BUSINESS & ECONOMICS

Petroleum bid will culminate in September

Yesterday, President Manuel Zelaya announced the climax of the recently discussed petroleum bid will occur at the start of September. He also discussed the formation of a commission that, maintaining transparency, will handle the bidding process. The representatives within the commission come from different backgrounds. Included are Cardinal Óscar Andrés Rodriguez and journalist Rossana Guevara, among others. The president has granted a total of 15 days for the analysis of legal and environmental ramifications of acquiring and storing more than 15.7 million fuel barrels. During this time foreign investors will also be making contracts.  The estimated value of this fuel is 100 million dollars and those companies currently the most enthusiastic are Petroleums of Venezuela (PDVSA), Caribbean Petroleum Chemical and two other companies of the United States and England.  

El Heraldo

64% increase in car thefts

The car insurance sector has lost more than 60 million Lempiras in the last six months after experiencing an increase of 64% in car thefts over the last year. José Luis Moncada, manager of the Honduran Chamber of Insurance Companies, has invited the Security Minister, the Police Director, and Interpol to come up with a clear policy to fight this trend. He cites the lack of transparency of the return process and non-existent measures against the exit of the stolen vehicles from Honduras as the main problems.

La Tribuna

Tax authority initiates operation "Responsible Contributor"

The director of Honduran tax authority  DEI established a mass operation in hopes of increasing collection and strengthening the fiscal revenue so as to promote fulfilment by the contributors as well as reduce the level of fiscal evasion  The name of the operation indicates its goal to help the Honduran citizens who are daily denied the rights to education, security, and health. The audits will run for eight weeks, visiting different companies that sell consumer products, and the hope is to raise approximately 250 million Lempiras. The objective of the operation is trying to make the companies more aware of their responsibilities and make them fulfil their duties, including the payment of taxes in a timely manner. 

La Tribuna

Honduras increases exports of tilapia

The Minister of Agriculture Hector Hernandez announced that by the end of this year there will be an increase of 70,000 lbs. of the exportation of tilapia to the international market.  This will place Honduras in the number one position of tilapia exporters. Since the beginning of this year the market has been experiencing an increase of exports, as fish farms have raised their production rate to satisfy the U.S. demands. The international revenue from these exports is estimated at 30 million dollars and Hernandez hopes to raise exports by 20% in the year 2007.  

La Tribuna

Twenty employees of the ENEE on dismissal list

Four employees of the National Electric Company were recently fired and approximately 20 temporary workers risk dismissal in the next few days, if decided so by the Commission managing the company. For six months, the commission will try to come to terms with the huge losses. The members of the Commission are split on their opinions and little is being revealed about the employees already fired. Some information available to the public was that Juan Bendeck, former manager of the ENEE, paid nine million Lempiras to certain workers, which was not accounted for in the budget. The 20 employees being questioned hope to retain their positions and their labor rights.  

El Heraldo

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Maquila to hire 1,100 new workers

In the second semester of this year, the Korean manufacturer Three H will recruit some 600 operators for its operations in Puerto Cortés. In 2007 it expects to hire an additional 500 persons, which will bring its worker total to 2,000. This new round of hiring comes after the company completed the construction of a new manufacturing facility that has allowed it to expand its production capacity. The new, state-of-the-art facility, will have air conditioning and good ventilation, which the company hopes will minimize the health problems that plagued workers at its old facility.

El Heraldo

Time change has not
produced the expected results

The one hour time change authorized by the government has not produced the anticipated results, say analysts from the business sector. While the time change has been in force since May 6th, the government has yet to produce clear numbers on the amount of gasoline and electricity saved by the time change. "I do not dare to give an exact number… but what we are able to deduce is that the change is not able to produce results because the prolongation of light is only 25 to 30 minutes and this does not have a significant effect," said Según Cándido Amaya, economic advisor to the Industrial Chamber of Commerce in Tegucigalpa. The purpose of the time change was to lengthen the amount of daylight in order to save on electricity costs.

El Heraldo

High cost of petroleum leads to a hike in air fares

The five international airlines that operate in Honduras began today a temporary price hike that is expected to last until the end of August. It is possible that the increased costs of tickets will provoke a fall in air travel to and from Honduras. However, Armando Fúnez, President of the Association of Honduran Airlines says that it is normal to raise prices in the summer due to the increased amount of vacationers travelling to the country from the United States, Canada, and Europe. A round-trip ticket from Tegucigalpa to Miami will increase from $497 to $522 and a Tegucigalpa-Washington flight will increase from $934 to $1,300.

El Heraldo

Honduras has the worst customs union in Central America

Despite efforts by the government to regulate the flow of merchandise between their main partners, they have neglected the offices that house these operations. Honduras' custom houses, which control the influx and outflux of both products and people, contribute roughly a fifth of the income of the economy according to the Honduran tax authority DEI.  In El Salvador, Costa Rica, Guatemala, and Nicaragua, the custom houses depend on modern facilities with concrete floors for the distributing vans, whereas Honduras' facilities store products in bulk in warehouses as well as outside on land estates. The Director the DEI, Armando Sarmiento, attests to the necessity of international lending by the World Bank and other organizations to make the reconstruction a reality.

El Heraldo

Coffee price reduces, increasing the commercial breach

The deficit of the balance of goods has been upset by improvements in international prices and a greater amount of coffee exports.  Unlike Honduras' other exports, including banana tree, sugar, wood and its manufactures and shrimps which have fell in exports, coffee has dominated the market rising from 220.3 to 261.7 million dollars between the months of January and May of 2005-2006.  The total exports of Honduras only add 1.945,6 million dollars while the imports are worth 5.005 million, creating a deficit of 3.059,4 million dollars.

El Heraldo

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Businesses ask for more analysis of Trade Deal with Canada

Before the resumption of trade negotiations with Canada, Honduran businesses have asked the government to reconsider its position. They worry that Honduras may be opening up its markets too fast, which may hinder their ability to compete with superior international competitors. Mario Canahuati, President of the Honduran Council of Private Enterprise, has asked President Mel Zelaya to consider in detail the implications of a trade deal with Canada. "What worries me most is that we are going to improve relations in the textile sector, when the principal problem is in the countryside where the poverty is increasing everyday. We have CAFTA and we should focus on this," said Canahuati. With a population of 31 million and a per capita income thirty-seven times that of Nicaragua, a trade deal with Canada would dramatically expand Honduras' market access.

El Heraldo

ENEE reports highest electricity consumption in Honduras' history

As a result of economic growth, the demand potential for energy in Honduras registered 1,065 megawatts. According to National Electric Energy Company, ENEE, this is the highest daily output recorded in the history of the country. Total energy demand, so far in 2006, is seven percent higher than the same period in 2005. ENEE expects another increase in demand next year, especially due to the implementation of CAFTA. In order to help meet this demand, the government has planned an overhauling of two of the turbines at the Francisco Morazán dam. The work will begin July 15 and the work on each turbine will take four months. The work is expected to cost 60 million lempiras.

El Heraldo

Government asking IMF for flexibility when negotiating with teachers

The Honduran government hopes that the International Monetary Fund (IMF) will accept raising the ceiling for public salaries, which currently is set at 9.5 % of the Gross National Product, which would permit the government to raise teachers' salaries.

"We are aware that we have certain commitments and defined goals, but they don't leave us any flexibility to reach an agreement with the teachers," said Rebeca Santos, Minister of Finance.

The last offer made by the government to the protesting teachers constituted 750 million lempiras, which is higher than the IMF recommendation of 170 to 200 million lempiras annually.

According to the government, the salary increases claimed by the teachers could pose a threat to the public finances, as well as other indicators such as inflation and economic growth.

El Heraldo

Honduras should diversify maquila production according to developer

Yusuf Amdani, prominent Honduran businessman, has begun a trip through North America, Europe, and Asia to promote investment in Honduras. Amdani, who possesses important investments in the industrial Green Valley, says that Honduras has sufficient fertile land and a capable labour force to warrant investment, but that it lacks technology, infrastructure, and a strategic plan to help lure investors. "My principal objective is to present Honduras as the best option for companies who want to set up operations in the region. Furthermore, we are promoting a diversification of the maquila industry into the manufacture of medical instruments, construction materials, electronics, computer assembly, home appliances, and automotive parts," said Amdani.

El Heraldo

Insurance sales up with sixteen percent

In spite of an increased risk of suffering damages due to tropical weather phenomenon this year compared to 2005, the insurance premiums will stay at similar levels according to the Honduran Chamber of Insurers (Cadah).

Cadah manifested a concern over the fact that Honduras has not taken the necessary measures to mitigate the damages caused by natural disasters, especially considering that the current hurricane season will be similar to that of last year.

During the first six months of the year, the purchase of insurances increased by 16 percent compared to the same period last year, representing an additional 400 million lempiras. The increase was seen in the areas of housing, machinery and cars.

El Heraldo

Construction of Central American electricity line underway

The construction of a 1,830 kilometer long 230 kilowatt electricity line that will connect Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama started last Wednesday. Loans from the Inter-American Development Bank (IADB) will finance more than 40 percent of the project. The national networks of the six countries will be connected through 16 substations and will permit the neighboring countries to cooperate in covering the national demands and reduce blackouts. Hopefully, the project could also save money through a more efficient use of the generation capacity.

La Prensa

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Honduras sticks to a Central American electricity program

Yesterday the Vice President, Elvin Santos, announced that as from next Monday, Honduras will join the Central American electricity system. This allows countries in the area to buy and sell at much lower prices. The announcement was made during a meeting of businessmen from the industrial and telecommunications sector to reformulate projects in the Mesoamerican Science and Technology Workshop.

La Tribuna

Honduras has the most growth in the region

The Executive President and the Head of Economics of the Central American Bank of Economic Integration presented a report on 'Economic Tendencies and Perspectives of Central America During the First Trimester and the Macroeconomic Stage for 2006'. The document stated that the panoramic economy of the region has created opportunities for major dynamics and financial activity. There has also been a creation of more formal jobs and a rise in the quality of life for people in Honduras.

La Tribuna

The Aztec Bank in Mexico insists on working in Honduras

The Aztec Bank has presented a new request to operate in Honduras before financial authorities, following a previously denied petition. The National Commission of Banking and Security of Honduras rejected a request in January from the Aztec Bank, arguing that there wasn't enough information about the existence of pending investigations in the US about the financial operations of the group's President.

La Tribuna

The second negotiation of TLC with Colombia begins

The second round of negotiations concerning the free trade agreement with Colombia has begun. It is emphasized that for all these types of negotiations, the production in each national sector must be thoroughly analyzed to determine the advantages or possible risks facing each one. The free trade agreement with Colombia will also include Guatemala and El Salvador.

La Tribuna

Taiwan to construct dam on the Patuca River

The governments of Honduras and Taiwan have signed an agreement to build the Patuca hydroelectric dam on the river of the same name, which runs along the border of Olancho and Gracias a Dios. The dam will be built with a loan made to Honduras' National Electric Company (ENEE) from the government of Taiwan. The dam will be administered for some years by the State Electric Company of Taiwan, after which it will be turned over to ENEE. It is hoped that this dam will diminish Honduras' reliance on foreign oil as a major energy source and lead to lower prices for Honduran consumers.

El Heraldo

Crisis in Honduras' Energy Sector

The Chief Executive Officer of the National Electric Energy Enterprise (ENEE), Leo Starkman, confirmed on Wednesday that the Intervention Committee was working hard to address the many problems faced by the state enterprise. One of the major complaints is that the company's accounts have been shrouded by a cloud of secrecy, which many claim, violates the principle of transparency. There is an alleged Lps. eight billion in accounts that have not been accounted for and will be looked into by the committee. ENEE's CEO has also announced a US $400 million plan aimed at salvaging Honduras' energy sector, which is currently in a crisis. The investments will be made under the watchful eye of the transparency commission, which was set up by President Zelaya in order to combat state corruption.

El Heraldo

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Ecuador interested in trade with Honduras

Following the unsuccessful attempt by Ecuador to secure a free trade agreement with the US, it is expected that they will attempt negotiations with Central American countries, including Honduras, to help reinitiate the Andean Community of Nations. Ecuador will also initiate negotiations with Mexico and El Salvador.

La Tribuna.

Mobile phone industry is top destination for foreign investment

The majority of foreign investment in Honduras since the year 2000 has been destined for the telephone sector said a report by the Central Bank of Honduras. The bulk of this investment has been in the cellular phones, with $250 million of the $350 million coming from companies such as Motorola, Millicom, and American Mobil. Other sectors receiving investment include the construction, hotel, and beer industries. The bulk of this investment is centered on the two major cities of San Pedro Sula and Tegucigalpa. The Central Bank estimates that Honduras will receive an additional $320 million in foreign investment in this year alone.

El Heraldo

Drinks contributing to national treasury

The tax from the production and consumption of carbonated drinks, beer, and flavored alcoholic drinks is the principal source of money in the national treasury, according to the Ministry of Finance. In 2004, they collected 972 million lempiras in tax from flavored alcoholic drinks. Carbonated drinks and beer created 674.2 million lempiras last year, while spirits created 55.4 million in 2004. There is a 15% sale tax on national and imported beverages, which created 479.2 million lempiras in 2005. It is anticipated that with the introduction of the free trade agreement with the US, the drinks industry will grow even more.

El Heraldo

Honduras viable market for foreign investors

In Guatemala, the First Ministerial Meeting of Commerce and Agricultural Negotiation of Central America established strategic alliances, the co-investment and development of farming markets and a starting point for negotiations in the region. The event brought together more than 120 businesspeople in agriculture from eight different countries. During the opening ceremony, the Honduran Minister of Agriculture and Livestock did a presentation to investors from south Mexico about the main types of agriculture in Honduras.

La Tribuna

Hondutel loosing for
million dollars to piracy

The Honduran national telecommunication company Hondutel is working hard to fight telephone piracy, which according to General Manager Jacobo Regalado, is causing a monthly loss of about four million dollars, by acquiring a special technology. The new management is also trying to recuperate the money lost since last December when Hondutel's monopoly on international telephone calls ended.

La Tribuna

World Bank pledges to cancel poor country debt

The World Bank has announced that it will cancel some of the debts that Honduras and other poor countries have with the International Development Bank (IDB). This cancellation forms a part of the initiative of the Multilateral Initiative to Alleviate the Debt and will enter into force as of July 1st. The IDB will provide $37 billion in debt-relief over the next 40 years. The World Bank has pledged an additional $17 billion for its Highly-Indebted Poor Countries initiative. Under this plan, Honduras would have almost all of its debt cancelled, but only if it conforms with the guidelines set out by the World Bank.

La Tribuna

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