start a spa in Pavana came about as an idea of how to create a labor making enterprise in an area which at the moment is useless. People do not use the land for anything but we believe it has great potential," says Caraballo.

The potential lies in the thermal springs which they want to use to build pools for relaxation and health recovery. The aim is to create a retreat where visitors can engage in weight loss programs, skin treatments or receive medical help for illnesses such as rheumatism, arthritis and respiratory problems. The site in Pavana also holds promises by being located right next to the main Honduran highway crossing from El Salvador to Nicaragua, making it easy to access for international visitors.

If all goes to plan the building of the spa will begin in November and continue to grow gradually according to demand, creating many job opportunities in the area. "We are going to help a lot of people over here both by providing jobs but also by helping them develop their own micro enterprises," says Caraballo.

The drive of the two entrepreneurs seems to have no limits and thoughts of how to expand once Pavana is up and running are already occupying their minds. One site in Le Tigre and one on a small island near Amapala are already in the line for development. For the visionary couple, the tourism market in Honduras holds endless possibilities.

Miguel Facussé Barjum, a Central American Role Model

Miguel Facussé Barjum, a Honduran entrepreneur, received on Tuesday, June 22 the medal of "Distinguished Central American" from his wife Vera and the general secretary of the Secretary of the Central American Economic Integration, Heraldo Rodas Melgar.

The even was attended by Ricardo Maduro, Porfirio Lobo Sosa and a group of friends and partners. "The great integration projects need the leadership, intelligence and the vision of great people."

Facussé is the founder and main actionist of Corporación Cressida since 1960, as well as several other companies in the Central American region.

He was once general manager of TACA Airways System and Latin American Aeronautic Services in Costa Rica, where he acted as an advisor for SAHSA airlines.

It is with Corporación Cressida that Facussé begins a transcendental period in the business world of Honduras.

From 1963 to 1967, with a visionary and enterprising spirit, he designs and organizes the company "Quimicas Dinam of Central America," a seed of Corporación Cressida, with which he seeks to attend the demands of the Common Market of Central America.

This is how he starts to manufacture laundry, cleaning and personal hygiene products; associating with companies such as Procter and Gamble, American Home Products, Stephan Chemical Company and Chemsearch Corporation.

During hi speech , Facussé exhorted the regional presidents, the Honduran authorities and regional institutions to increase their efforts to build "one united nation: Central America, great, strong and united for the benefit of future generations." El Heraldo

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