BUSINESS & ECONOMICS

US to pardon debt of $ 125 million to Honduras

According to William Chong Wong, Finance Minister, the United States will pardon $125 million of the debt owed by Honduras. The functionary declared that the signing of the pardon agreement will be signed “in the next few weeks.”

He also added that this action taken by the US government is part of the promise made in June by the most industrialized countries within the Group of the Eight (G8). They promise to pardon most of the debt to the highly indebted poor countries, including Honduras.

In what goes of this year, the international community has pardoned Honduras 60% of its foreign debt, which, until May 2005, added up to over $5,000 million. Radio América

Business owners ask for approval of new elecommunications Law

Representatives of approximately 1,500 companies asked the National Congress to approve the new Telecommunications Law.

Hector Ivan Nuñez, president of the Association of Private Companies of Telecommunications (ASETEL), expressed that they are afraid of the existence of a juridical emptiness as of December 25, 2005, when the telecommunication sector is liberalized in the country.

“We ask the National Congress to continue with its third and last debate referring to the approval of this new law before the legislative chamber begins is “break” due to the electoral process,” said Nuñez.

According to the business executive, this new law doesn’t promote the privatization of the Honduran Company of Telecommunications (HONDUTEL) because, nearly a decade ago, the finalization of the state monopolies was determined. El Heraldo

IMF knows about the situation in public finances

The development of the Honduran economy during the first semester of this year has begun to be analyzed this week. The mission of the IMF, headed by Luis Brewer from Paraguay, came to Honduras to revise the indicative goals contemplated in the economy program 2004-2006.

Among the indicative goals to be analyzed are the incomes and current expenses, the total fiscal deficit, the economic growth, the international reserves and the inflation. Nonetheless, the most important part of this evaluation is the situation of the public finances, which, being that it is and electoral year, the fear of this area losing control over the expenses, can affect the accomplishment of the goal of having an GIP of 3.5%, equivalent to Lps. 3,000 million.

Besides this, the effect that the high costs of fuel derivatives have on the national economy will also be debated, given that it can be related to the accomplishment of other programmed goals. The members of the mission have already accepted that this aspect has affected the consuming countries. El Heraldo

Payless Telephone enters Honduras market

By UNITED PRESS INTERNATIONAL
Published August 11, 2005

HALLANDALE BEACH, Florida — On Friday, Payless Telephone launched into a joint venture with InterGroup of Honduras to install WiFi and VoIP technology throughout the country.

Payless will supply the technology and infrastructure for the InterGroup contracts in Honduras. Payless and InterGroup will start the project in the cities of Tegucigalpa, San Pedro Sula, La Ceiba, Tela, El Progreso, La Lima, Choluteca, San Lorenzo, Juticalpa, Catacamas and Santa Rosa. It is predicted that the contract for services will exceed 100,000 users over the next 12 months, and shared revenues are estimated at over $15 million per year, according to Payless.

Humberto Mejia, InterGroup’s president of business development, said, “We are very excited to have signed an agreement with Payless and its management brings over 20 years of telecommunications experience to assist in our growth here in Honduras.”

Payless Communication Holdings president and CEO Ricardo J. Canal said, “As our business model states, we are deploying services in Central America and will continue to expand our triple technology to other countries in Central and South America.” World Peace Herald

The Trials of CAFTA

The writing’s on the wall: CAFTA on trial

By ALEX OGLE

The recently ratified Central American Free Trade Agreement (CAFTA) is the result of more than a decade of effort by commercial leaders and advocates of further market integration. Under the direction of the pact, Central America’s trade market will witness a metamorphosis.

CAFTA is modeled upon the decade-old North American Free Trade Agreement (NAFTA), which includes the United States, Canada and Mexico. As such, the new treaty seeks to bring the six Central American nations under a free trade umbrella erected and directed from the financial capitals of the North.

Inter-American Dialogue, a leading U.S. center for policy analysis and debate on Western Hemisphere affairs, stated in a recent report that the success of Latin American economies “will require substantially larger investments in education and infrastructure, increased national savings, improved tax collection and better managed anti-poverty programs.”

However, opponents of CAFTA fear that the commercial interests of major corporations are being put ahead of public investment and social considerations such as human rights, worker safety regulations, and already tenuous environmental laws. Critics of the advancement of globalized trading charge that the pact’s expansion of already well-integrated markets will have an adverse effect on the six country’s poor working populations when CAFTA comes into force on January 1, 2006.

But other analysts expect the effect of CAFTA on middle and upper classes to be significantly positive.

CAFTA’s purported aim is to expand regional opportunities for workers, manufacturers and farmers in the member nations through the elimination of tariffs and trade barriers.

The development of reciprocal access for U.S. products and industry under the treaty will override existing systems of trade with Central American countries; the Caribbean Basin Initiative, Generalized System of Preferences and Most Favored Nation programs.

The agreement is set to suppress 80% of present tariffs upon its initiation at the beginning of next year, and will correspondingly activate common, U.S. enforced regulations over investments, IT services and products of intellectual property.

In the build up to CAFTA’s ratification the Bush administration reiterated the expected benefits, stating last month in a press release that the agreement will “create jobs and expand business opportunities in all the signatory countries…. help reduce poverty, improve labor conditions and strengthen democratic governance in the region.”

The International Trade Administration (ITA) division of the U.S. Department of Commerce outlined the expected benefits of CAFTA for North American commerce. In an announcement of sector-specific benefits for U.S. service providers, the ITA noted that in the advertising sector, Honduras, along with Nicaragua and Guatemala, have “all committed to completely opening their market.”

Furthermore, the Grocery Manufacturers of America (GMA) proclaimed CAFTA would “open new markets for U.S. food and beverage companies.” According to GMA statistics, U.S. food and beverage exports to Honduras are expected to increase from $43.8 million to more than $77.4 million. Region wide, the elimination of many tariffs under CAFTA regulation means U.S. food and beverage exports could increase from $359 million to $662 million, an 84 percent increase over current figures.

According to Cesar Diaz, consultant and negotiator for the Honduran Secretary of Commerce and Industry, the largest benefactors of CAFTA within the Honduran economy will include the textile and metal industries, producers of plastic products and manufacturers of wood. For some sectors in the agricultural field, such as pork and corn, that will be exposed to an open commercial process under CAFTA, long periods of tax reduction have been established for the next 15 to 20 years in order to reduce possible negative effects of the treaty.

Diaz believes that CAFTA’s effect on smaller, medium sized companies (referred to as ‘PYME’) will be both positive and negative, and that the key to success for such enterprises will be efficiency.

Diaz maintained that CAFTA represents an opportunity for companies of all sizes in all sectors of the national economy, adding that while “PYME are smaller [than international corporations] it does not mean they are less competitive.” Countering the fear that moves toward an expansion of free trade will see the gradual decline of PYME in the face of international corporations and exposure to external competition, Diaz notes the necessity of governmental programs to strengthen the national infrastructure in order to provide support.

Indeed, Tatsuo Suzuki, head of the Japanese International Cooperation Agency in Honduras stated last week in Tegucigalpa that “the CAFTA region requires severe socioeconomic levels of competitivity.” He added that efficiency was key to improving the productivity and quality of products and services.

The expansion of trade initiatives south of Mexico with the CAFTA agreement may correspondingly encourage the rapid growth of maquilas (sweatshops) throughout Central America.

A number of solidarity networks and labor unions representing maquiladoras (workers in Maquila factories) have alleged that CAFTA’s introduction will almost certainly see an increase of unscrupulous working practices across Central America, such as insufficient labor and environmental laws and ‘race-to-the-bottom’ pay schemes.

Along the road of progress envisioned by the Bush administration and neo-liberal affiliates presiding at all levels of the U.S. government, CAFTA is a pit stop – albeit an important one – on the road to the all-encompassing Free Trade Area of the Americas (FTAA).

However, the Inter-American Dialogue policy center stated in its recent report that the Bush administration has yet to demonstrate “either the interest or capability to pursue a longer-term cooperative policy in the Americas that would mobilize the support of Latin American nations, and help buttress democracy and economic progress in the region.”

CAFTA’s trial lies in the hands of government policy analysts, economists and socially active groups monitoring its progress over the coming years. The agreement’s impact, for good or ill, will determine the time frame under which the FTAA will be brought to the table.

Success for Honduras: OMC rules against the eu

Honduras expressed its satisfaction with the recent ruling by the World Organisation of Commerce (OMC), giving nine Latin American banana-producing nations the right against the European Union’s intention to triple all tariffs on the fruit. The Honduran Minister for Foreign Affairs, Mario Fortín, told journalists that the ruling “favours the aspirations of Honduras and the rest of Latin Americas banana producers.” He also stressed that “this is a great victory for Honduras,” reiterating that banana exports represent over $200 million and a direct benefit to some 100,000 people in this country. He added that the ruling “clearly indicates that the aspirations of the EU are going against the regulations already established by the OMC.” Radio America

Benefits to be deducted from salaries, new law proposes

In the Congress of the Republic, a proposal has been brought forward directed at guaranteeing social benefits to workers in the apparel industries, on the condition that these benefits are achieved by means of the contributions of the workers themselves. The specialist in labour law, Olvin Rodriguez, has spoken out against the idea. However, in all this, what is most odd is that the Directorship of Workers has declined to comment and has even asked the government, together with Cohep, not to intervene on this issue. HRN

Honduras to make sure that European banana tariffs do not exceed 40 euros

Following the decision of the World Organisation of Commerce (OMC), Honduras considers that the tariffs set by the European Union for Latin America’s banana producers must not exceed 40 Euros per tonne, stated Irving Guerrero, Minister of Industry and Commerce. Guerrero’s judgement came after the OMC’s decision that the EU’s propsed tariff of 230 Euros ($279) per tonne was to high. HRN

Honduran economy growing at a good pace

The Honduran economy has been growing at a suitable rate which has been stimulated by the debt relief from the rich countries.

“Added to this are the expectations of the approval of the free trade agreement between the United States and Central America,” declared the president of the Honduran Association of Banking Institutions, Roque Rivera. Radio HRN

Textile businessmen of the continent analyze negotiation perspectives

Representatives of the textile and confection sector of the American continent celebrated their most important annual encounter on Tuesday and Wednesday in San Salvador.

In this encounter they explored business opportunities and analyzed the future perspective of one of the sectors that has generated a greater volume of investment in the last decade in the Central American region.

Those businessmen who are going to allow the creation of strategic alliances and produce more viability in this sector attended the encounter. HRN

Reforms to minimum wage law could be made

If the rate of inflation does not reach 12 per cent, the inter-annual revision of the minimum wage will not be made. According to union leaders, “this situation makes us think about a possible reform to this law.”

In the last five years the rate of inflation did not pass a two digits percentage. This is the reason for modifying the law, with a current rate of 10 percent the intention of achieving two annual revisions is there.

For the workers’ unions it is necessary to make a new revision to the minimum wage. They assure that the inflation, in fact, surpasses the numbers published by the Central Bank of Honduras. El Heraldo

BCH forecasts excess liquidity

The Central Bank of Honduras (BCH) is prepared to confront a possible excess of liquidity in the economy as a result of the the external debt reduction in addition to an increase in the remittances and the exports.

It is previewed that the remittances for the end of 2005 could reach an excess of $1,500 million, adding around 5’000 million of Lempiras in liquidity because of the money that will not be used to pay the external debt. El Heraldo