Saturday, November 30, 1996


Business & Economics

BUSINESS BRIEFS

Open skies on horizon with Canada

As part of a bilateral program to promote tourism in Honduras and Canada, the government of both nations are discussing an "open skies" policy that would facilitate air travel between the two countries. "This is part of the agreements to which we have arrived with the Canadian government so see how we can in some way integrate tourist services," says Foreign Relations Minister Delmer Urbizo Panting.

 Talks on hold but hopeful with Mexico

Negotiations between the Northern Triangle (Honduras, Guatemala and El Salvador) and Mexico for the eventual inclusion of the former in the North American Free Trade Agreement (NAFTA) have been put on hold for the holidays. But insiders say the pause is no indication of a breakdown in negotiations. Rather, each country will use the time to complete internal details before continuing talks in January, says the daily La Prensa. "It is impossible to ignore the globalization of the world economy and Honduras cannot fall behind in this area," says Foreign Relations Minister Delmer Urbizo Panting.

Exports down at Puerto Cortes

Tax earnings from Honduras' busiest port have been disappointing this year, says a report released this month by the Executive Revenue Department (DEI). Between January and October of 1995, Puerto Cortes generated nearly Lps. 775 million in tax revenues for the Honduran government, says the report. But over the same period in 1996, the port brought in only Lps. 672 million. Not only are this year's figures significantly lower than last years', they are also a disappointment compared to the Lps. 719 million that had been projected through October of this year.

Penal Code comes down hard on piracy

Honduras' new penal code, expected to become law within the next few weeks, sets forth heavy penalties for the violation of intellectual property rights. Wrought with patent and copyright violations, the country has struggled in recent years to clean up its intellectual property reputation, a requirement for key positions in regional trade agreements. As a member of the proposed American Free Trade Zone (Area de Libre Comercio para America, or ALCA), for example, Honduras -- and other member countries -- will have to shape up its enforcement of intellectual property rights laws by the year 2005. If enforced, the new laws promise to slash piracy to a minimum, imposing fines between Lps. 50,000 and Lps. 100,000 and prison terms of up to three years, doubled for repeat offenders.

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Another banana plantation closing

The Standard Fruit Company has offered employees of its "El Chorro" plantation Lps. 100,000 each to leave their jobs and seek employment elsewhere, La Tribuna reported Tuesday. But labor leaders say the offer isn't as good as it looks. "Many people are falling into this trap. They see the 100,000 lempiras, decide to give up and accept the offer," says one labor leader. "But what they don't realize is that this money won't last long once they lose their jobs." The company says the plantation's soil is no longer capable of producing quality fruit and argues that it's losing money by keeping it open. But Standard has signed a special agreement with the Honduran government, promising to continue producing bananas and employing Hondurans in exchange for an exemption from export fees. Worker unions say the company is getting off cheap with the Lps. 100,000 payoff when it should really be concerned about keeping its workers employed long-term.

Gas hike #65

 For the 65th time this year, the Petroleum Administration Commission has authorized a hike in gasoline prices, despite public outrage at subsequent inflation. Effective last Saturday (Nov. 2), in Tegucigalpa, super gasoline is up Lps. 1.49 to Lps. 24.76 per gallon; regular gasoline is up Lps. 1.70 to Lps. 22.52 per gallon; diesel is up 5 centavos to Lps. 18.90; and kerosene is up 33 centavos to Lps. 18.49. Prices are slightly lower in San Pedro Sula and on the South Coast and higher in La Mosquitia.

Lempira hits 13 on black market

 The lempira-dollar exchange rate hit 13:1 this week on the Honduran black market. This is the highest rate ever recorded. According to Central Bank of Honduras reports, the lempira has devaluated more than 60 percent during the Reina administration. Economists argue that after decades of the government-imposed 2:1 exchange rate, the value of the lempira has to get worse before it can get better, in this case "better" meaning "realistic." Although the official exchange rate in the nation's bank is Lps. 11.99 to the dollar, the BCH predicts black market rates will his 14 by Christmas.

Business opportunities

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Business opportunities

Honduran based Mining Company looking for U.S. or Canadian Mining Company to form joint venture or open for negotiation. Has several mining concessions permits. Contact Nick Tzavaras e-mail: hontweek@hondutel.hn

Juan Bendeck, president of the Honduran Private Enterprise Council (COHEP), says the falling lempira isn't entirely the fault of the government.

Falling lempira not fault of government

Juan Bendeck, president of the Honduran Private Enterprise Council (COHEP), says the falling lempira isn't entirely the fault of the government. The private sector is also a key element in achieving a stable currency, he said in an El Heraldo report, and the only way to stop the fall of the lempira is to increase exports. Honduras' trade imbalance -- the difference between the dollars it earns through exports and the dollars it needs to pay for imports -- is currently $5 million per year. If Honduran producers take on the initiative to produce $5 million more per year in exports, the lempira will stabilize rapidly, says Bendeck. Until that happens, the future of the nation's currency will continue to be grim, he said.