When negotiations take place under the table

Negotiations between Honduras and the International Monetary Fund to establish a ‘stand-by’ agreement are reaching an end. Last Wednesday, a preliminary understanding agreement became a “Temporary Intentions Letter,” lasting 12 to 18 months. However, this does not guarantee approval by the IMF director.

The Honduran government committed itself in Washington, D.C. to maintain the stability of labor wages and to not surpass the 9.2 percent of the labor salary mass with respect to the Internal Gross Income (IGI) reached back in 2007. ‘Salary mass’ means the wages and salaries the government pays its officials and employees.
                     
Last week, the IMF and the Honduran mission sent to Washington, discussed certain aspects of the rate of exchange policy of Honduras, the debate being a possible devaluation. The IMF asked for its justification because, according to them, it is necessary that the lempira loses some of its strength, about 5 percent, in comparison to the U.S. Dollar, for the duration of the temporary agreement.

Unofficially, Honduras repre­sentatives considered this a non-negotiable subject and reconfirmed to the IMF that Honduras has enough international reserves to cover 4 months of imports. Finance Minister Rebeca Santos expressed that the intention of the Honduran government is to consolidate the currency bid mechanism, which has been working successfully in the country.

Edwin Araque, president of the Honduran Central Bank, said that IMF representatives always suggest the reduction of liquid cash levels and a higher control of inflation with the aim of reaching consistent goals of economic growth.

Another delicate issue is the possible debt with PetroCaribe, which has been included in the negotiation process. According to Araque, it has been accepted. Some analysts in Tegucigalpa consider the issue of this particular debt as one of the more complicated issues to discuss and is worrisome to the IMF, especially because of the limited economic capacity to pay and because Honduras is just coming out of a huge debt forgive­ness process.

It is not hard to deduce that the IMF has to coordinate economies, it has to establish patterns to allow certain international macro-economical stability; this is why they desperately search to control micro-economical variables. But efficiently control variables that directly affect a nation in perpetual crisis?

The Honduran contingent has committed to the IMF to accomplish their many goals and to adjust and stabilize economic policies. Many internal, functional controls, in which we set the rules, will diminish the pressure and extreme demands of international financial organizations. But the question is: will it be necessary to approve more laws? We do not think so; all that is needed is to comply with those that already exist.

Dear All:

I wish to refer to the (Toncontin: Highway or Runway) article, which was published in volume 21, No.05 (985) Tegucigalpa, dated Saturday, Feb.2, 2008.

In my opinion, it was a very unfortunate decision for your weekly review to publish such article (written by Caroline Knell and Tess Gool), since it will not contribute to the national´s tourism industry. I know we do not have the greatest airport in the world, but I do not think it helps to make it so public printing such article in the first page of a magazine supposedly addressed to the tourists.

According to an add in a local radio station your page is seen by millions of people daily, how many of those are tourists planning to come to Honduras? Did you think about the consequences of a report of that kind? I do not think so.

I will suggest you to be more cautious about your printings and try to send more positive messages about our country.

Let us build, not destroy.

Sincerely,

Carlos Morales

Editor’s Response

Dear Mr. Morales:

Our decision to print the article was based on the differing view­points and opinions gathered by reporters Gool and Knell. While we do our best to present the positive aspects of Honduras, we also are obligated, as journalists, to print what is newsworthy as well. The airport article, in our view, was not so much a condemnation of Toncontin as much as it was perhaps a gentle nudge to authorities to continue improving the airport, including the runway.

We are grateful to readers like you who not only read ‘Honduras This Week,’ but take the time to offer construcitive criticism. We hope this provides adequate rationale for our decision to run the Toncontin article.

Thank you again, and thank you for reading the paper.

The Editors of HTW

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