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Report No. 1165-HO FILE COPYEconomic Position andProspects of HondurasAugust 23, 1976
Latin America and the Caribbean Regional Office
FOR OFFICIAL USE ONLY
Document of the World Bank
This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may nototherwise be disclosed without World Bank authorization.
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CURRENCY EQUIVALENTS
US$1.00 = 2.00 Lempiras (L)L 1.00 = US$0.50
GLOSSARY OF ABBREVIATIONS
BANASUPRO National Development Bank Food Marketing AgencyBNF National Development BankCABEI Central American Bank for Economic IntegrationCACM Central American Common MarketCIDA Canadian International Development AssociationCOHBANA Honduran Banana CorporationCOHDEFOR National Forestry CorporationCONADI National Investment CorporationCONSUPLAN National Planning CouncilECLA Economic Commission for Latin AmericaENEE National Electric Power CompanyENP National Port AuthorityFAO Food and Agriculture OrganizationFNH National Railway CompanyIDB Interamerican Development BankIHSS Social Security InstituteINA National Agrarian InstituteINFOP Professional Development InstituteINVA National Housing InstituteJNBS National Social Welfare BoardLNB National LotteryPANI National Child Welfare InstituteSANAA National Water and Sewerage ServiceUNAH National UniversityUSAID U.S. Agency for International Development
GOVERNMENT OF HONDURASFISCAL YEAR
January 1 to December 31
FOR OFFICIAL USE ONLY
This report is based on the findings of an economic mission
to Honduras in October/November 1975 composed of:
Ren6 Vandendries Mission ChiefMary Ellen Weber Deputy Mission ChiefStephen Weissman Investment AnalystLorne Sonley AgricultureLuis Liberman IndustryHelmut Wieseman PowerKye Woo Lee EducationJaime Biderman Social Sectors, PowerManuel Benedito Economic StatisticsSusana Rodriguez Secretary
This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.
HONDURAS
TABLE OF CONTENTS
Page No.
COUNTRY DATA
MAP
SUMMARY AND CONCLUSIONS ............. .. ................ i-viii
. BACKGROUND AND MAJOR ISSUES ............. .. 1............
SECTORAL ISSUES AND POLICIES ..... ............. 4
A. Agriculture ...................................... 4
Background ................................ 4
Agricultural Potential ..... ........... 7
Constraints to Agricultural Development ..... 8
Recent Developments ..... ............ 9
Major Issues and Prospects ................. . 11
Conclusion ...... ............ ................ 14
B. Forestry ......................................... 15
Resources and Their Use ......... .. .......... 15
The Forest Law of 1974 ......... .. ........... 17
Major Issues and Prospects ........ .. ........ 17
C. Manufacturing Industry ........................... 22
Growth and Structure ........... .. ........... 22Major Issues and Prospects ......... ......... 25
D. Social Problems and Policies .... ................. 27
Introduction ............... .. ............... 27
Health and Nutrition ........... .. ........... 28
Housing ........ ............................. 30
Water Supply and Sewerage .... ............... 31
Education ................................... 32
TABLE OF CONTENTS (Continued)
Page No.
III. PUBLIC INVESTMENT ..................................... 36
Developments Prior to 1972 ....................... 36Recent Trends .................................... 37Investment by Sector ............................. 39
Highways ....................................... 39Ports .......................................... 40Other Transport Facilities .................... 40Power .......................................... 40Communications ................................. 41Education ...................................... 41Health ......................................... 41Water and Sewerage ............................. 41Housing ........................................ 42Urban Development .............................. 42Agriculture .................................... 42Forestry ....................................... 42Tourism ........................................ 43
Investment Priorities and Constraints .... ........ 43
IV. PUBLIC FINANCE ........................................ 47
Background ....................................... 47Structure and Trends: 1960-1975 .... ............. 48
Central Government ............................. 48Autonomous Institutions ........................ 52Public Enterprises ............................. 52
Financing Development: 1976-1981 .... ............ 52Central Government ............................. 52Rest of the Public Sector ...................... 53
Conclusion ....................................... 58
V. BALANCE OF PAYMENTS ................................... 59
Introduction ..................................... 59Outlook and Creditworthiness ..................... 60
STATISTICAL APPENDIX
Page 1 of 2 pages
COUNTRY DATA - HONDURAS
AREA 2 POPULATION DENSITY112,100 km 2.9 million (mid-1975) 26.0 per km2
Rate of Growth: 2.7/1 (from 1961to 1974) .. per km2 of arable land
POPULATION CHARACTERISTICS (1970-75) HEALTH (1974)Crude Birth Rate (per 1,000) 49.3 Population per physician 3,710.0Crude Death Rate (per 1,000) 14.6 Population per hospital bed 800.0Infant Mortality (per 1,000 live births) 117.6
INCOME DISTRIBUTION (1967-68) DISTRIBUTION OF LAND OWNERSHIP% of national income, higtest quintile 60.6 7 owned by top 10% of owners
lowest quintile 2.5 % owned by smallest 10% of owners
ACCESS TO PIPED WATER (1974) ACCESS TO ELECTRICITY (1974)% of population - urban 89.o % of population 27.0
- rural 15.0
NUTRITION (1969-71) EDUCATION (1974)Calorie intake as % of requirements 94.o Adult literacy rate % 52.0Per capita protein intake 56.o Primary school enrollment % 81.0
2/GNP PER CAPITA in 1975 : US $ 350
GROSS NATIONAL PRODUCT IN 1974 ANNUAL RATE OF GROWTH (%. constant prices)
US $ Mln. % 1963-68 1968-74 1974
GNP at Market Prices 954.9 100.0 5.8 3.3 2.4Gross Domestic Investment 251.1 26.3 9.9 6.5 31.3Gross National Saving 109.7 11.5 10.8 5.4 10.3Current Account Balance 3/ -108.9 -11.4Exports of Goods, NFS 327.5 34.3 16.0 0.7 -3-3Imports of Goods, NFS 455.5 47.7 13.4 3.4 17.2
OUTPUT, LABOR FORCE ANDPRODUCTIVITY IN 1974
4/Value Added Labor Force- V. A. Per Worker
US $ Mln. % Mln. % US $ %
Agriculture 282 32.3 0.566 64.3 498 50.2Industry 221 25.3 0.104 11.8 2,125 214.0Services 371 42.4 0.210 23.9 1,767 177.9Unallocated ------___
Total/Average 874 100.O o.880 100.0 993 100.-0
GOVERNMENT FINANCEGeneral Government Central Government
(US$ Mln.) % of GDP ( US$ Mln.) % of GDP1974 1974 1972-74 1974 1974 1972-4
Current Receipts 153.4 15.8 15.0 126.1 13.0 12.6Current Expenditure 130.3 3 L 1 103,2 11.1 J1.LCurrent Surplus 23.1 2.3 1.7 18.9 1.9 1.5Capital Expenditures 49.4 5.1 4.1 46.8 4.8 3.8External Assistance (net) 11.4 1.2 1.2 9.3 1.0 1.1
1/ Population growth rate is lower than the rate of natural increase, largely because of emigration since 1969of El Salvadoreans resident in Honduras.
2/ GNP per capita estimate at market prices, calculated by same conversion method as World Bank Atlas (1973-75basis).
3/ Includes transfers.i Total labor force; unemployed are allocated to sector of their normal occupation. "Unallocated" consists mainly
of unemployed workers seeking their first job.
not availablenot applicable
Page 2 of 2 pages
COUNTRY DATA - HONDURAS
MONEY, CREDIT and PRICES 1969 1970 1971 1972 1973 1974(Million US$ outstanding end period)
Money and Quasi Money 147.0 164.4 182.2 207.8 253.8 265.9Bank Credit to Public Sector 11.5 26.9 35.1 40.1 43.8 42.9Bank Credit to Private Sector 149.4 173.7 184.5 206.7 253.8 290.6
(Percentages or Index Numbers)
Money and Quasi Money as % of GDP 22.0 23.0 24.0 25.4 28.2 27.5Consumer Price Index (1966 = l1o) 105.3 109.1 111.6 115.4 120.7 136.2Annual percentage changes in:
Consumer Price Index 1.3 3.6 2.3 3.4 4.6 12.8Bank credit to Public Sector 172.6 133.9 30.5 14.2 9.2 -2.1Bank credit to Private Sector 23.1 16.3 6.2 12.0 22.8 14.5
BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1972-74)
1972 1973 1974 US $ Mln %(Millions US $)
Exports of Goods, NFS 236.4 294.5 327.5 Bananas 87.1 33.5Imports of Goods, NFS 228.0 303.7 455.5 Coffee 39.9 15.4Resource Gap (deficit = -) -8 4 -9.2 -128.0 Wood 35 2.7
Beef 18.2 7.0Interest Payments (net) -5.6 -8.1 -14.0 All other commodities 78.9 30.4Workers' Remittances .. .. .. Total 259.7 lOQ. oOther Factor Payments (net) -21.9 -25.1 o.6Net Transfers 6.6 7.0 32.5 EXTERNAL DEBT, DECEMBER 31. 1974Balance on Current Account -12.5 -35.4 -108.9
US $ MlnDirect Foreign Investment 3.1 6(. 5 -1. 2Net MLT Borrowing 16.3 1:1.3 22.0 Public Debt, incl. guaranteed 1/ 154.0
Disbursements (20.2) (16.9) (28.0) Non-Guaranteed Private DebtAmortization (3 o,) 5.6) 6.0) Total outstanding & DisbursedSubtotal 19.4 17.8 20.8 2/
Capital Grants .. .. .. DEBT SERVICE RATIO for 1974-Other Capital (net) 1.9 1,'.6 91.3 %Other items n.i.e. .. 2 .2L9 6. Increase in Reserves (+) 12.0 -_4.1 9.5 Public Debt. incl. guaranteed 3.7
Non-Guaranteed Private DebtGross Reserves (end year) 35.2 41.8 44.4 Total outstanding & DisbursedNet Reserves (end year) 26.6 22.5 32.0
RATE OF EXCHANGE IBRD/IDA LENDING, January 31, 1976 (Million US$)
Through - 1971 IBRD IDAUS $ 1.00 = L 2.00
L 1.00 = US $0.50 Outstanding & Disbursed 57.1 28.7Undisbursed 55.4 6.9
Since - 1971 Outstanding incl. Undisbursed 112.5 35.6US $ 1.00 = L 2.00
L 1.00 = US $0.50
1/ Repayable in foreign currency.2/ Ratio of Debt Service to Exports of Goods and Non-Factor Services.
not available
not applicable
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SUMMARY AND CONCLUSIONS
Background
i. With a per capita income of about $350 in 1975, Honduras is oneof the poorest countries in the Western Hemisphere and continues to be pre-dominantly a land of small farmers obtaining a meager living by primitivemethods. The adult literacy rate is only about 50 percent and the caloricand protein intake of most of the population is well below minimum require-ments. These deficiencies are especially severe in rural areas, which stillaccount for about two-thirds of the population and for a larger proportionof the lower income groups. An official survey for 1967-68 shows the percapita income for the poorest (mostly rural) 40 percent of the populationat about one-fifth of the national average.
ii. The natural resource base is limited and often poorly utilized.The best agricultural soils include the northern coastal plain, where bananaproduction for export has been developed by foreign companies since the latenineteenth century, the southern coastal plain and some major inland rivervalleys. Apart from these, the predominance of steep rugged terrain seriouslylimits the agricultural potential. Most rural areas are fragmented intoisolated valleys. Thus, road construction is a most difficult and costlytask, and significant road development started only in the middle 1950's.Nevertheless, there are ample opportunities to improve land use by bringingareas of good potential more fully into the agricultural economy and byshifting land already in use to higher value crops. The country's othermajor natural asset consists of the largest pine forests in Central America:thus far, their exploitation has been limited and they are being wasted owingto uncontrolled forest fires and lack of conservation. Known mineral depositsare small: they include silver, lead and zinc, which have been exploited inlimited quantities, and low-grade iron ore.
iii. Variations in banana output have been the main determinant ofeconomic growth in the past. Between 1925 and 1950 real per capita incomegrew by only about 10 percent (0.4 percent per year). Bananas accounted forabout 90 percent of exports during that period and, apart from the bananaenclave development along the north coast, little changed during those yearsin the economy. Government attempts to stimulate the economic development ofthe country were first initiated in 1950. A program of highway planning andimprovement was begun, a Central Bank and a National Development Bank werecreated, the income tax was introduced and a significant effort was startedto broaden education services. Difficulties in the banana industry coupledwith several years of political instability caused delays in the preparationand execution of development programs until about 1960. Some progress hasbeen made since that time. A basic transport network connecting the mainpopulation centers was established, electric power service was expandedconsiderably and a significant increase in primary school enrollment tookplace. Lack of internal integration has limited the size of the domesticmarket and hampered industrial development. The creation of the CentralAmerican Common Market (CACM) in the early 1960's was an attempt to enlarge
- ii -
the market for industry and was responsible in large measure for the develop-ment of some new industries, including detergents, cosmetics, metal products,canned foods and plastics. Progress was halted by the conflict with ElSalvador in 1969. Even while the common market was fully operational, Hondurasdid not reap all of the expected benefits as, owing largely to deficientinfrastructure, it was at a competitive disadvantage vis-a-vis its neighborsin attracting new investments or developing new industries. On the whole,economic growth remained low: from 1950 to 1975, real per capita income grewby 19 percent or about 0.7 percent per year.
iv. Several factors help explain the continued sluggish performance ofthe economy. Even though the share of bananas in exports declined from 75percent in 1950 to 40 percent in the early 1970's, with the introduction ofcoffee, lumber and beef exports, economic growth still depends heavily onbananas, a product with a sluggish market and poor prospects. Much of theeconomic expansion in the last 25 years occurred during 1963-1968 when bananaexports boomed. On the other hand, the dependence on bananas and thus on thevagaries of the weather was dramatically illustrated during 1974-75 whendestruction in the banana plantations resulting from hurricane Fifi caused a5 percent drop in per capita income. Deficient credit, technical services anddevelopment programs for agriculture are other major reasons for the slow devel-opment of the economy. Roughly half of the farms account for only about 6 per-cent of the land in farms and fully two-thirds have an average size of only2.5 hectares. In addition, about one-third of rural families are landless.Until recently, major public sector involvement in agriculture was primarilylimited to credit programs. Rural incomes stagnated in recent years as valueadded in non-banana agriculture grew at about the rate of growth of rural popu-lation. Another major explanation for the sluggish economic growth is thecontinued shortage of basic infrastructure and of a well-trained labor force,despite significant efforts in these areas. Finally, and perhaps most impor-tant, economic development has been held back by the absence of a dynamicdomestic entrepreneurial class. Economic entrepreneurship has been dominatedby foreign investment, mainly in banana plantations, mining, banking andforestry. Domestic entrepreneurship centered on agriculture and livestock.The commercial sector was largely in the hands of first or second-generationimmigrants. The lack of transport infrastructure, the isolation of thecapital from the banana plantations/San Pedro Sula economic center in thenorth, and the dominant role of foreign enterprise may be mutually related.Because government was physically isolated from business, and because businesswas largely foreign, the Honduran elite may have kept longer to the tradi-tional occupations--political, military, religious--than has been the case insome other Latin American countries, where more and more of the elite wentinto business. The low rate of economic growth has continued in spite of asubstantial investment effort. The only dynamic segment of the economy, theindustrial center in the north, was isolated from the rest of the country andheavily protected, leading to over-investment in import-substitution indus-tries, hence to low capacity utilization and a high incremental capital-outputratio. Apart from this, the subsistence farming and government sectors arepredominant in the economy. Government investment has been largely in slowyielding basic infrastructure investment which the country lacks and whichis a precondition for growth.
A Development Strategy
v. The Government which took power at the end of 1972 brought with itmajor changes in public development policy-making. A period of active devel-opment planning has been initiated and several measures have been taken tolay the basis for a considerably improved economic outlook over the longerterm. Ongoing public investment in infrastructure is at an all-time high.Under pressure by militant peasant organizations, temporary land reformmeasures introduced in December 1972 were replaced in January 1975 by acomprehensive Agrarian Reform Law which aims at a much improved utilizationof land and increases in incomes of the poorest peasants, through the trans-fer of unutilized or poorly utilized land from large land-owners to landlessrural families. In January 1974 a forestry law was issued establishing theboundaries for private sector participation in forestry development and creat-ing a state forestry corporation (COHDEFOR). COHDEFOR was put in charge ofall basic forestry and forest industry policies and activities in order tobegin to exploit the country's large forest resources more rationally andto increase exports.
vi. The central issue is whether the Honduran economy with its rela-tively limited productive resource base can be lifted out of its long stag-nation. The development strategy during the next few years calls for largepublic investments in infrastructure, in the area of export diversificationthrough forestry development and tourism, and in agriculture to implement theland reform program. On the whole the public investment program is designedto alleviate the most significant bottlenecks to the country's long-termdevelopment process. At the same time, the size of the program will beconstrained by the macro-economic and fiscal limitations discussed below andpriorities will have to be set. Accelerated economic growth will requirea strategy emphasizing productive investments especially in projects withgood export potential. Investment in infrastructure will have to be keptwithin limits and social improvements will have to come more from increasedefficiency than from larger allocations. The necessary large outlays forbasic infrastructure investment during the next few years imply a continuedhigh incremental capital - output ratio.
Macro-economic Limitations
vii. On the basis of current trends and if expansion programs, espe-cially in lumber and sugar production, are carried out as planned, exportsof goods and non-factor services can be expected to grow by about 7.6percent per year in real terms between 1975 and 1981. A considerable partof this growth reflects recovery of banana exports following the destruc-tion caused by hurricane Fifi in 1974. Under normal conditions, real exportgrowth through 1981 would be only about 5 percent per year. Based on theseexport developments and feasible investment levels (around 22 percent of GDP)GDP could be expected to grow at about 4.6 percent per year, or 1.6 percent
- iv -
per capita, during 1976-81. Investment will be constrained by low domesticsavings, limits on the expected availability of foreign capital and by thegrowing burden of external debt service after 1980. The economic stagnationin 1974-75, resulting mainly from the hurricane and aggravated by a 20 per-cent deterioration in the terms of trade (which is expected to be reversed byonly about 8 percent by 1981) has seriously reduced the country's savingscapacity. The policy mix needed for an improved savings performance will haveto include such measures as additional taxes (beyond the new tax measuresalready introduced in 1975), credit curtailment to non-productive activities(such as consumer loans) and higher interest rates which together with a soundinvestment climate could help mobilize substantial private savings. A gradualrecovery of the savings ratio by the early 1980's to the level reached in pre-hurricane years will require that real consumption growth be limited to about3.6 percent per year.
viii. Capital goods imports are expected to remain large in function ofthe projected high investment levels, but restrained consumption growthand successful agricultural and industrial development policies should helpkeep the import elasticity with respect to GDP at about 1.1. Under theseconditions, economic growth could be accompanied by a resource gap declininggradually from 11.7 percent of GDP in 1975 to less than 7 percent by 1981.The financing of these resource gaps will require substantial capital inflows,the bulk of which will have to be met through public borrowing. About two-thirds of the public investment expenditures proposed in this report wouldhave to be covered by gross disbursements on foreign loans, or roughly $600million during 1976-81. An additional $110.0 million would have to be dis-bursed during this period as credit lines for development programs and $90.0million might become available under the Venezuelan Economic Cooperation Agree-ment. Even if Honduras obtains over 80 percent of the $800.0 million from themain international lending institutions and governments on relatively favor-able terms and the remainder from suppliers, these projected capital flowsare not expected to be sufficient to fill the balance of payments gap.Additional annual capital inflows (the bulk from commercial sources) of about$45.0 million during 1976-79 and larger amounts thereafter would be needed toachieve the projected modest GDP growth and associated import levels. Thepublic debt service ratio would rise from 5 percent in 1975 to 16 percent in1981 and 24 percent in 1985, an undesirably high level in view of thedemonstrated vulnerability of export earnings. The 4.6 percent growth targetwill probably require commercial bank borrowing during the next 3 to 4 yearsof the orders of magnitude suggested above. If during these years policymakers and entrepreneurs are very selective in their investment prioritiesand place emphasis on quick yielding investments, especially in projectswith good export potential, economic growth can be maintained and theresource gap reduced further towards the end of the decade to keep the debtservice ratio at about 15 percent of exports and maintain creditworthi-ness in the longer term.
Public Investment
ix. Ongoing investment projects of the public sector, mainly in infra-structure, are expected to bring public fixed investment to about 10 percentof GDP during 1976-77 compared with 6.4 percent in 1973-75. The Government'sproposed investment program, including a $400.0 million hydro-electric projectat El Cajon, would raise this ratio to close to 12 percent during 1977-80.Even a public investment program which does not exceed some 10 percent of GDPas proposed in this report will probably imply a reduction in private invest-ment from about 15-16 percent of GDP in recent years to about 12 percentthrough 1981. It is doubtful that the economy can expand even at 4.6 percentper year if private investment falls short of that level.
x. Furthermore, a public investment program of close to 12 percent ofGDP would require a public savings effort implying an unrealistic increase intaxes or a reduction in essential current expenditures. Major problems facingthe public sector are limited administrative capacity, owing partly to lowsalaries, a tendency for current spending to be kept below levels needed tocomplement capital spending and provide for operating and maintenance costs,and a fairly inelastic revenue structure. Even so, between 1972 and 1975 thecentral government tax ratio rose from 10.3 percent of GDP of 12.1 percent,owing to improvements in tax administration as well as additional taxes. Newtax measures adopted during 1975 should bring the tax ratio to about 13.5percent of GDP during 1976-78. The correction of past spending deficienciescombined with the necessary financing and complementary current spendingrequirements of the public investment program proposed in this report (about'0 percent of GDP) will require an increase in central government currentspending of at least 6 percent per year in real terms during 1976-81 andtherefore additional tax measures by 1978-79 to bring the tax ratio to ahigh 15 percent of GDP by 1981.
xi. The outstanding feature of the proposed public investment programis the considerably increased emphasis, as compared with the past, on invest-ment in the productive sectors, which is projected to rise from 4.6 percentof the total in 1970-75 to 21 percent in 1976-81. At the same time, infra-structure investment will continue to absorb more than 50 percent of thetotal, while investment in the social sectors, though not growing between1976 and 1981, is expected to be at several times its past levels in absoluteterms. The main issue is the amount to be invested in power. The suggestedinvestment program includes close to $200 million for power, an amount equalto about one-half the cost of the El Cajon hydro project (which would substi-tute for existing power from diesels as well as produce surplus energy throughthe 1980's). The choice open to the Government is between the $400 millionEl Cajon project on the one hand or a smaller investment in power (possiblyon the same site as El Cajon) combined with a number of projects in areassuch as feeder roads, agriculture, forestry or tourism on the other hand.The requirements of agricultural development and the need to improve thebalance of payments position argue strongly for investments in the latterareas. The feasibility of alternative power investments is currently beingexplored by the power company in conjunction with the updating of theEl Cajon feasibility study and it is expected that sufficient informationfor a decision will be available by the end of 1976.
- vi -
Sectoral Prospects
xii. A decisive effort has been started to improve agriculture's perform-ance. The technical possibilities for production increases are substantial.Government policy for agriculture has two broad objectives: (a) the improve-ment of agricultural incomes for lower income groups, and (b) the accelerationof agricultural output and export growth. Progress towards these objectivesis being made. An alleviation of rural poverty will depend on continuedimplementation of land reform. Its success will be contingent in part onadequate financing and access to trained technicians: it is the Government'sintention to concentrate its resources on the land reform., Over time theagrarian reform (now mainly for the landless) can lead to a more intensiveland use and help increase production. Because growth and exports are essen-tial, and land reform can be expected to contribute only modestly to theseobjectives in the short term, it is important that a sound investment climatebe maintained. Whereas the Government cannot provide much finance and tech-nical assistance to commercial farmers directly, it must continue to promotethe provision of these services (for instance through an expansion of theexisting Trust Fund in the Central Bank, with the commercial banks as opera-tives) if commercial agriculture is to grow.
xiii. Forestry development prospect are encouraging. Given the country'sresources, lumber and lumber products exports could become a major source ofgrowth. The focus of attention today is the implementation of the developmentplan for Olancho, the largest remaining reserve of pine in Central America.In designing the strategy for Olancho, the Government had two major options:(a) to proceed immediately with a pulp and paper plant and associated solidwood product industries; (b) to expand the solid wood product industriesgradually and to follow up at a later stage with a pulp and paper plant.Given the size of the investment required and the desirability of spreadingthe expenditures over several years and because of inexperience with largescale highly complex activities, and the need to proceed gradually in openingup the area to ensure the development of forest management and protectionpractices, the Government in May 1976 selected option (b). At the same time,the Government may want to consider exploiting the pine resources in therest of the country at the maximum possible rate in order to generate theforeign exchange needed to lift the country out of its long stagnation.For this to happen and given COHDEFOR's limited administrative and technicalcapacity, an active involvement by the local and foreign private sector,within the confines of the forest law, would be required.
xiv. Past manufacturing industry growth has been modest, in large measurebecause of the small size and sluggish growth of the domestic market, the in-ability to take much advantage of the CACM, and limited government promotionalefforts. Several of the constraints to more rapid and efficient growth couldbe overcome though a new draft Treaty (1976) proposing a restructuring of theCACM (giving preferential treatment to Honduras) and a revision of fiscalincentives schemes and through the recently created National Investment Corpor-ation (CONADI) to promote and directly participate in industrial enterprises.
- vii -
The expansion of industry will further require efforts to mobilize privatesavings. If, in addition, a major drive to promote exports to regionalas well as extraregional markets is initiated, the growth potential of theindustrial sector is substantial.
xv. Whereas substantial improvements in living conditions in Honduraswill be conditioned by an accelerated rate of economic growth, the severityof the current situation requires a minimum improvement in social servicesto help increase labor productivity. Increased spending in the socialsectors will be constrained by the demands for public funds from othersectors and much emphasis will have to be placed on more efficient spendingby making the contents and standards of services offered more appropriate tothe needs of target groups. At the same time, the requirements of agricul-tural and forestry development, especially, call for a substantial expansionof training programs in those sectors. In addition, a reorientation of manysocial sector programs towards the rural areas is desirable to complementother government development programs.
Conclusion
xvi. Honduras' rate of economic growth has been low in spite of asubstantial investment effort. The country is still in a stage of devel-opment where large public investments in infrastructure are required. Theseate preconditions--necessary but not sufficient--for further efficient output-generating investments. The overall return on capital investment has beenlow, not only because of the need to make substantial outlays for slow yield-ing basic infrastructure, but also because some productive investments haveeither not taken place or have had low yields. The adoption of new methodsof production in sectors such as agriculture or forestry which could yieldhigh returns on investment did not materialize for a number of reasons,including government policies and the lack of skilled labor and a strongentrepreneurial class. On the other hand, government policies subsidizinginvestment in industry did stimulate substantial capital outlays but led toidle capacity and hence low returns. Because current government policieshave become much more development-oriented and because the supply of skilledlabor and entrepreneurs is increasing, future investment should yield betterreturns than in the past and the country's growth performance should graduallyimprove. However, the continued need for large infrastructure outlays duringthe next few years is expected to keep the return on the economy's overallinvestment low. Moreover, as absorptive capacity improves, the mobilizationof domestic and foreign savings is likely to become a much more importantcondition for growth than in the past.
xvii. The Government of Honduras is trying to lay the basis for thelong-overdue acceleration of economic growth. The public investment andexpenditures program proposed in this report and based on government plansis consistent with the resources which the public sector can realisticallymobilize. Within these limits, the growth objective requires that prioritybe given to productive investments. A major illustration is provided bythe issue of the amount to be invested in power. The construction of the
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large $400 million El Cajon hydro-electric project would involve cutting someof the major programs the country is counting on to carry out the agrarianreform or to improve the balance-of-payments outlook and stimulate growth.The success of the public investment program will depend largely on whethertax revenues can be increased and the public sector administration improved,and on the pace of the agrarian reform program. A major effort will berequired to improve the efficiency of public spending in education to upgradethe quality of the labor force without substantially increased expenditure.Finally, these efforts are unlikely to succeed unless new exports besidesforestry products are generated. If, in addition to public investment inexport-oriented activities, a major effort is made to direct and stimulateprivate investment in foreign exchange earning projects, economic growthmight be accelerated and the country be expected to remain creditworthy overthe longer term.
CHAPTER I: BACKGROUND AND MAJOR ISSUES
1. In the 150 years since independence from Spain, Honduras has madeslow economic progress, with per capita income reaching only $350 by 1975.It is one of the poorest countries in the Western Hemisphere and cointinuesto be predominantly a land of small farmers obtaining a meager living byprimitive methods. The adult literacy rate is only about 50 percent andthe average national caloric and protein intake of most of the populationis well below minimum requirements.
2. The natural resource base is limited and often poorly utilized.The best agricultural soils include the northern coastal plain, where bananaproduction for export has been developed by foreign companies since the latenineteenth century, the southern coastal plain and some major inland rivervalleys. Apart from these, the predominance of steep rugged terrain seri-ously limits the agricultural potential and makes transportation difficultand costly. Nevertheless, there are ample opportunities to improve land useby bringing areas of good potential more fully into the agricultural economyand by shifting land already in use to higher value crops. The country'sother major natural asset consists of the largest pine forests in CentralAmerica: thus far, their exploitation has been limited and they are being
wasted owing to uncontrolled forest fires and lack of conservation. Known
mineral deposits are small: they include silver, lead and zinc, which have
been exploited in limited quantities, and low-grade iron ore.
3. Until around 1900, when commercial exploitation of bananas began,the principal export was silver mined in the vicinity of Tegucigalpa, thecapital city. Since then, bananas have become the leading export. From1925 until World War II bananas accounted for about 90 percent 'of exports.Apart from the banana enclave development along the north coast which ledto the growth of San Pedro Sula, the country's main industrial and commercialcity, little changed during those years in the economy. Estimates of GDP and
population growth suggest that real per capita income only grew by 10 percent,or about 0.4 percent per year between 1925 and 1950. Honduran governmentsdid little to stimulate the economic development of the country. The moun-
tainous terrain and the consequent relative isolation of population pocketscontributed to the growth of regional rivalries: political instability wasthe rule and governments were more concerned with political and militaryproblems than with the economy. 1/ Thus, for example, in the mid-fiftiesHonduras had only 24 miles of paved roads and public electric energy pro-duction per capita was only one-third the level in Nicaragua and Guatemala,
one-fifth of El Salvador's and one-twentieth of Costa Rica's.
1/ From 1932 to 1949, General Tiburcio Carias Andino did bring relativepolitical stability to the country but, as a strong defender of thestatus quo, failed to generate any significant material progress.
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4. The first serious government attempts to activate the economywere initiated in 1950. A program of highway planning and improvement wasbegun, a Central Bank and a National Development Bank were created, theincome tax was introduced and a significant effort was started to broadeneducation services. At the same time, demands for social change weregrowing, culminating in the banana workers' strike in 1954 which centeredon the United Fruit Company. Though the company had long enjoyed the supportof the ruling classes, the Government refused to break the strike, whichlasted for more than three months. Only after the company had lost some$20.0 million was an agreement reached including substantial concessions tothe workers in the form of wage boosts, housing programs and medical facili-ties. This strike, with results unequaled in Central America, not only gavelabor the right to organize but also marked the beginning of socio-economicreform and contributed to the emergence of peasant organizations which mostrecently (see paragraph 8) led to the initiation of a comprehensive agrarianreform program. 1/
5. The difficulties in the banana industry coupled with several yearsof political instability caused delays in the preparation and execution ofdevelopment programs until about 1960. Some progress has been made sincethat time. Major trunk roads now link the western valleys, the north coast,Tegucigalpa, the south and neighboring countries. The mountainous topographyof the country has made expansion of the road network slow and costly andsubstantial deficiencies remain to be overcome, especially in secondary andfeeder roads, before the economy is integrated. The modernization of PuertoCortes, the country's main port, was another major achievement in transport.Apart from transport, the bulk of public fixed investment, thus far, hasbeen in power, where significant improvements were made: the National PowerCompany's installed generating capacity more than tripled since 1965. Lackof internal integration has limited the size of the domestic market andhampered industrial development. The creation of the Central American CommonMarket (CACM) in the early 1960's was an attempt to enlarge the market forindustry and was responsible in large measure for the development of somenew industries, including detergents, cosmetics, metal products, canned foodsand plastics. Progress was halted by the conflict with El Salvador in 1969.Even while the common market was fully operational, Honduras did not reap allof the expected benefits as, owing largely to deficient infrastructure, it wasat a competitive disadvantage vis-a-vis its neighbors in attracting newinvestments or developing new industries. The Government has spent substan-tial and increasing amounts on education but with limited results, as the lowproductivity of the labor force remains a major obstacle to growth; the adultliteracy rate, which rose from 35 percent in 1950 to 47 percent in 1961 haschanged little during the past fifteen years.
1/ The Villeda Morales administration (1958-1963) provided the first attemptsat socio-economic reform in Honduras. In 1961, an agrarian reform lawwas passed and an Agrarian Reform Institute was created, but the programwas deemphasized during the subsequent administration.
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6. From 1950 to 1975 real GDP per capita grew by 19 percent or about0.7 percent per year. The continued lack of basic infrastructure and thelow efficiency of educational efforts explain in part the sluggish perform-ance of the Honduran economy during this period. Other major reasons in-clude deficient credit, technical services and development programs foragriculture and the neglect of forest development. Even though the shareof bananas in exports has declined from 75 percent in 1950 to 40 percent inthe early 1970's, as the structure of production and exports has become morediversified, 1/ economic growth has continued to depend heavily on bananas.Between 1950 and 1963 when strikes, the Panama disease and wind damage ledto long-run stagnation in banana output, real GDP growth per capita wasbarely 0.2 percent per year. The introduction in the mid-sixties of bananasless subject to wind damage and resistant to the Panama disease restored thecomparative advantage lost earlier to Ecuador: the volume of banana exportsrose by about 150 percent between 1963 and 1968 and real per capita GDP grewby 3.5 percent annually. Since 1968, banana production and exports havestagnated again (declining sharply in 1974 and especially in 1975 as a resultof hurricane Fifi); real per capita GDP grew by 0.2 percent per year between1968 and 1974, and declined by 3.3 percent in 1975.
7. The continued low level of economic development, insufficientinfrastructure, deficiencies in labor productivity and in public administ-ration, and modest prospects for traditional exports put severe limits onthe degree to which economic growth can be accelerated. On the other hand,several developments in public policy-making during the last three yearsoffer grounds for optimism. Since December 1972, economic development policieshave been much more dynamic than in the past.
8. A period of active development planning has been initiated andseveral measures have been taken to lessen the major obstacles to economicgrowth. Much emphasis is being placed on further infrastructure development.Most important, a start has been made to improve the exploitation of thecountry's major resources, land and forests. Under pressure by militantpeasant organizations temporary land reform measures introduced in December1972 were replaced in January 1975 by a comprehensive Agrarian Reform Lawwhich aims at a much improved utilization of land. At the same time the lawseeks to increase the incomes of the poorest peasants, mainly through thetransfer of unutilized or poorly utilized land from large land-owners tolandless rural families. A state forest corporation (COHDEFOR) was createdin January 1974 and was put in charge of all basic forestry and forestindustry policies and activities in order to begin to exploit the country'slarge forest resources more rationally and to increase exports. Finally,a preliminary medium-term development plan calls for substantial publicexpenditures in infrastructure, agriculture and forestry. While the countryfaces some difficult years ahead, these efforts could lead to the long overdueacceleration of economic growth. This report analyzes the conditions underwhich these efforts are most likely to succeed.
1/ Coffee and lumber became important export items shortly after World WarII; beef exports have grown rapidly since 1970.
CHAPTER II: SECTORAL ISSUES AND POLICIES
A. Agriculture 1/
Background
9. Honduras has remained predominantly an agricultural economy. Agri-culture (including forestry) still accounted for a third of value added duringthe early seventies--more than manufacturing, construction and commerce com-bined--and for nearly two-thirds of employment: agricultural products madeup about 80 percent of exports. The slow development of the economy has beena reflection of slow agricultural growth, the major exception being the period1963-68 when agricultural value added grew at 8.2 percent per year in realterms (see paragraph 6 above) and the economy grew at 6.3 percent. Cropsaccount for some 65 percent of value added in agriculture; livestock andpoultry for 23 percent; forestry for 11 percent; and fisheries for theremainder. In 1970, major crops included bananas (27 percent of value addedin agriculture), coffee (11 percent), corn (10 percent) and beans (4 percent).Since 1950 the production of bananas and coffee has grown considerably fasterthan that of corn, beans and sorghum, the staple food of the rural population.Corn and beans production did expand at a satisfactory rate through the latesixties, when Honduras was able to sell surplus production to El Salvador,but has declined since. Periodic droughts, floods and hurricanes have ledto large fluctuations in agricultural output. The substantial hurricanedamage to the banana plantations in September 1974, for instance, reducedbanana export volumes in 1975 to about half the level of previous years.Then, an emergency basic grains program designed to offset the consequencesof the hurricane had only limited success because of a drought.
10. Rural incomes stagnated in recent years: value added in total cropsproduction grew by 5.3 percent per year between the early 1960's and the early1970's; value added in banana production grew by 11.6 percent per year, butother crops, mainly staple food, grew only by 1.8 percent per year, about therate of growth of the rural population.
11. Crop yields are generally low. Improved seed is not widely used,fertilization is minimal, and pests and diseases take a heavy toll. The majorexception is bananas: produced in the Sula and Aguan Valleys in the northernregion, about 20,000 hectares are under cultivation. Some 65 percent ofbananas are produced by two foreign companies. Corn is the small farmer'sbasic crop: used mainly for food, corn is grown in most parts of the countryand far exceeds other crops in acreage. Beans, a major source of protein forlower income persons, are often interplanted or rotated with corn. Coffee is
1/ The IBRD/IDB/AID Agricultural/Rural Sector Survey of Honduras (YellowCover Draft completed in December 1975, hereinafter referred to as SectorSurvey Report) may be consulted as a supplement to the following section.
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Table 1: OUTPUT OF SELECT AGRICULTURAL PRODUCTS
(Annual averages for crop years, in 1000 metric tons)
Export Crops Basic GrainsYear Bananas Coffee Corn Beans Sorghum
1951-53 520 15 188 22 48
1961-63 650 25 269 44 49
1967-69 1316 36 344 60 45
1970-72 1494 39 278 37 41
1973-75 1274 5° 330 33 46
Source: Appendix Table.
Table 2: VALUE ADDED IN AGRICULTURE
(In millions of 1966 Lempiras)
Average Average Yearly Growth Rate1962 - 64 1971 - 73 (Percent)
Agriculture 301.9 471 -3 9
Crops 197.8 314.1 5.3
Bananas 54.3 145.7 11.6
Other crops 143.5 168.4 1.8
Source: Central Bank.
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grown by many small farmers and provides a major source of cash income; inspite of traditional production practices and low yields, output has grownsteadily, as acreage expanded. Cattle production is the most important live-stock activity and beef is the country's fourth largest export, even thoughproductivity is much lower than in neighboring countries.
12. An estimated 28,600 hectares, or 2 percent of the land currentlyunder crops and improved pastures, were in irrigation schemes in the early1970's. Of these, about 10,000 hectares were in government projects; becauseof problems such as design, management, farmer training and land tenure ithas not been possible to irrigate much more than one-third of the area includedin the government projects. Private systems include the large schemes of thebanana plantations, the sugarcane enterprises, and many small installations.In recent years some of the large-scale farmers in the Sula Valley andCholuteca have pumped groundwater, but most irrigation is still by diversionof streams into unlined canals.
13. Data derived from a 1967-68 Survey of Income and Expenditures indi-cate that the poorest 40 percent of the population is almost all rural andearned an average per capita income of about $45 per year in 1967-68, ascompared to a national average of $220. Many are landless or work smallplots of very poor quality. Rural poverty is widespread, but is most severein the southwest region bordering El Salvador: the terrain is very rough,soils are poor and infrastructure is limited. Copan and Santa Barbara(bordering Guatemala) enjoy somewhat better natural resources: both coffeeand tobacco are grown and the Western highway provides access to the labormarket of the San Pedro Sula area.
14. Deficiencies in education and nutrition are particularly acute inrural areas. Many in the rural population suffer from chronic lack ofcalories, proteins and vitamin A. Anemia, malaria and intestinal infectionsare common. Rural public water systems are rare and excreta disposal systemsare generally unsanitary.
15. Data for 1974 suggest that the rural population is about 1.93million (70 percent of Honduras' population) or roughly 300,000 families,in 178,000 farm units of which only 75,000 exceed 5 hectares. 1/ An estimated200,000 rural families are poor, with too little land for minimum subsistenceor no land at all. 2/ Thus poverty in Honduras is not limited to a few "core"areas--it is the condition of two-thirds of the rural population and almosthalf of the country's total population.
1/ The number of farm units is taken from the 1965 Agricultural Census.
2/ Roughly 100,000 rural families are estimated to earn incomes above sub-sistence: the 75,000 who have farms in excess of 5 hectares in size andthe 25,000 banana workers and their families. About 100,000 familieshave farms below 5 hectares in size and the remaining 100,000 are land-less.
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Agricultural Potential
16. Substantial technical possibilities exist for expanding output ofcrops and livestock, even though the land is not easy to exploit. 1/ Potentialland use studies suggest that close to 20,000 km2 (out of a total area ofabout 112,000 km2) are suitable for agriculture of which roughly one half islimited to extensive use because of soil conditions or steep slopes. 2/ Accor-ding to the National Planning Office some 13,700 km2 are currently undercultivation (including improved pastures), a substantial part of which areunsuitable even for extensive agriculture. Thus the possible increase in out-put and income opportunities through area expansion may be significant, eventhough many of these areas are still inaccessible. The technical potentialfor water development is also substantial. Although stream flow recordstypically cover only short periods (and even these are not available for allriver systems), the flows in most streams and rivers could provide much of theland with irrigation, if regulated by storage and properly managed. Sharpincreases in crop yields and pasture carrying capacity are also technicallypossible. Even though current technology is extremely limited in Honduras,yields can be increased by spreading the practices of the better farmers. Inthe longer term, applied research could contribute to further sharp yieldincreases. Finally, output gains are possible by shifting land now in cerealsproduction to higher value crops, such as African palm and grapefiuit and someland now in pastures is suitable for crops.
1/ Steep, rugged terrain predominates, with ridges and peaks ranging from2,400 m. in the north to 3,000 m. in the west. Areas with slopes under20 percent include the Sula and Aguan valleys, the Nacaome-Cholutecaplain in the south, and the Guayape Valley in the central zone. Theclimate is characterized by distinct dry and rainy seasons. Precipita-tion totals about 3,000 mm per year in the north, with an average ofabout 100 mm per month for March, April, and May, the driest months, and250 mm to 400 mm per month for June through January. Most of the inte-rior has an annual rainfall ranging from about 900 mm to 1,800 mm, withrelatively little rain (0 to 50 mm) between December and April. Thesouth coast has a slightly higher average annual rainfall, about 1,700mm, and the dry period is longer, beginning in November. Average meantemperatures in the tropical coastal zones (up to some 600 m) are around26 C. In the temperate zones, from 600 m. to 2,100m., mean temperaturesrange from about 16 0C to 24 C.
2/ "Uso Potencial de la Tierra, Parte V: Honduras". C.V. Plath, FAO, Rome,1967.
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Constraints to Agricultural Development
17. Limited knowledge of farming techniques; deficient public servicesfor agriculture; lack of access to land; skewed ownership of land presently
in farms; and land use patterns (as for example the growing of crops in
mountainous areas not fit for intensive agriculture, while fertile lands are
used for extensive grazing or left idle) all have contributed to the continued
stagnation of the agricultural sector. There is also a serious problem of
unclear land titles. A considerable portion of the land is owned by theGovernment but the line between public and private lands is often ill-defined
and illegal exploitation of public lands is therefore quite common.
18. Public services to agriculture offer great scope for improvement.
Authority and responsibility are fragmented, and duplication of effort is
common among agencies. Both at the pre-project and at the project implemen-tation stage, coordination, though improving, is weak between the AgrarianReform Institute (INA), the Ministry of Natural Resources, the National
Development Bank (BNF) and other agencies dealing with agriculture. Theimplementation of the agrarian reform will require inputs from these different
public agencies in a well integrated manner. 1/ Furthermore, decision-making
is overly centralized within most public agencies. This is partly because of
a serious shortage of professionally trained people: four public and two
private institutions offer professional and vocational education in agricul-
ture and forestry, but the output is inadequate in quantity and quality.
19. Lack of roads is another major constraint to rural development.Although improved in recent years, the road system is in need of expansion
and better maintenance if agriculture is to grow. Access roads are few and
far between.
20. Deficiencies in technical research and farmer advisory services
also limit output growth and rural income improvement. Only limited informa-tion is available on suitable varieties of basic crops, cultivation practices
and fertilization rates and what information exists is not reaching farmers.
A considerable part of the small and poorly trained extension staff is workingwith the asentamientos set up by INA, and operates without adequate back-uppersonnel specialized in essential subjects such as pest and disease control.
Finally, lack of improved seed is a severe problem: the country does not have
a seed certification system, nor the legislation establishing minimum stan-dards for seed quality, nor farmers specializing in seed production.
21. Since 1967-68 production expansion programs have included a govern-
ment purchase program for basic grains to help reduce seasonal fluctuations.
Minimum prices payable at the National Development Bank's storage facilities
1/ The recently created agricultural Coordinating Committee (COCO, paragraph35) was a major step towards this objective. Current government policiesto overcome constraints discussed in these paragraphs, and additionalrecommendations, are presented in paragraphs 35-39.
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moved little between the beginning of the program and 1974, but were raisedsubstantially during the past two crop years. 1/ However, the program hashad little impact. BNF storage capacity was very small until 1972. Althoughcompletion of new facilities in that year raised capacity to 45,000 tons,technical problems in handling grains and insufficient operating capital havelimited the use of the storage capacity to date. Currently, storage capacityis being further expanded and should reach about 58,000 tons by 1977, whichshould be sufficient to have an impact on prices. An increase in operatingcapital and improvements in handling will be required to make the systemfully operational and achieve the desired effect of providing stable pricesfor producers.
22. Existing retail price controls of a number of food products (Decree91, November 1973) and the purchasing-marketing activities of a new governmentagency (BANASUPRO, created in July 1974) are too recent to permit an appraisalof their effects on farmers. The clear purpose of these measures is to keepprices at a level acceptable to the consumer. The Government is aware of thedanger of public intervention in the market and its possible effects on produc-tion. In the case of milk, prices were frozen for producers and consumersfrom the early 1960's until 1974. This discouraged milk production and con-tributed to an increase in milk imports; in order to reverse this situationprices were increased substantially in 1974.
23. At times Honduras has exported substantial quantities of corn andbeans to the CACM. Since October 1965, trade in basic grains in CentralAmerica is subject to the Limon Protocol which gives the government marketingagencies control over quantities traded and prices. Export controls (withthe stated aim of assuring domestic food supplies at low prices) are a pricedepressant and may have contributed to the long-run stagnation in production.
Recent Developments
24. The skewed distribution of land holdings and the extreme poverty of
the rural population have given rise to numerous land disputes, land invasionsand increasing agrarian unrest during the last few years. Three fairly wellorganized peasant organizations have emerged--which in late 1975 joined forcesto form a Frente de Unidad Campesina--claiming a total membership exceeding100,000. Current rural development policy has responded by emphasizing landredistribution. The aim of the Government is to establish clear land titlesand to ensure an efficient use of land. Landless farmers and farmers with toolittle or unsuitable land would eventually be settled on government lands oron underused private lands.
25. Temporary land reform measures introduced in December 1972 (Decree8) were after much debate replaced by an Agrarian Reform Law in January 1975.The law provides the legal basis for redistributing land to the landless,providing complementary services as well as stimulating the development of
1/ Prices were announced, appropriately, at planting time.
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the commercial farm sector. Allowable maximum farm sizes range from 100hectares in irrigation districts to 2,000 hectares in the least developedareas of the country. 1/ Areas less than the indicated maximums are subjectto expropriation if (a) within six months of the date of the law the land isnot operated directly by the owner; (b) within three years (January 1978) thefarm is not exploited in accordance with the efficiency standards containedin the law; or (c) the land is in excessively fragmented units. Lands whichare totally unexploited are subject to immediate expropriation. Land inbananas, sugarcane, African palm, coffee, pineapple, citrus and tobacco arenot subject to expropriation as long as efficient production is maintained.
26. Implementing regulations have been issued, the National AgrarianInstitute responsible for the reform is being reorganized to improve admin-istrative procedures, and the process of land expropriation and redistribu-tion was started in October 1975. Farmers are not usually settled indivi-dually but in groups (asentamientos) and work on a cooperative basis.Preliminary plans call for the settlement of 20,000 families in 200asentamientos per year during the next five years. Group settlement appearsto receive increasing acceptance over individual settlement both among theleaders of the reform process and among the peasants, especially because thebulk of the beneficiaries are landless laborers and thus do not have thetradition of farming their own small plots. The larger farm size makes itpossible to take advantage of various economies of scale and allows easieraccess to credit. Under the temporary Decree 8 program more than 23,000families were settled over a two-year period, each family being providedwith about 3 hectares of land--which is admittedly very little. Because ofadverse climatic conditions during this period, it is impossible to evaluatethe performance of the new settlements. The Government regards the agrarianreform as its most important program. The effort needed to provide thevariety of farm services required for a successful land reform is great,and the authorities are only beginning to confront these problems. (Seeparagraphs 35-39.)
27. A second development of considerable significance for the mediumterm is the ongoing expansion in sugar. Honduras has a substantial produc-tion potential because of climate and the relatively cheap and abundant labor.Four new plants are scheduled to come on stream in late 1977 or early 1978with some of the sugarcane supplies expected to come from the agrarian reformsettlements. Sugarcane plantings were begun in late 1975 and plant construc-tion is to start in 1976. Three of the plants are private and the fourthis being built for the National Development Bank. Exports averaged 4,500 MTin recent years and may go up to about 80-90,000 MT in the early 1980's.
1/ The law includes provisions which permit land holdings in excess of theestablished maxima in certain exceptional cases (based on considerationsof efficiency and priority) and subject to government approval in eachcase.
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28. Some 1,500 acres have been planted in melons for export in early1976 under an experimental program developed by PATSA, a subsidiary ofUnited Brands, jointly with the Agrarian Reform Institute, the Ministry ofNatural Resources and the National Development Bank. Production is con-tracted with farmers in the Choluteca area. PATSA provicfes seed, technicalassistance and the marketing service. Current plans call for doubling theacreage in 1976, and for experimental marketing of cucumbers and othervegetables. These exports could be increased to several million dollarsprovided insects and diseases are controlled.
29. Cattle management practices are also improving, particularlyanimal nutrition. Compared to neighboring countries, cattle death rates arehigh and reproduction rates and marketing weights low. The ongoing livestockprograms of the Central Bank should further improve management practices,both directly and indirectly.
Major Issues and Prospects
30. Current government policy for agriculture has two broad objectives:(a) the improvement of agricultural incomes for lower income groups, and(b) the acceleration of agricultural output and export growth. Progresstowards these objectives is being made. An alleviation of rural povertywill depend on continued implementation of land reform. Its success will becontingent in part on adequate financing and access to trained technicians:it is the Government's intention to concentrate its resources on the landreform. Over time the agrarian reform (now mainly for the landless) canlead to a more intensive land use and help increase production. Becausegrowth and exports are essential, and land reform is expected to contributeonly modestly to these objectives in the short term, it is important that asound investment climate be maintained. Recent agrarian reform legislationhas reduced much of the uncertainty prevailing during the last few yearsand private investment in sugar suggests a fair degree of confidence.
31. The interrelationship between the land reform program and otherexpansion plans suggests that successful agricultural development hinges onmaintaining progress in both areas. Land reform is essential to improverural living levels and to induce farmers to utilize land more efficiently;it will also help maintain political stability and thus private investmentincentives; increased private investment can contribute to the more rapidgrowth of output and exports needed to implement the Government's develop-ment plans.
32. In its initial stages land reform will not benefit small holdersdirectly. Expanded output on their part will depend, therefore, on comple-mentary programs. 1/ Two measures towards the development of a small farmer
1/ Small holders could be defined to include as a minimum those 100,000families whose farms are less than 5 hectares in size (paragraph 15).Given present production and marketing practices, farms of this sizeare not large enough to produce acceptable living levels.
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program would be of particular importance. First, a study of the assetand income profile of the rural population; without this information, itwill be difficult to choose priority target groups, estimate and mobilizethe resources required and design a program for small farmers. The ongoingcadaster work should be given high priority. Second, it would be usefulto design and test a small-holder service system integrating technical guid-ance, credit, inputs and marketing. The test program could start out withone commodity (corn) in selected parts of the country on selected farms(the "best" farmer in the area, who might eventually be imitated by others).Neither the organization of the small farmer program, its non-agriculturalcomponents, if any, nor its location or commodity coverage can be pre-scribed now; the preparatory work should be designed to answer these ques-tions. Following two to three years of preparatory work, a small farmerservice system could be installed before 1980.
33. The implementation of the Agrarian Reform Law will graduallyclarify circumstances under which farmers face expropriation. Two addi-tional steps are desirable to stimulate investment in medium and largefarms. First, a meaningful real estate tax could be instituted to raise thecosts of holding underused land. A great deal of preparatory work for a ruralreal estate tax has already been done in connection with the cadaster program.This makes it technically possible to install a land tax at an early date.Second, arrangements could be made to provide commercial farmers with thefinance and technical services they require to expand output. The Governmentcannot now nor in the near future provide more than a very limited amount ofthese services from its own resources. Consideration could be given toexpanding the existing fiduciary unit in the Central Bank to design andmonitor an integrated credit and technical assistance program for large andmedium farmers, with the commercial banks as operatives. The cost of technicalassistance could be met by the borrowers. The manpower resources required forsuch a program should be small, and consideration might be given to hiringtechnicians from abroad if necessary to avoid diverting from the agrarianreform program the limited manpower available to the public sector. Althoughthe program for commercial agriculture will require some local public finan-cial resources (mainly credit from the Central Bank), this is justified givenits importance and should not divert funds from the land reform program. Evenwhile proceeding at the maximum possible rate, the latter program will havelimited capacity for absorbing funds efficiently for some time to come.
34. This expansion program for commercial agriculture might be ex-tended to specific quick-yielding, exchange-earning projects. One possi-bility is in rice. Suitable land is available on the north coast (forexample, in the Cuyamel, Omoa, and Chameleconcito areas near Puerto Cortes).A mechanized, double-cropped project merits investigation. Such a projectcould later provide seed and services (technical, machinery, and marketing)to small-holder outgrowers and asentamientos.
35. Successful rural development programs will require substantialimprovements in public administration. The problems of interagency co-ordination and administrative procedures are now being tackled through the
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creation of regional offices of the different agencies and through an agri-cultural Coordinating Committee which should review and harmonize the annual
work program of the key agencies. Effective management will require thatsubstantial authority be given to the regional offices, accompanied by aneffective monitoring system. If operations in the field are to proceedsmoothly, local offices must be allowed to make expenditures without explicitauthorization from the center (within reasonable limits) and they must playa larger role than they do now in devising work programs and budgets.
36. More funds are needed to expand and maintain rural roads. Giventheir crucial importance, consideration might be given to setting up in theMinistry of Public Works a separate directorate responsible for design,
construction and maintenance and, eventually for handling other rural infra-structure. The Ministry of Public Works is now experimenting with labor-intensive methods of feeder roads construction (under a foreign technicalassistance program) to develop technically sound yet labor-intensive construc-tion techniques. Following the examples of some municipalities such as SanPedro Sula and Choluteca, an effort might be made to encourage the moreprogressive municipal governments to participate in rural roads programs.
37. Agricultural research would gain if inter-disciplinary teams forcommodity and farm systems and training programs were formed. The mosteffective approach would be to tackle specific basic commodities, which canbe tested under farm conditions. 1/ The commodity programs could begin withyield trials on domestic and foreign seeds and, if necessary, the eventualdevelopment of varieties more suitable for local conditions. The economicsof production practices, such as planting dates and densities, fertilizationrates and the like could be studied as soon as possible. At this point,farmers could be recruited as cooperators, and on-farm testing could bestarted. Soon thereafter extension work could get underway, using the on-farmtesting program for demonstration purposes. As knowledge on varieties andpractices builds up, crop production specialists could be trained to add toextension activity. The project should be designed to produce adequatequantities of seed of proven varieties for multiplication under an improvedseed program.
38. According to CONSUPLAN, the total supply of technical agriculturalstaff available in Honduras to both the private and public sectors as of 1972was 737, which included local and foreign personnel. Of these, 216 wereprofessionals and 521 middle and lower level technicians; about half wereworking for government programs. 2/ The shortage of agricultural personnel
1/ Research institutions specialized along functional lines, i.e., wheredifferent researchers study a large number of commodities but onlywithin their field of specialization (for instance pathology, or ferti-lization), are costly and this approach is less suitable to testingunder farm conditions.
2/ Sector Survey Report, Annex 11, Table 2, and CONSUPLAN, Plan de DesarrolloEconomico y Social 1972-77, Plan Agropecuario, Vol. I, page 236, July 1972.
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is general but particularly acute at the middle and lower levels. Require-ments are difficult to estimate but an indication of the magnitude of thedeficit can be drawn from a CONSUPLAN estimate of the number of extensionagents needed to provide minimum basic coverage (these would be mainly middleand lower level). For 1972, the estimated requirement was 1,300 while only70 were actually working in government programs. 1/ The Sector Survey Reportsuggested that the agrarian reform alone may need a staff of up to 350 tosettle 20,000 families on 200 asentamientos in the first year of operation;once the agrarian reform is in full operation a minimum staff of up to 1,000may be required, of which about 20 percent would be professionals and 80percent middle and lower level technicians. 2/
39. Against these requirements for the agrarian reform and extensionprograms the yearly output is not expected to exceed 180 technical agricul-tural graduates (including 140 middle and lower level technicians). 3/ Thegap between potential output and requirements is very large. Furthermore,a lack of qualified entrants and occasional political turmoil and closureof the National Agricultural School (the major school for lower level tech-nicians) has limited output in the past. Agricultural development willrequire that the Government give higher priority to training. The attackwill have to be two-pronged: increasing the supply of students qualified foradmission to agricultural training programs and increasing the quality of theprograms. Specific proposals to expand and improve agricultural schools arecontained in the Sector Survey Report, Annex 11.
40. In water development, the primary task in the next few years isto build up the qualified personnel, the legal base, and the administrativemechanism to manage the national water resource. Currently responsibilitiesfor irrigation and flood control are divided among several ministries, andthe electric power company views water resources purely from a hydroelectricperspective. There is a great need for an integrated approach to waterdevelopment. At the same time, feasibility studies and pilot work on a fewprojects could go forward. Areas might be identified in the Sula valleywhich could become productive for rice or other crops without additionalflood protection if some drainage facilities were provided; this could prob-ably be done at little cost.
Conclusion
41. After decades of stagnation in rural incomes and inactivity onthe part of the public sector, the Government has in the past two to threeyears started a serious effort to improve agricultural performance. A landreform program was initiated, designed to raise rural living levels and
1/ Sector Survey Report, Annex 11, Table 3.
2/ Sector Survey Report, Annex 4, paragraphs 57-59.
3/ Sector Survey Report, Annex 11, Table 1.
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increase agricultural output through land redistribution and intensifiedland use. The land reform law also has reduced much of the uncertaintyprevailing in the private sector, thus helping to stimulate investment.The agrarian reform program will require a major effort to expand and improvepublic sector services and a concentration of these services on the reformprogram. If successful, it will further stimulate investment and technicalimprovements in the private agricultural sector. Whereas the Governmentcannot provide much finance and technical assistance to commercial farmersdirectly, it must make certain that arrangements are made to provide theseservices (for instance through an expansion of the existing fiduciary unitin the Central Bank, with the commercial banks as operatives) if commercialagriculture is to grow. The technical possibilities for production increasesin Honduras are substantial. Measures along the lines suggested in the pre-ceding paragraphs can establish a significant upward trend in agriculturaloutput and rural living levels within the next few years and, for selectedproducts, considerable gains in exports. In per capita terms, the rapidrate of growth of rural population (close to 2 percent per year, notwith-standing substantial rural/urban migration) will continue to limit incomegrowth. However, if output in the agrarian reform settlements can be graduallymade to grow at a feasible 4 percent per year, rural income levels wouldimprove by 50 percent within two decades. While difficult to quantify, growthin export agriculture, essential to strengthen the balance of payments, couldbe much more rapid.
B. Forestry
Resources and Their Use
42. Forest lands (or lands best suited for forests) account for some7.4 million hectares or roughly two-thirds of Honduras' land area: about2 million hectares are coniferous and about 3.2 million hectares are broad-leaved forests; the remaining 2.2 million hectares have been denuded and areused for marginal agriculture or have been abandoned. In the past, more than90 percent of the wood used for commercial purposes came from the coniferousforests and this situation is expected to continue in the near future.
43. Broadleaved forests (mostly mixed tropical hardwoods) are locatedmainly in the eastern and northern parts of the country. Until recently,very little was known about these forests. In the east they are fairlyinaccessible and in the north they have been cut selectively for a few valu-able species. These forests are generally difficult to manage. Their compo-sition is extremely heterogeneous, with low volumes per hectare of commerciallyknown species. Extraction costs are high if only the few commercially knownspecies are cut, and the valuable species do not regenerate on the exploitedareas without special silvicultural management. Furthermore, Honduran hard-woods are difficult to process and given current world supplies do not havea ready market, except for a few valuable species. Because of this andbecause of the favorable outlook for pine forests exploitation, about which
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much more is known and on which the Government intends to concentrate itsscarce resources in the immediate future, the prospects for hardwoods are
not discussed further in this report. A partial inventory and prefeasi-bility study of the industrial use of Honduran hardwoods has recently been
completed. 1/ With increasing knowledge the development potential of thehardwood forests should become clearer.
44. Almost all estimates of existing pine volumes start with theUNDP/FAO inventory of 1965. A number of uncertainties are involved inbringing the data up to date, including the amount of timber harvested ordestroyed since 1965, net growth estimates, composition of the forest insize classes, and location and access of pine stands. Depending on the
assumptions made, widely differing conclusions can be reached concerningthe rate of depletion and the time it will take to exhaust the present pineresource if management does not improve. A FAO/IDB report reaches the con-
clusion that the present standing volume of commercial pine sawtimber is
about 81 million m3, 40 percent of which is in the little exploited Olanchoreserve. 2/ In addition, the report estimates a commercially useable volume of
14 million m3 of small-sized wood in the country as a whole. 3/ Zero net growthis assumed after 1965, i.e., growth is offset by losses due to fire, insects,etc. Inaccessible and low-density forest areas were not included. These
FAO/IDB estimates are accepted for purposes of this report. 4/ The FAO/IDB
report also estimates that, at present cutting rates (2-2.5 million m3/year)
and in the absence of a forest protection and management program, the esti-
mated pine sawtimber resource of 81 million m will have been totally depleted
in 30-40 years. 5/ This may be contrasted with the immense pine forest potential
suggested in the 1965 UNDP/FAO report: "Under conditions of full stocking,fire control, and sound forest management, the pine forests appear potentially
capable of yielding 18 million m3 per year without reducing the growing stockvolume."
1/ Government of Honduras. Canadian International Development Agency,Forest Resource Study, June 1975.
2/ FAO/IDB Cooperative Programme: Report of Olancho Forestry Project inHonduras, March 1975.
3/ i.e., wood with dbh (diameter at breast height) between 10 cm. and 25 cm.
4/ The 81 million m3 can be considered a safe lower estimate of availablevolume. A more optimistic estimate would make allowance for future
growth into the sawtimber category of the 14 million m3 small-sizedwood and make some allowance for increased access to remote areas suchas Gracias a Dios as world market prices increase.
5/ Cutting rates have increased substantially during the last 20 years;pine lumber has become an important export item only since the early1950's. In addition a pine bark beetle epidemic in 1963-65 killed anestimated 20 percent of the volume of pine in the country. Furthermore,even though, with proper management, natural regeneration is excellent,the pine resource is being rapidly depleted by indiscriminate cuttingand repeated burning, which prevent regeneration. A substantial partof the 2.2 million hectares of forest lands which have been denuded(paragraph 42) presumably were pine forests.
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45. The production of sawnwood, mostly pine for export, is by far themost important forest industry activity. During the past 7 years pine sawlogremovals and sawnwood production and exports have grown at close to 4 percentper year. The decline in 1974-75 was a result of the world recession and ofthe temporary disruption of the industry following the creation of the govern-ment forest corporation (see paragraph 46). The production process is veryinefficient. The widespread use of the axe is wasteful, young trees are des-troyed with larger ones, and good wood in smaller logs is often left behind astransport costs are high: only about 70 percent of useable harvested woodreaches the mills. Furthermore, most mills use circular head saws which wastelumber and maintenance is deficient. Only about one-third of the industrialsawlog removals end up as lumber (see Table 3). There is very little furtherprocessing of lumber into mouldings, furniture parts, etc. Besides sawmills,two companies manufacture plywood and various companies produce minor forestsproducts such as resin.
The Forest Law of 1974
46. Wasteful exploitation practices, widespread burning, 1/ allegedunder-reporting of exports by the industry and a lack of definition of landownership with resulting bottlenecks in wood supply led to the issuance ofLaw 103 and the creation of the Honduran Corporation for Forestry Development(COHDEFOR) in January 1974. As mentioned in paragraph 8 above, COHDEFOR wasmade responsible for forest policy and its implementation and controls allforest resources, public and private. A major goal of Law 103 is nationalcontrol of all basic forestry and forest industry activities; all logging andsawing is to be done by the Corporation itself or by enterprises of privateor mixed capital formed exclusively by Hondurans, which may include peasantassociations or cooperatives. 2/ Foreign equity participation in pulp andpaper, plywood, furniture or other similar intermediate or final productsis limited to a minority status and is subject to COHDEFOR approval. COHDEFORis the only agency authorized to wholesale and export wood products. It hassole responsibility for the management, protection and utilization of allforests. The corporation is also required to organize the "Social ForestSystem", including forest worker associations expected to exploit and protectforest areas assigned to them.
Major Issues and Prospects
47. The continuation of past practices would lead to the disappearanceof Honduran pine forests within one or two generations and with it the country
1/ Fires are an integral part of the shifting agriculture system. Landsthus taken over by farmers are generally marginal for agriculture, andafter possibly two harvests farmers are forced to move to other lands.As regeneration of the forest has been prevented the land becomes idleand useless.
2/ The Law does, however, allow participation of foreign capital inspecific situations, i.e., if foreign capital or expertise is deemedessential.
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Table 3 : REMOVALS, PRODUCTION AND EXPORTS OF PINE
(In thousands of m3)
1968 1969 1970 1971 1972 1973 1974 1975
Sawlog Removals 1,475 1,520 1,524 1,619 1,906 2,261 (1,801) (1,900)
IndustrialSawlogs ?/ 1,364 1,408 1,413 1,513 1,797 2,144 (1,681) (1,775)
Other / 111 112 111 106 109 117 (120) (125)
SawnwoodProduction j 460 44O 440 460 570 665 550 585
SawnwoodExports g 375 357 350 378 472 570 455 486
ExportValue L / 13.7 13.7 14.7 17.9 25.5 37.0 38.7 40-5
Items in parentheses are estimated from 1972-73 ratios.
j Excluding fuelwood, fence posts and other small roundwood products./ Sawlogs processed in Honduras.
j Rough estimate, includes export logs, sleepers and logs for rural construction.About 95 percent of total wood exports is pine: exports in volume and value areequal to about 95 percent of series as reported by Central Bank. The series forsawnwood production is an estimate based on actuals for 1973 as reported by re-gistered mills and for 1975 as estimated by COHDEFOR,and based on exports and esti-mated domestic consumption trends.
/ In million US dollars.
Sources: Central Bank, CCHDEFOR, Planning Council and FAO/BID Report (1975).
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would forego the opportunity to increase substantially the revenue and employ-ment of its major potential natural resource. COHDEFOR's effectiveness willdepend on its ability to generate projects both to increase the efficiencyof existing industry and to develop new capacity (for instance, further elabo-ration of wood products), and to build up technical and administrative manpowerto manage and protect forests, and develop a marketing system. COHDEFOR'stask goes far beyond that of administering regulations: it is a corporationengaged in production and sales, and needs to develop its expertise.
48. Currently, approximately 90 people working in Honduras have someforestry background (30 professionals and 60 middle and lower level techni-cians). 1/ COHDEFOR's work program would require a minimum of 50 professionalsand 550 middle and lower level technicians by 1978. 2/ Students graduatingfrom the National Forestry School are well trained but the school's yearlyoutput (25 middle and lower level technicians in 1974) is too small. At theuniversity level local training opportunities are minimal. There is, there-fore, an urgent need for increased financial support of the forestry schoolon the part of the Government so that its output can be expanded. At thesame time outside help in the form of scholarships, training programs and,temporarily, the hiring of foreign technical personnel will be crucial.
49. The industry can be made much more efficient through trainingprograms for sawyers and saw doctors and by realigning and relocating equip-ment. Foreign expertise would be especially valuable in helping to developproject preparation capabilities, including the further processing of lumber.It is critically important that COHDEFOR develop adequate product standards,grading rules and pricing systems. As the corporation has the legal powerto set prices at all levels of the production process there is no effectivemarket price system: thus a comprehensive information system must bedeveloped to help COHDEFOR set prices that will lead to more efficient useof wood and provide incentives for private enterprise to participate in thesector's development; such participation is advisable because of the magni-tude of the task.
50. Forest management and protection will not be possible withoutcampesino participation. At present, the search for agricultural land bythe rural population hinders the development of rational forest exploita-tion. The approach taken, following the creation of COHDEFOR, has beenthe "Social Forest System", under which campesinos organized in associationswill protect the forest under the direction of a forest officer. They willshare in the benefits of forest exploitation initially through the productionof resin, and within a given area COHDEFOR (in cooperation with the AgrarianReform Institute) will assign lands with agricultural potential to them forfood production. Success will depend on whether the benefits exceed thosefrom shifting agriculture. In this regard it is also vitally important thatroad construction, forest management and campesino involvement be closely
1/ Sector Survey Report, Annex 11, Table 2.
2/ Sector Survey Report, Annex 5, paragraphs 54-59 and Table 11.
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coordinated so as to avoid, at least in the remaining unexploited forestareas (e.g., Olancho) the continued depletion of the forest by settlerswho follow new roads.
51. The major focus of attention in the forestry field today is theimplementation of the development plan for Olancho, the largest remainingreserve of pine in Central America. The emphasis is warranted becauseOlancho presents the opportunity to introduce rational forestry development(as well as the potential for substantial production for export) and becausefailure to move ahead rapidly would result in depletion: Olancho accountsfor about 14 percent of total sawlog removals in Honduras, and productionmethods in Olancho are as wasteful as those practiced elsewhere.
52. Project proposals for the Olancho reserve have been under discus-sion for many years; proposals for a pulp and paper mill, including a detailedscheme put forth in 1972, have not been implemented owing to the complexity ofthe project and the large investments required. Project expenditures ofseveral hundred million dollars are at stake. The goal is to establish largeindustrial complexes producing a variety of forest products, with ultimatefocus on pulp and paper. Obstacles in the way of the development of thereserve include all of the problems discussed earlier; on the other hand,the high quality of the mature pine is a major positive factor.
53. In designing the development program for Olancho the Governmenthad two major options: (a) to proceed immediately with a pulp and paperproject and associated solid wood product industries; (b) to expand the solidwood product industries gradually, and to follow up at a later stage with apulp and paper project based initially on residues, thinnings and low-gradesawtimber. In May 1976 the Government of Honduras signed a Memorandum ofUnderstanding with the IDB and the Venezuelan Investment Fund in which option(b) was selected.
54. The immediate introduction of pulp and paper production would haverequired financial resources in excess of $300 million, not including infra-structure. There is no experience in Honduras with large scale highly com-plex activities such as pulp and paper which require considerable adminis-trative and managerial skills. In the absence of a forest management system,the logistic problems of the operation could be seriously underestimated.For example, the magnitude of problems in securing the pulp wood require-ments is difficult to anticipate and there is a risk that wood best suitedfor other activities be used to supply the pulp plant, with consequenteconomic losses to the country.
55. On the other hand, the improvement and expansion of solid woodproduct industries will be much easier to manage as a first step. Thecountry has experience in this area and world market prospects are excellent.Capital and technical requirements are considerably less than for a pulp andpaper project. A gradual increase in sawmilling capacity and efficiency,and the establishment of secondary wood-using industries can be accompaniedby an increasing supply of skilled workers and managers, essential for theoperation of a pulp and paper plant at a later stage. Revenues generated
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in the process can help meet the capital requirements of the pulp mill. Mostimportant, the need to engage the cooperation of the campesinos in forestmanagement and protection practices argues strongly for a gradual approach inopening up the area and developing the industry. If roads are built too longin advance of the establishment of effective management programs, chances arethat the volumes opened up will have been cut and cattlemen and farmers willhave moved into the new areas before a rational forest exploitation programcould be started. Road expansion, the development of local forestry coopera-tives protecting the forest and gaining income from it, and effective publicforest management should go hand in hand.
56. The investment sequence chosen in the Memorandum of Understandingprovides for three new sawmills to be constructed during 1977-81 and the startof the construction of a pulp and paper plant in 1979. However, because ofthe problems discussed in paragraph 54 it would seem more likely that someslippage may occur and, for purposes of this report, the construction of thepulp and paper plant has been assumed to start in 1981.
57. The volume of pine sawnwood exports is not likely to grow during thenext two or three years (see Appendix Table 7.3) but may expand rapidly there-after with the establishment of new sawmilling capacity in the Olancho area.Market prospects for pine lumber are excellent and wood supply is not a limit-
ing factor in the near future. Of the estimated 81 million m3 standing volumeof commercially deliverable pine about 31 million m3 are in Olancho (FAO/IDBReport). Potential output from future mills in Olancho could grow from
64,000 m3 of sawnwood in 1979 to 468,000 m in 1984-85 if, as proposed, chreemajor new sawmills are installed. 1/ Increases in output from the existingmills (somewhat more than 100 mills produced about 585,000 m3 of pine sawnwoodin 1975) are expected to be small but enough to supply the increase in domesticconsumption, provided a gradual improvement in conversion efficiency offsetsmore difficult and costly access to wood supplies; progress in modernizing theexisting industry outside the Olancho area is expected to be slow (exceptunder the conditions as discussed in paragraph 59), because the task of devel-oping a rational forest exploitation system in Olancho will likely absorb mostof COHDEFOR's limited administrative and technical capabilities.
58. If these developments materialize, the volume of lumber exportswould remain at current levels up to 1978 but thereafter grow at 10 percent
1/ COHDEFOR, Industrialization of the Olancho Forest Reserve. September1975. (H.A. Simons Ltd., Consulting Engineers.) See also AppendixTable 7.3.
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per year through 1985. Prices are expected to rise substantially. 1/ Exportearnings from wood products (95 percent of it pine lumber) could grow from$43 million in 1975 to more than $100 million in 1980 and more than $200million by 1985. By that time a pulp and paper plant supplied with residuesfrom sawmills could be put in operation.
59. As outlined above, forestry prospects are encouraging. Elsewherein this report (Chapter V) the scarcity of foreign exchange during the nextseveral years is identified as a major obstacle to the country's growth. Not-withstanding the conclusion in paragraph 57, the potential for large3increasesin production outside the Olancho area does exist: the 50 3million m of pineoutside Olaicho could, if cut at the rate of 2.5 million m per year, yield1,250,000 m of sawnwood per year if conversion efficiency increases from 30to 50 percent (still a low conversion factor). This level could last for 25years even without conservation. For this to happen and given COHDEFOR'slimited administrative and technical capacity, an active involvement by thelocal and foreign private sector, within the confines of the forest law, wouldbe required. The law's provision permitting foreign capital or expertise insawmilling if the development of the sector so requires would have to be usedand foreign involvement would have to be encouraged explicitly.
C. Manufacturing Industry
Growth and Structure
60. Manufacturing industry currently accounts for 15 percent of GDP atfactor cost and employs about 9 percent of the labor force. More than 70percent of the total value added is generated in the modern factory sector(establishments employing 5 or more workers) with about 40 percent of totalindustrial employment. Traditional consumer goods industries, such as foodproducts, beverages, textiles and apparel, together with intermediate goodsindustries such as lumber and cardboard boxes, are predominant. Honduras'participation in the CACM did contribute to the creation of some new industriesduring the 1960's, such as detergents, cosmetics, metal products, canned foods
31/ In 1975, Honduras' lumber exports sold for about $83/m . About 20 percent
of it is high-grade lumber sold to Europe with the remainder being soldmostly to countries in the Caribbean. It is expected that by 1980, in1975 p5ices, lumber from existing mills will sell for an average price of$106/m with 3he same market composition ($150/m for lumber sold toEurope, $95/m for other lumber). The new mills in Olancho should pro-duce higher quality lumber with more of it sold to the higher gradeEuropean market, and may sell for an average price of $119/m3 by 1980,in 1975 prices. (Price data are from COHDEFOR, Industrialization of theOlancho Forest Reserve. September 1975, H.A. Simons Ltd., ConsultingEngineers.)
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and plastics, but on the whole little change in structure took place: consumergoods accounted for 64 percent of value added in factory manufacturing in 1960and for 62 percent in 1973, and the production of capital goods or heavy inter-mediates remains minimal.
61. Unlike in the other Central American countries where manufacturinggrowth has been faster than that of GDP, in Honduras value added by the manu-facturing sector increased by a modest 4.5 percent per year in real termsbetween 1960 and 1973, similar to that of GDP, and has stagnated since. 1/A number of factors contributed to the slow growth performance of the sector:the small size and sluggish growth of the domestic market, the inability totake much advantage of the CACM and limited government promotional effortswhich have in the past mainly been confined to granting tax exemptions.Shortages of food products for processing industries also have-been a majorlimiting factor.
62. The domestic market for industry is exceedingly small: even if theroughly 50 percent of the population which currently practices subsistencefarming (see paragraph 15) is gradually brought into the market economy duringthe next few years, rapid industrial growth would have to rely on exportmarkets. Currently, there are only two relatively important urban centers,Tegucigalpa (population 300,000) and San Pedro Sula (population 200,000). Thelatter, because of its proximity to the banana plantations, which generate afairly substantial wage bill, as well as to other agricultural activities inthe north, has become the country's major industrial center: its share ofmanufacturing output increased from a third to 55 percent during the pastdecade, while that of Tegucigalpa decreased from 40 to 25 percent.
63. The creation of the CACM in 1961 was an attempt to enlarge themarket for manufactures through a policy of regional import substitution:Honduras exports of manufactures to the CACM increased from $3.0 millionin 1960 to close to $20.0 million by 1968. However, the country's tradebalance with the CACM became increasingly negative during this period. More-over, Honduras' manufacturing growth rate, unlike that of the rest of CentralAmerica, was actually lower between 1960 and 1968 than during the 1950's,leading the Government and industrialists to start questioning the merits ofthe integration scheme. The relative lack of basic infrastructure in Hondurasand the initial lower level of industrial development than in the other coun-tries made it difficult for Honduras to attract a substantial share of thenew investments which followed the creation of the CACM. The armed conflictwith El Salvador led to the loss of the country's major trading partner in1969, and on January 1, 1971, Honduras imposed tariffs on regional importsthus withdrawing from the free trade arrangements of the CACM. During thenext two years, because of the restricted external competition, industrialcapacity utilization and activity expanded rapidly. Nevertheless, it is
1/ The corresponding growth rates for modern factory output and for handi-craft production were, respectively, 5.3 and 2.8 percent.
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clear that, in the longer run, an efficient and growing industrial sectorwill have to rely on external markets. Efforts to restructure the CACMare currently underway and a new draft Treaty was submitted to the CentralAmerican governments in March of 1976 (see paragraph 67). 1/
64. The chief industrial development policy tool has been an IndustrialDevelopment Law, adopted in 1958. 2/ The law grants import duty exemptionson industrial inputs and machinery imported from outside the CACM as well asincome tax exemptions for fairly long periods of time. Honduras, however, hasnot interpreted and applied the fiscal incentives program as liberally as theother countries have and, at times, has created uncertainty among investorsbecause of frequent fiscal incentives policy changes: industrial incentiveswere reduced somewhat at the time of Honduras' withdrawal from the CACM freetrade system and were almost totally eliminated in December of 1971 becauseof fiscal problems, a move which was reversed in June 1973. The benefitsderived from the fiscal incentives policy combined with high tariffs forconsumer goods are questionable. The result has been higher prices for anumber of consumer goods and an increase in the capital intensity of theindustrial sector. 3/ Except for 1970-72, when Honduras' changing fiscalincentives and break with the CACM discouraged capital formation, industrialinvestment has grown substantially. Between 1965 and 1972 fixed assets perworker in the modern factory sector increased by more than 50 percent inreal terms. However, value added per worker stagnated, as capacity utiliza-tion--estimated by the National Planning Council at only 50 percent in 1968--was extremely low. This may be explained by technical constraints of minimumscale and limited product specialization in individual plants in the contextof a small market. In spite of high production costs, profit margins arehigh (in some cases over 50 percent return on equity) largely because of thegenerous fiscal incentives. In addition, these incentives, especially importduty incentives, have been increasingly costly in foregone fiscal revenues.
1/ In 1972-73, Honduras signed bilateral trade treaties with Nicaragua,Guatemala and Costa Rica, which include lists of freely traded goodsalthough Honduras, because of its less developed status, can chargetariffs ranging from 1 to 25 percent ad valorem. Intra-regional tradehas since increased, but some products such as apparel, of which Hondurashad started to export substantial quantities before 1969, have not beenincluded in the treaties.
2/ Similar laws had been enacted earlier in the other CACM countries.Industrial incentives legislation in the CACM was made uniform in 1969under the Central American Agreement on Fiscal Incentives.
3/ IBRD, Report of the Industrial Finance Mission to Central America; TheCommon Market and Its Future, May 2, 1972.
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Table 4: REVENUE EFFECTS OF FISCAL INCENTIVES(millions of lempiras)
Import Tax Company Income TaxImports Import Tax Exemptions Income Tax /1 Exemptions
1960 130.8 33.7 0.20 7.5 -1965 226.4 41.0 6.02 11.5 0.401966 276.0 40.7 9.18 16.2 0.551967 304.0 41.1 9.15 17.2 0.771968 338.8 43.8 10.15 20.2 0.761969 339.4 39.2 10.32 22.5 0.591970 406.8 44.6 13.09 23.8 0.851971 355.2 48.2 18.17 28.0 n.a.1972 353.0 51.7 21.76 27.9 n.a.1973 487.2 56.2 23.07 29.6 1.111974 768.0 64.9 29.38 41.4 1.02
/1 Excludes banana company income tax collections.
Source: Appendix Tables 3.1, 5.3, and 8.10.
Major Issues and Prospects
65. Accelerated industrial growth in Honduras will require more emphasison efficiency and export promotion, a decisive effort by the Government topromote and finance industry, and a revision of current industrial incentiveslegislation. Current export promotion efforts are too limited in scope tohave a significant impact. They include a $2.0 million export fund in theCentral Bank to finance the export of non-traditional products, which hasproven to be insufficient to meet demand, and a system of duty-free importsof inputs (drawback) for extra regional exports. The value of exportsutilizing the drawback system has generally been less than $1.0 million peryear, but the Government is in the process of developing two industrial parks(in Puerto Cortes and San Pedro Sula) to promote this activity. Measureswhich could help create the necessary conditions for more rapid industrialgrowth include an increase in the resources of the export fund and the crea-tion of an export promotion center; this center could provide industrialistswith information about and contacts in foreign markets. In addition, fiscalincentives could be redesigned to avoid discrimination against production forexports. Given the country's resource base, products with good export poten-tial include food items such as tomato products, shrimp or vegetable oils,cotton fabrics, apparel, furniture parts and other wood products.
66. Until the creation of the National Investment Corporation (CONADI)in 1974, there was no public development institution designed to promoteindustrial investment through the provision of credit nor was technical andmanagerial assistance through direct public participation in new enterprisesor collaboration with private entrepreneurs available. In addition, CONADI
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may venture into new industrial areas then sell these firms, once they areviable, to the private sector. In little more than one year CONADI has madeloans to and purchased equity in several companies and identified severalproject possibilities. While CONADI's resources of both domestic and inter-national origin are growing, it can only provide part of the industrialsector's financial needs. With the exception of lending by the CentralAmerican Bank for Economic Integration (CABEI) and CONADI, there is currentlyno source of long-term lending for industry. The low level of interest rates 1/and the narrow spread between rates on commercial banks' assets and liabili-ties discourage banks from searching for domestic long-term funds. An upwardrevision of interest rates and changes in the structure would not only helpmobilize private savings but also, by increasing the cost of capital, tend toincrease capacity utilization and encourage more labor intensive industriesand production methods.
67. Hondur4s' industrial policies must be viewed in the context ofthose of the CACM. The industrial incentives laws, combined with high tariffsfor consumer goods are the main elements of the CACM's import substitutionpolicy. The Governments of Central America have become increasingly awareof its shortcomings--significant fiscal sacrifices owing to the high taxexemptions and a bias towards capital intensive consumer goods industries.The new draft treaty which is currently being discussed by the Central AmericanGovernments includes provisions for industrial policy emphasis on efficiency;for instance, industries which require the CACM market as a whole, because ofeconomies of scale, are to be given monopoly status (under the control andsupervision of a new CACM agency) until the market is large enough to supportmore than one firm. The tariff structure is to be revised to reduce excessiveprotection and avoid the current bias towards capital intensive productionprocesses and against the production of intermediate or capital goods. 2/Gradually, a common export policy (including joint financial and marketingarrangements) is to be developed to promote exports to extra regional markets.Honduras is to be given special treatment through some degree of protectionfrom regional imports and through financing and technical assistance arrange-ments. Finally, fiscal incentives are to be reduced, made more selective andtime periods shortened.
68. In sum, several of the major constraints to more rapid and effi-cient industrial growth could be overcome, through the draft treaty proposinga restructuring of the CACM and a revision of fiscal incentives schemes, andthrough the ongoing Honduran Government program to promote and directlyparticipate in industrial enterprises. The expansion of industry will further
1/ Maximum loan and deposit rates are set by the Central Bank. Loans forproductive activities (agriculture, livestock, industry, services andtransport) carry a maximum interest rate of 11 percent per year whilethe rate on loans for commerce is 13 percent.
2/ There is substantial room for efficient internal production of suchitems as hand tools, electric motors and various types of agriculturalequipment.
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require efforts to mobilize private savings. If, in addition, a major driveto promote exports to regional as well as extra-regional markets is initiated,the growth potential of the industrial sector is substantial.
D. Social Problems and Policies
Introduction
69. The need for social improvement in Honduras can be highlighted bysome major indicators. Only about half of all adults are literate. Malnutri-tion is widespread and severe: about three-quarters of pre-school childrenare estimated to suffer from protein and calorie deficiencies and infantmortality is estimated at 118 per thousand live births. Roughly, 60 percentof the population has no access to a piped water supply and an estimated 80percent lives without any form of sanitary waste disposal. Averages for thecountry furthermore conceal regional disparities: living conditions in therural areas are much poorer than in the cities. The rapid rate of growth ofpopulation further aggravates the situation.
70. The total population is about 3 million, two-thirds of whom livein rural areas, 18 percent live in the two main urban areas of Tegucigalpaand San Pedro Sula, and the remaining 15 in eight secondary cities. Whilethe overall population growth rate is 3 percent, that for the urban areas isconsiderably higher with Tegucigalpa and San Pedro Sula averaging 5.5 percentand the other cities 3.6 percent. The higher urban rates may largely beexplained by the attempt of migrating peasants to take advantage of the rela-tively better (although still poor) incomes and living standards in the urbanareas. The population is concentrated in the western part of the country,but the extension of the feeder road network and the development of theOlancho forest reserves are expected to increase migration to the East.Family planning information and services are provided without charge at gov-ernment health clinics to everyone requesting them but to date the growthrate of the population has not been considered a severe problem by the Govern-ment since there is no immediate scarcity of land. The immediate problem isseen as that of increasing the supply of food by improved agricultural pro-duction. However, rapid population growth places increasing demands on thepublic sector for social services. Furthermore, if progress is made inimproving health and nutrition, it can be expected that the population growthrate will be increasing in the medium term as a declining death rate may notbe matched by a declining birth rate.
71. The distribution of income in Honduras is very uneven, mainly as aresult of large urban/rural differentials. As compared with an average annualper capita income for the country of $220 in 1967-68, average rural per capitaincome at $100 was roughly one-fifth that in urban areas. Average income percapita for the lowest 40 percent, almost all of whom reside in rural areas,was estimated at barely $45 per year.
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Table 5: PER CAPITA INCOME DISTRIBUTION
Population IncomeDeciles Percent Cumulative
0-10 0.9 0.910-20 1.6 2.520-30 2.5 5.030-40 3.4 8.440-50 4.7 13.150-60 6.2 19.360-70 8.4 27.770-80 11.7 39.480-90 18.1 57.590-100 42.5 100.095-100 28.0
Source: Shail Jain, Size Distribution ofIncome. IBRD data derived from a1967-68 Survey of Income andExpenditures.
72. These problems are not different from those of some other countriesin the area, but they are, in general, more severe in Honduras and the re-sources available for their resolution are probably more limited. While majorimprovements will depend on an accelerated rate of economic growth, the sever-ity of the current situation requires a minimum improvement in living condi-tions to help increase labor productivity. Except for education, governmentspending in the social sectors has been small in the past. Increased spendingin the future will be constrained by the demands for public funds from othersectors. However, as discussed below, funds can be spent much more effi-ciently than has been the case thus far and more emphasis must be placed onthe rural areas if the country's rural development objectives are to beachieved.
Health and Nutrition
73. The prevailing poor health conditions and the associated pattern ofinfectious and parasitic diseases are closely linked to malnutrition and asevere shortage of social infrastructure. Unsafe water, the lack of sanitarysewerage systems and overcrowded housing lead to a high incidence of communi-cable diseases and resistance is low because of poor nutrition. The averagedaily nutritional intake of the poorest 50 percent of the population is esti-mated at 33 grams of protein and 1,500 calories. 1/ Possible improvements in
1/ The Nutritional Institute for Central America and Panama (INCAP) estimatesdaily nutritional requirements in Central America at 2,000-2,500 caloriesand 50-70 grams of protein.
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health care and in other social infrastructure are only part of the answer
to health problems. The major contribution will have to come from improved
nutrition through increases in agricultural output and higher purchasing power.
74. Physical and human resources in the health sector are very limited.
With few exceptions, heavy emphasis has been placed on high-cost, hospital-
based curative medicine, as opposed to preventive measures. Public health
care is dominated by the Ministry of Public Health (created in 1954), but
various autonomous institutions also provide some services. The Social
Security Institute (created in 1962) provides medical services but its cover-
age is limited to Tegucigalpa and San Pedro Sula and includes only about
5 percent of the population. Health care provided by the private sector
serves about 15 percent of the population. In total there are only 12 hos-
pital beds and 2.7 doctors per 10,000 people. Coverage in rural areas is
extremely limited: only about half of the people are estimated to receive
even minimal health care. Tegucigalpa, on the other hand, with about 11
percent of the population has 54 percent of the country's physicians. The
annual output of medical and paramedical personnel is not sufficient to change
the situation rapidly: about 25 physicians, 35 nurses and 150-200 auxiliary
nurses are graduated per year. One of every two Honduran physicians who doadvanced studies abroad does not return to the country.
75. In order to improve the geographic distribution of health care the
Government initiated in 1975 a National Health Services Program (PRONASSA)
oriented to the rural areas. The program basically consists of building and
equipping more than 200 rural health centers, 8 emergency hospital centers,
one new national hospital and the expansion of two others. Auxiliary nurses
would staff the rural health centers, and they would be visited periodically
by a physician and a nurse from the nearest emergency center to which cases
beyond the capabilities of the auxiliary nurses will be referred. 1/ The use
of personnel with basic paramedical training to service the largest possiblenumber of people serves the goal of extending medical coverage with a minimumuse of resources. Extending the coverage of health care, however, is only
one element of the overall health problem. The crux of the problem is to
reduce demand for health services through preventive public health measures.
In the absence of the latter and of environmental measures (paragraphs 79,
85-86) and improved nutrition, even a successful expansion and reorientationof health care services will have only a marginal impact.
76. A major obstacle to the implementation of the PRONASSA program is
a lack of manpower. During the next five years the program would require
per year an additional 300 auxiliary nurses, 55 nurses and 30 medical techni-
cians. Present output especially of auxiliary nurses and nurses is insuffi-
cient (paragraph 74). For the program to succeed training opportunities for
1/ Since 1969, all health professionals are required to do a year of social
medical service in places designated by the Ministry in order to obtaintheir degree. It is expected that these professionals will constitute
most of the staff of the PRONASSA Program.
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paramedical personnel will have to be increased rapidly. The current univer-sity programs to train nurses and technicians are too lengthy to attract manystudents and could be shortened to increase the number of personnel trained.Furthermore, because of the possibility of on-the-job training and the avail-ability of qualified staff an expansion of the training centers attached tohospitals could train auxiliary nurses more efficiently than could trainingcourses at the upper secondary level, which the Government is currentlycontemplating. In addition, if the staffing needs of the PRONASSA programare to be met, fairly high salaries and other incentives will have to beoffered to make living in rural areas more acceptable.
Housing
77. Data on housing conditions (1974 census) indicate that between one-half amd two-thirds of the housing stock can be considered substandard. 1/Private investment accounts for about 80 percent of total investment inhousing; public investment is carried out primarily by the National HousingInstitute (INVA). Both public and private investment have benefittedmainly the middle and upper income groups in urban areas (about 20 percent ofthe population); the total yearly housing output roughly equals the annualhousehold formation of these groups. Though INVA's investment presumablyshould aim at lower income groups, because of relatively high standards theaverage unit cost of construction (US$2,000) is beyond the purchasing powerof roughly half the urban and 80 percent of the total population. 2/
78. Between 1957, when it began operations, and 1975, INVA has con-structed about 7,200 housing units, mostly in Tegucigalpa and San Pedro Sula;during the last five years and with international financial assistance yearlyconstruction has averaged 560 units. The major public sector agencies in-volved in the rural areas are JNBS, whose contribution is small, and INA.INA's program includes two small projects in new rural settlements and thehousing component of the Aguan Valley Development Project; unit costs areexpected to range between US$2,000 and US$2,500. Thus, INA's (as well asINVA's) programs are poorly designed to service lower income groups. 3/
1/ Substandard dwellings are those with 3 or more persons per room, lack ofaccess to sanitary services and structural deficiencies (earthen floors,precarious roofs or adobe walls).
2/ Despite low incomes, many people would be able to afford the expense ofimproved housing, if standards and costs were reduced. It is not uncommonfor people in substandard housing to pay higher rents than what the monthlypayment would be on a low cost (and improved) house.
3/ INA is not qualified to undertake housing programs and, to avoid duplica-tion, should cooperate with INVA in its future activities in housing.
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79. Given the limited funds likely to be available to the public sectorfor housing investment in the future (paragraph 116) and without a majorattempt to lower unit costs, the housing problem will become increasinglysevere. Currently, INVA's staff does not appear to have the capacity todesign and implement low-cost housing programs; therefore, the internationaltechnical assistance which INVA receives should be used to train its staffin developing such programs if public investment is to reach a larger propor-tion of the population with the given resources. Much could be learned from(or the Government could directly support) the successful experience ofprivate non-profit organizations involved in the provision of low-cost housingfollowing hurricane Fifi. Through direct self-help efforts, 3,770 houses wereconstructed at an average unit cost of US$250. These houses have wooden walls,cement floors, minimal (often communal) sewerage facilities, access to wellwater and a zinc roof. Though very rudimentary, these dwellings ar,e moresanitary than a large percentage of the existing housing stock.
80. INVA's financial situation is weak and it has typically run acurrent account deficit. Its finances could be strengthened substantiallythrough an improvement in loan approval policies which would help reducedelinquent mortgage payments.
81. It has also been increasingly difficult for INVA to acquire landfor housing, but land legislation is currently under consideration whichwould revise eminent domain laws 1/ and thereby ease public access to pri-vate urban property. The proposed legislation also includes provisions todiscourage underutilization of urban property by taxing urban land at itsmarket value and a valorization tax which would allow the public sector tocapture some of the increases in land value due to public investment.
82. Though a system of financial intermediation for the construction ofmiddle and upper income housing is not as well established in Honduras as inother Central American countries, there are three savings and loan associa-tions which operate on a relatively small scale. In addition, a mortgagebank (Banco Hipotecario) was created in 1969 and has financed some 200 unitsper year. The Financiera Nacional de la Vivienda (FINAVI) was establishedin 1975 to regulate the savings and loan system and create a national secondarymortgage market. FINAVI is to provide secondary mortgage capital not only tothe savings and loan system but to other housing financial intermediaries aswell, including INVA, which could allow the latter to concentrate its re-sources increasingly on low-income housing.
Water Supply and Sewerage
83. The coverage of water supply facilities and sewerage systems islimited and large urban/rural disparities exist. While 89 percent of theurban population has access to piped water (house connection or publicstandpipe) and 60 percent has access to sewerage facilities, the proportionsin the rural areas are, respectively, 15 and 5 percent.
1/ Eminent domain laws define the circumstances under which the Governmentmay take possession of property.
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84. As noted in paragraph 73, an expansion of health care must beaccompanied by increases in the provision of water and sewerage facilitiesin order to improve the overall efficiency of social sector spending. Sinceits creation in 1961, the National Water and Sewerage Service (SANAA) hasbeen responsible for public water supply and sewerage service throughoutthe country, but it has directed its efforts primarily towards urban areas.At present, SANAA operates about 100 water supply systems and one seweragesystem (Tegucigalpa) serving about 50 and 40 percent respectively of thepopulation with some access to these services. SANAA also acts as executingagent for loans made by the Municipal Bank to individual municipalities.These municipalities own and operate most of the systems in the country, butrely on SANAA for supervision of the design and construction of new or ex-panded facilities; the only exception is San Pedro Sula, which operatescompletely on its own.
85. SANAA's financial performance has been very weak. Its revenuesdo not cover operating costs and it relies on central government transfersto cover its current account deficit. Apart from low tariffs, the roots ofthe financial difficulties lie in water wastage because of leakages in thesystem (estimated at 50 percent of production) and deficient metering andbilling practices. The current investment program substantially exceedspast levels, but urban areas continue to be favored with about 80 percent ofthe investment projected for 1976-80. A major improvement in SANAA's finan-cial situation will be required during the coming years: otherwise the in-vestment program may fall behind schedule, unless increased central govern-ment transfers materialize which would be difficult given the overall demandon public sector funds. Furthermore, a sounder financial situation wouldpermit SANAA to increase its investment in the future, especially in ruralareas where needs are greatest. In considering improvements in water tariffs,rates must be designed to discourage excessive use, given the general in-sufficiency of water supplies in Honduras, while at the same time providinglower income groups access to water and sanitary services.
86. The Government may wish to reconsider the limited emphasis on ruralareas in the light of its overall development strategy. Progress in ruralhealth programs, for instance, may be frustrated if the overall environmentalconditions in the rural sector do not improve. Because of lower acceptablestandards of service and costs in rural areas, more coverage can be achievedwith the same amount of resources. In order to give rural areas more empha-sis, the creation of a separate rural division within SANAA should be con-sidered. This would also facilitate the synchronization of SANAA's activitieswith those of other sectors in the rural areas.
Education
87. In the past fifteen years sizeable increases in spending on educa-tion have resulted in greatly expanded enrollments but not in commensurate
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improvements in the quality of education. 1/ While literacy rose from 35percent of those over age 10 in 1950 to 47 percent in 1961, it has not risenmuch since. Retention rates are very low and those who do complete theirprimary or secondary education are poorly qualified to enter the labor force.These problems are especially severe in rural areas.
88. The current high level of government spending in the educationsector together with competing demands for public funds from other sectorssuggests that spending on education cannot be increased rapidly in the future.Therefore, if the Government wants to reach more students and improve thequality of education more effort will have to be made to increase theefficiency of spending. At the same time, the personnel requirements foragricultural and forestry development will require a growing emphasis onthose sectors. (Their personnel needs are discussed in paragraphs 38-39,48-49.)
89. At present, about 94 percent of all primary and 26 percent of allsecondary school students attend public schools; semiofficial secondaryschools receive substantial government subsidies. 2/ The primary schoolgross enrollment ratio 3/ reached 81 percent in 1974: while almost allurban children were enrolled, only about 56 percent of rural children hadaccess to primary education. The internal inefficiency of the system issuggested by the very low overall completion ratio 4/ of 21 percent (41 per-cent in the cities, 12 percent in rural areas). The Government has beendevoting 25 percent of the current expenditures for primary education tochildren who do not reach the minimum level of education (estimated byUNESCO to be grade 4) required to obtain functional literacy. The reasonsfor the low efficiency include the poor quality of teachers, the shortageof educational materials, the lack of schools providing the full six gradesand, in the rural areas, the distance to and from school. The ongoing con-struction of a number of rural application (two room, six grade) primaryschools and of four regional primary teacher training schools is expected tohelp address these problems.
1/ Spending on education in 1975 was 3.2 percent of GDP and 28 percent ofcentral government current spending.
2/ The public school system has been in operation since 1882. The nationaluniversity was created in 1847.
3/ The gross enrollment ratio is the number of students regardless of ageattending a given level of school divided by the total population fallingwithin the relevant age range. Therefore gross enrollment figures includeoverage and repeater students.
4/ The completion ratio is the total number of students graduating from agiven level of schooling divided by the number of students originallyenrolled in the first year of the cycle. Thus, for every 100 studentsentering primary school in Honduras, 21 complete the cycle.
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90. At a secondary level the completion rate is 60 percent, but only18 percent of the relevant age group is enrolled. Furthermore, those whodo graduate usually require substantial additional training to meet the re-quirements of employers, because secondary teachers are often poorlyqualified 1/ and the curricula do not provide an adequate background forentrance into the labor market or into vocational training programs.
91. Although there has been some reorganization of the school curri-cula and modules of three year cycles have been tried the proportion ofstudents receiving instruction under the revised curricula is very small.If the school curricula were reorganized country-wide to give less emphasisto commercial-secretarial (of which there is an oversupply) and primaryteacher training programs (especially now that primary teacher training isbeing upgraded and consolidated into four program centers) a higher quality,more diversified, secondary education would better prepare students forpost-secondary training or for the job market. Also, if the present lengthy(up to 6 years) vacation training program for upgrading the quality ofteachers were to be replaced by a more appropriate in-service teacher train-ing program, many more secondary teachers' skills could be upgraded and thusthe quality of education improved.
92. The completion rate for higher education is only 22 percent whichis due in part to the extremely lengthy curriculum but also to the inadequatebackground of many entrants. The University absorbs 17 percent of totaleducational spending. If it doubled its efficiency by producing the samenumber of graduates with higher entrance requirements and a time limit forcompletion of a degree, the money saved could be used to service half theprimary-age children presently outside the school system.
93. In addition to the need to economize there are equity implicationswhich suggest that the Government consider the possibility of reducing thesubsidization of semiofficial secondary and of higher education. Tuitionfees in both the University and semiofficial secondary schools, which serveprimarily students from upper and middle income families, could be raisedand scholarships made available to help needy qualified students.
94. The Government has created a multitude of formal and non-formalprograms in an effort to increase the training opportunities of the laborforce. Some of these programs, such as those offered in the Pan AmericanAgricultural School, the National Forestry School, and the ProfessionalTraining Institute (INFOP) are of high quality but still suffer from in-adequate capacity owing to financing constraints even though there has beenan increase in their financing during the past several years. Others, gener-ally in the agricultural area, are of much lower quality and are duplicativeand poorly coordinated. A consolidation of these programs could reduce costsper student and improve the quality of the training offered. A problemcommon to all vocational and post-secondary training programs is a shortageof qualified applicants.
1/ A secondary teacher training college is being built but the majorproblem is upgrading the qualifications of existing secondary teachers.
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95. The Government has recently initiated a system of four-year multi-grade schools to provide literacy training in the outlying rural areas.After completion of the four-year cycle, promising studeRts are sent from
these schools to more advanced central schools which offer practical trainingrelevant to the rural environment. In addition an adult literacy trainingprogram has been proposed. Spending on these two programs would be moreefficient if they were integrated so that the same teachers, buildings and
equipment could serve both groups of students. Rural primary teachertraining is beginnning to include courses in community leadership and insubjects relevant to rural life but existing teachers have not had trainingin these areas. Furthermore, substantial benefits could be derived if aclose working relationship were developed with the field staff of otherpublic agencies working in the area who could contribute to the teachingprograms of the rural schools.
96. The lack of coordination between the different public agenciesengaged in education and training and the over-centralization within eachagency wastes resources. The establishment of district education officeswith responsibility for coordinating all training services would increase
efficiency and economize on the use of resources.
97. In sum, the situation in all of the social sectors demonstrates
the urgency of accelerating the implementation of the many programs whichhave been initiated. Because of resource limitations, the most pressingtask facing the social sectors is that of increasing efficiency by making
the contents and standards of the services offered more appropriate to theneeds of the target groups. It will be especially important to assure thatthere is adequate current spending for operations and maintenance if thebenefits of capital spending are to be maximized. Finally, a serious effortwill have to be made to correct the existing imbalance between rural and urbanaccess to social services if the agricultural reform is to be a success andagricultural productivity is to be improved.
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CHAPTER III: PUBLIC INVESTMENT
Developments Prior to 1972
98. Although Honduras undertook some major infrastructure projects inthe 1950's and 1960's, investment was limited, primarily because of theGovernment's weak project preparation and implementation capacity. Medium-term and annual investment plans were often unrealistic. As a result, thepercentage of actual over budgeted investment was usually modest, averaging55 percent during the second half of the sixties. Occasionally, the execu-tion ratio rose, owing to good progress with a few large ongoing projects,but the process of improving project planning and implementation was slow.
99. The level of public investment fluctuated widely as a result ofthe lumpiness of individual projects. Public fixed investment declined fromL33 million or 4.2 percent of GDP in 1962-63 to L24 million or 2.5 percentof GDP in 1964-65 owing to the completion of relatively large highway andpower projects and a dearth of new projects resulting from the lack of pre-paratory work. After three years of rapid and fairly steady growth, publicinvestment increased abruptly in 1969-70 when large highway, port and powerprojects were being completed, the investment ratio averaging 6.5 percent ofGDP. In 1971-72 investment declined again because of a lack of new proj-ects. (See Table 6.)
Table 6: PUBLIC FIXED INVESTMENT, 1960-75
In millions As a percent In millions As a percentYear of Lempiras of GDP Year of Lempiras of GDP
1960 21.2 3.2 1968 54.4 4.2
1961 20.8 2.9 1969 85.2 6.4
1962 33.0 4.3 1970 92.5 6.5
1963 34.3 4.2 1971 72.6 4.8
1964 24.8 2.7 1972 61.6 3.8
1965 23.8 2.3 1973 86.6 4.8
1966 33.7 :3.1 1974 120.7 6.2
1967 42.4 3.5 1975 164.4 8.1
Source: CONSUPLAN, Central Bank and Appendix Table 5.11.
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100. The bulk of public fixed investment in the 1960's and early 1970'swas for transport and power. A relatively small share of fixed investmentwas in the social sectors, although it was substantial in the late 1960'swith support from external lenders. Investment in the productive sectorswas always minor. This low level of investment reflected unwillingness onthe part of the Government to go beyond offering credit or to develop publicinstitutional capacity to carry out programs in an area that was regarded asreserved for the private sector. (See Table 7.)
Table 7 * PUBLIC FIXED 1NVESIMENT BY SECTOR, 1965-75
(In percentages)
1965-67 1968 1969 1970 1971 1972 1973 1974 1975
Infrastructure 47.9 62.7 71.8 78.2 74.6 76.4 76.9 61.8 54.6
Transport 36.9 48.4 .52.6 54.2 58.7 47.4 38.5 40.6 30.6Power 9.8 12.7 18.4 22.9 14.9 23.2 33.0 18.2 21.8Communications 1.2 1.6 0.8 1.1 1.0 5.8 5.4 3.0 2.2
Social Sectors 46.3 35.8 25.5 13.9 22.2 22.6 20.0 33.0 38.3
Education 4.6 3.9 4.8 3.7 5.0 6.5 6.7 5.6 8.3Health 4.8 7.0 5.4 2.0 3.2 3.6 3.8 3.3 4.9Water and Sewerage 11.0 7.0 4.9 1.5 1.6 2.4 1.5 11.0 11.3Housing 7.7 9.5 5.8 2.3 3.0 1.8 0.7 4.0 3.6Urban Development 18.2 8.4 4.6 4.4 9.4 8.3 7.3 9.1 10.2
-Productive Sectors 5.8 1.5 2.7 7.9 3.2 1.0 3.1 5.2 7.1
Agriculture 5.8 1.5 2.7 7.9 3.2 1.0 3.1 5.2 7.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: Appendix Table 5.11.
Recent Trends
101. The Government which took power at the end of 1972 put much greateremphasis on increasing public investment. A development plan with a fairlyrealistic investment program was prepared, and work began on structural changessuch as agrarian and forest reform that were necessary to provide a basis foran increase in public investment and in economic growth. At the same time,government project planning and executing capacity improved, particularlyin infrastructure, as a result of experience gained in the development of thelarge infrastructure projects of the 1960's and early 1970's. These newpolicies and administrative improvements were reflected in an increase infixed investment from L86.6 million in 1973 (4.8 percent of GDP) to an esti-mated L164.4 million (8.1 percent of GDP) in 1975.
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102. In addition to the increased level of inves_ment, the compositionof investment has shifted with spending on the social sectors rising rapid-ly since 1973 to almost 40 percent of total investment in 1975. Projects ineducation, urban development and water and sewerage construction have beeninitiated in the past few years. There was also a moderate increase inagricultural investment in the 1973-75 period as a result of the AguanValley project, but absorptive capacity has been so limited that the highstated priority given to this sector is likely to be reflected in substan-tial increases in investment only in 1977.
103. The basis is now being laid for a sharp increase in public invest-ment over the next two years. In order to help finance this increase exter-nal loan commitments are expected to reach about US$160.0 million in 1976,not including funds committed under the economic cooperation agreement withVenezuela. For 1977, there are good prospects for the development of proj-ects which would involve external loans of about US$100.0 million withoutthe inclusion of a new power project, which should begin within the next fewyears if the country's power needs are to be met.
104. The projections for fixed public investment for the 1976-81 periodcontained in Appendix Table 5.9 which includes the US$400 million El Cajonproject are based on the government investment program prepared by CONSUPLANfor the 1974-1978 period. Investment for the 1979-1981 period is projected onthe basis of ongoing and new projects which have already been identified andin most cases are associated with potential foreign loans. 1/ Appendix Table5.9 reflects the following modifications to the government investment program:(a) project cost estimates and timing have been revised based on externallender projections regarding the timing and size of projects they are preparedto finance; (b) although the projected program reflects a more rapid rate ofdisbursement for projects than in the past, particularly for infrastructureprojects where implementation capacity has improved greatly, it is still some-what more cautious in this respect than the government program; and (c) a fewprojects in the government program projected to start toward the end of theperiod have been delayed either because there is no foreign financing yetassociated with them, or because there is some specific reason why they areunlikely to proceed on schedule. On the whole, a principal impact of thesemodifications is to reduce the levels of investment projected by CONSUPLAN in
1/ Appendix Table 5.9 shows a detailed list of projects for the period 1974-81, including project costs and potential sources of financing. Theprojections in this report, including those in Appendix Table 5.9, wereprepared before the May 1976 signing of the Memorandum of Understandingon Olancho (paragraph 53). Although this Memorandum affects the probabletiming of some of the investments presented in this report (for example,the largest sawmill is now expected to be built ahead of the smallersawmills while the reverse has been assumed in our projections), it doesnot significantly affect the overall magnitude of the 1976-81 publicinvestment program and therefore does not alter the analysis and con-clusions of this report.
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such sectors as health, education and agriculture where absorptive capacity islikely to be limited in the medium term. Major variations from the governmentprogram are discussed below.
Table 8: PROPOSED FIXED PUBLIC INVESTMENT BY SECTOR, 1975-81
(as a percent of total investment)!/
Estimate ProJections197- 1976 1977 1978 1979 1980 198;
Infrastructure 54.6 55.6 53.2 47.4 52.2 57.2 51.4
Transportation 30.6 28.3 24.9 21.8 15.0 14.4 16.1Power 21.8 21.5 13.0 15.7 33.1 41.3 33.7Communications 2.2 5.8 15.3 9.9 4.1 1.5 1.6
(Total) (89.7) (127.9) (138.3) (132.7) (161.8) (194.4) (195.0)
Social Sectors 38.3 35.2 31.1 24.6 21.6 20.3 21.5
Education 8.3 10.7 5.1 4.8 4.8 4.7 4.2Health 4.9 8.2 10.0 5.9 4.2 3.2 3.9Water and Sewerage 11.3 6.3 5.8 5.0 3.9 35 4.2Housing 3.6 2.6 3.0 3.5 3.2 3.6 3.7Urban Development 10.2 7., 7.2 5.4 5.5 5.3 5.5
(Total) (63.0) (81.0) (81.0) (68.9) (67.0) (69.0) (82.0)
Productive Sectors 7.1 9.2 15.7 28.0 26.2 22.5 27.1
Agriculture 7.1 8.3 7.2 5.1 6.5 7.1 10.0Forestry - - 5.2 17.8 16.2 12.2 14.7
Tourism - 0.9 Y.3 5.1 3.5 3.2 2.4
(Total) (11.7) (21.1) (40.7) (78.4) (81.2) (76.6) (103.0)
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
(Total proposed fixed (164.4) (230.0) (260.0) (280.0) (310.0) (340.0) (380.0)investment)
As a percent of GDP 8.1 10.0, 10.0 9.6 9.5 9.3 S.1
(Total fixed investment (232.5) (320.4) (346.3) (380.1) (419.3) (390.0)including El Cajon)
As a percent of GDP 10.1 12.3 11.9 11.6 11.4 9.4
2/ Figures in parentheses are in millions of lempiras.
Source: Appendix Table 5.11.
Investment by Sector
105. Highways dominate the transport sector. Because distances areshort and the terrain is rugged, inland waterways and railways are, with fewexceptions, in a non-competitive position vis-a-vis roads, which carry an
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estimated 86 percent of freight tonnage and 96 percent of passenger traffic.
Highway investment has traditionally been the largest category of public
investment and represented 31 percent of the total in the 1971-75 period.
106. The completion of a road system that would enable the country to
exploit its natural resources more effectively than in the past is expected
to remain a high priority through the 1970's. With the construction in the
late 1970's of the highways to the east (Juticalpa, Danli and Yoro) and the
connection between the upper Aguan Valley and La Ceiba, the focus should
shift to secondary and access roads to complement the primary roads built
over the past ten years. Because of the lack of complementary investment,
these major roads have not been as effective as they might have been in
stimulating production and thus providing the economy with a high return on
its investment.
107. The current highway master plan was designed in the early 1960's and
thus does not take present day needs and developments fully into account. A
new plan is being prepared which should help ensure that future road invest-ment makes a more effective contribution to economic growth.
108. Port investment in the proposed program reaches close to 10 percent
of total public fixed investment in 1976 when a major ongoing construction
program involving the expansion of Puerto Cortes and the building of a Pacific
Coast port at Henecan is expected to reach its peak. With the completion of
this program, Honduras will have adequate port capacity to meet its needs until
about 1980. Puerto Cortes, one of the best facilities of its size in Latin
America, can provide significant economic benefits to Honduras if the opportu-
nities are taken advantage of to develop a free port and to provide port
services for other Central American countries. Puerto Castilla, which is in-
tended to serve the Olancho forest industries project and the Aguan Valley is
expected to be the only significant port project toward the end of the 1970's.
109. Other transport facilities include railroads and airports. Investment
in these areas has not been significant in the past. The railroads were
installed by the fruit companies primarily to carry bananas to port. They are
now owned by the Government, and no major investment is planned. Substantial
improvement is required for the Tegucigalpa airport which is small and danger-
ous. The Ramon Villeda Morales airport in San Pedro Sula would have to be
improved if it is to handle traffic generated by the tourism project now being
considered.
110. Electric power generation has increased very rapidly during the last
several years. Even so, electricity is still available only in the more
densely populated parts of the country and to only about 27 percent of the
population. Annual electricity consumption of 150 kWh per capita remains
below that in other Central American countries, but the gap has been de-
creasing over time. Power investment has averaged over 20 percent of total
fixed investment in the 1970's and is projected to rise substantially in the
next few years as the last stage of the Lake Yojoa hydro project is completed,
and a major new hydro project is expected to be undertaken to supply future
Honduran needs.
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111. As noted above, the investment program includes a US$400.0 million(including interest during construction) El Cajon project with a high archdam. A number of other less costly alternatives are being considered inconjunction with the updating of the El Cajon feasibility study, and thisevaluation should be ready by December 1976. The alternatives consist ofvarious types and sizes of dams for El Cajon as well as the Remolino andNaranjito hydro projects. Even if a less costly alternative is identified,it is still likely to be a relatively expensive new hydro development re-quiring an investment approaching US$200.0 million. Some of the economicconsiderations surrounding that choice are examined below (see paragraphs128, 129).
112. Communications investment is expected to average about 10 percentof total investment in the 1976-78 period as Honduras makes long overdue im-provements in its telephone system, particularly for San Pedro Sula, thecountry's commercial center, which has very poor telephone service. Nomajor new investment is projected after completion of this project.
113. Education investment has risen steadily to over 8 percent of fixedpublic investment in 1975, and should continue to increase in absolute terms.A series of projects financed by external lenders have provided, and areexpected to continue to provide substantial support for this sector. Therewill be greatly increased concentration on such priority areas as the improve-ment of rural primary schools and other rural education facilities, and theexpansion of vocational and agricultural education facilities. The majorconstraint to increasing investment in this sector is the shortage of quali-fied teachers at all grade levels. Current education projects involve theconstruction of teacher training facilities in an effort to lessen thisproblem.
114. Health investment is expected to increase from 2 percent of totalinvestment in 1970-74 to an average of almost 7 percent for the 1976-78 period.This is primarily a result of the IDB hospital construction and rural healthcenter loans, and a proposed AID nutrition project. Investment is projectedto decline somewhat once these externally financed programs are completed,until new projects are initiated. Even with the increases of the next fewyears, health programs will only begin to deal with the country's enormoushealth problems. The principal constraints to undertaking a major healthinvestment program are the very limited number of health personnel, theirconcentration in urban areas and weak administrative capacity of the sector.
115. Water and Sewerage investment has grown substantially since theearly 1970's, supported by externally financed projects. In 1974 and 1975,it accounted for over 11 percent of public fixed investment. Investmentsin the water and sewerage sectors are projected to decline somewhat aftercurrent projects are completed. Although three new projects to providewater for smaller cities and rural areas are under consideration for initia-tion in 1977-78, it seems unlikely that SANAA with its limited project exe-cution capability could undertake them simultaneously, and therefore govern-ment projections of investment in this sector have been reduced to includeonly two new projects - one in 1977 and one in 1979.
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116. Housing investment is projected to grow very gradually during the1976-81 period, given the housing agency's (INVA) limited capacity to exe-cute projects and the probable lack of external financial support. INVAbuilds mainly subsidized middle income housing. International support ismore likely to be available for programs which serve lower income groups,and until INVA develops its capacity to prepare and execute such programs,public investment in housing is not likely to increase significantly.
117. Urban development investment includes municipal streets, markets,slaughterhouses, water and sewerage systems (where not financed by SANAA)and other municipal improvements. Most financing is provided by the CentralGovernment through transfers or by Municipal Development Bank (BANMA) credits.The municipalities themselves provide limited financing. The Ministry ofPublic Works (SCOPT) also carries out urban development projects. Most in-vestment is expected to take place in Tegucigalpa and San Pedro Sula, butinvestment in other urban areas should increase as a result of the AID/BANMAloan. Overall urban development investment is projected to remain fairlyconstant through 1981, in view of the municipalities' limited capacity toimplement projects.
118. Fixed public investment in agriculture has been negligible in thepast. Aside from agricultural and livestock credit projects, the only majordevelopment effort since the late 1960's has been in the Aguan Valley, anduntil recently, this project has moved slowly.
119. Public investment is expected to begin growing given the highpriority now being accorded to agricultural development, the agrarian reformeffort, and a major external:Ly financed technical assistance effort aimed atimproving absorptive capacity. This growth will be based primarily on ex-ternally financed projects which have been recently approved, or are now beingprepared. Because there still are many problems which will limit absorptivecapacity (see paragraphs 9-41 on Agriculture), a number of projects are shownas being committed later and disbursing more slowly than projected by theGovernment. The major investment projects likely to be undertaken in the1976-81 period include a second phase of the Aguan project, several new ruraldevelopment projects, a project for flood control in the Sula Valley, andinvestment in the development of new agrarian reform settlements by INA.
120. Investment in forestry development for both a conservation andforest management program and a forest industries project should begin in1977. The projected public investment program reflects one likely scenariofor the implementation of a phased industrial project for the Olancho forestreserve: it would consist of the installation of two sawmills beginning in1977 and an integrated sawmill/pulp and paper project in the early 1980's.Construction of the latter would not start earlier in view of the economicand managerial constraints which must be dealt with before this part of theproject can go forward (see paragraphs 53-56).
121. The entire Olancho project (three sawmills and the pulp and papermill, but not including infrastructure) is estimated to cost over US$400.0million in current prices; the roads and ports associated with the project
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are expected to cost about US$75.0 million. The first and most critical stepin the development of a forest industries project is the implementation of aforest conservation and management program to prevent further loss of trees.The program prepared by the FAO/IDB mission in 1974 is now being consideredfor financing by the Canadian International Development Agency (CIDA).
122. Tourism has received little government attention until fairlyrecently. A preinvestment study for development of the Tornasal Beach onthe north coast has been completed, and the Government and external lendersare now considering a possible project. An estimated US$30.0 million inpublicly financed infrastructure would be required for the proposed projectand this amount has been included in the investment projection in AppendixTable 5.9. Even if this project proposal is not accepted, Honduras hasexcellent tourism resources, and a sizeable project (1,000-1,500 rooms) whichwould involve substantial public investment could be developed in the nearfuture.
Investment Priorities and Constraints
123. In general, the proposed public investment program reflects contin-ued emphasis on infrastructure development and a dramatically increasedeffort in the productive sectors. Infrastructure investment would increasesubstantially at least through 1980 in absolute amounts (with or without aUS$400 million high arch dam at El Cajon), but would decline somewhat as apercentage of total public investment from the peak years of 1969-73 when itaveraged about 75 percent. This decline is due to the rapid growth that hasalready occurred in social sector investment and the projected gr6wth inproductive sector investment in the next few years. By the early 1980'sinvestment in both the power and transport sectors should begin to declinein absolute terms as the major hydro project and the primary roads now plannedare completed. Investment should remain at a high level in the social sectorsand should grow rapidly in the productive sectors as constraints which limitedinvestment in the past are overcome and forest industries, tourism, and newagriculture, education, and health projects are initiated. The projectedgrowth in investment is based on demonstrated progress in improving projectadministration, preparation capacity, training competent personnel, and re-solving legal and structural (e.g. land tenure) problems. Although the growthprojected in most sectors is high, it is generally a continuation of develop-ments initiated during 1973-75 and should continue until 1978, based on currentand fairly firm prospective external loan commitments. By 1978, the rate ofgrowth can be expected to level off even though investment will continue in-creasing in absolute terms.
124. The program for infrastructure investment is responsive to thecountry's needs, with its concentration on completing basic transport facili-ties, increasing complementary investment such as feeder roads, making basicimprovements in communications and meeting future power needs. The majorissue, discussed in paragraph 127 below, is the amount the country can affordto devote to a new power project during the next 3 to 5 years. Absorptivecapacity in infrastructure is relatively high in part because the problems of
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preparing and implementing projects are less complex and require fewer localprofessionals (or can be easily handled by foreign consultants) than in such
areas as agriculture or education. Also the institutional and organizationalproblems which impeded investment in the infrastructure sectors in the pastwere largely overcome in the 1960's and early 1970's as a result of theattention external lenders gave these sectors. The projected level ofinvestment for the social and productive sectors reflects a limited butimproving absorptive capacity. In the productive sectors the successfuldevelopment of a pulp and paper mill will ultimately depend on the country'sability to acquire the technical and administrative expertise needed to im-plement the project.
125. Apart from the limited public fixed investment in the productivesectors, there has been in the past few years a substantial increase inforeign financed government supervised credit programs, particularly foragriculture. The Government intends to continue to expand these programsproviding US$20-25 million of credit for agriculture and industry during the
next 2-3 years and larger amounts thereafter as the recently created NationalInvestment Corporation expands its activities and the Central Bank furtherincreases the scope of these credit operations.
126. The principal constraint to achieving the levels of investment in
Table 8 will lie not so much in limitations in sectoral absorptive capacityas in the ability of the country to obtain external financing at reasonableterms in the amounts called for by the program. On the basis of external loancommitments already made, public investment can be expected to rise fromUS$43.3 million in 1973 (4.8 percent of GDP) to a projected US$116.3 millionin 1976 (10.1 percent of GDP). In 1977, if the US$400 million El Cajon proj-ect is undertaken, investment will probably increase to US$160.2 million(12.3 percent of GDP). Even if no new power project starts in 1977, invest-ment would still be almost US$130.0 million (10 percent of GDP), because ofsubstantial increases in programs already underway in other sectors. If theUS$400 million power project is undertaken, fixed public investment wouldaverage 11.8 percent of GDP during 1977-80, declining to 9.5 percent in 1981.
127. A public investment level beyond 10 percent of GDP (far higher thananything Honduras has achieved in the past) would, given stringent limits onthe country's overall capacity to invest during the next few years, probablyimply insufficient private investment to achieve the modest rate of economicgrowth projected in this report (see Chapter V). Public investment prioritieswill, therefore, have to be set. As a practical matter the choice is eitherthe US$400 million high arch dam at El Cajon or a number of other projects.Based on current cost estimates, the high arch dam alternative would re-
present over 4 percent of GDP in the 1977-81 period, and quite a few projectswould have to be eliminated to make room for it in a feasible investmentprogram. Since external loans to finance many projects (e.g., forestry,communications, much of the highway and port program, education, health, somewater and sewerage projects) have already been, or will shortly be, committed,the Government has in a sense already determined its priorities by utilizingso much of its borrowing capacity to begin other projects and this reducesthe room for choice.
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128. Even if all the projects at a relatively early stage of develop-ment were cut (e.g. feeder roads, future agricultural projects, futurewater and sewerage projects, and tourism), the savings would be far toosmall to significantly reduce public investment. Further, such cutswould eliminate some of the programs the country is counting on to carryout the agrarian reform, to improve its balance-of-payments position in the1980's and to stimulate the growth of production. The US$400 million ElCajon project, on the other hand, would not stimulate economic growth muchduring the projection period, particularly because the high arch dam alter-native may produce surplus energy through most of the 1980's, thus providingno benefit to the economy unless it can be sold to a neighboring country orattract new electricity intensive industry. Undertaking the US$400 millionEl Cajon project at this time, if viable alternatives can be identified and ifit means sacrificing a number of other important development projects, wouldnot seem to be consistent with the economic development strategy reflected inthe public investment program adopted by the Government and endorsed in thisreport, which gives increased priority to directly productive investment.
129. Under any circumstances, it will be necessary for Honduras to begina new power generation project in the near future to meet its load require-ments in the 1980's. Given the nature of its power resources, this is mostlikely to be a relatively expensive hydro project. In order to determine theamount that might reasonably be invested in a hydro project, the cost of theUS$400 million high arch dam at El Cajon was subtracted from total fixed publicinvestment (see Table 8), and the difference between investment net of El Cajonand a reasonably affordable public investment program (one which graduallydeclines from 10 percent in 1977 to 9 percent of GDP by 1981) was assumed tobe available for such a project (see Appendix Table 5.10). If public invest-ment were gradually reduced to 9 percent of GDP by 1981, about US$180.0million would be left for a new hydro project in the 1978-81 period. Severalhydro alternatives have been identified, some of which are included in anoptimization study currently being undertaken, in conjunction with the updat-ing of the El Cajon feasibility study, by the Power Company. At this timethe analysis of alternatives is not advanced enough to determine whetherthis above amount would be sufficient to build a major, economically attrac-tive hydroelectric project. If it is not, a combination of smaller projectswould have to be considered. It is expected that the elements needed for adecision will be available by the end of 1976.
130. The outstanding feature of the proposed public investment program isthe considerably increased emphasis, as compared with the past, on investmentin the productive sectors. At the same time, infrastructure investment isexpected to continue to account for more than half of the total, while invest-ment in the social sectors, though not growing between 1976 and 1981, isexpected to be at several times its past levels in absolute terms. A majorissue is the amount to be invested in a new power project. The advantage of alower investment level for power than necessitated by the US$400 million ElCajon project is that it would permit the country to initiate at an earlier
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date other essential projects in such areas as agriculture, forestry or tour-
ism. The overall program should lay the basis for a gradual improvement in
the exploitation of the country's resources and an acceleration in the rate
of economic growth.
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CHAPTER IV: PUBLIC FINANCE
Background
131. As in most Central American countries the role of the publicsector has remained limited until fairly recently. 1/ The followingindicators, which show the increasing importance of the public sector inthe economy, especially since 1968, remain considerably below those in mostother countries in the world with similar populations and income levels.
Table 9: PUBLIC SECTOR: INDICATORS OF SIZE(Percentages of GDP)
Average Average Average1960-61 1967-68 1974-75
Central Government
Current revenue 10.7 11.1 13.2(of which tax revenue) (9.6) (10.2) (11.7)
Current expenditure 9.3 9.6 11.4Capital expenditure 2.1 2.7 4.3
General Government
Current revenue 12.8 13.0 16.1Current expenditure 10.6 11.0 13.8Capital expenditure 2.9 3.0 4.8
Public Sector
Current account savings 2.4 2.7 3.8Capital receipts 0.1 0.1 0.2Capital expenditure 3.3 4.2 8.2Overall deficit -0.8 -1.4 -4.2
Net external financing 0.9 1.2 3.0Net domestic financing -0.1 0.2 1.2
Source: Appendix Tables 2.1 and 5.2.
The tax revenue structure is basically inelastic and the increase in the taxto GDP ratio over time has resulted mainly from the periodic enactment ofnew tax measures and from improvements in tax collection. General government
1/ The public sector is defined to include the General Government (CentralGovernment, autonomous institutions and municipalities) and publicenterprises.
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current revenues and expenditures both increased by about 3 percentage pointsof GDP between 1960-61 and 1974-75, but most of the growth occurred after 1968.Current expenditures increased dramatically in 1969 to a large extent as aresult of increased defense expenditures associated with the border conflictwith El Salvador. Expenditures on defense and police, which averaged about1 percent of GDP during 1965-68 rose to a permanently higher level followingthe end of the conflict, averaging 1.6 percent of GDP during 1971-74. Asdiscussed in more detail below, current spending for non-defense purposes hasnot grown sufficiently to meet the demand for public services nor has it keptpace with the growing maintenance requirements of the rapidly rising publiccapital stock.
132. The growth of public capital expenditures has far outstripped thegrowth in current government revenues as well as the growth in privateinvestment. The level of public capital expenditures increased from 3.3percent of GDP in 1960-61 to 8.2 percent in 1974-75; public investmentaccounted for about one-fourth of total domestic investment in 1960-61 andfor about one-third in 1974-75. At the same time, the share of public invest-ment financed by public savings declined from about two-thirds in 1960-61 and1967-68 to about 45 percent in 1974-75. Net external financing fluctuatedconsiderably from year to year and on average increased from about 30 percentduring the sixties to more than 35 percent during the present decade. Netdomestic financing has increased over time, but with few exceptions has beenkept limited.
133. Two major issues emerge from the preceding trends: (a) what arethe implications of the slow growth in current expenditures during the pastfifteen years? (b) how will the ambitious public investment program outlinedin Chapter III be financed? The first issue relates to low levels of remunera-tion in the public sector, and to the deficiency of many government services.The second relates to ways and means of mobilizing additional revenues for thepublic sector without discouraging private enterprise. The two issues overlapinsofar as higher public revenues will be needed both to improve publicservices and to finance a larger public investment program.
Structure and Trends: 1960-1975
134. Within the public sector the operations of the Central Government(exclusive of transfers to the rest of the public sector) are by far the mostimportant, accounting for two-thirds of public sector current account flows,half of public sector investment and 85 percent of general government currentand capital operations.
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Table 10Public Sector Operations
(as a percentage of total)
1960 1961 1970 1971 1972 1973 1974 1975 t/
Public Sector Current Rbvenue 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Central Governnent 1/ 78.0 74.2 74.2 71.8 71.9 71.0 66.6 68.0Autonomous Institutions / 2.8 5.0 2.8 2.8 9.0 10.9 11.0 12.0Public Enterprises / 11.4 14.5 17.8 20.0 14.1 13.0 17.2 15.0Xticipalities 1/ 7.8 6.3 5.2 5.4 5.0 5.1 5.1 5.0
Public Sector Current Spending 100.0 100.0 100.0 100.0 100.0 100.0 100.0 10040Central Government 2 74.
267.2 72.8 70.2 72.9 70.7 65.9 67.0
Autonomous Institutions 1/ l0.4 14.3 7.7 8.8 11.9 1l.9 17.2 15.5Pablic FEterprises 1/ 8.1 11.9 13.8 15.5 10.5 9.7 11.9 12.5Municipalities V J 7.3 6.7 5.7 5.5 4.7 4.7 5.0 5.0
Public Sector CniD Spe_qln 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0Central Goverr-ent I/ 65.9 55.9 54.6 67.6 63.4 52.2 50.1 53.0Autonomous Institutions / 14.7 6.9 5.5 5.7 3.2 4.6 3.8 4.0Public Enterprises 1 10.8 32.6 36.6 20.5 27.2 38.4 38.9 35.5Municipalities 1/ 8.6 4.6 3.3 6.2 6.2 4.8 7.2 7.5
1/ Net of transfers.V Estimate.
Source: Appendix Tables 5.2, 5.5.
135. Although the growth rate of central government current spendingexceeded that of GDP during the last 15 years, current spending has beeninsufficient to complement capital spending and to satisfy the growing needfor public services. Examples of the inadequacy of complementary currentspending may be drawn from the education and transport sectors. In the former,the Government was forced to convert a number of public schools built with
USAID financing to semiofficial schools when the necessary public funds wereunavailable to cover operating expenses. In the case of transport, it isestimated that ongoing road maintenance is only a fraction of what it shouldbe.
136. Successive governments' restrained wage and salary policies, com-bined with a lack of training opportunities, have made it difficult to attractadequate numbers of high caliber people to the public sector for long-termservice. In the 1960's there was little growth of wages and salaries andalthough there has been some improvement in the 1970's they remain uncompeti-tive with the private sector. The low wage level has resulted in inefficientadministration and thus limited the effectiveness of the public sector.
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137. The share of current spending devoted to social services,especially education, has increased over time, while the shares of economicservices and of general services have declined. Considerable progress hasbeen made in the past 15 years in expanding access to social services.Nevertheless, the growth of social sector spending has been limited byfinancial constraints, much of it has been inefficient and its benefitshave been concentrated on the urban and higher income groups (see paragraphs44-53). Current spending on economic sectors has been low, largely becauseuntil recently there was little emphasis on direct government participationin economic development. This has led, in the case of agriculture, forexample, to a serious lack of extension services and of research and devel-opment programs in such areas as seed, fertilization, and irrigation.
138. Since the 1960's tax revenues have constituted about 90 percentof central government current revenue with the remainder being contributedby fees, licenses and transfers from the rest of the public sector. Overalltax revenues have shown some buoyancy in the past 15 years, with the taxratio rising from 9.6 percent in 1960-61 to 11.7 percent in 1974-75. Thisincrease has been due to periodic administrative improvements, including theestablishment of a unified tax roll in 1969, to the introduction of newtaxes such as the banana export tax in 1974 and to some increases in therates of existing taxes. In addition, Honduras' participation in and sub-sequent withdrawal from the free trade arrangements of the CACM have causedconsiderable changes in import taxation and yields as have changing indus-trial and agricultural fiscal incentives in the form of liberal import andincome tax exemptions (see paragraphs 63-64).
139. As a result of the various changes in the tax system the compo-sition of tax revenue has been altered following a pattern fairly typicalof an export-oriented developing country. The heavy fiscal reliance onforeign trade taxes, especially on import taxes, during the early 1960'swas gradually reduced as it became possible to generate more revenues fromtaxes on domestic transactions. Subsequently, direct taxes became the mostdynamic component of the tax system. At present a greater effort is beingmade to tax exports, especially those which are foreign controlled and/ornon-renewable, as well as to increase direct tax yields. Taxes on foreigntrade have been the most volatile contributors to total revenue partlybecause of alterations in Honduras' tariff position vis-a-vis the otherCentral American countries and the rest of the world. Considerable poten-tial revenues have been foregone because of exemptions designed (oftenunsuccessfully) to promote industry and agriculture (see paragraphs 64-65).In addition, government officials suspect a large amount of evasion of taxeson foreign trade. Import taxes as a percent of merchandise imports havedeclined from 25.8 percent in 1960 and 18.1 percent in 1965 to 11.0 percentin 1970 and were 8.5 percent in 1975. By 1975 import duty exemptions amountedto almost 50 percent of import tax collections and the value of import dutyexemptions between 1970 and 1975 was $53 million.
Table 11: CENTRAL GOVERNMENT CURRENT REVENUE, SELECTED YEARS
(millions of current lempiras)
1960 1965 1970 1971 1972 1973 1971 1975
Current Revenue 73.2 110.7 188.1 184.0 200.2 227.0 252.1 272.2
Tax Revenue 67.1 98.5 156.5 161.0 168.3 194.4 220.7 244.4
Taxes on income and property 11.2 18.5 44.5 43.7 41.6 50.0 67.6 75.8Banana companies 0.4 0.6 11.3 5.6 2.6 6.6 6.9 __Other companies 7.5 11.6 23.8 28.0 27.9 29.6 41.4 54.2Personal income 2.5 4.7 6.9 7.9 9.1 11.2 17.1 18.8Other 0.8 1.7 4.5 3.2 2.0 2.6 2.2 2.8
Taxes on domestic transactions 18.6 33.4 61.5 62.8 68.9 77.0 80.9 82.2Sales __ 6.9 11.0 11.7 12.1 15.0 16.7 16.7Beer 7.4 9.2 12.7 14.6 16.4 17.2 15.9 16.0Alcohol 4.7 6.5 9.6 10.1 9.9 11.4 12.2 12.9Cigarettes 2.7 4.2 5.5 5.5 5.7 6.2 6.9 7.3Petroleum products -- -- 8.7 9.8 12.1 12.9 12.3 12.5Other 3.8 13.0 14.0 11.1 12.7 14.3 16.9 16.8
Taxes on foreign trade 37.1 46.3 50.4 54.5 57.7 67.6 72.2 86.2Import taxes 33.7 41.0 44.6 48.2 51.7 56,2 64.9 62.6Export taxes 3.4 5.3 5.8 6.3 6.0 11.4 7.3 23.7
Coffee 2,5 3.9 3.7 4.0 3.6 6.6 4.6 7.9Banana 0.3 0.4 0.6 0.8 0.7 0.7 0.7 15.0Other __ 1.0 1.5 1.5 1.7 4.1 2.0 0.8
Miscellaneous taxes -- -- 0.1 0.1 0.1 0.1 0.1 0.2
Non-Tax Revenue 6.1 12.2 31.6 23.0 31.9 32.6 31.4 27.8
Public sector transfers -- 2.6 3.9 4.3 8.5 4.7 4.2 __Other 1/ 6.1 9.6 27.7 18.7 23.4 27.9 27.2 27.8
1/ Includes funds from government enterprises, semi-official institutions, cooperativeprojects and others which beginning in 1970 are classified under Central Government inthe Consolidation of the Public Sector.
Source: Appendix Table 5.3.
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140. Three autonomous institutions, the National Lottery, which isrevenue agent for the National Child Welfare Agency (LNB-PANI), theNational Social Welfare Board (JNBS), and the Social Security Institute(IHSS), provide health, welfare, and social security services and withintheir financial constraints they have operated quite well. 1/ The mostpressing fiscal problem of the autonomous institutions centers around theneeds of INFOP and INA to gain sufficient financial and administrativecapacities to meet the goals of the National Development Plan (see para-graphs 35, 88). The current spending of both have been very low in thepast and would have to rise significantly if the quality of the laborforce and the productivity of the rural sector are to be improved. WhileINFOP can rely on revenues from an earmarked payroll tax, the government'scommitment to agricultural development and the agrarian reform will requirelarge increases in transfers to INA both for current and capital spending.
141. The savings performance of the public enterprises has been improv-ing somewhat over time owing mainly to the growing strength of the NationalPort Authority (ENP) and the National Power Company (ENEE), and more recently,to COHDEFOR. ENP and ENEE have been able to finance large investment programsout of their own savings and direct borrowing. 2/ Their current expenditureshave been adequate and they have highly competent management. At the timeCOHDEFOR was created in 1974 (see paragraph 46), the Government hoped surplusesfrom COHDEFOR could be used to help finance other public sector activities,especially the agrarian reform. At present, however, while COHDEFOR isalmost entirely self-financing, it has not been able to release surpluses forthe use of the rest of the public sector because of lower than expected pro-fits as well as because of its own capital spending requirements. The savingsperformance of the other major public enterprises has generally been poor andcan be improved. SANAA and INVA have had negative savings throughout the1970's despite inadequate current expenditure programs because of generallypoor financial policies (see paragraphs 80 and 85). Two additional publicenterprises, the National Development Bank Food Marketing Agency (BANASUPRO),created in 1974, and the Honduran Banana Corporation (COHBANA), created inlate 1975, are as yet too young to be evaluated but are not likely to have agreat impact on public savings in the medium term.
Financing Development: 1976-1981
142. The successful implementation of the public investment programoutlined in Chapter III will require significant increases in complementarycurrent expenditures especially in agriculture, highways, and the socialsectors. Moreover, the correction of past spending deficiencies calls foradditional increases in current spending. Central government current
1/ See Appendix Table 5.7 for summary transactions of each of the majorpublic entities.
2/ Since 1960 the public enterprises have received only very small capitaltransfers from the Central Government.
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expenditures, net of interest payments, will have to grow in real termsat an annual average rate of at least 6 percent. As a percent of GDPcentral government current spending would rise from 11.4 percent in 1974-1975 to 13.8 percent in 1980-81. The 6 percent yearly growth rate is basedon an estimated 10 percent yearly growth of expenditures for economic servicesand 5 percent for general and social services. The implementation of theagrarian reform program requires a considerable increase in spending in theagricultural sector including substantially higher central government trans-fers to INA than in the past. Current spending for general and socialservices will have to grow at 5 percent per year in view of the expected 3percent yearly growth in population and the requirements of ongoing programs,especially in the social sectors. These projected current spending growthrates must be considered as minimum objectives and must be complemented withincreases in spending efficiency if the objectives of the National DevelopmentPlan are to be accomplished with the limited resources available.
Table 12: CENTRAL GOVERNMENT ACCOUNTS(millions of current lempiras)
1976 1977 1978 1979 1980 1981
Central Government
Current Revenue 336.0 385.5 438.6 520.3 600.7 671.8Yield of 1974 and 1975
fiscal measures 41.5 54.9 68.0 76.9 75.8 81.7New fiscal measures -- -- -- 35.3 72.2 80.7
Current Expenditures 287.4 336.2 385.1 443.7 507.7 572.5Current Savings 48.6 49.3 53.5 76.6 93.0 99.3
… ---------- As percent of GDP -
Central Government
Current Revenue 14.6 14.8 15.0 15.9 16.4 16.1Yield of 1974 and 1975
fiscal measures 1.8 2.1 2.3 2.3 2.1 2.0New fiscal measures -- -- -- 1.1 2.0 1.9
Current Expenditures 12.5 12.9 13.2 13.5 13.8 13.8Current Savings 2.1 1.9 1.8 2.4 2.6 2.3
Source: Appendix Table 5.8.
143. Current spending by the rest of the public sector will also have togrow rapidly in view of the Government's development objectives. In order tomaintain savings of the rest of the public sector at about 1.6 percent of GDPduring 1976-81, equivalent to about a third of its planned investment expendi-ture, revenues will have to be increase considerably. Thus, for instance, amajor effort will be needed to improve the financial management of such insti-tutions as SANAA and INVA; at some point the revenues of INFOP may have to be
- 54 -
increased through higher payroll taxes or fees if it is to train a largerpercentage of the labor force, and further tariff increases will have tobe made by such major enterprises as ENEE.
144. Almost 50 percent of the public sector investment expendituresfor 1976-81 proposed in this report are expected to be financed by netforeign capital inflows, and another 15 percent by domestic borrowing andfunds from the Venezuelan Economic Cooperation Agreement. The need tostimulate productive private investments and the present limitations of thedomestic capital market, especially in the provision of long-term funds,requires a cautious liberalization of monetary policy and an intcrease in theavailability of long-term credit to the private sector if economic growth isto be promoted. Therefore, domestic borrowing by the public sector shouldbe limited to about 0.6 percent of GDP (in line with past experience), whichcombined with a somewhat more expansionary monetary policy than in earlieryears should leave the banking system with adequate funds to help financeprivate investment. Honduras already experienced a more liberal monetarypolicy in 1974 and 1975.
145. Public sector savings would have to finance about 35 percent ofpublic investment expenditures during 1976-81 equivalent to about 3.8percent of GDP; current savings at the central government level will haveto average about 2.2 percent of GDP. Therefore, central government currentrevenues as a percent of GDP will have to rise from 13.2 percent in 1974-75to 16.2 percent by 1980-81.
146. A series of tax changes were introduced in late 1975, which, alongwith the banana export tax of 1974, are expected to increase the tax-to-GDPratio from 12.1 percent in 1975 to 13.2 percent in 1976. Although the 1975tax package is expected to raise revenues, it will have only a modest impacton the structure and elasticity of the tax system. It may, however, improveequity somewhat by eliminating the tax exemption of dividend income and thespecial treatment of personal foreign incomes and incomes earned by Honduransliving abroad.
147. In the absence of further tax changes and/or administrative reforms,it is expected that revenues will be declining as a percentage of GDP oncethe initial effect of the new tax package has been felt. This is largely dueto the continued predominance of indirect taxes which are mainly specificand to the fact that evasion of ad valorem taxes especially on imports islikely to continue unless significant improvements in administration takeplace. Even the direct taxes as a group are still expected to be fairlyinelastic despite the 1975 tax package. The banana companies are expectedto continue to dominate the private sector but cannot be relied on for muchincome tax revenue since determination of their income tax liability is some-what beyond the control of the Honduran tax authorities. 1/ Inheritance,
1/ The amount of banana company taxable income is determined by a 1950agreement between the Honduran Government and the U.S. Internal RevenueService. Negotiations between the Government and the banana companiesestablish the rate they will pay.
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gift and property taxes will not automatically respond to changes in GDP.Personal and company income taxes are somewhat more elastic than the taxsystem as a whole but will continue to be outweighed by the other revenuecomponents.
Table 13
Estimated Yield of 1974 and 1975 F[scal Measures
(millions of current lempiras)
1976 1977 1978 1979 1980 1981
Income TaxesDividends, etc. 8.5 9.6 10.8 12.1 13.5 15.6Mining 6.0 6.7 7.14 8.2 9.1 10.1
Beer 6.3 6.4 6.5 6.6 6.7 6.8Alcohol 1.7 1.8 1.8 1.9 2.0 2.1Cigarettes 1.7 1.7 1.7 1.8 1.8 1.9Coffee 13.8 20.9 27.2 28.3 29.2 30.2
Sub-Total 38.0 147.1 55.14 58.9 52.3 66.7
Increments to Banana Tax 3.5 7.8 12.6 18.0 23.5 25.0
Total 41.5 54.9 68.0 76.9 75.8 81.7As % of GDP 1.8 2.1 2.3 2.3 2.1 2.0
Total Projected Tax Revenues 3041 .0 351.3 400.8 143.9 483.7 545.0As % of GDP 13.2 13.5 13.7 13.5 13.2 13.1
Total Current Revenues 335.8 3814.8 1438.0 1485.0 528.5 5949As % of GDP 14.6 114.8 15.0 14.8 11.14 14.3
GDP 1/ 2300.0 2600.0 2920.0 3280.0 3670.0 4160.0
GDP is projected to grow at 4.6 percent per year in real terms.Although in the past Honduras has managed to keep its inflation belowworld levels, it is assumed that the need for a more expansionarymonetary policy will require acceptance of world inflation rates ofabont 8.8 percent in 1976 gradually declining to 7 percent for 1980and 1981.
Source; Mission estimates and Appendix Table 5.3.
148. There are several possibilities for raising additional currentrevenue while supporting other policy objectives such as income distribution,equity, administrative ease, incentives for growth and higher elasticity ofthe tax system. It is important in formulating future tax changes that theoverall structure of the tax system be considered so that elasticity andequity may be improved at the same time that private consumption is restrainedand savings and investment encouraged.
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149. There is room for increasing the yield, progressivity and effi-
ciency of direct taxes through administrative improvements designed to
reduce evasion and through changes in the structure of these taxes, espe-
cially of the company income tax, which would reduce legal loopholes and
simplify compliance and administrative requirements. The nine marginal
rates currently applicable to company income could be replaced by two rates,
for example 25 percent and 40 percent, which would increase yields, reduce
compliance costs as well as administrative costs, and largely eliminate the
business fragmentation induced by the current tax structure.
150. The yield of property taxes has been negligible in the past.
Because these taxes do have considerable revenue potential and are designed
to discourage underutilization and speculation, they could be more stringently
enforced. Also, many properties are currently outside the tax system because
their titles are not clear and/or they have not been assessed. The ongoing
cadaster program can eventually provide the information necessary to tax
these lands. Meanwhile, for properties with undisputed titles, owner assess-
ment could be a viable interim alternative to government assessment of pro-perties for tax purposes because now owners have an incentive to set the value
of their property at or above market value given the possibility of expro-
priation through the agrarian reform program.
151. Although indirect taxes generally tend to be less progressive than
direct taxes, in the case of Honduras these taxes primarily affect middle and
upper income groups and therefore could be increased without seriously reducing
equity. Indirect tax increases offer an attractive medium-term solution to
the financing problem because these taxes are fairly easy to administer and at
present they are quite low compared with some other Central American countries
which have higher sales tax rates and more ad valorem excise taxes. The
combined burden of sales, excise and import taxes is well below 10 percent of
private consumption and even with the 1975 tax package would not reach 10 per-
cent by 1980. These taxes constitute as much as a third of private consumption
in many other developing countries, and they could be increased in Honduras.
The sales tax rate of 3 percent could be increased to 5 or 6 percent and the
specific rates on excises changed to ad valorem rates which would increase
revenue elasticity. Government officials estimate that the import tax evasion
rate may be as high as 50 percent and the various fiscal incentive import tax
exemptions now cost L 20-40 million in revenues foregone annually. Steps to
improve the administration and structure of taxes on foreign trade, especially
import taxes, could be taken which would increase revenues and promote more
efficient utilization of capital (see paragraph 67).
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Table 14
POTENTIAL SOURCES OF ADDITIONAL REVENUES
(In millions of lempiras)
1977 1978 1979 1980 1981
Needed -- -- 35.3 72.2 80.7
Import taxes /1 20.0 21.0 22.0 26.0 28.0Fiscal incentives /1 10.0 11.0 12.0 18.0 20.0
Sales taxes /2 13.0 14.6 16.4 18.4 20.7
Property taxes /3 2.0 2.2 2.4 2.6 3.8
Excise taxes /3 3.0 3.2 3.4 3.7 5.0
Corporate income taxes /3 3.0 3.4 3.8 4.3 4.8
Total Taxes 51.0 55.4 60.0 73.0 82.3
/1 Assumes eliminating half of the evasion suspected by the Government
and cutting fiscal incentives by 25% to 50%.
/2 Assumes an increase in the sales tax rate from 3% to 5%.
/3 Assumes moderately successful changes of the type outlined in the text.
Source: Mission estimates.
152. Through 1978 the fiscal situation is expected to remain manageable,even without new taxes, but by 1979 revenue shortages will be severe if new
measures are not implemented. The revenue measures suggested in Table 14
could yield more revenues than needed to cover the projected public financinggap between 1979 and 1981 according to present expectations, so there is some
flexibility in the selection and timing of each change.
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Table 15
SUMTMARY OPERATIONS OF TIE PUBLIC SECTOR, PROJECTIONS, 1976-81
1976 1977 1978 1979 1980 2981
(millions of lempiras)
Central Government Savings l/ 48.6 49.3 53.5 76.6 93.0 99.3Rest of Public Sector Savings l/ 43.0 46.2 41.8 54.6 54.o 63.9
Total Public Sector Savings 1/ 9i.5 95.5 95.3 131.2 147.0 163.2
Public Sector Investment 2/ 264.2 290.0 302.0 327.0 358.0 400.0Of which fixed investment 230.0 260.0 280.0 310.0 340.o 380.0
Deficit -170.2 -190.9 -202.7 -191.9 -207.1 -233.8
Net Foreign Financing 3/ 130.4 150.3 150.0 158.0 -133.2 181.2Net Domestic Financing 3/ 13.8 15.2 17.7 19.7 20.2 28.3
Venezuelan Oil Fund 26.0 25.4 35.0 14.2 53.7 24.3
(as percentage of GDP)
Central Government Savings 1/ 2.1 1.9 1.8 2.h 2.6 2.3Rest of Public Sector Savings 1/ 1.9 1.8 1.4 1.7 1.5 1.5
Total Public Sector Savings 1/ 1.0 3.7 3.2 4.1 4.1 3.8
Public Sector Investment 2/ 11.5 11.2 10.3 10.0 9.8 9.6Of which fixed investment 10.0 10.0 9.6 9.5 9.3 9.1
Deficit -7.4 -7.4 -7.0 -5.8 -5.6 -5.7
Net Foreign Financing 3/ 5.7 5.8 5.2 4.8 3.6 1.4NIet Domestic Financing 3/ 0.6 o.6 0.6 0.6 0.6 0.7
Venezuelan Oil Fund 1.1 1.0 1.2 0.4 1.4 o.6
1/ Includes new revenue measures.2/ Includes finiancial irnvestment.3/ Fxcludes Venezuelan Oil Fund.
Source: Mission estimates.
Conclusion
153. Major problems facing the public sector are weak administrativecapacity, owing partly to low salaries, a tendency for current spending tobe kept below levels needed to complement capital spending and provide foroperating and maintenance costs, and a fairly inelastic revenue structure.The effectiveness of the public sector in fostering development can beincreased only through a correction of past current spending deficiencies,including a major effort to improve the quality of public services andincreased current spending to complement new investments. This togetherwith the financial needs of the proposed public investment program (equalto around 10 percent of GDP) will require major efforts to improve revenueperformance in several public sector agencies and to increase the tax toGDP ratio from 11.7 percent in 1974-75 to about 15 percent by 1980-81,without discouraging private enterprise. Under these conditions domesticborrowing by the public sector would be limited which should leave thebanking system with adequate funds to help finance private investment.
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CHAPTER V: BALANCE OF PAYMENTS
Introduction
154. Bananas continue to dominate Honduran exports. Other major exportitems include coffee, beef and lumber. These products, together with minerals(lead, zinc and silver) have accounted for around 80 percent of merchandiseexports during the past decade. Manufactured goods exports have been limited,largely as a result of the low level of industrial development, and includemainly detergents, textiles and shoes, sold mostly to other Central Americancountries. The small size of the industrial sector has also been reflected ina great variety of imported items and years of rapid economic growth in thepast have been associated with accelerated import growth. 1/ On the whole theresource gap and the current account deficit as a percent of GDP have beensmall, with 1969-70 and 1974-75 as major exceptions. In 1969-70 adverseweather conditions and the conflict with El Salvador reduced exports while aliberal credit policy led to a large increase in imports. The unprecedentedresource gap in 1974-75 was the result of a variety of factors including asevere deterioration of the terms of trade, the world recession and hurricaneFifi, which devastated the banana plantations.
155. In the past, public and private capital inflows contributed aboutequally to financing the current account deficit. As almost all public debthas been contracted with international agencies or with USAID and almost halfof it on highly concessionary terms, the overall terms of Honduras' debt arequite favorable. As of December 31, 1974, the public external debt (outstand-ing and repayable in foreign currency) amounted to US$154.4 million, 95 percentof it from international agencies or governments. The public debt serviceratio has risen slowly over time but by 1975 was still as low as 5 percent.
1/ Generally the higher GDP growth has been, the higher the import elasticity.
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Table 16
Select Balance of Paymen tls Variables, 1965-75
Resource GaD Current Account Deficit Public Debt Sericein millions as K of GDP in millions as 5 of GDP in ;aillions Itato in 6 Jof U.S. $ __of U.S. $ of . __
1965 2.3 0.5 -7.0 i.4 3.3 2.41966 -8.0 1.5 -19.2 3.5 3.4 2.21967 -12.5 2.1 -,38.6 1.8 3.5 2.11968 -7.8 1.2 -24.7 3.8 3.4 1.71909 -19.3 2.9 -30.6 14.6 IJ.3 2.31970 -147.8 6.7 -63.8 8.9 5.6 2.&1971 -6.3 0.8 -2It.2 3.2 7.0 3.21972 8.4 1.0 -12.5 1.5 7.9 3.31973 -9.2 1.0 -35.4 3.9 11.1 3.8197ht -128.0 13.2 -108.9 11.2 12.0 3.71975 2/ -118.8 11.7 -139.6 13.8 15.2 5.o
1/ Ratio of public debt service to exports of goods and non-factor service.T/ l X tima,e .
Source: Central Bank and IBRD Debt Reporting Sorvice.
Outlook and Creditworthiness
156. The past stagnation of the economy was attributable to major
deficiencies in basic infrastructure, to neglect of agricultural and forestry
development and to excessive dependence on bananas. Currently, the basis
is being laid for a considerably improved economic outlook over the longer
term: ongoing public investment in infrastructure is at an all-time high,
and government programs were initiated in 1974 for forest resource development
and in 1975 to accelerate agricultural development through agrarian reform.On the other hand, the economic stagnation in 1974-75, resulting mainly from
the hurricane and aggravated by a 20 percent deterioration in the terms of
trade 1/ (of which less than one half is expected to be recovered by 1981)has seriously reduced the country's saving capacity. Together with a modest
outlook for traditional exports this will place stringent limits on the
capacity to invest during the next few years. The rate of economic growth
will accelerate only if policy makers and entrepreneurs are very selective
in their investment priorities and place emphasis on quick yielding invest-ments. Moreover, to strengthen the balance of payments and maintain credit-
worthiness, investments in projects with direct or indirect high exportpotential are essential.
1/ The deterioration was largely a result of increased import prices of
which petroleum was the most characteristic example.
- 61 -
157. On the basis of current trends and planned expansion programs,exports of goods and non-factor services can be expected to grow by about7.6 percent per year in real terms between 1975 and 1981. A considerablepart of this growth reflects recovery of banana exports following thedestruction caused by hurricane Fifi in 1974: under normal conditions realexport growth through 1981 is expected to be only 5 percent per year, com-pared to 7 percent per year during 1960-73, when a major expansion inbanana production provided a stimulus unlikely to recur.
158. Just before the hurricane, annual banana production for exportaveraged 45-50 million boxes on about 50,000 acres. By December 1975 about36,000 acres were in production. Because of the poor financial conditionsof some of the independent producers, it is unlikely that all 50,000 acreswill come back into production before the end of the decade. Private aswell as government supported rehabilitation of much of the destroyed acre-age is underway, however, and if accompanied by further productivity in-creases, earlier export levels might be reestablished by about 1979-80.Coffee exports reached record levels in 1975, following a year of stock-building in anticipation of higher prices. A long-term trend in productionand export volume growth of about 2 percent per year is expected mainly asa result of the Coffee Institute's ongoing yield improvement program. 1/
159. Lumber export volumes should grow at 6.5 percent per year through1981 (and considerably faster thereafter) if capacity expansion plans mate-rialize (see paragraph 57). The ongoing expansion in sugar could lead to aneight-fold increase in the volume of sugar exports by the early 1980's (seeparagraph 27). Beef exports may grow by 15 percent per year in volume through1981, starting from a low base in 1975. This estimate is based on projectedavailable export supplies if ongoing efforts at improving cattle managementare continued. A crucial factor in the growth of exports of "other goods"is increased trade with neighboring countries through a restructured CACM,in which case a 5 percent yearly growth in real terms could probably beattained. Given the country's resource base, these exports could grow muchmore rapidly starting towards the end of the 1970's if the Government suc-cessfully develops mechanisms to carry out its export promotion policyobjective: lumber exports could be greatly increased (see paragraph 59)
1/ The world coffee market situation and outlook have changed substantiallyin recent weeks. World coffee prices have reached much higher levelsduring 1976 than anticipated in the beginning of the year and assumed forpurposes of this report. As a result expansion of coffee production isbeing planned by several countries, including Honduras, which is likelyto result in lower coffee prices towards the end of the decade. InHonduras the expansion of output is expected to outweigh the pricedecline and lead to somewhat larger export earnings towards the end ofthe decade than projected in this report. These additional export earn-ings would be instrumental in helping to achieve the needed reduction inthe projected balance of payments gap discussed in paragraph 163.
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and a variety of agricultural (fruits, vegetables, rice) and industrial ex-
ports (vegetable oils, cotton fabrics, furniture parts) could be promoted.
Exports of non-factor services have been stagnant in the past and are not
expected to grow rapidly between now and 1980; but tourism receipts may
increase substantially in the early 1980's. 1/
Tabl 17 BAlANCE OF PArsiJTS TRENDS, 1974l-19S
(millions of U.S. dollars)
Actual Estinate Projections
197T 1975 1976 1977 1978 1979 1980 1951
Current Account Balance -108.9 -139.6 -157 -168 -175 -183 -i94 -238
( cf GC? at current market prices) (1.2) (13.8) (13.7) (12.9) (12.0) (11.2) (10.6) (ll.L)Kr'orts of goods and n.f.s. 327.5 312.9 l 03 4l7
6 554 639 728 822
i'rpDrt3 of goods and n.f.s. h55.IL i31.7 528 599 67. 752 839 964
Factor incore, net -13.4l -38.3 -i44 -58 -72 -85 -99 -113Transfers, nect 32.5 17.5 12 13 iIL 15 16 17
Financing:
Capital inflows:0t fIci.l capital 27.0 123.8 14L3 144 146 150 157 203
Private capiLal 25.5 47.3 25 32 37 4L2 1X7 IL9Cattall 'ran3actions, netY 65.9 -13.8 - - - - -
Change in re5erves (- - increase)2/ -9.5 -17.7 -11 -8 -8 -9 -10 -14
Yemorandum Item
Futlic debt service ratio 3.7 5.0 7.7 10.5 13.4L 1I1.7 16.1 16.3
Source: A?pendix Tables 3.5 and 6.1
l/ includes srrors and omissions.
2/ International reserves, net rise from 3½ weeks exports in 1974L to the equivalent of 6 weeks imports during the period 1975-1981.
160. A 7.6 percent real growth in exports and continued high levels of
investment might go hand in hand with a 4.6 percent real growth in GDP per
year through 1981, similar to the 1960-73 rate. Historically, this level
of GDP growth has been associated with an import elasticity of 1.5. The
country produces a limited range of products, and while unutilized produc-
tive capacity exists in a great number of firms, shortages of domestic in-
put supplies are common. Imports were somewhat below normal levels during
1975 as inventories were drawn down. Real import growth is estimated at
12 percent during 1976; thereafter, the import elasticity with respect to
1/ Excellent price prospects for coffee, lumber and beef will more than off-
set the expected weakening of banana prices. Export prices might rise
by about 9 percent per year through 1981, compared with a rise in import
prices of less than 8 percent projected by the World Bank (November 1975,
Commodity Price Forecasts).
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GDP may be expected to be at least 1.1 on the assumption of gradual in-creases in capital productivity and some import substitution. Slow consump-tion growth (see paragraph 161) can help keep the yearly growth of consumergoods imports to less than 3 percent, while successful agricultural and in-dustrial development policies should help maintain the import elasticityof intermediate goods with respect to GDP at about 1.2. Increased agricul-tural output can lead to increased capacity utilization in food-processingplants. Adequate price policies are crucial: the 1975 milk price increasecan be expected to raise output and reduce milk imports. Imports of vegetableoils can be reduced as palm oil production in the Aguan Valley increases, andthere are a number of other import substitution possibilities. Under theseconditions with regard to exports and imports, economic growth could beaccompanied by a resource gap declining gradually from 11.7 percent of GDPin 1975 to less than 7 percent in 1981.
161. To maintain a high investment level and given the likely availabil-ity of foreign capital discussed below the savings ratio will have to rise.Real consumption stagnated during the last two years (or declined by about 5percent in per capita terms). Given the overall low consumption levels, itmay be difficult and even undesirable to severely limit consumption growth.If real consumption growth is kept at only 3.6 percent per year (about 0.6percent per capita), the savings ratio could gradually recover by the early1980's to the level reached in pre-hurricane years. The policy mix neededto achieve these targets will have to include such measures as additionaltaxes (beyond those introduced in 1975), credit curtailment to non-productiveactivities (such as consumer loans) and higher interest rates which togetherwith a sound investment climate could help mobilize substantial privatesavings (see Table 18).
- 64 -
Tcblel8: SELECT NATIO!MAL ACCOLNTS DATA
Average1967-69 1973 1974 19751/ 1979 1950 1581
(in millions of U.S. dollars at 1974 prices)
Cross D^oes:.ic ?rod'ct 803.3 963.5 968.3 963.4 1,318.8 1,200.5 1,260.6.cr.s cf:Trade Ad'ustm.ent 31.3 ,4.7 - -33.3 -17.8 -18.7 -16.0Gr0:5 Zo.e:t;c Incorm 8M4.6 9y8.2 968.3 930.1 1,131.0 1,181.3 1,2L32.6
~-:orts of goods & n.f.s. 3,7.9 392.2 499.9 393.9 50.0 522.8 560.57-?o-ts of sgods & n.f.s. S330.2 314X5. 327.5 318.7 443.5 472.1 1.4-.1E crts *^cl. Ter 3 of Trade Adjustment 334 .5 380.2 327.5 295.4 425.7 453.4 473.2:-e-ee-^e Gap 23.14 12.0 128 108.5 75.3 69.4 82.4
CCr.SZrntinn 655.1 818.9 89L5.3 631.9 949,1 987.6 1,02L .9172.9 191.3 251.1 206.7 257.3 263.7 300.1
srcatiO -, Savi- nZs 149.5 179.3 123.0 98.2 182.0 194.2 217.8
_______________ I-er-(sel2cted ratios)
4L4.5 4°.7 47.0 40.9 43.6 43.5 441.537.7 35.9 33.8 33.1 38.6 39.3 39.4
Cs-3pori/0DY 82.1 82.0 87.3 89.4 53.9 83.6 82.5Invost .ec-/GDY 20.7 19.2 25.9 22.2 22.8 22.3 2L.2
Gross Do-e-tic Saving,s/3DY 17.9 18.0 12.7 10.6 16.1 16.4 17.5
I/ E-stimate
So=ce: Ap?endix Table 2.7.
162. The financing of the current account gaps and debt amortizationprojected in this report will require substantial capital inflows. Whileprivate sector inflows are expected to be fairly limited, they should bemuch above past levels because an increasing number of new investmentopportunities are being identified and exploited (for instance in sugar,cement and textiles), and because of the stimulus of the possible reopeningof the CACM. The bulk of the foreign capital requirements will have to bemet through public borrowing. About two thirds of the public investmentexpenditures proposed in this report are expected to be covered by grossdisbursements on foreign loans, or roughly US$600 million during 1976-81. 1/An additional US$110 million are expected to be disbursed during this periodas credit lines for development programs and US$90 million might becomeavailable under the Venezuelan Economic Cooperation Agreement. On the basisof tentative lending programs by the main international lending institutions
1/ This would, on average, cover the foreign cost of the public investmentprogram.
- 65 -
and governments, Honduras should be able to obtain over 80 percent of theUS$800 million from these official sources on relatively favorable terms andthe remainder from suppliers.
163. These projected disbursements, however, are not expected to besufficient to fill the balance-of-payments gap. Additional funds will beneeded, as was the case in 1975, when balance-of-payments support was providedby a US$33 million public capital inflow on commercial terms from central banksof Spain and Latin America. The modest GDP growth and associated import levelsprojected in this report, while preserving a minimum level of reserves, wouldrequire additional capital inflows of the order of US$45 million per year during1976-79, US$60 million in 1980 and more than US$100 million in 1981. Thoughsome of these funds might be obtained from sources such as the IMF, the bulkwould have to come from commercial sources. The public debt service ratiowould rise from 5 percent in 1975 to 16 percent in 1981 and 24 percent in 1985,an undesirably high level in view of the demonstrated vulnerability of exportearnings (bananas and coffee together would still account for close to a thirdof export earnings by 1985). 1/ A prospective debt service ratio exceeding15-20 percent might, moreover, limit the scope for commercial bank borrowing.During the next 3 to 4 years, commercial bank borrowing of the orders of magni-tude suggested above will probably have to be relied upon to achieve a 4.6percent growth target. If during these years economic policy placesemphasis on the development of foreign exchange earning activities it willbe possible to reduce the resource gap starting towards the end of thedecade and keep the debt service at about 15 percent of exports and thusmaintain growth and creditworthiness in the longer term.
164. Over the past 15 years, gross domestic investment has risengradually from an average of 13.7 percent of GDP in 1960-62 to 22.3 percentin 1973-75, partly because of increased fixed public investment in basicinfrastructure. Public sector fixed investment grew from 3.5 percent ofGDP in 1960-62 to 6.4 percent in 1973-75 and reached an all-time high of8.1 percent in 1975. Despite this rapid increase in capital formation, therate of growth of GDP has remained low. The capital-output ratio has gener-ally been high. 2/ The only dynamic segment of the economy, the industrial
1/ The US$800 million of disbursements during 1976-81, discussed in the pre-ceding paragraph, imply US$930 million of new commitments during thisperiod. The average terms assumed on these commitments for purposesof this report are 6 percent interest, 25 years maturity and 5 yearsgrace period. It is unlikely that Honduras would be able to obtainmore than this amount of resources on such terms. On the basis ofthese borrowings alone, the public debt service ratio would rise from5 percent in 1975 to 10 percent by 1980 and thereafter remain at thatlevel.
2/ Ignoring the 1974-75 period, when output stagnated because of thehurricane and of deteriorating world market conditions, a capital-outputratio of 3.7:1 was estimated from 1960-73 data, and of about 5:1 from
1969-73 data.
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center in the north, was isolated from the rest of the country and heavilyprotected, leading to over-investment in import substitution industries;hence to low capacity utilization and a high incremental capital-output ratio.Apart from this, the subsistence farming and government sectors are predomi-nant in the economy. Government investment has been largely in slow yieldingbasic infrastructure investment which the country lacks and which is a pre-condition for growth. In order to reach the 4.6 percent growth target, grossdomestic investment will have to remain at about the same high share of GDPas in 1973-75.
165. Ongoing investment projects of the public sector, mainly in infra-structure, are expected to bring public fixed investment to about 10 percentof GDP during 1976-77. The government's proposed investment plan (includingEl Cajon) would raise this ratio to close to 12 percent during 1977-80. Thedevelopment strategy outlined in this report involves a public investmentlevel which does not exceed some 10 percent of GDP. Even this scaled-downpublic investment program will probably imply a reduction in private invest-ment from about 15-16 percent in recent years to about 12 percent through1981. It is doubtful that the economy can expand even at the modest rateprojected in this report if private investment falls short of that level.Therefore, an increase in public investment beyond 10 percent of GDP may wellhave detrimental effects on growth and exports. Furthermore, a public invest-ment program of about 12 percent of GDP for several years would require apublic savings effort implying an unrealistic increase in taxes or a reduc-tion in essential current expenditures. Finally, it is doubtful whetherexternal loans needed to achieve these investment levels would be available.
166. It is clear that slow yielding basic infrastructure investments willcontinue to absorb a considerable share of public resources. The provisionof a modicum of social services, of additional major highways and of the powerneeded in the country are imperative. Yet the growth objective and theconstraints to the investment capacity suggest that greater efforts mustbe made to increase the productivity of past and new investments. This isthe reason for the increasing emphasis placed in the suggested public invest-ment program on the agricultural, forestry and tourism sectors and on theconstruction of feeder roads. (See Chapter III above.)
167. The largest single item in the government program is the US$400million El Cajon hyroelectric project, the expenditures for which wouldaverage more than 4 percent of GDP during the proposed 1977-81 constructionperiod. If, as it appears at present, its execution would require substantialreductions or postponements of projects in other sectors, it would be con-siderably more difficult to raise the rate of economic growth and achieve othergovernment objectives. The analysis in this report suggests that an investmentlevel in power of close to US$200 million during 1976-81 would free resourcesfor investment in other sectors where there are no ready alternatives to in-vestments proposed in Chapter III. The feasibility of alternative investmentsin power is currently being explored by the Power Company in conjunction withthe updating of the El Cajon feasibility study, and it is expected that suffi-cient information for a decision will be available by the end of 1976.
- 67 -
168. In sum, the central issue is whether the economy can be lifted outof its long stagnation, so that living standards can be gradually improved.On the basis of current export prospects and feasible investment levels GDPmay be expected to grow at about 4.6 percent per year, or 1.6 percent percapita, during 1976-81. Investment will be constrained by low domesticsavings, limits on the expected availability of foreign capital and by thegrowing burden of external debt service after 1980. If the country is togrow and maintain creditworthiness, emphasis will have to be placed on moreproductive investments than in the past, especially in projects with goodexport potential, and public investment in infrastructure will have to bekept within limits. Ongoing public infrastructure investment is at an all-time high. The most important choice now open to the Government in settingits investment priorities is between the US$400 million El Cajon high archdam or a number of projects in areas such as feeder roads, agriculture orforestry combined with a smaller investment in power. The requirements ofagricultural development and the need to improve the balance-of-paymentsposition in the 1980's imply that projects in agriculture and forestry mustbe carried out as rapidly as possible, which would leave close to US$200million for investment in power during 1976-81. If in addition to the publicinvestment in export-oriented activities a major effort is made to directand stimulate private investment in foreign exchange earning projects, eco-nomic growth could be accelerated further in the 1980's and the country couldbe expected to remain creditworthy over the longer term.
STATISTICAL APPENDIX
Table Number
I. POPULATION AND EMPLOYMENT
1.1 Mid-Year Population and Its Growth, 1925-741.2 Urban and Rural Censal Population by Department, 1961, 19741.3 Economically Active Population by Sector, 1960-74
II. NATIONAL ACCOUNTS
2.1 Expenditure on the Gross Domestic Product, Current Prices, 1925-752.2 Expenditure on the Gross Domestic Product, 1966 Prices, 1925-752.3 Gross Domestic Product at Factor Cost by Industrial Origin, Current
Prices, 1925-742.4 Gross Domestic Product at Factor Cost by Industrial Origin, 1966
Prices, 1950-742.5 Investment and Its Financing, 1950-752.6 Distribution of National Income, 1950-722.7 Select National Accounts Data, 1967-75, and Projections, 1976-81
III. BALANCE OF PAYMENTS AND EXTERNAL TRADE
3.1 Balance of Payments, 1950-753.2 Value, Volume and Unit Value of Principal Exports, 1965-743.3 Summary of Merchandise Imports, 1960-743.4 Terms of Trade, 1967-743.5 Balance of Payments, 1974-813.6 Import Detail, 1974-813.7 Export Detail, 1974-813.8 Direction of Trade, 1950-743.9 Trade with Central America, 1960-743.10 Exports to Central America and the Rest of the World, 1967-743.11 Exports of Manufactures, 1960-723.12 Imports of Manufactures, 1960, 1970, 1972
IV. EXTERNAL DEBT
4.1 External Public Debt Outstanding as of December 31, 1974,byCreditor. Debt Repayable in Foreign Currency.
4.2 External Public Debt Outstanding as of December 31, 1974,Trans-actions. Debt Repayable in Foreign Currency.
4.3 External Public Debt Outstanding as of December 31, 1974,byCreditor. Debt Repayable in Local Currency.
4.4 External Public Debt Outstanding as of December 31, 1974,Trans-actions. Debt Repayable in Local Currency.
-2-
Table Number
4.5 Commitments and Disbursements of External Public Debt, 1975-814.6 External Public Debt Outstanding as of December 31, 1965 and 1974
V. PUBLIC SECTOR FINANCES
5.1 Institutional Classification of the Public Sector5.2 Public Sector Operations, 1960-815.3 Central Government Current Revenue, 1960-815.4 Central Government Expenditure by Economic Classification, 1960-745.5 Central Government General Administration Current Expenditures by
Major Function, 1960-745.6 Summary of Public Sector Intra-Sectoral Transfers, 1960-815.7 Summary Transactions of Major Public Entities, 1960-815.8 Financing of Public Sector Capital Expenditures, 1960-815.9 Public Fixed Investment, Actual 1974, Estimated 1975, and Planned
1976-81 (Including El Cajon)5.10 Scaled Down Public Fixed Investment, 1976-815.11 Public Fixed Investment by Sector, 1965-81
VI. MONEY AND CREDIT
6.1 Summary Accounts of the Banking System, 1960-756.2 Financing Capacity of the Banking System, 1965-756.3 Net Changes in the Assets and Liabilities of the Banking System, 1966-756.4 Distribution of Bank Credit to the Private Sector, 1960-756.5 Banking System Distribution of New Loans, 1965-746.6 New Loans of the Banking System to the Industrial Sector, 1960-746.7 Banking System Interest Rates6.8 New Industrial Loans by Term, 1969-72
VII. AGRICULTURE
7.1 Agricultural Production, Selected Products, 1952-757.2 Population and Agricultural Production Indices, 1952-757.3 Projected Production, Domestic Consumption and Exports of Pine, 1975-857.4 Farm Units by Size and Area
VIII. INDUSTRY
8.1 Gross Value Added in Manufacturing, 1960-748.2 Gross Domestic Product and Value Added in Manufacturing, 1960-748.3 Gross Value of Industrial Production, 1960-738.4 Share of Value Added in Gross Value of Production, 1960-738.5 Employment and Productivity, 1965, 1970, 19728.6 Exemptions Granted Under the Industrial Development Law8.7 Fiscal Incentive Contracts, 1960-758.8 Fiscal Incentive Contracts by Sector, 1971-75
-3-
Table Number
8.9 Import Duty Exemptions by Manufacturing Subsector, 1962-748.10 Value of Import Duty and Income Tax Exemptions in Manufacturing, 1960-748.11 Import Dependence of the Manufacturing Sector, 1962, 1965, 1971
IX. SOCIAL SECTORS
9.1 General Consumer Price Index by Groups, 1967-759.2 Monthly Household Incomes and Affordability of Housing by Income and
Location9.3 Characteristics of Housing Stock, 19749.4 Health Indicators in Selected Latin American Countries9.5 Hospital Services and Their Utilization in Selected Latin American
Countries
X. EDUCATION
10.1 Educational Profile of the Labor Force of 10 or More Years of Age,1961, 1974
10.2 Educational Enrollment, 197510.3 Enrollments and Recurrent Expenditure, 1968, 1973, 198010.4 Efficiency Indicators10.5 Distribution of Primary Schools by Number of Grades Offered: Urban
and Rural, 197410.6 Enrollment and Output - University Education, 197410.7 Government Education Expenditure, 1975
Table 1.1: HONDURAS: MID-YEAR POPULATION- AND ITS GRnWTH
Year Mid-Year Population Annual Growth(thousands) Rate (%)
1925 863.0
1930 949.O1935 l,0h3.O 1.91940 1,147.01945 1,262.1
1950 1,429.3 2.5
1951 1,473.41952 1,518.91953 1,565.81954 1,614.21955 1,664.1 3.11956 1,715.51957 1,768.41958 1,823.11959 1,879.h1960 1,937.41961 1,995.5
1962 2,048.51963 2,102.91964 2,158.81965 2,216.11966 2,274.91967 2,335.h 2.71968 2,397.41969 2, 461.01970 2,526.41971 2,593.51972 2,662.41973 2,733.11974 2,805.6
1/ These figures do not refleot the decrease in population which resultedfrom the Honduras-El Salvador war in 1969.
Source: CELADE, Demographio Bulletins; UN Demographic Yearbook; Honduras,Direcci6n General de Estadistica y Censos: Cifras PreliminaresCenso Naoional de Poblaci6n y Vivienda, Enero, 1975; and missionestimates.
Table 1.2: HONDURAS: URBAN AND RURAL CENSAL POPULATION BY DEPARTMENT
Department 17 - IV - 1961 Census 6 - III - 1974 Census 1/Total Urban 2/ % Urban Rural Total Urban 3/ % Urban Rural
TOTAL 1,884,765 437,818 23.2 1,446,947 2,653,857 824,994 31.1 1,828,863
Atlantida 92.914 39,645 42.7 53,269 148,440 57,850 34.o 90,590Col6n 41,904 4,499 10.7 37,405 77,239 9,090 11.8 68,149Comayagtfa 96,442 144,66 15.0 81,976 135,455 35,567 26.3 99,888Copan 126,183 12,241 9.7 113,942 151,331 28,022 18.5 123,309Cortes 200,099 106,992 53.5 93,107 373,629 219,038 58.6 154,591Choluteoa 149,175 17,933 12.0 131,242 192,145 34,440 17.9 157,705El Paralso 106,823 13,770 12.9 93,053 140,840 18,086 12.8 122,754Francisco Morazan 284,428 140,375 49.4 144,053 451,778 286,434 63.4 165,344Gracias a Dios 10,905 0 0.0 10,905 21,079 0 0.0 21,079Intibuca 73,138 6,027 8.2 67,111 81,685 8,191 10.0 73,494Islas de la Bahia 8,961 2,844 31.7 6,117 13,227 0 0.0 13,227La Paz 60,600 6,533 10.8 54,067 65,390 9,1428 14.4 55,962Lempira 111,546 1,854 1.7 109,692 127,465 2,580 2.0 124,885Ocotopeque 52,540 5,702 10.9 46,838 51,161 6,623 12.9 44,538Olancho 110,744 14,048 12.7 96,696 151,923 23,738 15.6 128,185Santa Barbara 146,909 17,101 11.6 129,808 185,163 23,027 12.4 162,136Valle 80,907 8,119 10.0 72,788 90,954 17,611 19.4 73,343Yoro 130,547 25,669 19.7 104,878 194,953 45,269 23.2 149,684
1/ Preliminary.2/ Refers to looalities with 1,000 or more inhabitants having essentially urban characteristics.3/ Refers to loealities with 2,000 or more inhabitants having essentially urban characteristics.
Source: Honduras, Dirreecion General de Estadistica y Censos; Censo Naoional de Poblaci6n y Vivienda, Diciembre 1965and Cifras Preliminares Censo Nacional de Poblaci6n y Vivienda, Enero 1975.
Table 1.3: HONDURAS: ECONOMICALLY ACTIVE POPULATION BY SECTOR
(Thousands)
1960 1965 1970 1974
Total Labor Force 610.6 678.1 780.7 879.8
Agriculture 1/ 407.3 444.8 509.0 566.0Mining 1.8 2.0 2.3 2.8Manufacturing 47.6 54.2 64.8 77.1Construction 12.2 14.2 17.2 20.4Electricity, gas and water 1.2 2.7 3.9 18.9Transportation and communication 8.5 11.5 14.1 )Services 132.0 148.7 169.4 194.6
Total employed 574.o 636.7 718.2 721.4Total unemployed 36.6 41.4 62.5 158.4 2/
(As percentage of total labor force)
Agriculture 1/ 66.7 65.6 65.2 64.3Mining 0.3 0.3 0.3 0.3Manufacturing 7.8 8.0 8.3 8.8Construction 2.0 2.1 2.2 2.3Electritity, gas and water 0.2 0.4 0.5 t 2.2Transportation and communication 1.4 1.7 1.8 JServices 21.6 21.9 21.7 22.1
Total employed 94.o 93.9 92.0 82.0Total unemployed 6.0 6.1 8.0 18.0 2/
Labor force as percentage oftotal population 30.6 30.6 30.9 31.4
1/ Includes silviculture, fisheries and hunting.2/ These figures include the effects on unemployment of Hurricane Fifi.
Source: Planning Council, CELADE and mission estimates.
Page 1 of 2Table 2.1: HONDUEAS: EXPENDITURE ON THE GROSS DOMESTIC PRODUCT
(In millions of current lempiras)
1925 1930 1935 1940 1945 1950 1955 1960
Consumption 108.4 126.8 123.1 141.5 220.7 355.5 482.3 588.8Private consumption 3 83 116.0 T T 130.0 2 320.7 429.1 514.General government consumption 10.1 10.8 10.4 11.5 15.8 26.8 53.2 74.3
Gross Domestic Investment 8.8 15.3 14.8 16.0 28.9 54.2 83.9 93.3Gross fixed investment 7.2 13.0 12.1 11 2.1 7 7b.3 B72Change in stocks 1.6 2.3 2.7 0.9 4.8 5.4 5.6 9.1
Resource Balance 29.7 37.5 25.5 27.7 27.2 42.1 -17.3 -10.8Exports of goods and
non-factor services 56.2 71.0 49.7 53.0 66.0 124.4 113.5 144.oImports of goods andnon-factor services 26.5 33.5 24.2 25.3 38.8 82.3 130.8 154.8
GDP at Market Prices i46.9 179.6 163.4 185.2 276.8 451.8 548.9 671.3Annual growth rate (%) ... 4.1 . -1.9 . 2.5 . 8.4 .. 10.3 . .0. 4.1.
Net Factor Income from Abroad -36.0 -36.5 -22.5 -26.1 -29.5 -41.4 2.3 17.0
GNP at Market Prices 110.9 143.1 14 0.9 159.1 247.3 41o.4 551.2 688.3Annual growth rate(%) ... 5.2 . -0.3 . 2.5 . 9.2 . 10.7 .... 6.1 .. 4.5.
(As percentage of GDP)
Consumption 73.8 70.6 75.3 76.4 79.7 78.7 87.9 87.7Private consumption 69 6. 69.0 70.2 74. 7 7 76.6General government consumption 6.9 6.0 6.3 6.2 5.7 5.9 9.7 11.1
Gross Domestic Investment 6.o 8.5 9.1 8.6 10.4 12.0 15.3 13.9Gross fixed investment 4.9 7.2 0 7 o.7 lO.o 12.5Change in stocks 1.1 1.3 1.7 0.5 1.7 1.2 1.0 1.4
Resource Balance 20.2 20.9 15.6 15.0 9.8 9.3 -3.2 -1.6Exports of goods andnon-factor services 38.2 39.5 30.4 28.6 23.8 27.5 20.6 21.5
Imports of goods andnon-factor services 18.0 18.6 14.8 13.6 14.0 18.2 23.8 23.1
GDP at Market Prices 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Page 2 of 2Table 2.1: HONDURAS: EXPENDITORE ON THE GROSS DOMESTIC PRODUCT
(In millions of current lempiras)
1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1/ 1975 1/
Consumption 588.8 622.6 656.8 711.1 801.2 864.0 939.5 985.3 1,069.9 1,115.8 1 212.7 1 278.2 1 354 1 1,486.6 1 690.5 1 801.4Private consumption 514 . 5 5 573.5 623.3 761 .o o 9 4 1 967. 1,0 1,0 6 1,i16. 1,300.0 '1,4 75. 1 ,562.1General government consumption 74.3 82.1 83.3 87.5 102.1 102.2 113.9 120.2 128.8 148.5 166.2 174.6 188.1 186.6 214.6 239.3
Gross Domestic Investment 93.3 86.8 115.5 130.9 133.6 148.7 176.4 235.1 239.3 258.8 312.5 249.9 263.4 329.8 502.1 461.3Gross fixed investment B772 77.1 l 06.2 T 122. 6 1 32.3 1 59. 5 213. 3 2 4 4.5 2 73. 3 25 .7 24.3.7 240T7 7. -35 .4 l0 4 77.Change in stocks 9.1 9.7 9.3 9.2 11.0 16.4 16.9 21.8 12.6 114.3 39.3 -5.8 14.6 20.1 98.7 -10.9
Resource Balance -10.8 3.0 3.2 -21.6 -20.8 4.6 -16.0 -24.2 -15.6 -38.6 -95.6 -12.6 16.8 -18.4 -256.o -237.6Exports of goods and
non-factor services 144.0 159.2 174.6 181.4 205.6 277.2 314.8 341.2 393.4 373.8 393.0 436.0 472.8 589.0 655.0 625.7Imports of goods and
non-factor services 154.8 165.2 171.4 203.0 226.4 272.6 330.8 365.4 409.0 412.4 488.6 448.6 456.o 607.4 911.0 863.3
GDP at Market Prices 671.3 712.4 775.5 820.4 914.0 1,017.3 1,099.9 1,196.2 1,293.6 1,336.0 1,429.6 1,515.5 1 634.3 1,798.0 1,936.6 2 025 1Annual growth rate (%) 6.1 d. 5.o 11. 4 1. o 8 o 7.0 6.0 10.0 7.7 1
Net Factor Income from Abroad 17.0 -2.0 -8.6 -12.0 -14.0 -26.2 -31.0 -42.4 -46.2 -37.2 -45.2 -49.4 -55.0 -66.4 -26.8 -76.5
GNP at Market Prices 688.3 710.4 766.9 808.4 900.0 991.1 1,068.9 1,153.8 1,247.4 1,298.8 1,3814.4 1 466.1 1,579.3 1,731.6 1 909.8 1 948.6Annual growth rate (%) 3.2 o. 10.1 7ol 4. 1 6.7 7 . '7 9.6 10.3 2.0
(As percentage of GDP)
Consumption 87.7 87.4 84.7 86.7 87.7 84.9 85.4 82.4 82.7 83.5 84.8 84.3 82.9 82.7 87.3 88.9Private consumption 73 7 7fi 74. 7 7T 77 7L 73 72. 77 T T72.3 72 77.1General government consumption 11.1 11.5 10.7 10.7 11.2 10.0 10.3 10.1 10.0 11.1 11.6 11.5 11.5 10.4 11.1 11.8
Gross Domestic Investment 13.9 12.2 14.9 15.9 14.6 14.6 16.0 19.6 18.5 19.4 21.9 16.5 16.1 18.3 25.9 22.8Gross fixed investment l.o 2 2 T70 TT i I7T 16.9 i2Change in stocks 1.4 1.4 1.2 1.1 1.2 1.6 1.5 1.8 1.0 1.1 2.8 -0.4 0.9 1.1 5.1 -0.5
Resource Balance -1.6 0.4 0.4 -2.6 -2.3 0.5 -1.4 -2.0 -1.2 -2.9 -6.7 -0.8 1.0 -1.0 -13.2 -11.7Exports of goods and
non-factor services 21.5 22.3 22.5 22.1 22.5 27.2 28.6 28.5 30.4 28.0 27.5 28.8 28.9 32.8 33.8 30.9Imports of goods and
non-factor services 23.1 21.9 22.1 24.7 24.8 26.7 30.0 30.5 31.6 30.9 34.2 29.6 27.9 33.8 47.0 42.6
GDP at Market Prices 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
1/ Preliminary.
Source: Central Bank and mission estimates.
Page 1 of 2
Table 2.2: HONDURAS: EXPENDITURE ON THE GROSS DOMESTIC PRODUCT
(In millions of 1966 lempiras)
1925 1930 1935 1940 1945 1950 1955 1960
Consumption 253.2 295.2 285.6 316.6 378.1 489.5 619.o 705.3Private consumption 231.3 272.2 -27= 292.2 346.1 555.2 617.5General government consumption 21.9 23.0 23.4 24.4 32.0 41.1 63.8 87.8
Gross Domestic Investment 21.1 26.7 31.1 32.0 41.7 71.6 98.7 104.4Gross fixed investment 15. 25.1 257 20.1 3. 6. 91.7 93.3Change in stocks 5.7 1.6 5.4 3.9 2.1 7.2 6.9 11.1
Resource Balance 58.7 74.6 51.0 47.9 38.4 42.9 -38.8 7.2Exports of goods and
non-factor services n.a. n.a. n.a. n.a. n.a. 150.8 119.6 167.4Imports of goods and
non-factor services n.a. n.a. n.a. n.a. n.a. 107.9 158.4 160.2
GDP at 1966 Market Prices 333.0 396.5 367.7 396.5 458.2 604.o 678.9 816.9Annual growth rate (%) ... 3.5 . -1.5 . 1.5 . 2.9 .. 5.7 . 2.4 .. 3.8....
Net Factor Income From Abroad -81.1 -77.9 -50.4 -55.6 -48.6 -55.0 2.8 18.5
GNP at 1966 Market Prices 251.9 318.6 317.3 340.9 409.6 549.0 681.7 835.4Annual growth rate (%) ... 4.8 .... 1 . 1.4 . 3.7 . 6.0 . 4.4 . 4.2.
(As percentage of GDP)
Consumption 76.1 74.5 77.7 79.8 82.5 81.0 91.2 86.3Private consumption 9.5 6c7 7YJ 7T7 74.2 olo 77General government consumption 6.6 5.8 6.4 6.1 7.0 6.8 9.4 10.7
Gross Domestic Investment 6.3 6.7 8.4 8.1 9.1 11.9 14.5 12.8Gross fixed investment 1T 6.7 7.0 BW7 7 10T.7 13.5T I1.Change in stocks 1.7 0.4 1.4 1.0 4.5 1.2 1.0 1.4
Resource Balance 17.6 18.8 13.9 12.1 8.4 7.1 -5.7 0.9Exports of goods and
non-factor services n.a. n.a. n.a. n.a. n.a. 25.0 17.6 20.5Imports of goods andnon-factor services n.a. n.a. n.a. n.a. n.a. 17.9 23.3 19.6
GDP at Market Prices 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Page 2 of 2
Table 2.2: HONDURAS: EXPENDITURE ON THE GROSS DOMESTIC PRODUCT
(In millions of 1966 lempiras)
1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1/ 1975 V
Consumption 705.3 733.4 757.2 798.6 859.9 900.2 939.5 959.5 1,025.7 1,041.5 1,086.7 1,117.3 1,133.0 1,208.1 1 221.9 1,207.8Private consumption 617.5 641.9 664.8 704.5 752.4 794.9 3 B o43. 1 907.4 910.2 948.0 91.2 994. 1,075.4 1 1,062.7General Government consumption 87.8 91.5 92.4 94.1 107.5 105.3 113.9 116.2 118.3 131.3 138.7 136.1 138.2 132.7 139.9 145.1
Gross Domestic Investment 104.4 94.2 124.3 143.0 1143.3 155.6 176.4 229.5 229.2 231.7 275.9 215.5 211.9 254.5 334.1 275.0Gross fixed investment 93.3 82. 113.o 1 131.7 138 8 15. 2217.2 21 . 240.5 220.6 I 7f 2 3 . 2;7Change in stocks 11.1 11.3 10.5 10.2 11.6 16.8 16.9 21.1 12.0 13.3 35.4 -5.1 12.5 16.3 74.7 -7.o
Resource Balance 7.2 5.8 -4.4 -33.7 -43.5 -12.4 -16.0 -29.5 -22.6 -30.7 -74.3 0.2 37.6 -9.6 -95.5 -29.5Exports of goods andnon-factor services 167.4 169.4 174.9 181.6 197.9 270.4 314.8 338.5 381.2 358.4 356.6 387.6 402.7 411.3 397.7 380.4Imports of goods andnon-factor services 160.2 163.6 179.3 215.3 241.4 282.8 330.8 368.0 403.8 389.1 430.9 387.4 365.1 420.9 493.2 409.9
GDP at 1966 Market Prices 816.9 833.4 877.1 907.9 959.7 1,043.4 1,099.9 1,159.5 1,232.3 1,242.5 1,288.3 1,333.0 1,382.5 1 453 0 1 460 5 1,453.3Annual growth rate (%) -. 0 3.5T 5.7 8.7 5.4T 3.7 0 3.7 3-0.5
Net Factor Inccne From Abroad 18.5 -2.1 -9.1 -12.9 -15.5 -27.7 -31.0 -42.8 -45.7 -34.8 -39.5 -42.2 143.1 -44.6
-17.7 -37.1
GNP at 1966 Market Prices 835.4 831.3 868.o 895.0 944.2 1,015.7 1,068.9 1,116.7 1,186.6 1,207.7 1,248.8 1,290.8 1,339.4 1,408.4 11442.8 11416 2Annual growth rate (%) -0.5 4.4 3.1 5.5 7.6 5.2 . - -3.4 2.4 -: .
(As percentage of GDP)
Consumption 86.3 88.0 86.3 88.0 89.6 86.3 85.4 82.7 83.2 83.8 84.4 83.8 82.0 83.2 83.7 83.1Private consumption 77 77. 77.7 77W 77 77= 77W 77W 7716 77W 777 777 7T7 77U 77 737.General Government consumption 10.7 11.0 10.5 10.4 11.2 10.1 10.3 10.0 9.6 10.6 10.8 10.2 10.0 9.2 9.6 10.0
Gross Domestic Investment 12.8 11.3 114.2 15.7 14.9 14.9 16.0 19.8 18.6 18.7 21.4 16.2 15.3 17.5 22.9 18.9Gross fixed investment 9 .7 -37 TIv 7 Il7T 17.7 77W IB 7W 177 177 I-W 77 177 77 19.5Change in stocks 1.4 1.4 1.2 1.1 1.2 1.6 1.5 1.8 1.0 1.1 2.7 -0.4 0.9 1.1 5.1 -0.6
Resource Balance 0.9 0.7 -0.5 -3.7 -4.5 -1.2 -1.4 -2.5 -1.8 -2.5 -5.8 0.0 2.7 -0.7 -6.6 -2.0Exports of goods andnon-factor services 20.5 20.3 19.9 20.0 20.6 25.9 28.6 29.2 30.9 28.8 27.7 29.1 29.1 28.3 27.2 26.2Imports of goods andnon-factor services 19.6 19.6 20.4 23.7 25.1 27.1 30.0 31.7 32.7 31.3 33.5 29.1 26.4 29.0 33.8 28.2
GDP at Market Prices 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
1/ Preliminary.
3ource: Central Bank and mission estimates.
Page 1 of 2
Table 2.3: HONDURAS: GROSS DCMESTIC PRODUCT AT FACTOR COST BY INDUSTRIAL ORIGIN
(In millions of current lempiras)
1925 1930 1935 1940 1945 1950 1955 1960
Agriculture, silviculture,fisheries and hunting 80.6 96.0 82.6 93.0 136.5 208.2 204.7 227.0
Mining 2.7 1.9 3.5 3.3 3.5 8.1 6.1 10.3Construction 0.3 0.7 0.4 0.8 3.1 17.0 21.5 24.0Manufacturing 10.6 11.7 14.3 16.5 22.6 34.7 51.5 76.1Electricity, gas and water 0.4 0.4 0.5 0.7 1.0 0.6 1.7 4.2Transportation and
communications 7.9 10.1 11.0 10.2 15.8 25.8 33.4 42.0Trade 14.7 20.5 13.6 15.0 32.1 44.7 63.7 80.7Banking, insurance and real
estate 0.4 0.6 o.6 0.7 1.3 4.6 6.0 10.3Ownership of dwellings 8.7 11.8 13.4 18.2 24.1 28.5 39.5 51.5Services 5.9 7.5 7.9 9.6 114.7 38.0 51.5 56.1Public administration and
defense 5.4 5.9 5.4 5.8 6.4 10.7 18.8 24.6
GDP at factor cost 137.6 167.1 153.2 173.8 261.1 420.9 498.4 606.8Annual growth rate (%) ... 4.0 . -1.7 . 2.6 . 8.5 10.0 . 3.4 . 4.0....
Net indirect taxes 9.3 12.5 10.2 11.4 15.7 30.9 50.5 64.5Annual growth rate(%) ... 6.1 . -4.0 . 2.2 . 6.6 . 14.5 . 10.3 . 5.0....
GDP at market prices 146.9 179.6 163.4 185.2 276.8 451.8 548.9 671.3
(As percentage of GDP at factor cost)
Agriculture, silviculture,fisheries and hunting 58.6 57.5 53.9 53.5 52.3 49.5 41.1 37.4
Mining 2.0 1.1 2.3 1.9 1.3 1.9 1.2 1.7Construction 0.2 0.4 0.3 0.5 1.2 4.0 4.3 4.0Manufacturing 7.7 7.0 9.3 9.5 8.7 8.2 10.3 12.5Electricity, gas and water 0.3 0.2 0.3 0.4 0.4 0.2 0.3 0.7Transportation and
communications 5.7 6.0 7.2 5.9 6.1 6.1 6.7 6.9Trade 10.7 12.3 8.9 8.6 12.3 10.6 12.8 13.3Banking, insurance and real
estate 0.3 0.4 0.4 0.4 0.5 1.1 1.2 1.7Ownership of dwellings 6.3 7.1 8.7 10.5 9.2 6.8 7.9 8.5Services 4.3 4.5 5.2 5.5 5.6 9.0 10.4 9.2Public administration and
defense 3.9 3.5 3.5 3.3 2.4 2.6 3.8 4.1
GDP at factor cost 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Page 2 of 2
Table 2.3: HONDURAS: GROSS DCMESTIC PRODUCT AT FACTOR COST BY INDUSTMIAL ORIGIN
(In millions of current lesmpiras)
1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1/
Agriculture, silviculture,fisheries and hunting 227.0 251.2 274.5 282.3 315.2 370.7 397.8 423.1 448.o 437.2 446.7 474.0 515.5 555.5 564.oMining 10.3 10.8 12.9 14.4 15.5 18.6 18.8 24.9 30.0 29.1 29.1 27.7 30.4 44.2 61.2Construction 24.0 23.0 32.1 33.0 32.7 34.4 34.5 52.4 57.6 58.1 64.6 61.7 60.2 73.0 91.3Manufacturing 76.1 80.1 88.2 95.1 106.4 115.0 125.9 136.2 151.0 164.7 180.5 197.5 218.4 243.5 261.6
Electricity, gas and water 4.2 4.8 5.2 5.1 8.2 9.3 9.3 12.7 14.9 16.2 17.7 19.8 23.1 24.9 27.3Transportation and
communications 42.0 43.0 44.2 49.2 55.6 59.5 63.1 71.0 74.6 79.8 85.9 92.8 101.3 113.2 125.1Trade 80.7 83.2 88.4 96.9 106.1 116.5 134.5 140.7 153.1 163.9 171.1 175.4 183.8 196.7 207.5Banking, insurance and realestate 10.3 10.4 11.6 13.0 15.7 19.3 21.4 22.3 27.5 31.8 37.3 40.8 46.6 52.5 59.1Ownership of dwellings 51.5 55.5 59.9 64.6 69.8 69.4 71.7 77.5 83.8 90.8 98.4 106.7 115.7 125.4 135.8Services 56.1 60.5 65.3 70.4 77.8 82.6' 94.7 96.2 99.0 104.3 112.5 127.0 135.3 144.3 154.4Public acdministration anddefense 24.6 24.9 25.9 26.8 29.6 30.7 33.3 38.2 40.9 42.9 46.8 49.7 53.2 56.8 61.1
GDP at factor cost 606.8 647.4 708.2 750.8 832.6 926.0 1 005.0 1,095.2 1,180.4 1 218.8 1,290.6 1 373.1 11483.5 1,630.0 1,748.4Annual growth rate (%) - 7 9.4 6 .0 10.9 11.2 9.0T 7 . :!;3.3 5. t '8.0 9.9 7.3
Net indirect taxes 64.5 65.0 67.3 69.6 81.4 91.3 94.9 101.0 113.2 117.2 139.0 142.4 150.8 168.0 188.2Annual growth rate (%) 0.8 3.5 3.4 17.0 12.2 3.9 6.4 12.1 3.5 18.6 2.4 5.9 11.4 12.0
GDP at market prices 671.3 712.4 775.5 820.4 914.0 1,017.3 1,099.9 1,196.2 1,293.6 1,336.0 1,429.6 1,515.5 1,634.3 1,798.0 1,936.6
(As percentage of GDP at factor cost)
Agriculture, silviculture,fisheries and hunting 37.4 38.8 38.8 37.6 37.9 40.0 39.6 38.6 38.0 35.9 34.6 34.5 34.7 34.1 32.2Mining 1.7 1.7 1.8 1.9 1.9 2.0 1.9 2.3 2.5 2.4 2.2 2.0 2.1 2.7 3.5Construction 4.0 3.6 4.5 4.4 3.9 3.7 3.4 4.8 4.9 4.8 5.0 4.5 4.1 4.5 5.2Manufacturing 12.5 12.4 12.5 12.7 12.8 12.4 12.5 12.4 12.8 13.4 14.0 14.4 14.7 114.9 15.0Electricity, gas and water 0.7 0.7 0.7 0.7 1.0 1.0 1.0 1.2 1.3 1.3 1.4 1.4 1.6 1.5 1.5Transportation andcommunications 6.9 6.6 6.2 6.5 6.7 6.5 6.3 6.5 6.3 6.6 6.7 6.8 6.8 6.9 7.2Trade 13.3 12.9 12.5 12.9 12.7 12.6 13.4 12.8 13.0 13.5 13.3 12.8 12.4 12.1 11.9Banking, insurance and realestate 1.7 1.6 1.6 1.7 1.9 2.1 2.1 2.0 2.3 2.6 2.9 3.0 3.1 3.2 3.4Ownership of dwellings 8.5 8.6 8.5 8.6 8.4 7.5 7.1 7.1 7.1 7.4 7.6 7.8 7.8 7.7 7.8Services 9.2 9.3 9.2 9.4 9.3 8.9 9.4 8.8 8.4 8.6 8.7 9.2 9.1 8.9 8.8Public administration anddefense 4.1 3.8 3.7 3.6 3.5 3.3 3.3 3.5 3.4 3.5 3.6 3.6 3.6 3.5 3.5
GDP at factor cost 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
1/ Preliminary.
Source: Central Bank and mission estimates.
Table 2.4: HONDURAS: GROSS DOMESTIC PRODUCT AT FACTOR COST BY INDUSTRIAL ORIGIN
(In millions of 1966 lempiras)
1950 1955 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 19714 1/
Agriculture, silviculture,fisheries and hunting 247.2 213.4 258.7 275.6 288.7 299.2 317.8 367.9 397.8 413.3 443.1 425.8 429.5 456.1 470.0 489.5 475.7
Mining 13.2 8.7 12.8 13.7 15.1 15.8 15.9 18.4 18.8 23.4 26.3 24.8 24.4 24.2 26.0 33.0 39.7Construction 27.0 30.9 31.1 27.9 39.0 38.5 36.9 35.6 34.5 50.3 53.3 51.8 54.3 50.2 45.5 52.0 60.5Manufacturing 53.8 76.3 105.5 104.7 108.5 112.0 116.8 121.0 125.9 132.9 139.9 144.1 152.1 160.1 172.9 186.9 186.2Electricity, gas and water 0.9 2.2 4.8 5.3 5.6 5.3 8.2 9.2 9.3 11.2 12.9 14.9 14.4 13.2 14.6 15.2 16.2Transportation and
dommunications 37.8 46.8 55.5 55.3 55.9 58.8 61.0 63.9 63.1 67.2 69.7 71.2 71.2 74.9 78.8 83.4 83.7Trade 61.8 80.6 93.4 94.7 99.7 106.0 111.5 123.2 134.5 137.8 147.2 155.6 157.7 158.4 160.2 162.9 158.4Banking, insurance and real
estate 8.0 9.4 14.6 14.4 14.9 15.5 16.8 19.7 21.4 21.0 23.9 24.5 26.6 29.6 32.2 34.0 36.1Ownership of dwellings 41.6 51.2 58.9 62.1 65.5 69.1 73.0 71.0 71.7 75.8 80.1 84.9 89.9 95.4 101.2 103.7 106.3Services 56.9 72.6 72.8 75.9 79.2 82.2 85.6 88.9 94.7 92.8 93.0 100.3 106.6 110.3 115.9 117.5 115.7Public Administiation and
defense 14.4 24.3 30.3 27.8 28.9 28.5 30.7 31.0 33.3 35.9 35.1 35.6 36.4 35.1 37.6 39.2 39.6
GDP at 1966 factor cost 562.6 616.4 738.4 757.4 801.0 830.9 874.2 949.8 1,005.0 1,061.6 1,124.5 1,133.5 1163.1 1,207.8 1,254.9 1,317.3 1,318.1Annual growth rate () . ..1.8. .3.7.... -2. 6 5. B 3.7 5 .2 o . 6 5 . o 53 2.6 59O 3. 0.1
Net indirect taxes 41.. 62.5 78.5 76.0 76.1 77.0 85.5 93.6 94.9 97.9 107.8 109.0 125.2 125.2 127.6 135.7 142.4Annual growth rate (%) ... 8.6 .. 4.7.... -3.2 0.1 1.2 11.0 9.5 1.4 3.2 10.1 1.1 14.9 0.0 1.9 6.3 4.9
GDP at 1966 market prices 604.o 678.9 816.9 833.4 877.1 907.9 959.7 1,043.4 1,099.9 1,159.5 1,232.3 1,242.5 1,288.3 1,333.0 1,382.5 1,453 1,1460.5
(As percentage of GDP at factor cost)Agriculture, silviculture,
fisheries and hunting 43.9 34.6 35.0 36.4 36.o 36.o 36.4 38.7 39.6 38.9 39.4 37.6 36.9 37.8 37.4 37.2 36.1Mining 2.3 1.4 1.7 1.8 1.9 1.9 1.8 1.9 1.9 2.2 2.3 2.2 2.1 2.0 2.1 2.5 3.0Construction 4.8 5.0 4.2 3.7 4.9 4.6 4.2 3.7 3.4 4.7 4.8 4.6 4.7 4.1 3.6 3.9 4.6Manufacturing 9.6 12.4 14.3 13.8 13.5 13.5 13.4 12.7 12.4 12.5 12.4 12.7 13.1 13.3 13.8 14.2 14.1Electricity, gas and water 0.2 0.4 0.7 0.7 0.7 o.6 0.9 1.0 1.0 1.1 1.2 1.3 1.2 1.1 1.1 1.1 1.2Transportation and
communications 6.7 7.6 7.5 7.3 7.0 7.1 7.0 6.7 6.3 6.3 6.2 6.3 6.1 6.2 6.3 6.3 6.4Trade 11.0 13.1 12.6 12.5 12.4 12.8 12.7 13.0 13.4 13.0 13.1 13.7 13.6 13.1 12.8 12.4 12.0Banking, insurance and real
estate 1.4 1.5 2.0 1.9 1.9 1.9 1.9 2.1 2.1 2.0 2.1 2.2 2.3 2.5 2.6 2.6 2.7Ownership of dwellings 7.4 8.3 8.0 8.2 8.2 8.3 8.4 7.5 7.1 7.1 7.1 7.5 7.7 7.9 8.1 7.9 8.1Services 10.1 11.8 9.9 10.0 9.9 9.9 9.8 9.4 9.4 8.8 8.3 8.8 9.2 9.1 9.2 8.9 8.8Public administration and
defense 2.6 3.9 4.1 3.7 3.6 3.4 3.5 3.3 3.3 3.4 3.1 3.1 3.1 2.9 3.0 3.0 3.0
GDP at 1966 factor cost 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
1/ Prelininary.
Source: Central Bank.
Table 2.5: HOND[RAS: INVESTtENT AND ITS FINANCING
(In millions of current le1niras)
1950 1955 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1/ 1975 1/
INVESTMENT
Gross domestic investment Sh28 86.8 ll S.S 10 16 148.7 176.4 251.1 29.3 2S8. Z12.S 24 9.92.8Change in stocks -6 39.3
a1. 20.1 9.7 -10.9Gross fixed Lnvestment 48.8 78.3 84.2 77.1 106.2 121.7 122.6 132.3 159.5 213.3 226.7 244.5 273.2 255.7 248.8 309.7 403.4 472.2
Type of CaPital GoodsBualdangs 23.4 35.9 31.4 33.6 37.3 38.8 41.7 43.7 53.0 61.8 77.5 62.0 66.3 69.3 81.3 n.a. n.a. n.a.Other construction 11.6 20.9 17.8 13.9 29.2 27.7 24.8 26.6 24.5 54.7 50.7 67.1 77.3 70.4 55.4 n.a. n.a. n.a.Machinery and equipment 13.8 21.5 35.0 29.6 39.7 55.2 56.1 62.0 82.0 96.8 98.5 115.4 129.6 116.0 112.1 n.a. n.a. n.a.
Sector of InvestmentPrivate sector 41.6 63.9 65.0 57.8 73.4 90.2 98.3 108.3 132.3 173.1 178.4 159.1 178.8 184.8 192.9 224.3 269.2 320.4Public sector 7.2 14.4 19.2 19.3 32.8 31.5 24.3 24.o 27.2 40.2 48.3 85.4 94.4 70.9 55.9 85.4 134.2 151.8
INVESTHENT FINANCING
Gross domestic investment .2 836.8 1 15.5 133.6 18.7 176.1 2 3 5 .258.8 312.5 2 263. 4 329.8 502.1 61.3Gross national saving 542 68 99.5 87.8 110.1 97.3 2 127.1 129. 177 3. 1717 187.9 225.2 245-0 219.3 147.2General government saving 13.6 14. 12.3 9.0 20.9 o 20.6 . 36.. 4 2.2 30.6 33.7 28.5 16.8 n.e. n.a. n.a.Public corporations saving 2/ - - - - - - - - - - - - - - - - - -PrLvate saving 41.3 54.5 87.2 78.8 101.2 87.5 88.2 106.5 102.6 132.1 135.3 152.4 138.0 159.4 208.4 n.a. n.a. n.a.Current account balance 3/
(+ indicates deficit) -0.7 15.0 -6.2 -1.0 5.4 33.6 34.8 21.6 47.0 66.6 61.8 75.8 140.8 62.0 38.2 84.8 282.8 314.1Net exports of goods andnon-factor services 42.1 -17.3 -10.8 3.0 3.2 -21.6 -20.8 4.6 -16.0 -24.2 -15.6 -38.6 -95.6 -12.6 16.8 -18.4 -256.0 -237.6Net factor incase from abroad -41.4 2.3 17.0 -2.0 -8.6 -12.0 -14.0 -26.2 -31.0 -42.4 -46.2 -37.2 -45.2 -49.4 -55.0 -66.4 -26.8 -76.5
1/ Preliminary.2/ Included in private saving./ Excludes current transfers.
Source: Central Bank of Honduras and mission estimates.
Table 2.6: HONDURAS: DISTRIBUTION OF NATIONAL INCOME
(In millions of current lempsras)
1950 1955 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972
National Income 360.4 469.2 579.4 599.7 660.0 699.5 772.9 856.1 930.3 1,007.0 1,083.3 1,130.2 1,192.0 1,268.7 1,371.5
Wages and salaries 167.8 223.4 277.7 298.1 321.3 341.4 364.o 400.1 438.6 460.7 506.8 521.7 557.6 6114.8 675.8Profits of non-corporate enterprises 159.2 208.6 234.3 239.6 244.9 268.6 304.4 344.6 373.3 387.3 423.2 435.3 454.9 472.7 484.2Coroorate savines 1.1 1.5 15.3 5.8 31.7 22.7 32.9 34.6 30.6 5?.5 45.8 58.2 61.5 57.5 78.4Corporate incame tax 6.o 3.8 3.2 2.9 3.1 3.6 3.9 8.9 16.7 20.0 22.0 21.4 17.4 15.0 16.0Private property income 24.8 30.9 49.6 53.1 58.8 62.9 68.5 69.0 72.1 79.9 86.3 94.8 103.5 113.2 124.4Goverrment property income 1.8 2.1 2.4 3.5 L.2 4.3 4.5 3.9 4.9 8.7 6.6 7.8 9.2 10.6 11.8Less: interest on public debt 1/ - 0.4 2.3 2.4 2.9 3.0 4.1 3.6 4.0 4.4 4.7 5.5 7.6 10.4 13.3Less: interest on consumer debt 1/ o.6 0.7 o.8 0.9 1.1 1.0 1.2 1.4 1.9 2.7 2.7 3.5 4.5 4.7 5.8
(As percentage of national income)
Wages and salaries 46.6 47.6 47.9 49.7 48.7 48.8 47.1 46.7 47.2 45.7 46.8 46.2 46.8 48.5 49.3Profits of non-corporate enterprises 44.2 44.5 40.4 40.0 37.1 38.4 39.4 40.3 40.1 38.5 39.1 38.5 38.1 37.3 35.3Corporate savings 0.4 0.3 2.6 1.0 4.8 3.2 4.2 4.0 3.3 5.7 4.2 5.1 5.1 4.5 5.7Corporate incame tax 1.6 0.8 o.6 0.5 0.5 o.5 0.5 1.0 1.8 2.0 2.0 1.9 1.5 1.2 1.2Private property income 6.9 6.6 8.6 8.8 8.9 9.0 8.9 8.1 7.7 7.9 8.0 8.4 8.7 8.9 9.1Government property income 0.5 0.2 0.4 o.6 o.6 o.6 o.6 0.5 0.5 0.9 o.6 0.7 0.8 0.8 0.8
I/ Included in "private property income."
Source: Central Bank of Honduras and mission estimates.
Table 2.7: HONDURAS: SELECT NATIONAL ACCOUNTS DATA 1967-75 AND PROJECTIONS 1976-81
1967 1968 1969 1970 1971 1972 1973 1974 197561 1976 1977 1978 1979 1980 1981
(in millions of U.S. dollars at 1974 prices)
Gross Domestic Product 768.8 817.2 824.0 854.0 884.1 917.0 963.5 968.3 963.4 1,006.7 1,052.0 1,099.4 1,148.8 1,200.5 1,260.6Terms of Trade Adjustment 34.0 38.7 21.2 19.6 26.4 21.8 34.7 - -33.3 -9.6 0.7 -4.8 -17.8 -18.7 -18.0Gross Domestic Income 802.8 855.9 845.2 873.6 910.5 938.8 998.2 968.3 930.1 997.1 1,052.7 1,094.6 1,131.0 1,181.8 1,242.6
Imports of goods & n.f.s. 341.2 375.3 357.1 401.8 368.5 343.9 392.2 455.5 393.9 440.o 461.4 480.1 501.0 522.8 560.6Exports of goods & n.f.s 284.6 322.3 302.6 303.3 331.4 335.0 345.5 327.5 318.7 345.8 365.8 400.9 443.5 472.1 496.1Export Terms of Trade Adjustment 318.6 361.0 323.8 322.9 357.8 356.8 380.2 327.5 285.4 336.2 366.5 396.1 425.7 453.4 478.2Resource Gap 22.6 114.3 33.3 78.9 10.7 -12.9 12.0 128.0 108.5 103.8 94.9 84.o 75.3 69.4 82.4
Consumption 652.9 697.9 704.5 745.1 759.2 766.7 818.9 845.3 831.9 871.2 907.5 932.5 949.1 987.6 1,024.9Investmsent 172.5 172.3 174.0 207.4 162.0 159.2 191.3 251.1 206.7 229.8 240.1 246.2 257.3 263.7 300.1
Gross Domestic Savings 1)49.9 158.0 140.7 128.5 151.3 172.1 179.3 123.0 98.2 126.0 1)5.3 162.1 182.0 194.2 217.8
Memorandum Items (selected ratios)
Imports/GDP 44.4 45.9 43.3 47.1 41.7 37.5 40.7 47.0 40.9 43.7 43.9 43.7 43.6 43.5 44.5Exports/GDP 37.0 39.4 36.7 35.5 37.5 36.5 35.9 33.8 33.1 34.4 34.8 36.5 38.6 39.3 39.4
Consumption/GDY 81.3 81.5 83.4 85.3 83.4 81.7 82.0 87.3 89.4 87.4 86.2 85.2 83.9 83.6 82.5Investment/GDY 21.5 20.1 20.6 23.7 17.8 17.0 19.2 25.9 22.2 23.1 22.8 22.5 22.8 22.3 24.2
Gross Domestic Savings/GDY 18.7 18.5 16.6 14.7 16.6 18.3 18.0 12.7 10.6 12.6 13.8 114.8 16.1 16.4 17.5
1/ Estimate
Source: Mission estimates.
Table 3.1: HONDURAS: BALANCE OF PAY4ENTS
(millions of US dollars)
1950 1955 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1/
Exports of goods and non-factor services 62.2 56.7 71.8 79.5 87.2 90.6 102.7 138.7 157.4 170.6 196.7 186.9 196.5 218.0 236.4 294.5 327.5 312.9Merchandise f.o.b. 60.2 53.7 64.3 74.0 82.4 84.3 95.0 128.1 1144.3 155.8 180.8 170.7 178.1 197.0 213.5 268.2 297.5 281.4Non-factor services 2.0 3.0 7.5 5.5 4.8 6.3 7.7 10.6 13.1 14.8 15.9 16.2 18.4 21.0 22.9 26.3 30.0 31.5
Imports of goods and non-factor services 41.1 65.4 77.3 78.1 85.6 101.4 113.1 136.4 165.4 182.7 204.5 206.2 244.3 224.3 228.0 303.7 455.5 431.7Merchandise f.o.b. 34.7 55.2 65.4 66.3 73.8 88.3 94.7 113.2 138.0 152.0 169.4 169.7 203.4 177.6 176.5 243.6 384.0 367.6Non-factor services 6.4 10.2 11.9 11.8 11.8 13.1 18.4 23.2 27.4 30.7 35.1 36.5 40.9 46.7 51.5 60.1 71.5 64.1
Resource gap 21.1 -8.7 -5.5 1.2 1.6 -10.8 -10.4 2.3 -8.0 -12.5 -7.8 -19.3 -47.8 -6.3 8.4 -9.2 -128.0 -118.8Factor income, net 1.1 8T7 -1.0 -4. -6.0 _T7O h5 -7.0TT T 2 - T TW _T13.7 -27.5 -33.2 3.-1 -3. 2 -3
Receipts -- 3 7 0. 0.7 0.7 1.0 1.4 -T T1 lTT 2.27 T3 2.3 2. 3 2.4 34Payments 20.7 -0.5 -7.3 1.6 5.0 6.7 8.0 1
1i .11 17.6 23.9 25.2 21.3 24.9 27.0 29.9 37.1 17.5 42.9
Transfers, net -0.8 1.0 2.6 4.5 3.0 3.0 6.2 3.7 4.3 4.7 6.2 7.3 6.6 6.8 6.6 7.0 32.5 17.5CURRENT ACCOUNT BALANCE 0 ° 6 T7 T9 0.3 _3T -2 7 _77 77 _77 -2oT _306 T 7 =T 7W -100.9 -Mr
Private capital, net 2.6 2.2 -8.3 -6.8 -1.5 (.6 16.0 9.5 9.2 10.2 19.5 9.2 17.6 2.8 -1.6 15.9 55.6 48.8Direct investment, net 0T 2.1 27.1 -7 . 6 1.3.3 T8. 13.9 8.4 TT T7 T7 9 T 7. 3.1 o 5 -1.2 19.0Other long-term, net -- 0.2 -- -0.3 0.2 3.1 3.1 0.2 -0.1 0.9 -0.2 0.2 4.2 4.5 5.4 9.3 26.7 28.3Short-tern, net 2.5 -0.1 -0.7 -0.3 -0.4 0.5 -1.0 3.0 1.1 o.6 5.3 0.1 5.0 -9.1 -10.1 0.1 30.1 1.5
Public capital, net -1.2 -- 4.4 2.0 6.6 11.0 4.6 3.2 5.7 10.3 9.6 19.2 28.0 19.5 11.0 8.4 26.2 53.4Long-term, net __ __ .. Tr -T 77 7T TT ThW 7 iv 365 -ro 4.4 14.4 = 1 2 21/
Disbursements (--) -- .. .. (5.0) (8.9) (8.3) (7.4) (5.8) (6.5) (10.4) (17.0) (28.7) (15.9) (20.2) (16.9) (28.0) (8.4)fAmortization (--) -- .. .. (1.2) (1.7) (1.8) (2.2) (2.0) (2.2) (2.0) (2.6) (3.1) (3.7) (3.9) (5.6) (6.0) (7.1)
Other capital, net -1.2 -- .. .. 2.8 3.8 -1.9 -2.0 1.9 5.9 1.2 4.8 2.4 7.3 -5.3 -2.9 4.2 52.1
Banking system, net -1.2 -- .. -0.2 o.6 1.5 2.1 4.7 4.6 2.3 5.3 2.3 0.1 4.7 8.5 12.5 2.6 -1.0IMF transactions, net .. .. 25 1.2 -1.2 -0.9 2.5 -2. 1 0 5 _ -- -. 27.7 3/Allocation of SDR's -- -- -- -- -- -- -- -- -- -- -- -- =2 2.7 3.4 1.1 -- --Capital N.E.I. and errors and omissions 3.2 -0.5 -1.9 -1.9 -6.2 -6.6 -7.9 -10.7 2.2 -- 2.4 -3.4 0.9 0.1 3.2 0.9 6.3 56.1Change in reserves (+ indicates decrease) 3- 0 4. 9 7 .7 TT 1I67 2.oT I7T TT ¶ 12 TTS 7.7 -5. 7r TT1 t9 -17.7
CAPITAL ACCOUNT BALANCE 0.4 6.6 -5.5 -4.9 -0.3 13.8 11.2 7.0 19.2 28.6 24.7 30.6 63.8 24.2 12.5 35.4 108.9 139.6
1/ Preliminary.7/ Loans and obligations contracted after 1974 are included in other capital.3/ Included in capital N.E.I. and errors and omissions.
Source: Central Bank, IMF, IBRD Debt Reporting System and mission estimates.
Table 3.2: HONDURAS: VALUE, VOLUME AND UNIT VALUE OF PRINCIPAL EXPORTS
(value in millions of US$, volume in thousands of metric tons-/and unit value in US$)
1965 1966 1967 1968 1969 1970 1971 1972 1973 1974
BananasValue 52.9 69.6 78.5 79.7 74.1 75.3 95.7 90.7 94.o 76.5Volume 516.6 697.2 767.3 816.5 772.4 738.5 970.8 847.7 825.6 616.6Unit value 102.4 99.8 102.3 97.6 95.9 102.0 98.6 107.0 113.9 124.1
CoffeeValue 22.1 19.9 14.0 20.8 18.5 25.9 23.3 27.3 48.5 43.9Volume 25.0 23.0 17.0 26.0 25.0 26.0 25.1 32.7 39.9 30.8Unit value 884.0 865.2 823.5 800.0 740.o 996.2 928.3 834.9 1,215.5 1,425.3
LumberValue 8.7 9.6 12.2 14.4 15.3 16.2 19.2 27.1 39.1 40.7Volume (1,000 m3) 281.0 301.0 332.0 395.o 380.0 356.0 402.0 491.0 591.0 479.O'Unit value 31.0 31.9 36.7 36.5 40.3 45.5 47.8 55.2 66.2 85.0
BeefValue 3.2 3.9 4.3 4.7 9.0 9.7 12.5 16.1 21.9 16.8Volume 5.4 6.3 6.6 6.9 11.6 12.4 15.3 18.1 19.8 13.1Unit value 592.6 619.0 651.5 681.2 775.9 782.3 817.0 889.5 1,106.1 1,282.4
SugarValue n.a. n.a. 1.2 1.4 0.3 1.2 1.6 2.0 -- 4.5Volume n.a. n.a. 9.7 10.3 2.0 9.8 10.0 12.1 -- 7.5Unit value n.a. n.a. 123.7 135.9 150.0 122.4 160.0 165.3 -- 600.0
Petroleum DerivativesValue -- -- -- 2.1 4.8 6.2 3.0 3.4 4.1 14.5Volume -- -- -- 107.3 272.2 356.7 212.5 216.6 222.1 214.0Unit value -- -- -- 19.6 17.6 17.4 14.1 15.7 18.5 67.8
All Other ExportsValue 41.3 41.4 45.6 57.7 48.7 43.6 41.7 46.9 60.6 100.6
TOTAL MERCHANDISE EXPORT VALUE (FOB) 128.2 144.4 155.8 180.8 170.7 178.1 197.0 213.5 268.2 297.5
1/ Except for lumber exports.
Source: Central Bank and mission estimates.
Table 3.3: HONDURAS: SUMMARY OF MERCHANDISE IDPORTS
(In millions of U.S. dollars)
1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974
TOTAL MERCHANDISE IMPORTS (CIF) 73.1 73.4 81.1 96.8 103.4 124.2 151.3 167.0 186.1 186.0 222.7 197.7 197.3 269.6 421.5
Food 5.3 5.u 5.0 6.4 7.2 8.1 10.1 11.3 13.3 12.5 14.3 7.8 9.6 11.5 15.4Other Consumer Goods 17.9 17.6 20.0 24.1 24.0 29.3 33.2 38.2 44.2 42.9 53.9 41.2 40.4 42.6 61.4Petroleum, Oil and Lubricants 6.2 7.2 7.0 7.2 6.8 6.9 7.8 8.0 12.2 12.7 14.7 17.4 19.2 26.0 63.7Other Intermediate Goods 28.7 31.1 32.1 35.1 41.1 53.0 64.2 67.3 74.5 67.7 84.5 84.2 84.1 120.2 191.3Capital Goods 15.0 12.5 17.0 24.0 24.3 26.9 36.o 42.2 41.9 50.2 55.3 47.1 44.0 69.3 89.7
Source: Central Bank and mission estimates.
Table 3.h: HONDURAS: TERMS OF TRADE
(1967-1969 = 100)
1967 1968 1969 190 1971 1972 19 1
EXPORT PRICE INDEX
Bananas 103.8 99.0 97.3 103.4 100.0 10865 115.5 125.9Coffee 105.1 102.0 94.4 127.0 118.3 106.6 155.2 181.8Lumber 97.1 96.h 106.3 120.2 126.1 145.8 174.7 224.6Beef 90.0 95.5 108.4 109.0 113.5 123.7 154.0 178.8Sugar 93.8 102.9 115.2 92.9 121.1 124.h -- 450.1Petroleum derivatives -- 107.7 97.0 95.6 77.6 86.3 101.5 372.4All other goods 90.1 102.8 107.6 97.3 115.6 121.3 15765 153.2
Total Merchandise (FOB) 9865 l00.4 101.1 105.9 107.7 115.h 139.8 162.6Non-Factor Services 9T 99.2 1O.h 1097 113.0 123.9 1I 2T 1____
Total Merchandise and Non-Factor Services 98.3 100.2 101.3 106.3 107.9 1i5.8 139.9 164h1
IMPORT PRICE INDEX
Food 100.9 98.h 100.9 108.h 122.1 136.2 132.5 172.0Other consumer goods 99.0 96.7 loh.6 108.2 108.8 124.2 135.0 169.9Petroleum, oil and lubricants 100.7 99.8 99.8 107.6 126.8 142.8 187.5 551.6Other intermediate goods 97.0 100.7 102.4 112.5 113.5 123.1 150.2 169.9Capital goods 91.h 99.3 109.3 108.h 110.0 116.1 12h.3 143.2
Total Merchandise (CIF) 96.4 99.2 lo4.4 109.8 113.0 123.8 142.0 181.8Non-Factor Services 9T-[ 99.2 105T. 109.8 113.0 123.9 1i2J7 1- 7F
Total Merchandise and Non-Factor Services 96.h 99.2 10o.h 109.8 113.0 123.9 142.0 181.8
TERMS OF TRADE 102.0 101.1 97.0 96.8 95.5 9365 9865 90.3
Source: Central Bank and mission estimates.
Table 3.5 : HONDURAS: BALANCE OF PAYMENTS, 1974-1981(in millions of dollars)
Actual Estimate Projections1974 1975 1976 1977 1970 1979 1980 1981
Exports, goods and n.f.s. 327.5 312.9 403 476 554 639 728 822
Imports, goods and n.f.s. 455.5 431.7 528 599 671 752 839 964
Resource balance -128.0 -118.8 -125 -123 -117 -113 -111 -1142
Factor income, net -13.4 -38.3 -44 -58 -72 -85 -99 -113Investment income, net -4.8 -16.9 -20 -22 -25 -28 -31 - 34Interest, net -18.2 -21.4 -24 -36 -47 -57 -68 - 79(of which: public) (6.0) (7.2) (17) (28) (38) (47) (56) (67)
Transfers, net 32.5 17.5 12 13 14 15 16 17
Current account balance -108.9 -139.6 -157 -168 -175 -183 -194 -238
Private capital, net 25.5 47.3 25 32 37 42 147 49Direct investment, net I "- -I -n -7 -7 72Other long term, net 26.7 28.3 13 17 17 17 17 17
Public medium and long-term, net 22.0 116.8 138 141 143 148 157 203Disbursements 2975 12522 1IT3i 179 I9 2r1 270Amortization -6.o -8.4 -14 -22 -36 -47 -61 -67
Loans repayable in local currencyl/ 5.0 7.0 5 3 3 2 - -
Capital transaction, n.e.i.2/ 65.9 -13.8 - - - - - -
Net change in reserves (- increase) -9.5 -17.7 -11 -8 -8 -9 -10 -14
I/ Disbursed in foreign currency.
2/ Includes errors and omissions.
Source: Central Bank and mission estimates.
Table 3.6 : HONDURAS: IMPORT DETAIL, 1974-81(in millions of dollars)
Actual Estimate Projections1974 1975 1976 1977 1975 1979 1950 1971
Food Value 15.4 28.0 19 22 24 25 2/ 30Volume index 100.0 2i4.Y 17 147 1I9 150 154 17Unit value index 100.0 84.7 o5 90 105 109 1114 122
Other consumer goods Value 61.4 60.5 68 76 o4 91 101 111Volume-index 100.0 5771 90 93 95 96 100 104Unit value index 100.0 113.1 123 133 142 153 1bL4 175
Petroleum Value 63.7 63.1 79 90 101 115 130 1147volume index iG 7 oo.5 -57 lu 17 1±9 173Unit value index 100.0 111.8 121 131 141 151 162 173
Intermediate goods Value 191.3 159.9 198 226 257 290 327 373VolTuTme index I=f 752 -f56 -TI _9TI 113y iFitUnit value index 100.0 110.8 121 130 140 151 161 173
Capital goods Value 89.7 88.5 128 144 159 179 196 238Volume index 110. 56.5 T11 i-25 M3 EST 132 150Unit value index 100.0 113.6 124 134 144 155 166 178
Non-factor services Value 34.0 31.7 36 41 46 52 58 65Volume index 10 1llUnit value index 100.0 110.8 121 130 140 151 161 173
Imported goods and Value 455.5 431.7 528 599 671 752 839 964and non-factor services Volume index 100.0 86.7 77 TT7 II: l-i7 123
Unit value index 100.0 109.6 120 130 140 150 161 172
Source: Central Bank and mission estimates.
Table 3.7: HONDURAS: EXPORT DETAIL, 1974-81
(value in millions of US$, volume in thousands of metric tons-, and unit value in US$)
Actual Estimate Projections1974 1975 1976 1977 1978 1979 1980 1981
Bananas Value 76.5 54.0 84 99 112 126 141 157Volume 616.6 437.2 635 709 765 820 857 876Unit value 124.1 123.6 132 140 146 154 165 180
Coffee Value 43.9 52.2 79 99 115 119 122 130Volume 30.8 47.9 42 43 44 45 46 47Unit value 1,425.3 1,087.5 1,881 2,302 2,614 2,644 2,652 2,766
Lumber Value 40.7 42.6 48 54 62 80 107 127Volume (1,000 m3j 479.0 512.5 512 512 512 580 680 747Unit value 85.0 83.0 94 106 121 138 157 170
Beef Value 16.8 10.6 20 31 36 44 53 64Volume 13.1 10.5 14 18 19 21 22 24Unit value 1,282.4 1,006.7 1,429 1,722 1,895 2,095 2,409 2,667
Sugar Value 4.5 6.1 2 1 13 27 33 37Volume 7.5 10.2 7 2 35 68 77 81Unit value 600.0 600.0 300 372 378 402 432 462
Petroleum Value 14.5 13.0 17 20 23 26 29 33Volume 214.0 171.2 212 227 240 255 270 285Unit value 67.8 75.8 82 89 96 102 109 117
Other goods Value 100.6 102.9 118 134 151 171 192 217Volume index 100.0 92.4 97 102 107 112 118 125Unit value index 100.0 110.8 121 130 140 151 161 173
Non-factor services Value 30.0 31.5 35 38 42 46 51 57Volume index 100.0 94.7 97 98 100 102 105 110Unit value index 100.0 110.8 121 130 140 151 161 173
Total goods and non-factor Value 327.5 312.9 403 476 554 639 728 822services Volume index 100.0 97.3 106 112 122 135 144 151
Unit value index 100.0 98.2 117 130 138 144 154 166
1/ Except lumber exports.Source: Central Bank and mission estimates.
Table 3.8: HONDURAS: DIRECTION OF TRADE, 1950-1974
(in percentages)
1950 1955 1960 1965 1970 1971 1972 1973 1974
Exports 100 100 100 100 100 100 100 100 100
Developed Areas 75 83 77 84 88 86 90 89 83United States 77 79 7 5- 52 Z TO 52 TOIndustrial Europe 4 12 18 19 2h 20 27 23 21Canada 4 2 2 7 6 1 8 6 5Japan - - 1 3 2 _ 2 3 3Other 1/ - - - 1 1 1 3 4 h
Less Developed Areas 25 17 23 16 12 1h 10 11 17Iatin America 20 13 TT T 7 3 T 10Caribbean 5 4 5 3 4 6 6 5 6Other 2/ - - - - - 1 1 1 1
Sino-Soviet Countries - - - - _ _ _ _ _
Imports 100 100 100 100 100 100 100 100 100
Developed Areas 83 86 82 73 69 78 74 72 69United States 71 7 g 7 2 47 7 T 47Industrial Europe 5 14 19 15 13 18 16 15 14Canada 1 1 2 1- 1 1 2 2 2Japan 1 5 6 5 8 11 8 9 7Other 1/ - - - - - 1 2 2 1
Less Developed Areas 17 13 17 27 31 21 26 27 30Latin America 11 6 10 24 3 1 V VCaribbean 6 6 6 3 - 2 2 2 4Other 2/ - 1 1 - - 1 8 7 10
Sino-Soviet Countries - 1 1 - - 1 1 1 1
1/ Includes non-industrial Europe, Australia, New Zealand and South Africa.2/ Middle East and oil exporting countries.
Source: For 1950-70, TBRD, Basic Report on the Economy of Honduras, 1972; and IMF, Direction of Trade,for 1971-74 data.
Table 3.9: HONDURAS: TRADE WITH CENTRAL AMERICA
(in millions of U.S. dollars)
1960 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974
Exports, f.o.b. 8.1 20.5 19.5 23.4 30.3 22.1 18.1 7.0 6.5 12.1 24.7Costa Rica -- TW7 -7T 3.0 53 T.7 7.1 1.8 1.6 2.7 T7WEl Salvador 6.3 13.0 10.7 11.L 13.8 7.0 -- -- -- -- --
Guatemala 1.6 5.1 4.7 6.4 7.1 6.1 6.9 3.2 1.2 2.9 7.8Nicaragua 0.1 1.0 2.L 2.6 4.2 3.3 4.1 2.0 3.7 6.5 10.1
Imports, c.i.f. 5.3 23.5 34.0 4o.8 48.7 44.0 5h.9 15.6 24.0 38.3 51.4Costa Rica 0.1 5.0 -7T TY 7-T 6 T TO T.9 10.7El Salvador 4.1 12.3 16.3 19.9 23.2 12.4 -- -- -- -- --Guatemala 1.1 8.1 9.8 11.8 14.2 17.8 28.5 8.0 10.3 18.4 29.0Nicaragua -- 2.1 2.9 3.8 4j.7 6.4 1h.0 3.0 8.7 13.0 11.8
Regional Trade Balance 2.8 -5.0 -14.5 -17.4 -18.4 -21.9 -36.8 -8.6 -17.5 -26.2 -26.7
CACM Trade as a Percentage of Total Trade
Exports, f.o.b. 12.6 16.0 13.5 15.0 16.7 12.9 10.2 3.7 3.0 4.5 8.3
Imports, c.i.f. 7.2 20.9 22.5 21.4 26.0 23.5 24.6 8.0 2.5 2.6 2.5
Source: IBRD Report No. 399-HO, The Economic Position and Prospects of Honduras, for data through 1971 andTMF, Direction of Trade for 1972-1974 data.
Table 3.10: HONDURAS: EXPORTS TO CENTRAL AMERICA AND THE REST OF THE WORLD
(millions of U.S. dollars)
1967 1965 1969 1970 1971 1972 1973 1974 1/C.A. Total C.A. Total C.A. Total C.A. Total C.A. Total C.A. Total C.A. Total C.A. Total
Agricultural Products 7.9 108.7 10.1 117.7 5.2 103.9 3.0 108.2 2.9 126.5 2.1 126.1 0.8 149.2 3.5 132.3Bananas -- -- 79.7 -- -77- - -73 97 -- 90.7 -- -90 -- 76.Coffee -- 14.0 __ 20.8 -- 18.5 -- 25.9 23.3 -- 27.3 -- 48.5 - 43.9Cotton -- 5.2 3.8 -- 3.4 -- 1.1 -- 0.5 -- 0.7 -- 1.6 -- 3.2Tobacco o.6 2.5 0.5 2.7 0.3 2.3 -- 2.0 2.1 -- 2.2 -- 2.8 0.1 4.3Corn 1.9 1.9 2.9 2.9 0.9 0.9 0.9 0.9 0.9 0.9 o.6 o.6 0.3 0.3 -- --Beans 2.7 2.7 4.0 4.0 3.2 3.2 1.6 1.6 1.7 2.4 1.0 2.0 0.2 0.2 3.2 3.2Live animals 2.7 3.3 2.7 2.8 0.8 0.9 0.4 o.6 0.2 0.3 0.4 0.9 -- 0.1 -- --Plantains -- o.6 -- 1.0 -- o.6 0.1 0.8 0.1 1.3 0.1 1.7 0.3 1.7 0.2 1.2
Industrial Products 5.8 25.8 7.0 31.5 3.6 37.2 9.4 45.5 0.4 44.5 1.7 57.0 3.2 75.1 4.8 91.4Meat __ TT3 0.2 -47 0.1 9.0 -- 9.7 -- 1-- = -- 21.9 -- 16Sugar __ 1.2 0.9 1.4 -- 0.3 -- 1.2 -- 1.6 -- 2.0 -- -- -- 4.5Processed fruits -- 1.4 -- 2.0 -- 2.3 -- 2.2 -- 2.3 -- 2.3 -- 1.9 1.9Vegetable lard 0.5 o.6 0.4 0.4 o.6 o.6 1.1 1.1 -- -- 0.2 0.2 0.7 0.7 0.4 0.4Lumber 1.2 12.2 1.1 14.4 o.6 15.3 -- 16.2 - 19.2 0.1 27.1 -- 39.1 0.2 40.7Tobacco 0.6 2.5 0.5 2.7 0.3 2.3 0.2 2.3 -- 2.1 -- 2.2 -- 2.9 0.1 4.3Clothing and shoes 2.3 2.4 2.4 2.4 2.2 2.2 1.6 1.7 -- 0.2 -- 0.3 0.1 -- 0.1Chemicals and dyes 1.2 1.2 1.4 1.4 0.7 0.7 0.9 0.9 0.3 0.3 0.9 0.9 0.9 0.9 1.5 1.5Petroleum derivatives -- -- 0.1 2.1 0.1 4.8 0.1 6.2 0.1 3.0 0.3 3.4 0.3 4.1 -- 14.5Soap 2.5 2.5 -- -- 0.2 0.2 1.3 1.3 2.6 2.7Seafoods __ __ __ __ __ -- 1.4 -- 3.3 -- 2.3 -- 2.2 -- 4.0
Mineral Products -- 7.6 11.6 9.2 8.9 12.4 -- 14.4 -- 20.0 -- 32.0Silver -77 -- 1177 -4.2 -- -- 7 - 7-° - -17Lead and zinc __ 3.6 3.8 -- 4.4 -- 4.7 -- 8.1 -- 9.1 13.0 - 18.9
Other 9.7 13.7 13.2 11.5 12.3 20.4 5.6 15.5 3.7 13.6 3.7 16.0 8.1 23.9 16.4 41.8
TOTAL 23.4 155.8 30.3 180.8 22.1 170.7 18.1 178.1 7.0 197.0 6.5 213.5 12.1 268.2 24.7 297.5
1/ Preliminary.
Source: Central Bank.
Table 3.11: HONDURAS: EXPORTS OF MANUFACTURES
(In thousands Lempiras)
1960 1965 1970 1972Central Central Central CentralAmerica Other Total America Other Total America Other Total America Other Total
Consumer Goods 3,251.7 3,287.5 6,539.2 5,849.6 9,212.8 15,062.4 12,169.4 33,156.4 45,325.8 1,720.0 41,674.5 43,394.5
Food Products 2,412.8 3,127.5 5,540.3 2,107.0 9,054.5 11,161.5 4,462.6 29,973.1 34,435.7 1,127.0 39,042.7 40,169.7Beverages - - - 1.0 7.1 8.1 - 13.0 13.0 - - -Tobacco 294.1 143.2 3,923.0 170.5 82.7 253.2 1.1 136.7 137.8 5.7 1,275.3 1,281.0Textiles 42.5 10.1 52.6 740.7 3.0 743.7 3,992.8 903.8 4,896.6 419.8 110.1 529.9Apparel 487.7 1.1 480.8 2,402.6 1.0 2,403.6 2,836.2 2,124.4 44,960.6 49.3 1,185.7 1,235.0Footware 4.5 - 4.5 314.8 - 314.8 671.6 - 671.6 15.0 - 15.0Furniture 7.8 - 7.8 21.2 5.0 26.2 7.6 4.3 11.9 - 19.5 19.5Printing 2.3 5.6 7.9 46.4 - 46.4 174.7 1.1 175.8 47.0 1.1 48.1Other - - - 45.4 59.5 104.9 22.8 - 22.8 56.2 40.1 96.3
Intermediate Goods 2,653.1 14,549.1 17,202.2 10,766.8 15,371.3 26,138.1 18,121.2 47,370.9 65,492.1 4,827.8 50,696.1 55,523.9
Lumbar and Products 1,665.5 14,382.5 16,048.0 3,140.3 14,521.7 17,662.0 1,008.0 28,221.9 29,229.9 587.3 40,783.0 41,370.3Paper and Products 3.4 - 3.4 70.6 138.3 208.9 2,730.9 1,270.5 4,001.4 666.4 177.8 844.2Leather 30.2 - 30.2 230.0 2.0 232.0 1.7 208.3 210.0 39.0 53.9 92.9Rubber Products 13.4 159.9 173.3 503.5 89.8 593.3 641.2 3.2 644.4 18.3 51.6 69.9Chemicals 406.o 5.6 411.6 5,240.2 249.2 5,489.4 13,685.7 17,301.4 30,986.5 3,495.0 7,688.0 11,183.0Non-metallic minerals 532.4 - 532.4 1,393.5 367.3 1,760.8 44.5 345.0 389.5 - 1,962.0 1,962.0Basic metals 2.2 1.1 2.2 188.7 3.0 191.7 9.8 20.6 30.4 21.8 21.8 42.6
Metal Products 11.2 - 11.2 82.7 3.0 85.7 639.1 46.7 685.8 890.5 958.1 1,848.6
Total 5,916.0 17,836.6 23,752.6 16,699.1 24,587.1 41,286.2 30,929.7 80,474.0 111,503.7 7,438.3 93,328.7 100,767.0
Percentage 2.5 97.5 100.0 140.4 59.6 100.0 27.7 72.3 100.0 7.4 92.6 100.0
1/ Re-exports
Source: CONSUPLAN and Central Bank.
Table 3.12: HONDURAS: IMPORTS OF MANUFACTURES
(In Thousand Lempiras)
1960 1970 1972Central Central CentralAmerica Other Total America Other Total America Other Total
Consumer Goods 6,344 46,399 52,743 60,902 42,737 103,639 10,734 54,258 64,992
Food Products 4,312 12,430 16,742 19,901 14,539 34,440 5,684 175407 23,091Beverages 28 1,179 1,207 495 1,782 2,277 - 1,881 1,881Tobacco 2 75 77 2,541 700 3,241 - 37 37Textiles 911 23,992 24,903 25,615 14,103 39,718 4,069 22,546 26,615Apparel 432 2,713 3,145 2,847 2,984 5,831 32 3,524 3,556Footwear 412 1,592 2,004 5,761 749 6,510 35 676 711Furniture 28 231 259 869 433 1,302 4 161 165Printing 87 1,286 1,373 763 2,016 2,779 253 1,897 2,150Other 132 2,901 3,033 2,110 5,431 7,541 657 6,129 6,786
Intermediate Goods 2,200 49,024 51,224 32,400 106,277 138,677 22,293 112,691 134,984
Lumber & Products 185 948 1,133 1,773 1,066 2,839 368 618 986Paper and Products 137 3,793 3,930 2,421 29,599 32,020 635 31,361 31,996Leather 238 1,587 1,825 1,383 287 1,670 12 309 321Rubber Products 399 3,838 4,237 3,988 7,130 11,118 3,598 5,967 9,565Chemicals 1,025 32,000 33,025 16,687 48,523 65,210 10,446 59,342 69,788Non-metallic Minerals 20 4,o68 4,088 2,372 14,555 16,927 2,953 10,272 13,225
Capital Goods 2,841 50,186 53,027 10,550 131,767 142,317 6,907 97,947 104,854
Total 11,385 145,609 156,994 103,852 280,781 384,633 39,934 264,896 304,830
Percentage 7.3 92.7 100.0 27.0 73.0 100.0 13.1 86.9 100.0
Source: CONSUPLAN and Central Bank.
TABLEL.1: HONDURAS IL/i9/7:
EXTERNAL PUBLIC OEBT OUTSTANDING AS OF DECEMBER 31 5974
CEST REPAYABLE IN fCREIGN CURRENCY
IN THOUSANDS OF U#S. DOLLARS pA
OEBT OUTSTANDING DECEMSER 31JL974
CREODTOR COUNTRY uNolS-TYPE OF CREDITOR DISBURSED 8URSEO TOTAL
BELG IUM 69 ' 6FRANCE 20 29JAPAN 2'622 ' 2622USA 1.239 4200t Al
SUPPLIERS 3'950 4'OO 7P951
USA 2,100 1,500 3#60uPRIVATE BANKS 2,100 12500 3,60Q
eCIE 32,089 29,039 6sL,20I9R0 45,426 30C996 76-42kIOA 26,949 e80808 35,757t10 2,450 1 0120 12,57tJ
LOANS FRCO INTL. ORGANIZATIONS 106A914 78,963 L5,877
USA 4LJ479 30POS5 7l,53'4VENEZIIELA - 5,0000 5 004
LOANS FROM GOVERNMENT S 41D4-79 35'055 76P534
TOTAL EXTERNAL PUBLIC DEBT 1) 154.443 U19'519 Y73P962
NOTE: DEBT WITH A MATURITY OF aVER ONE YEAR
I) EXCLUOES THE FOLLOWING? AMOUNT
INTEREST IN ARREARS?BCIE 2
LOANS FROM INTL. ORGANIZATIONS 2
TOTAL 2
rNCLUOES PRINCIPAL .N ARREARSI
eCE 1SLOANS FROM INTL. ORGANIZATIONS 15
TOTAL is
"r=M AL 13522, DI71 ICON?1cCFror ^a_czsow :9 vov &vso=
CONFIDENTIAL
Table 4.2: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS Of DECEMBER 31i1974
DEBT REPAYABLE IN FOREIAN CURRENCY
IN THOUSANDS Of U.S. nOLLARS !PAGE 1
TOTAL
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING Of PERIOD CANCEL'
LATIONS.DISBURSED INCLUDING COHNIT- DISBURSF- SERVICE PAYMENTS ADJUSTa
YEAR ONLY UNDISBURSED WENTS MENTS PRINCIPAL INTEREST TOTAL RENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 50,168 112"211 14.820 16*962 2.572 1,724 40296 '9019oT 64,543 124.369 22.731 28,684 3,122 2,526 5,648 -741971 9U,104 143,904 13V898 15,0hO 3,692 3,323 7,015 '6941977 102*301 153,416 19,870 20,1f4 3,945 3.91u 7,855 5621973 119.377 169.903 45#349 16,894 S.557 5.579 11.136 1,6301974 132.378 211.325 69.123 2h,036 5,960 6.026 11.986 -541
1975 154,428 273.947 40.001 A,407 b6754 15,1601976 186,022 265.540 - 29,150 9.680 t§0059 17t739 -1977 205,492 255,860 - 19.921 10991 9,021 20.012197? 214,422 244,869 - 15.3Ro 9,588 9,219 19.106 -1979 219.914 234,981 - 7.752 10.067 9,143 19',2111980 217,599 224,914 _ 4.863 127814 8,p75U 210564 -1981 209.640 212,100 _ 1.769 12,002 b*l79 20.181 -1982 199,435 200.098 - 501 11,676 r.576 19P2531983 188,266 188I,422 - 126 11,954 6.967 18,9201984 116.438 176,468 3 30 12,025 6.337 18,363 -1985 164.443 164.443 I n 10.713 5S937 16,650 -1986 153,730 153.730 - _ 10627 5.529 16.156 -1987 143.103 143#103 - _ 10.809 5.006 15.815198It 132.293 132.293 ' 10.551 4,481 15,032 -1989 121,742 121./42 - _ 9,014 3.988 13.0021990 112.728 112,128 - - 8.116 3.563 11.6801991 104.612 104P612 - - t.394 3.209 9.604I992 98,217 98,217 -, - .237 2.946 9.183 -1993 91.981 91,981 - - 6.090 2.682 8,773 -1994 65.890, 85,890 - _ 5,857 2.437 8,293
NOTE: INCLUDES SERVICE ON ALL DEBT LISTED IN:TABLE 1, PREPARED DECEMBER 22, 1975, WITH 1HE]EXCEPTION OF THE FOLLOWING:PRINCIPAL IN ARREARS 15IANS FROM INTERNATIONAL ORGANIZATIONS (BCIE) 15
i CONFIDENliAL
Table 4.2: HiONDURAS 1iN 9/A5
EXTERNAL PUBLIC DEBT AS OF DFCEMBER 31P19?4
DEBT REPAYABLE IN FOREIGN CURRENCY
IN THOUSANDS OF U.S. nOLLARS PAGE 2
SUPPLIERSBELGIUM
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL-
LATIONS#DISBURSED INCLUDING CUMMITO DISBURSE- SERVICE PAYMENTS ADJUST-
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 488 497 - . -_197o 488 497 ' 70 46 1161971 418 427 _ 140 54 194 11972 279 288 T O 70 20 90 -91973 209 209 - 70 30 100 -
1974 139 139 ' 70 10 80
1975 69 69 - 35 5 391976 35 35 - - 35 2 37
Table 4.2: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 31#1974
DEBT REPAYABLE IN FOREIGN CURRENCY
IN THOUSANDS OF U.S. nOLLARS PAGE 3
SUPPLIERSFRANCE
DEBT OUTSTANDING TRANSACTIONS DURING PERIOOBEGINNING OF PERIOD CANCEL;
LATIONSDISBURSED INCLUDING COMMIT DISBURSF- SERVICE PAYMENTS ADJUST&
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 307 820 4S6 64 64 Y92197o 664 664 - - 134 35 169 -
1971 530 530 - - 218 37 255 30197? 342 342 _ , 82 9 91 _1.973 260 260 - - 188 13 201 271974 99 99 - - 82 26 108 3
1975 20 20 - 20 1 21 -
Table 4.2: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DFCEMBER 31#1974
DEBT REPAYABLE IN FOREIGN CURRENCY
IN THOUSANDS OF U.S nOLLARS PAGE h
SUPPLIERSJAPAN
DEBT UUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL°
LATIONSPDISBURSED INCLUDING COMMIT- DISBURSE- SERVICE PAYMENTS ADJUST&
YEAR ONLY UNDISBURSED MENTS MENTS PRINcIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 1,910 W, 432 150 571 4454 95 549 -197T 2,021 2,128 - 1lo 615 175 790 -1971 1,513 1,513 20135 - 629 99 728 1197? 885 3#020 - - 189 61 250 -
1973 696 2,831 - - 188 48 236 -
1974 508 2P643 346 2#481 366 354 720
1975 2'622 2#622 - 514 17? 691 -1976 2,1u6 2108 - 514 141 655197- 1,594 1,594 ' - 354 105 460197A 1,240 1,240 354 81 435 -
1979 866 886 - - 354 56 410 -1980 531 531 - 354 31 385 -
1981 177 177 - - 177 6 183 -
Table 4.2: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 31,1974
DEBT REPAYABLE IN FOREIGN CURRENCY
IN tHOUSANDS OF U.S. DOLLARS PAGE 5
SUPPLIERSUSA
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL
LATIONS,DISBURSED INCLUDING COHMIT' DISBURSE- SERVICE PAYMENTS ADJUSTO
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 1,019 2,229 - I, un 399 127 526 -197o1 1,620 1,830 ' 402 95 497 -
1971 1,21-8 1,428 . 418 80 498 -
1972 800 1,010 IP165 327 42 369 -2101973 473 1,638 4i001 253 43 2961974 220 5,386 1,165 146 27 173
1975 1,239 5,240 1881 203 141 3441976 2,917 5po37 - 1,200 207 218 425 - -1977 3,910 4,830 , 640 207 258 4661978 4,343 4,623 -2O 207 272 479 _1979 4,416 4,416 - _ 207 265 473 _1980 4,208 4,208 _1007 239 1,2461981 3,201 3,201 _ 800 180 980 _1982 2,401 2,401 - - 800 132 932 -
1983 1,600 1,600 . , 800 84 884 -1984 800 800 ' - 800 36 836 -
Table 4.2: HONDURAS 1119/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 3101974
DEBT REPAYABLE IN FOREIGN CURRENCY
IN THOUSANDS OF U6S. nOLLARS PAGE 6
SUPPLIERS
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL-
LATIONS#DISBURSED INCLUDING COMMIT DISBURSE,. SERVICE PAYMENTS ADJUST
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 3,724 5,978 150 2*027 917 222 1*139 -921970 4,799 5,119 - lo 1#221 351 1*5721971 3,679 3,898 2*135- 1*405 270 1*675 321972 2,306 4P660 1s165 668 132 800 -2191973 1,638 40938 41001 - 699 134 833 271974 966 8,267 346 3P646 664 417 1*081 2
1975 3P950 7,951 - 1ptIA 771 324 1*095 -1976 5,060 7l180 1i200 756 362 1#1171977 5,504 6,1424 - 640 562 364 925 -1978 5,583 5,863 - 280 562 352 914 -1979 5,301 5,301 - - 562 321 8831980 4P740 4,740 - - 1,362 270 1*632 -1981 3,3?8 3#378 - 977 186 1*1641982 2#401 2,401 - 800 132 9321983 1,600 1,600 - - 800 84 884 -1984 800 800 - - 800 36 836
Table 4.2: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DFCEMBER 31,1974
DEBT REPAYABLE IN FOREIGN CURRENCY
IN THOUSANDS OF U.S nOLLARS PAGE 7
PRIVATE BANKSUSA
DEUT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL-
LATIONS#DISBURSED INCLUDING COMMITO DISBURSE SERVICE PAYMENTS ADJUST-
YEAR ONLY UNDISBURSED MENTS HENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1972 ' 3P0O0 3o0o001973 3,000 3.000 - 300 123 4231974 2,700 2,700 1#500 600 334 934 -
1975 2,100 3,600 - 1l050 873 274 101461976 2#277 2.727 255 873 262 1#1351977 1#660 1#855 - 150 873 188 1.0611978 937 982 45 573 99 672 a
1979 409 409 - 273 48 3201980 136 136 - 136 10 146
EXTERNAL DEBT DIVISIONECONOMIC ANALYSIS & PROJECTIONS DEPARTMENT
DECEMBER 22, 1975
Table h.2: HONDURAS 1 rI19/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 31 1974
DEBT REPAYABLE IN FOREIGN CURRENCY
IN THOUSANDS OF US. nDOLLARS PAGE 8
PRIVATE BANKS
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL-
LATIONS#DISBURSED INCLUDING COMMITO DISBURSE- SERVICE PAYMENTS ADJUST-
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1972 - 3 000 3,ono01973 30000 3,00 300 123 4231974 2*700 2*700 1'0500 600 334 934
1975 2,100 3,600 1,000 873 274 1.1461976 2,271 2,127 - 255 873 262 1,135 -
1977 1,660 1.855 I sO 8A73 188 10611978 93? 982 4 573 99 6721979 409 409 ' - 273 48 320 a
1980 136 136 - - 136 1o 146
Table 4.2: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DFCEMBER 3101974
DEBT REPAYABLE IN FOREIGN CURRENCY
IN THOUSANDS OF US. nDOLLARS PAGE 9
LOANS FROM INTL. ORGANIZATIONSBCIE
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL
LATIONSpDISBURSED INCLUDING COMMIT DISBURSE- SERVICE PAYMENTS ADJUST
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 2,007 11,227 40670 1*842 348 115 463 11970 3,501 21,550 9Y131 90370 461 268 729 -311971 12,411 30*189 3,763 7,*557 424 617 1,041 21972 19,546 33,530 3,405 6,546 920 982 1p902 11973 25p1 72 36,JU6 5*600 3,998 2,123 1,681 38o04 681974 27,081 39,561 24,057 6,982 1,961 1J217 3-17b -544
1975 32,0(4 61,113 11,390 3,362 2#056 5J420 -
197h 40#102 57,751 - o1*49 4,179 2,430 6,609 _1977 43,0(3 53,573 - 5*060 4,297 2.595 6,892 -197tH 43,836 49,276 _4JI92 3,639 2,677 6J3161979 44,949 45,637 - 402 4,188 2,627 6o814 -1980 41,1b3 41,449 228 4,812 2,366 7P178 _1981 36,579 36,637 -8 4#190 2'078 6P268 -1902 32,441 32,447 - _ 3,721 I1823 5P544 -
1983 28,725 28,725 - - 3,721 1J585 5o3071984 25'004 25,004 - _ 3,241 1J357 405981985 21,164 21,764 - 3,149 19159 4 3O8 -198A 18,614 18,614 - 3,149 965 40114 -
1987 15,465 15,465 - 3,149 771 3P921 -
1988 12,316 12,316 - 3,149 578 3'7271989 9,161 9,167 - - 2,0U3 394 2'397 -199uI -'164 7,164 _ 1491 291 1782 -
1991 5,612 5,672 - - 752 221 9731992 4,920 4,920 - - 752 186 938 -1993 4,168 4,168 - - 752 150 902 -
1994 3,416 3,416 - 498 115 613 -
Table 4.2: HONDURAS 11 t9/75
EXTERNAL PUBLIC DEBT AS OF DFCEMBER 31.1974
DEBT REPAYABLE IN FOREIGN CURRENCY
IN THOUSANDS OF U.Ss nOLLARS PAGE 10
LOANS FROM INTL. ORGANIZATIONSIBRD
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL
LATIONS.DISBURSED INCLUDING COMMITO DISBURSE- SERVICE PAYMENTS ADJUST;
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (C)
1969 13,29U 38,929 - 8.1r4' 697 980 1.6771970 20.746 38,232 5,500 9,945 736 1.438 2,17411971 29,955 42,996 6,00U 4,7,1 17089 1H849 2#938 2321972 33,587 47,675 12.30U 2.161 1.629 2.212 3.841 .301973 34,089 58,316 18..800 7#663 1,728 2.825 4.553 '271974 40,024 75P361 3,000 7#341 1,939 3.238 5#177
1975 45,426 76,p422 - 6P.12 P,095 2,733 4.8281976 51P452 74,327 _ 7P076 2,470 3.351 5,821197? 56.056 71,857 - 5.631 2,770 j3942 0.712 2197h 58,919 69,087 - 40164 2,836 4.090 6J926 -
1979 60,247 66,251 3#093 2,915 4,151 7.066198( 6U,425 63,336 - 1,7A5 3,115 4,122 7P237 -1981 59,055 60,221 - 701 3,310 3,999 7.3091982 56,446 56,9ll ' 315 3,525 3,815 7.340 -
1983 53,236 53,386 ' 120 3,760 3.597 '7,357 -1984 49,596 49,626 _30 4,060 3,354 7,434 -1985 45,546 45,546 - - 3P997 3i085 7.082 -1986 41,549 41,549 - _ 3,865 20831 6.696198? 37,684 37,684 _ _ 4,115 2.572 6.687198h 33,569 33,569 - - 3P545 2J309 5,B541989 30*024 3U0024 - 3,780 2,065 5.8451990 26,244 26,244 - - 3,524 1.805 5P329 -1991 22,720 22,720 - _ 2,475 1,584 4.059 -1992 20,245 20,245 ' 3 2.315 1419 3,734 41993 17,930 17,930 ' - 2,105 1.254 3.4191994 15.765 15,p65 - - 1,990 1.108 3.098 -
Table 4.2: HONDURAS 11F19/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 31P1974
DEBT REPAYABLE IN FOREIGN CURRENCY
IN THOUSANDS OF U.S. nOLLARS PAGE 11
LOANS FROM INTL. ORGANIZATIONSIDA
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL-
LATIONS.DISBURSED INCLUDING COMMIT DISBURSE- SERVICE PAYMENTS ADJUST'
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (S) (6) (7) (8)
1969 11#916 15.928 I 1.185 - 33 331970 13P101 15P928 6,100 2.052 - 61 611917 15.153 24,028 - 1.687 42 116 15f -1972 16.798 23,986 - 1*1600 4 154 238 8611973 i,*115 24,763 6p600 2.147 85 206 291 1,5631974 25.800 32,S41 3#000 1.233 84 193 277 _
1975 26,949 35,757 - 2#076 105 210 3151976 28,920 35P652 - 1.921 127 224 3501971 30.714 35.525 1538 151 236 386 -1978 32.102 35,375 - 1.170 175 245 419 -1979 33,097 35,200 885 175 251 426 _1980 33.807 35.025 - 614 233 255 489 -1981 34.188 34*792 4 406 349 257 6061982 34*1245 34P443 - 192 433 257 690 -1983 34.004 34,olO I 6 433 254 687 -1984* 33571 33.577 529 251 780 _1985 33,048 3304*8 - 571 247 818198e 32.471 32,471 - _ 614 242 856 -1981 31.863 31.863 - - 662 238 8f99 -1988 31,201 31.201 - - 710 233 942 -1989 30.492 30.492 - - 710 227 937 11990 29,762 29.762 - 827 222 1.049 -1991 28.955 28.955 - _ 890 215 1.105 -1992 28.065 28.O65 - - 890 209 1.098 81993 27.176 27.176 - _ 890 202 1.092 -IY94 26,286 26.286 - _ 1.082 195 1.277 -
Table 4.2: HODURAS 11r19/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 3101974
DEBT REPAYABLE IN FOREIGN CURRENCY
IN THOUSANDS OF US. DnOLLARS PAGE 12
LOANS FROM INTLs ORGANIZATIONSIDB
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL-
LATIONS,DISBURSED INCLUDING COMMIT' DISBURSF- SERVICE PAYMENTS ADJUST;
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (S) (6) (C) (8)
1969 5#263 5,399 - 131 380 209 589197( 5014 5,019 5 470 196 666 11971 4,550 4,550 - 500 177 6771972 4,050 4,O50 - - 500 156 656 -
1973 3550U 3,55-5U - 500 137 637 -
1974 3,05U 3,0o5 1O'120 - 600 117 717 -
1975 2,450 12,57U 2P599 700 104 804 -
1976 4,279 11,870 2#631 700 101 8011977 6,210 11,170 - 1i721 700 95 795 -
1978 7,231 10,470 - 1J316 350 82 4321979 8P197 10,120 * 012 - 87 87 -198( 9,209 10,120 - 7n9 96 96 -
1981 9,918 10,120 202 - 100 100 -1982 10,120 10,120 - - - 101 1011983 10U120 10,120 - - - 101 101 -
1984 10U120 10,120 - - - 101 101 -
1985 10i12U 10s120 - - 337 201 538 0
1986 9,763 9,183 - 337 194 531 0
1987 9,445 9,445 - - 337 187 5251988 9,108 9,108 - - 337 180 518 -
1989 8,771 8,771 - - 337 174 511 0
1990 J,433 8,433 - - 337 167 504 41991 b,096 8U096 _ 337 160 498 -
1992 ?P759 7,759 - - 337 153 491199.4 7,421 1,421 - - 337 147 4841994 /,064 7,ou84 - - 337 140 477 0
Table 4.2: HONDURAS I 1fT9/75
EXTERNAL PUBLIC DEBT AS OF DFCEMBER 31.1974
DEBT REPAYABLE IN FOREIGN CURRENCY
IN THOUSANDS.oF U.S. nOLLARS PAGE 13
LOANS FROM INILs ORGANIZATIONS
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD' CANCEL;
LATIONS.DISBURSED INCLUDING COMMITO DISBURSE- SERVICE PAYMENTS ADJUST-
YEAR ONLY UNOISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 32,476 77,483 4.670 11312 1.425 1,337 2J762 11970 42,362 80.729 22.731 21.372 1,667 1.963 3,630 301971 62,069 101.763 9.763 13.965 2.055 2*759 4,814 2301972 73,981 109,241 15.705 13.307 3.#133 3,o504 6,637 8321973 84,986 122e645 31.000 13,768l 40436 4,B49 9.285 1,6041974 95,955 150.813 4o.177 15,596 4,584 4.765 9,349 *544
1979 106,899 185,862 - 24,116 6,262 5.105 11.3671976 124.753 179P600 - 18.777 7,475 6.1o7 13.5821977 136,055 172.125 - 13p990 7.917 6,868 14.786197A 142,087 164p2U7 - 11.402 6,999 7,094 14.094 -1979 146,490 157,208 -5392 7.277 1.116 140393198 144,605 149,931 - 3P296 A,161 6,839 15.000 -1981 139.740 141.770 1P367 7,849 6,435 14.2831982 133,258 133.921 507 7.680 5.995 13.675 -1983 126.086 126.242 126 7.915 5,538 13.4531984 11.b29? 118,327 - 30 7,850 5,063 12.9121985 110U477 110,477 _ - A.055 4.692 12.7461986 1U2,423 102.423 - - 7.965 4,233 12.1981981 94,451 94.457 - A,263 3,768 12.032198Hi b86.194 86,194 7,741 3.300 11.0411989 78,453 78.453 - - 6.830 2,860 9.690 -199o I1,623 71,623 - - 6,I80 2.485 8.6651991 65,443 65,443 -- 4454 2.181 6.635 -199? 6U,989 6U0989 - - 4,294 1.967 6.2611993 56,695 56.695 - _ 4,144 1.754 5.897 _1994 52.551 52,551 _ 3,907 1,558 5.464
Table 4.2: HOIDURAS 11l9/75
EXTERNAL PUBLIC DEBT AS OF DFCEMBER 31P1974
DEBT REPAYABLE IN FOREInN CURRENCY
IN THOUSANDS OF U.S. nOLLARS PAGE 14
LOANS FROM GOVERNMFNTSUSA
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL
LATIONS,DISBURSED INCLUDING COMMITO DISBURSF- SERVICE PAYMENTS ADJUST-
YEAR ONLY UNOISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 13,968 26.750 10i000 3.643 230 165 395 11970 1f.382 38P521 - 7P211 234 212 446 441971 24,356 38.243 WOOU 1P895 232 294 526 4961972 26b020 39#515 - 3.877 144 274 418 *511973 29,153 39,320 10,348 3.126 122 473 595 11914 32,757 49.545 22,100 8834 112 51U 622 1
1975 41.479 71.534 - 11,1%4 501 1.051 1.552 -
1976 52.132 71,033 7 7,31 8 577 1.329 1#9061971 58,873 70,456 - 4.281 1#639 1.601 3J240 -1978 61,515 68,817 - 3o103 1t754 1.673 3.4271979 62.864 67.063 - 2o210 1t706 1.659 3.364 41980 63,36B 65,357 - 1.561 2P655 1.632 4J2871981 62,280 62.102 422 2,675 1.559 4.234 -
1982 60,021 6U,027 - - 2.697 1.449 4.1461983 517330 5 1330 - - 2.739 1.345 4.0841984 54.591 54#591 - 8 2.876 1.239 4.1141985 51,716 51716 - - 2.158 1I245 3.404 4198A 49,551 49,557 - - 2,162 1.296 3J458 b1987 47.395 47,395 - - 2,046 1.237 3.283 _1988 45,349 45,349 - 3 2.310 1181 3.491 -1989 43.039 43,039 9 - 1i934 1 128 3.062 2199o 41.105 41#105 - - 1,937 1.076 3P015 -
1991 39,168 39.168 - _ 1,940 1J029 2J969 -1992 3/-,228 37P228 _1943 979 2.922 -
-1993 35.285 35,285 I I1947 929 2.8751994 33.339 33,339 - - 1,950 879 2.*829 -
Table 4.2: HONDURAS i
EXTERNAL PUBLIC DEBT AS OF DECEMBER 31#1974
DEBT REPAYABLE IN FOREIGN CURRENCY
IN THOUSANDS OF U.S nOLLARS PAGE 15
LOANS FRUM GOVERNMENTSVENEZUELA
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL-
LATIONS#DISBURSED INCLUDING COMMIT' DISBURS- SERVICE PAYMENTS ADJUST'
YEAR ONLY! UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1974 - - 5JO000 _ _
1975 - 5,J000 - 1.80 - S -
1976 l,800 5,000 - 1J600 S - 5
1977 3,400 5,uOO 900 - -
197A 4#300 5,000 5S50 - S - -
1979 4.,850 5ouoO 1S0 250 250 -
198o) 4,750 4,150 - - 500 5001981 4,250 4,250 - a 500 500 a
1982 3,750 3,750 - - 500 500 -
1983 3,250 3P250 a a SUO ' 5001984 2P750 2P750 500 5001985 2,250 2,250 -500 a 500 a
1986 1,750 1,750 - - 500 500 a
1987 1,2250 1,250 s500 500 a
1988 750 750 500 5001989 250 250 - 250 a 250 a
Table 4.2: HONDURAS 11/19/75
EXTERNAL PUBLIC OEBT AS OF DECEMHER 31,1974
DEBT REPAYABLE IN FOREIJN CURRENCY
IN THOUSANDS OF U.S. DOLLARS PAGE 16
LOANS FROM GOVERNHFNTS
DEbT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL
LATIONS.DISBURSED INCLUDING COMMIT DISBURSF- SERVICE PAYMENTS ADJUST-
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (a)
1969 13.968 28,750 10.000 3J643 230 165 395 11970 17J3M2 380521 7.211 234 212 446 -441971 24,356 38P243 2,O0O 1.895 232 294 526 -4961972 26,020 39.515 3.877 144 274 418 -511973 29#753 39,320 1UJ348 3.1,6 122 473 595 -I1974 32.757 49,545 27.100 8P814 112 510 622 1
1975 41.479 76,534 - 12.954 501 1.051 1.5521976 53.932 76,033 - 8.918 577 1,329 1#9061977 62P273 75,456 - 5.18l 1,639 1.601 3#240197A 65.815 73,I17 _ 3#6%3 1,754 1.673 3,4271979 67,714 72,063 - 2,360 1,956 1,659 3P 61 41980 68,118 7u,107 - 1I567 3,155 1.632 4.78171981 66,530 66.952 - 422 3,175 1*559 4 734 31982 63,777 63,771 - - 3,197 1 449 4,6461983 6U0580 6U,580 - - 3,239 1.345 4.584I98a4 57.341 57,341 _ 3376 1.239 4.6141985 53,966 53.966 P- 2658 1.245 3.9041986 51,307 51,307 , 2,662 1,296 3.9581987 48,645 4B.645 - _ 7,546 1.237 3.7831988 46,099 46,099 - - ?,810 10181 3P9911989 43,289 43,289 - _ ?1,84 1.228 3.3121990) 41.105 41,105 - - 1,937 1.078 3.0151991 39.168 39,168 1 _ 2,940 .*029 2.9691992 37,228 37,228 - - 1943 979 2.9221993 35*285 35,285 - - 1,947 929 2P8751994 33,339 33,339 - - 1,950 879 2#829
EXTERN Al DEBT DIVISIONECONOMIC ANAJYSIS & PROJECTIONS DEPARTMhJT
DECEMBER 22, 1975
CONFiDENTIALTABLE 4.3: HONDURAS 11 /19 /75
EXTERNAL PUBLIC DEBT OUTSTANDING AS OF DECEMBER 31,1974
DEBT REPAYABLE IN LOCAL CURRENCY
IN THOUSANDS OF U.S. DOLLARS PAG3 1
DET -OUTSTANDING DECEMBER 31,1974CURRENCY DISBURSED
CREDITOR COUNTRY UNDIS-TYPE OF CREDITOR DISBURSED BURSED TOTAL
DISBURSED IN LOCAL CURRENCY 11,610 1*080 12,69vBCIE 11,610 1'080 12P-69(
DISBURSED IN LOCAL CURRENCY 9,139 8,093 17,232DISBURSED IN FOREIGN CURRENCY 34.952 23#224 58,176
1DB 44,091 31'317 -75,40wLOANS FROM INTL. ORGANIZATIONS 55to?7 32J397 $8809k
DISBURSED IN LOCAL CURRENCY 867 - 867DISRURSED IN FOREIGN CURRENCY 3,511 3,511
USA 4,378 4,376LOANS FROM GOVERNMENTS -4,378 4#37
OTAL EXTERNAL PUBLIC DEBT 60,079 32#397 92,476
NOTEt DEBT WITH A MATURITY OF OVER ONE YEAR
ErTAASI &}!30C DTIvSI&XJa3CMINC ANA=;Sis &_ .1RE=.S IDEkRMI
-DEZME 22. 1975
ICONFIL JIALTABLE4.4: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DFCEMBER 31P1974
DEBT REPAYABLE IN LOCAL CURRENCY
IN THOUSANDS OF U#S. nOLLARS PAGE 1
IOTAL
DEBT OUTSTANDING TRANSACTIUNS DURING PERIODBEGINNING OF PERIOD CANCELO
LATIONS,DISBURSED INCLUDING CUMMIT DISBURSE- SERVICE PAYMENTS ADJUSTO
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 27,635 49,695 10,500 9P204 1;107 1,247 2,354 '41970 35,733 59,084 5,260 9,873 1,666 1,527 3,193 *4991971 43,941 62,165 17,035 7,351 1,961 1,748 30729 31972 49,313 77,242 5s676 3,792 7,390 1,769 4,159 '351973 5U,719 80,493 10U825 40911 3,166 1,964 5*130 -71974 52,461 88,145 6,736 11,044 .2,943 1,989 4#932 536
1975 60#079 92,476 11,116 4,610 2P276 6,8861976 66p565 87,866 7,846 4,905 2,307 7#2131977 69,526 82,961 5,610 4,949 2P261 7#2101978 7U,187 78,012 - 3,147 4,940 2,170 7 I1I0-1979 68,993 73,071 - 2p825 4,330 2,059 6#3901980 67,488 68,741 - 1120 4,343 1,942 6,284 41981 64,265 64,398 - 133 4,339 1,797 6P1371982 6U,059 60,059 a 4,215 1#643 5v8581983 55,A43 55#643 - - 4#341 1,535 5,877 -1984 5 1502 51,502 4,519 1,439 509591985 46,983 46,983 - - 4,722 1,333 6,0551986 42.261 42,261 4- 4,520 1,175 5,6951987 37,740 37,740 - 4,032 1'026 5,058 -1988 33,708 33P708 4,062 887 4,949 -1989 29,646 29,646 - - 3,590 757 4,3471990 26,056 26,056 - . 3,602 643 40244 -1991 22,455 22,455 ' - P,948 532 3P4801992 19,506 19,506 - - 2,696 448 3#1441993 16,81U 16,810 - - 2,395 372 2P767 -
1994 14,415 14,415 - 2,395 306 2.701
NOTE: INCLUDES SERVICE ON ALL DEBT LISTED IN TABLE 1, PREPARED DECEMBER 22, 1975.
TABLE 4.h: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 3101974
DEBT REPAYABLE IN LOCAL CURRENCY
IN THOUSANDS OF U.S. nOLLARS PAGE 2
LOANS FROM INTL. ORGANIZATIONSBCIE
DISBURSED IN LOCAL CUJRRENCY
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL-
LATIONS*DISBURSED INCLUDING COMMIT DISBURSE- SERVICE PAYMENTS ADJUST;
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (a)
1969 1,835 5,390 - 1,269 189 21 4 403 31970 2#914 5,200 5J260 2J358 134 230 364 -4981971 5,140 9,834 435 2,373 181 300 481 21972 7e333 10,090 876 1e6r1 218 289 507 31973 8,768 10,751 425 1J910 359 290 649 .91974 10,314 10,808 1,708 1,638 343 323 666 517
1975 11,610 12,690 938 762 528 1J2901976 11786 11,928 - 142 643 522 1*1641977 11,285 11,285 - 681 496 1J1761978 10,604 10,604 - 666 462 1,028 a
1979 9,938 9,938 - - 654 430 1JO841980 9,284 9,284 - _ 654 399 1,0531981 8,630 8,630 - - 654 367 1#0211982 7,975 7,975 - - 654 335 9901983 7,321 7,321 - - 654 304 958 -1984 6,667 6,667 - - 654 272 926 -1985 6,013 6,013 - 654 241 8951986 5,359 5,359 654 209 8631987 4.705 4,705 - a 654 177 832 21988 4,050 4,U5U - - 604 147 7511989 3,446 3,446 - a 431 120 551 a
1990 3,015 3,o015 - a 431 101 5321991 2,584 2,584 - a 206 84 290 -
1992 2,378 2,378 - a 206 76 282 -1993 2,173 2,173 - - 155 69 225 a
1994 2,017 2P017 - - 155 64 219
TABLE 4.4: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 3101974
DEBT REPAYABLE IN LOCAL CURRENCY
IN THOUSANDS OF US. nDOLLARS PAGE 3
LOANS FROM INTL. ORGANIZATIONSBCIE
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL
LATIONS,DISBURSED INCLUDING COMMIT' DISBURSE- SERVICE PAYMENTS ADJUST&
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 1i835 5,390 - 10269 189 214 403 -11970 2,914 5P200 5J266 2#358 134 230 364 -4981971 5*140 9,834 435 2#373 181 300 481 21972 7P333 10,090 876 1i651 218 289 507 31973 8,768 10,751 425 1J910 359 290 649 091974 1U,314 10,808 10708 1P638 343 323 666 517
1975 11,610 12,690 - 938 762 526 1J290 -1976 l1766 l1,928 - 142 643 522 10164 -1977 11a285 11j285 - 681 496 1*176 -1978 10J,604 10,604 - 666 462 1.128 a1979 9,938 9,93830 - 654 430 1*0841980 9,284 9,284 - - 654 399 1*0531961 d6630 8,630 - - 654 367 1J0211982 7.,975 7,975 - 654 335 9901983 I.321 7,321 - 654 304 958 -1984 6,667 6,667 - 654 272 9261985 6,013 6,013 - - 654 241 8951986 5,359 5,359 - - 654 209 8631987 4,705 4,705 - - 654 177 832198tt 4,050 4,050 - - 604 14? 751 -1989 3,446 3,446 - - 431 120 551 -1990 3P015 3,015 - 431 101 5321991 2P584 2,584 - - 206 84 2901992 2,378 2,378 - - 206 76 282 -1993 2.o173 2,173 - - 155 69 225 51994 2P017 2,017 - - 155 64 219
TABLE 4.h:HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 31P1974
DEBT REPAYABLE IN LOCAL CURRENCY
IN THOUSANDS OF U.S. DOLLARS PAGE 4
LOANS FROM INTL& ORGANIZATIONSIDB
DISBURSED IN LOCAL CURRENCY
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL
LATIONSPDISBURSED INCLUDING COMMIT DISBURSE- SERVICE PAYMENTS ADJUST'
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) CO)
1969 1.782 2,050 1,600 1 - 62 621970 1,783 3,650 - 1,027 105 73 1781971 2,705 3,545 4J658 615 103 95 1981977 3.217 8*100 50U 985 110 128 2381973 4,092 8,490 3,427 496 108 152 2601974 4,480 11,809 5,030 4D769 109 182 291 502
1975 9,139 17,232 * 2J480 377 280 6571976 11,242 16,855 2p105 470 295 7641977 12,877 16#385 -1437 470 299 768197A 13,844 15,915 975 470 296 7651979 14,350 15,446 w 644 470 288 7581980 14,524 14,976 - 352 470 278 7471981 14,406 14,506 - loo 470 264 7341982 14,037 14,037 - 470 248 718 -1983 13,567 13,567 - 546 248 794 -1984 13,021 13,021 - 630 249 878 -1985 12, 392 12,392 797 280 1 O?771986 11,594 11,594 - 797 259 1*0561987 10,797 10,797 - - 712 23b 9501988 10,085 10O085 - - 712 219 9311989 9,373 9,373 - 695 200 895 -1990 8,679 8,679 - 677 183 860 -1991 8,0U1 8,001 - - 677 165 8431992 I, 324 7,324 ' - 677 148 8251993 6,646 6,646 - - 673 131 803 -1994 5,914 5,974 * 673 114 786 -
TABLE h.4:HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 3111974
DEBT REPAYABLE IN LOCAL CURRENCY
IN THOUSANDS OF U.Ss DnLLARS PAGE 5
LOANS FROM INTL. ORGANIZATIONSIDB
DISBURSED IN FOREIGN CURRENCY
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCELO
LATIONS,DISBURSED INCLUDING CUMMIT' DISBURSE- SERVICE PAYMENTS ADJUST;
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 16,098 34P335 8,90U 7.934 376 706 1#084 -31970 23,658 42,856 6P488 874 950 1'824 "11971 29,271 41,981 11,942 4'363 1,109 1I123 2i232 11972 32,526 52,815 4D300 1'156 1,611 1,185 2P796 "401973 32'071 55,464 60973 2P505 1,929 1#288 3#2171974 32,647 60,508 - 11637 I1849 1*314 3,163 -483
1975 34.952 58,176 *7698 2,692 1i318 4#0091976 39,958 55,484 - 5,599 3,014 1*369 4P3831977 42,543 52,470 - 40173 3,020 1,373 4,393 -1978 43,696 49,450 - 2P772 3,026 1.346 4P3721979 43,442 46,424 - 2l1Rl 3,038 1,298 4,336 -
1980 42,585 43P386 768 3,051 1*228 4,279 -1981 4U,303 40(,336 - 33 3,047 1,136 4,183 -
1982 37,289 37,289 - 2,923 1,034 3P9571983 34,366 34,366 - - 2P973 964 3#937 -1984 31,393 31,393 - - 3,067 905 3,#9721985 28,325 28,325 - 3,102 805 3,907 -1986 25,223 25,223 - - 7,985 706 3,690 -
1987 22,239 22J23Y 3- 2, 666 610 3,277 -1988 19P572 19,572 - - 2p745 522 3P267 -
1989 16,82? 16,827 a ?,464 436 2P901 -1990 14s363 14,363 - - 2,493 359 2'8531991 11,869 11,869 - - 2,065 282 2.347 -
1992 9,804 9P8014 - - 1,813 223 2P037 -
1993 7,991 7,991 - - 1,567 172 1 739 -1994 6,424 6P424 - - 1,567 128 1o695
TABLE 4.4: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DFCEMBER 3101974
DEBT REPAYABLE IN LOCAL CURRENCY
IN THOUSANDS OF US. nDOLLARS PAGE 6
LOANS FROM INTL. ORGANIZATIONSJOB
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL
LATIONSPDISBURSED INCLUDING COMMIT DISBURSE- SERVICE PAYMENTS ADJUST
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 1 78 80 36o385 10*500 7'9 35 376 770 1 146 3197o 25,441 46#506 - 7P515 979 1.O23 2J002 *11971 31 9?6 45p526 16,600 4.978 1 212 1,218 2 430 11972 35P743 6UJ915 4J,80U 2J141 1,721 1w313 3JO34 *401973 36,163 63*954 10.400 3#001 2?037 1,440 3J4771974 3?F127 72,317 5,030 9o406 1,958 1,496 3J454 19
1975 44JO91 75,408 - 10.178 3J069 1#598 4P667 -1976 51J2UU 72P339 - 7,704 3J484 1,664 5.1471977 55.420 68JB655 - 5P610 3,490 1,671 5J161197A 57541 65.366 - 3*747 3J496 1,642 5.*138 -1979 57.792 61,670 * 2P825 3,508 1*586 5.0941980 57,109 58.362 - 10120 3J520 1J506 5.0261981 54,70)9 54,642 - 1.33 3,517 1J399 4J916 61982 5i1.325 51,325 - 3,323 1,282 4'6751983 4 1933 47,933 3 - 3,519 1.212 4.731 31984 44,414 44,414 - - 3J697 1.154 4J8511985 4UJ717 40,117 - 3J899 1.085 40984 -
1986 36,818 36,618 - _ 3,782 964 4J7461981 33,0o6 33,036 - 3J378 84b 4J227 -
198A 29J,658 29,658 - 3,457 741 4J1981989 26.200 26,200 - 3.159 637 3J796 -
199) 23,041 23,041 - _ 3,171 542 3J7131991 19J19J819870 - 2,774? 448 3.190 -
1992 11,128 17,128 - - ?J491 371 2J862 -
1993 14J637 14,637 - 2,239 303 2.5421994 12J396 12J398 - 2,?239 242 2.481
TABLE 4.4: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DFCEMBER 3101974
DEBT REPAYABLE IN LOCAL CURRENCY
IN THOUSANDS OF U.S. DOLLARS PAGE 7
LOANS FROM INTL. ORGANTIZATIONS
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL-
LATIONS,DISBURSEU INCLUDING CUMMIT- DISBURSE- SERVICE PAYMENTS AOJUST-
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) t5) (6) (7) (8)
1969 l19715 41,H'5 10'500 9J204 565 984 1P549 -41970 26,355 51,706 5 266 9'873 1s113 1P253 2 366 4-4991971 371116 55P36U 17,O35 7,351 1,393 1,518 2p911 31972 43,076 71.u05 5,676 3*792 1s939 1,602 3#541 -371973 44P931 74,705 1O'825 4s911 2#396 1,730 4,126 91974 47,441 83P125 6o736 11,044 2,301 1,819 40120 536
1975 55P701 88JO98 11,116 3#831 2'126 5.P9571976 62P986 84,267 - 7P846 4,127 2P185 6P312 -1977 66.705 U0,140 - 5,610 4,171 2,16? 6,337197h 66,145 75,970 _ 3#747 4,162 2,104 6J266 61979 6(,730 71,808 _ 2'625 4,162 2PO17 6P17918(o 66,393 61,646 1*120 4,174 1,905 6#079 -1981 63,339 63,472 - 133 4,171 1,767 5,937198f2 59,301 59,301 -I 4,047 16618 5 664 -1983 55p2514 55s254 - 4,173 1*516 5#689 -1984 51,081 51,081 - 4,351 1#42t 5o777 -1985 46,730 46730 - - 4P554 1#325 5o8791986 42116 42,176 4,436 1*173 5J6091981 37,740 37,74U - _ 4,032 1,026 5s058 -1988 3JJ706 33,708 - - 4,062 887 4'9491989 29,646 29Y646 - 3,590 757 4,347199o 26J056 26,056 - - 3,602 643 4;244 -1991 22.455 22,455 - - 2,948 532 3P460 -1992 19,506 19,506 - 7,696 446 321441993 16o810 16J81U - - 2,395 372 2#7671994 14,415 14,415 - 2,395 306 2*70X
lABLE 4.4: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 3101974
DEBT REPAYABLE IN LOCAL CURRENCY
IN THOUSANDS OF U.S. nOLLARS PAGE 8
LOANS FROM GOVERNMENTSUSA
DISBURSED IN LOCAL CURRENCY
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCEL-
LATIONSsDISBURSED INCLUDING CUMMIT' DISBURSE- SERVICE PAYMENTS ADJUST
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 1,9989 1,989 - - 173 58 231197o 1,816 1,816 - - 171 80 2511971 1,645 1,645 - - 192 48 2401972 1,453 1,453 - - 190 42 2321973 1,264 1,264 -4 196 37 2331974 1,069 1P069 - - 202 31 233
1975 867 867 - - 217 33 249 -1976 650 650 _ , 217 24 2411977 434 434 - - 217 15 2321978 217 217 - _ 217 7 223
TABLE 4.4: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 31s1974
DEBT REPAYABLE IN LOCAL CURRENCY
IN THOUSANDS OF U.S. nOLLARS PAGE 9
LOANS FRUM GOVERNMENTSUSA
DISBURSED IN FOREIGN CURRENCY
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOu CANCEL&
LAT1ONS#DISBURSED INCLUDING CUMMIT' DISBURSE& SERVICE PAYMENTS ADJUST'
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MENTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 5,941 5,931 ' - 369 205 5741970 5,5562 5562 - - 382 194 5761971 5,180 5,180 - - 396 182 578 -1972 4,784 4,o74 - _ 261 125 3861973 4,524 4,524 - 574 197 7711974 3,951 3,951 - - 440 139 579 -
1975 3p511 3,511 - - 562 118 680 -1976 2,949 2,949 - - 562 98 6601977 2,381 2,381 - - 562 79 6411978 1825 1,825 - - 562 59 621 -1979 1,263 1,263 ' - 168 43 2111980 1,095 1,095 ' - 168 37 2051981 926 926 - - 168 31 1991982 756 758 - - 168 25 193 -1983 5J0 590 - - 168 19 1881984 4?1 421 - - 168 13 1821985 253 253 - - 168 7 1761986 84 84 - - 64 1 86
TABLE 4.4: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBt AS OF DECEMBER 31s1974
DEBT REPAYABLE IN LOCAL C.URRENCY
IN THOUSANDS OF U.S. DOLLARS PAGE 10
LOANS FROM GOVERNMENTSUSA
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOD CANCELO
LATIONS,DISBURSED INCLUDING COMMIT' DISBURSE- SERVICE PAYMENTS ADJUST-
YEAR ONLY UNDISBURSED MENTS MENTS PRINCIPAL INTEREST TOTAL MLNTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 7,920 7.920 - - 542 263 805 -
1970 7,378 7,378 - - 553 274 827 -
1971 6,B25 6,U25 - 588 230 8181972 6,231 6,237 451 167 618 21973 5,78B 5,788 - - 770 234 1*004 21974 5.020 5,020 - 642 170 812
1975 4,378 4,378 - 779 150 9291976 3,599 3.,599 - - 779 122 9011977 2,821 2,B21 - . 779 94 872197H 2,042 2,U42 - 779 65 8441979 1,263 1,263 a - 168 43 2111980 1,095 1,095 - - 168 31 2051961 926 926 - - 168 31 199 -1982 75d 758 - - 168 25 1931983 590 590 - 168 19 1881964 421 421 - - 168 13 182 -
1985 253 253 ' - 168 7 176 a
1986 84 84 - - 84 1 86 a
TABLE 4.h: HONDURAS 11/19/75
EXTERNAL PUBLIC DEBT AS OF DECEMBER 31P1974
DEBT REPAYABLE IN LOCAL CURRENCY
IN THOUSANDS OF U.S. nOLLARS PAGE 11
LOANS FROM GOVERNMENTS
DEBT OUTSTANDING TRANSACTIONS DURING PERIODBEGINNING OF PERIOU CANCEL&
LATIONS,DISBURSEU INCLUDING COMMIT' DISBURSE- SERVICE PAYMENTS ADJUST&
YEAR ONLY UNDISBURSEU MENTS MENTS PRINCIPAL INTEREST TOTAL MLNTS(1) (2) (3) (4) (5) (6) (7) (8)
1969 7,920 7,920 - - 542 263 805
1970 7,378 7,378 - 553 274 8271971 6,825 6,825 ' - 588 23U 8181972 b'2J7 6,237 - - 451 161 618 21973 5,788 5,78 8 - 770 234 1004 21974 5,020 5U020 - 642 17U 812
1975 4.378 4,378 - 779 150 9291976 3,599 3,599 - - 779 122 9011977 2,821 2,821 - - 779 94 872
197ti 2,042 2,042 - - 779 65 8441979 1,263 1,263 - - 168 43 2111980 1,095 1,095 - - 168 37 205 -
1981 926 926 - - 168 31 199 -
1982 756 758 _ _ 168 25 1931983 59U 590 - - 168 19 1881984 421 421 - 168 13 182 -
1985 253 253 - 168 7 176 -
1986 84 84 - - 84 1 86
EXTERNAL DEBT DIVISIONECONOMIC ANALYSIS & PROJECTIONS DEPARTMENT
DECEMBER 22, 1975
Table 4.5: HOTDURAS: COIIETMENTS AND DISBURSEMENTS OF EXTERNAL PUBLIC DEBT
( In millions of dollars )
Estimate Projections1975 1976 1977 1975 1979 1950 1951
Commitments
International Organizations 70.3 118 205 56 43 60 80Governments 39.0 47 35 30 34 30 31(of which: Venezuela) (20.0) (20) (20) (15) (15). (10) (10)
FOCEM 1/ 25.0 - - - - - -Suppliers _ 35 20 25 25 35 20Other 33.0 60 4o 4o 4o 60 125TOTAL 173- 2b0 300 1i1 1TF 125 5'6
Disbursements
International Organization 28.4 38 60 81 96 97 89Governments 35.9 39 39 32 34 30 29(of which: Venezuela) (20.0) (20) (20) (15) (15) (10) (10)
FOCEM 1/ 25.0 - - - - - -Suppliers 2.9 15 24 26 25 31 27Other 33.0 60 4o ho ho 60 125TOTAL 125.2 1: 173- 17- 21 '7
1/ Central American Stabilization Fund.
Source: Mission estimates.
Table 4.6: HONDURAS: EXTEWI-4L PUBLIC DEBT OUTSTANDING AS OF DEC. 31J1965 AND 1974
( In millions of dollars )
iao±e h.6: hUfWUfliib:1 4L.7JqNAL ?UISLLU DMT UUThSTANDJiNG oUP DEC. I 1(4 -Miisbursed includling Fercent,Includ=ng Disbursed -inciucndg Percent,Includangonly undisbursec( In Pjmta-,-cs dollars ) only undisbursed undisbursed
Suppliers 2.9 2_$96 5 4.9 3.9 s.a 9 7 4 2.9IJrD,sed. iI~T? ng eFernMylnc1u=ng bf1lYursec1 ncu Mg Tercent,7nciuUrrgPrivate banks (PAy undj(pJjrsed und4.,ursed 2*.rMy undiyjt6rsed undipsbyrsed
Int. Organizations 25.7 39.9 67 106.9 185.9 67.9Sup7s W.a9 9T9OIBRD 13.0 19. 33, 7 45 76 Ih 27 9Priake banks 61. 12 121 212 26 I' 357L 1372IDB 6.~ lJ611-0Int. Organizations - 2*7 9 M 9 l;9
Gover:s 4l7 167 2 7i7 1 7 2;USWRD W7 O Iz 9 7n 7 4B %1 g7*VAAA-zuela -6.4 12.5 21.1 26.9 8 1IDB 5.2 6.5 11.0 2.5 12.6: 4.6TOTAL 33.4 59.1 100.0 154.1 274.0 00.0Governments 4.7 16.2 27.4 41.5 76.5 27.9USA 71771T7 7TVenezuela - - 5.0 1.8
TOTAL 33.4 59.1 100.0 154.h 274.0 100.0
1/ Debt Repayable in Foreign Currency
Source: IBRD Debt Reporting Service.
1/ Debt Repayable in Foreign Currency
Source: IBRD Debt Reporting Service.
Table 5.1: HONDURAS: INSTITUTIONAL CLASSIFICATION OF THE PUBLIC SECTOR
I. Central GovernmentSemi-official InstitutionsCooperative ProjectsDirector of CooperativesNational Sports FederationNational Commission for Sports FacilitiesGeneral Administration
II. Municipalities
III. Autonomous InstitutionsNational University (UNAH)National Social Welfare Board (JNBS)Social Security Institute (IHSS)National Agrarian Institute (INA)National Lottery (INB)Professional Development Institute (INFOP)-
IV. Public EnterprisesNational Electric Power Company (ENEE)National Port Authority (ENP)National Water and Sewerage Service (SANAA)National Housing Institute (INVA)National Railway Company (FNH)National Forestry Corporation (COHDEFOR)---Honduran Banana Corporation (COHBANA) --National Development Bank Food Marketing Agenoy (BANASUPRO)
Source: Central Bank of Honduras
Page 1 of 6
Table 5.2: HONDtRAS: PUBLIC SECT¶R OPERATIONS
(millions of carrent lempiras)
1960 1965 1966 1967 1968 1969 19701 1971 1972 1973 1974 1 9 7 5 2/ 1976 1977 1978 1979 1980 1981
I. Central Government
Current revenue 73.2 110.4 123.8 128.9 1146.8 155.9 188.1 184.0 200.2 227.0 252.1 272.2 336.0 385.5 438.6 520.3 600.7 671.8Of which transfers from public enterprises
and autonomous institutions - 2.6 3.9 2.4 2.6 3.2 3.9 4.3 8.5 4.7 4.2 - - - - - - -Current expenditures 63.5 93.6 103.6 113.4 125.9 154.3 158.1 164.2 192.8 188.6 214.3 239.0 287.4 336.2 385.1 443.7 507.7 572.5
Of which transfers 5.6 12.6 14.3 17.4 19.8 17.6 10.9 10.5 11.1 9.0 20.3 21.5 25.4 29.7 34.2 39.9 44.5 50.0To public enterprises (-) (-) (-) (-) (-) (-) (-) (0.9) (1.4) (-) (1.0) (-) (-) (-) (-) (-) (-) (-)To autonomous institutions (4.9) (12.4) (13.3) (17.1) (19.7) (17.5) (10.4) (8.8) (9.5) (9.0) (19.2) (21.5) (25.4) (29.7) (34.2) (39.9) (44.5) (50.0)To municipalities (0.7) (0.2) (1.0) (0.3) (0.1) (0.1) (0.5) (0.8) (0.2) (-) (0-1) (-) (-) (-) (-) (-) (-) (-)
Current account surplus (+), deficit (-) 9.7 16.8 20.2 15.5 20.9 1.6 30.0 19.8 7.4 38.4 37.8 33.2 48.6 49.3 53.5 76.o 93.0 99.3
Capital receipts 0.5 - - - - - - - - - - - - - - - -
Investment expenditure 16.8 17.5 26.9 31.1 35.0 50.6 65.6 61.5 50.4 62.6 93.5 77.9 148.3 190.7 178.4 159.4 164.1 189.3Of which transfers 1.5 2.7 5.1 6.8 7.3 7.6 6.4 6.9 9.4 13.1 18.3 18.0 15.9 21.8 21.6 37.4 49.6 52.3
To public enterprises (0.5) (2.7) (3.9) (4.7) (4.7) (5.3) (4.1) (2.7) (1.2) (4.0) (6.8) (8.1) (6.7) (6.2) (7.7) (18.6) (24.4) (27.8)To autonomous institutions (1.0) (-) (1.2) (1.1) (1.1) (1.0) (1.4) (3.9) (7.2) (8.6) (11.0) (4.4) (3.0) (2.0) (4.0) (4.7) (9.0) (7-0)To municipalities (-3 C-) (-) (1.4) (1.5) (1.3) (0.9) (0.3) (1.0) (0.5) (0.5) (5.5) (6.2) (13.6) (9.9) (14.1) (16.2) (17.5)
Overall surplus (+), deficit (-) -6.6 -0.7 -6.7 -15.6 -14.1 -49.0 -35.6 -41.7 -43.0 -24.2 -55.7 -44.7 -99.7 -141.4 -124.9 -82.8 -71.1 -90.0
External financing, net 7.5 1.2 4.5 7.6 13.8 23.8 13.6 34.4 19.4 18.8 18.6 38.5 79.6 96.6 72.3 45.4 50.0 50.0Disbursement 10.0 7l7 71 17324 103. 3 122739.9 106.6T TiT =2 1i7 loT7 17 lo-W TT 102.7 1I69Amortization 3.5 3.0 2.6 2.5 2.7 4.0 4.2 5.5 6.4 7.6 8.2 5.0 23.7 26.3 34.3 41.8 52.7 66.9
DomestLc financing, net _1.9 2.2 8.0 22. 7. 23.6 5.4 6.2 2 2.1
Barking system, net -42 2. -4 15.2 24.7 9.1 3.6 9-4.9Other, net 3.7 8.6 5.2 4.6 10.0 -2.7 -7.8 14.5 1.8 42.0 - -
Gap to be financed by Venezuelan oil funds - - - - - - - - - - - - 26.0 25,4 35.0 14.2 9.4 24.3
1/ Beginning in 1970 government enterprises, semi-official institutions, cooperative projects and "others" are included under the Central Government.2/ Estimate.
Page 2 of 6Table 5.2: HONDURAS: PUBLIC SECTOR OPERATIONS
(millions of current lempiras)
1960 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 V/ 1976 1977 1978 1979 1980 1981
II. Municipalities
Current revenue 8.1 9.4 9.8 13.8 11.6 12.6 13.4 14.4 13.5 16.1 19.2 20.0 20.8 21.6 22.5 23.4 24.3 26.0Transfers from the Central Government (0.7) (0.2) (1.0) (0.3) (0.1) (0.1) (0.5) (0.8) (0.2) (-) (0.1) (-) (-) (-) (-) (-) (-) (i)
Current expenditure 5.7 8.1 10.3 11.9 11.1 11.0 11.6 12.0 11.6 12.0 14.8 16.0 19.1 22.4 25.9 28.0 31.0 32.5Current account surplus (+), deficit (-) 2.4 1.3 -0.5 1.9 0.5 1.6 1.8 2.4 1.9 L.1 4.4 4.0 1.7 -o.8 -3.4 -4.6 -6.7 -6.5
Capital receipts 0.3 0.8 1.0 1.8 2.2 2.2 2.8 1.8 1.0 1.0 0.5 5.5 6.2 13.9 9.9 14.1 16.2 17.5Transfers from the Central Government (-) (-) (-) (1-4) (1-5) (1.3) (0.9) (0.3) (1.0) (0.5) (0.5) (5.5) (6.2) (13.6) (9.9) (14.1) (16.2) (17.5)
Investment expenditure 2.0 1.2 1. 4 2.9 1.9 5.2 3.5 5.0 4.o 4.6 ll.o i4.4 14.7 16.7 13.0 14.0 15.0 17.0
Overall surplus (+), deficit (-) 0.7 0.9 -0.9 0.8 0.8 -1.4 1.1 -0.8 -1.1 0.5 -6.1 -4.9 -6.8 -3.6 -6.5 -4.5 -5.5 -6.o
External financing, net - - - - - - - - - - - 3.9 2.7 2.6 3.5 2.5 2.5 3.0Domestic financing, net -0.7 -0.9 0.9 -0.8 -0.8 1.4 -1.1 0.8 1.1 -o.5 6.1 1.0 4.1 1.0 3.0 2.0 3.0 3.0
1/ Estimate.
Page 3 of 6Table 5.2: HONDURAS: PUBLIC SECTOR OPERATIONS
(millions of current lempiras)
1960 1965 1966 1967 1968 1969 1970kg 19711/ 19721/ 1973-/ 1974-/ 1975-/ 1976 1977 1978 1979 1980 1981
III. Autonomous Institutions
Current revenue 11.0 23.6 25.1 30.0 34.3 33.4 17.4 15.8 33.5 43.1 59.0 60.7 70.5 81.0 91.0 104.1 116.9 130.0Of which transfers 8.4 16.4 16.7 22.2 24.6 22.0 10.4 8.8 9.5 9.0 19.2 21.5 25.4 29.7 34.2 39.9 44.5 50.0
From Central Government (4.9) (12.4) (13.3) (17.1) (19.6) (17.5) (10.4) (8.8) (9.5) (9.0) (19.2) (21.5) (25.4) (29.7) (34.2) (39.9) (44.5) (50.0)From public enterprises (3.5) (4.0) (3.4) (5.1) (5.M) (4.6) (-) (-) ( -) (--) () -) (_) (-) ( -) (-) (-) (- )
Current expenditure 8.1 19.8 24.2 24.8 28.0 31.1 15.6 19.2 35.1 42.5 54.9 51.5 60.8 71.6 84.1 94.9 111.1 121.5Transfers to Central Government (-) (2.6) (3.9) (2.4) (2.6) (3.2) (-) (-) (5-4) (4-5) (4.2) (-) ( -) (-) (-) (-) (-) (-)
Current surplus (+), deficit (-) 2.9 3.8 0.9 5.2 6.3 2.3 1.8 -3.4 -1.6 0.6 4.1 9.2 9.7 9.4 6.9 9.2 5.8 8.5
Capital receipts 1.0 - 1.2 1.1 1.1 1.0 1.5 5.2 8.6 10.4 12.6 5.4 3.0 2.0 4.0 4.7 9.0 7.0Transfers from Central Government (1.0) (-) (1.2) (1.1) (1.1) (1.0) (1.4) (3.9) (7.2) (8.6) (11.0) (4.4) (3.0) (2.0) (4.0) (4.7) (9.0) (7.0)
Investment expendLture 3.4 1.8 3.1 6.1 3.8 5.7 5.9 4.6 2.1 4.4 5.8 8.7 10.8 10.7 9.9 13.8 19.2 25.0
Overall surplus (+), deficit (-) 0.5 2.0 -1.0 0.2 3.6 -2.4 -2.6 -2.8 4.9 6.6 10.9 5.9 1.9 0.7 1.0 0.1 -4.4 -9.5
External financing, net - 0.1 0.2 - - 1.2 2.4 3.0 1.2 1.4 4.2 1.6 2.3 2.0 2.3 4.7 7.1 14.4Disbursement _C7 - L T 7 T7 17 1T 7 77 T.h 2.2 2 T 7WAmortization - - _ _ 0.1 - - - - - - - 0.1 0.2 0.3 o.4 0.5 o.6
Domestic financing, net -0.5 -2.1 0.8 -0.2 -3.6 1.2 0.2 -0.2 -6.1 -8.o -15.1 -7.5 -4.2 -2.7 -3.3 -4.8 -2.7 -4.9
1/ Includes National University, Social Security Institute, National Agrarian Institute, National Social Welfare Board.
2/ National Lottery is included.
3/ Professional Development Institute has been added.
4/ The breakdown between public enterprises and autonomous institutions is an estimate.
5/ Estimate.
Page 4 of 6Table 5.2: HONDURAS: PUBLIC SECTOR OPERATIONS
(millions of current 1lefpiras)
1960 1965 1966 1967 1968 1969 1970 1971 19,72 1973 1974~ 19751- 1976 1977 1978 1979 1980 1981
IV. General Government (I+II+I11)
Current revenue 86.7 128.2 l140.5 152.9 170.4~ 181.1 208.0 204~.6 232.1 272.7 306.8 331A4 401.9 4&58.4 517.9 607.9 697.4 777.8of which transfers
from public enterprises (3.5) (4-0O) (3.4) (5.1) (5.0) (4.6) (3.9) (4 .3) (3.1) (0.2) C) C) ) C- () C) C) C)Current expenditure 71.7 1.06.3 119.9 130.3 14i2.7 175.6 174~.4 185.8 224:4I 229.6 260.5 285.0 34i1.9 400o.5 460.9 526.7 605.3 676.5
Of which transfersto public enterprises (- C-) () C) C) C) () (0.9) (1.-4 (.) (1.0) ( ) ( ) ( - -
Current surplus (+,deficit ()15.0 21.9 20.6 22.6 27.7 5.5 33.6 18.8 7.? 4~3.1 46.3 4i6
.4 60.0 57.9 57.0 81.2 92.1 101.3
Capital receipts .0.8 0. 1.0 o.4 0.7 0.9 2.0 2.8 1.4 2.3 1.6 1.0 - 0.3 - - - -
Invesisnent expenditure 21.2 20.5 30.2 37.6 38.1 59.2 72.7 66.9 48.3 62.5 98.8 91.1 164.6 202.5 187.4~ 168.14 173.1 206.8Of which transfers
to public enterprises (0.5) (2.7) (3.9) (14.7) (14.7) (5.3) (14.1) (2.7) (1.2) (14.0) (6.8) (8.1) (6.7) C) C) () (~ -
Overall surplus (+), deficit ()-5.14 2.2 -8.6 -114.6 -9.7 -52.8 -37.1 -145.3 -39.2 -17.1 -50.9 -143.7 -10o4.6 -1.414.3 -130.14 .87.2 -81.0 -105.5
External financing, net 7.5 1.3 14.7 7.6 13.8 25.0 16.0 37.14 20.6 20.2 22.8 144.0 814.6 101.2 78.1 52.6 59.6 67.14Disbursement 10.0 147 -7Y =~ W " = U7. " MT TM T 1i i I"7 1127 M7 l= 1.7~Amortization -3.5 3.0 2.6 2.5 2.8 14.0 4.14 5.5 6.14 7.6 8.2 1.1 23.8 26.5 314.6 142.2 53.2 67.5
Domestic financing, net -2.1 -3.5 3.9 7.0 .44.1 27.8 21.1 7.9 18.6 -3.1 28.1 -0.3 -6.0 17.7 17.3 20.14 12.0 13.8Banking system, net - 77T- :6iT = 77 T77 ~77 ' 3T 7.T -T : - - - -Other, net - 3.7 10.3 14.2 0.2 10.0 -3.6 -7.2 9.5 ..6.7 33.0 - - -- --
Gap to be financed by Venezuelan oil fund - - - - - - - - - - - - 26.0 25.14 35.0 114.2 9.14 214.3
1/ Estimate.
Page 5 of 6Table 5.2: HONDURAS: PUBLIC SECTOR OPERATIONS
(millions of current lempiras)
1960 1965 1966 1967 1968 1969 1970-1 1971L/ 1972i/ 1973 1974 19751/ 1976 1977 1978 1979 1980 1981
V. Public Enterprises
Current revenue 10.7 21.0 25.4 33.0 35.7 38.3 44.0 50.0 37.8 40.6 63.9 145.o 166.7 190.5 217.4 265.2 332.7 351.0Current expenditure 9.8 18.3 20.0 23.9 26.4 27.1 31.8 34.3 26.4 24.9 35.0 116.8 135.2 152.9 179.1 215.2 277.8 289.1
Transfers to autonomous institutions (3.5) (4.0) (3.4) (5.1) (5.0) (4.6) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-)Transfers to Central Government (-) (-) (-) (-) (-) (-) (3.9) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-)Current account surplus (+), deficit (-) 0.9 2.7 5.4 9.1 9.3 11.2 12.2 15.7 11.4 15.7 28.9 28.2 31.5 37.6 38.3 50.0 54.9 61.9
Capital receipts 0.5 2.8 5.0 5.0 5.0 6.3 7.3 3.3 3.2 6.6 10.8 8.5 9.1 9.5 11.7 22.5 28.3 30.8Of which transfers from Central
Government (0.5) (2.7) (3.9) (4.7) (4.7) (5.3) (4.1) (2.7) (1.2) (4.0) (6.8) (8.1) (6.7) (6.2) (7.7) (18.6) (24.4) (27.8)
Investment expenditure 2.5 8.0 9.4 13.6 25.0 35.5 38.9 16.7 17.7 36.4 59.8 90.3 106.3 93.7 122.3 177.2 209.3 221.0
Overall surplus (+), deficit (-) -1.1 -2.5 1.0 0.5 -10.7 18.0 -19.4 2.3 -3.1 -14.1 -20.1 -53.6 -65.7 -46.6 -72.3 -104.7 -126.1 -128.3
External financing, net 1.3 5.1 1.9 3.1 4.4 14.6 18.4 7.0 5.4 12.0 12.8 39.6 45.6 49.1 71.9 105.4 73.6 113.8Disbursements 1.3 6.2 2.7 ; 7.1 16 10.08 18. 423.1 49.8 73 7=1 109. o2 119.3Amortization - 1.1 0.8 1.4 2.7 2.2 2.4 3.0 4.4 6.6 5.4 3.5 4.2 4.7 4.2 4.4 9.2 5.5Domestic financing, net -0.2 -2.6 -2.9 -3.6 6.3 3.4 1.0 -9.3 -2.3 2.1 7.3 14.0 20.1 -2.5 0.4 -0.7 8.2 114.Venezuelan oil fund - - - - - - - - - - - _ _ _ _ _ 44.3 -
1/ Includes National Electric Power Company, National Railway Company, National Water and Sewerage Service, National Lottery, National Port Authority, National Housing Institute.f/ National Lottery has reclassified as an autonomous institution.3/ Estimate.
Page 6 of 6Table 5.2: HONDURAS: PUBLIC SECTOR OPERATIONS
(millions of carrent lempiras)
1960 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1/ 1976 1977 1978 1979 1980 1981
VI. Public Sector (IV+V)
Current revenue 93.9 145.2 162.5 180.8 201.1 214.8 248.1 249.4 265.4 313.1 369.7 476.4 568;6 648.9 735.3 873.1 1030.1 1128.8Current expenditure 78.0 120.6 136.5 149.1 164.1 198.1 202.3 214.9 246.3 254.3 294.5 401.8 477.1 553.4 640.0 741.9 883.1 965.6Current surplus (+), deficit (-) 15.9 24.6 26.0 31.7 37.0 16.7 45.8 34.5 19.1 58.8 75.2 74.6 91.5 95.5 95.3 131.2 147.0 163.2
Capital receipts 0.8 0.9 2.1 0.7 1.0 1.9 5.2 3.4 3.4 4.9 5.6 1.4 2.4 3.6 4.0 3.9 3.9 3.0
Investment expenditure 23.2 25.8 35.7 46.5 58.4 89.4 107.5 80.9 64.8 94.9 151.8 173.3 264.2 290.0 302.0 327.0 358.0 400.0
Overall surplus (+), deficit (-) -6.5 -0.3 -7.6 -14.1 -20.4 -70.8 -56.5 -43.0 -42.3 -31.2 -71.0 -97.3 -170.3 -190.9 -202.7 -191.9 -207.1 -233.8
External financing, net 8.8 6 6 l7 18.2 3 4 26.0 32.2 35.6 83.6 130.2 10 10.0 138.0 153O. 1Disbursement 11.3 10.5 14.6 23.7 23.7 45.8 41.0 52.8 3- 6 T717 9 249. 92.1 158.2 181.5 188.8 204.6 1956 254.2Amortization 2.5 4.1 3.4 3.9 5.5 6.2 6.6 8.4 10.8 14.2 13.6 8.5 28.0 31.2 38.8 46.6 62.4 73.0
Domestic financing, net -2. -6.1 1.0 3.4 2.2 31.2 22.1 -1.4 16.3 -1.0 35. 1317 4141 15.2 17.7 19.7 20.2 28-3Banking system, net -T -7.2 2.8 7 134. 27.7 16.1 9.9 -77 - _ _ -_Other, net - 8.2 0.6 7.5 16.7 -5.6 -17.5 6.4 -8.4 39.6 - - - - - -
Gap to be financed by Venezuelan oil fund 26.0 25.4 35.0 14.2 53.7 24.3
1/ Estimate.
Source: Tables 5.3, 5.4, 5.7 and mission estimates.
Page 1 of 2
Table 5.3: HONDURAS: CENTRAL GOVERNMENT CURRENT REVENUE, 1960-75 ACTUAL AND 1976-81 PROJECTIONS
(millions of current lempiras)
1960 1961 1962 1963 19614 1965 1966 1967 1966 1969 1970 1971 1972 1973 197T 1975
Current Revenue 73.2 74.7 75.2 79.6 92.9 109.1 123.8 128.9 146.8 155.9 188.1 184.0 200.2 227.0 252.1 272.1
Tax Revenue 67.1 66.o 67.9 72.1 83.4 97.7 109.4 118.1 134.8 139.0 156.5 161.0 168.3 194.4 220.7 244.4
Taxes on income and property 11.2 10.4 10.0 12.0 13.3 18.4 28.4 35.5 40.9 44.3 44.5 43.7 41.6 50.0 67.6 75.8Banana companies 0. -- 0.2 0.9 0.5 *- 6.7 1.3 FT 14.1 l3 5. 2. 6.9Other companies 7.5 7.0 6.2 7.3 8.4 11.5 16.2 17.2 20.2 22.5 23.8 28.0 27.9 29.6 41.4 54.2Personal income 2.5 2.5 2.7 3.0 3.0 4.5 3.9 4.14 5.3 6.3 6.9 7.9 9.1 11.2 17.1 18.8Inheritance and gift 0.3 0.3 0.3 0.3 0.5 0.7 0.7 0.7 0.7 o.4 1.1 0.7 0.7 0.7 o.6 0.9Property 0.4 o.4 o.4 o.4 o.6 0.7 0.7 0.7 1.0 0.8 0.9 1.2 1.3 1.6 1.5 1.8Other 0.1 0.2 0.2 0.1 0.3 0.1 0.2 0.2 0.1 0.2 2.5 0.3 -- 0.3 0.1 o.1
Taxes on domestic transactions 18.6 18.3 19.6 20.0 30.1 33.0 35.2 37.0 43.4 49.7 61.5 62.8 68.9 77.O 80.9 82.2
Sales -- -- -- -- 6.4 6.9 8.0 8.7 9.5 9.7 11.0 11.7 12.1 15.0 16.7 16.7Beer 7.4 7.0 7.3 7.2 8.9 9.2 9.1 9.3 10.2 11.2 12.7 14.6 16.4 17.2 15.9 16.0Alcohol 4.7 4.6 5.0 4.9 6.o 6.5 7.0 7.1 8.0 8.3 9.6 10.1 9.9 11.4 12.2 12.9Cigarettes 2.7 2.7 2.9 3.2 3.4 4.2 4.1 4.2 4.7 5.0 5.5 5.5 5.7 6.2 6.9 7.3Petroleum products -- -- -- -- -- -- -- -- 1.1 4.7 8.7 9.8 12.1 12.9 12.3 12.5New vehicles 0.4 0.4 0.5 0.5 0.7 0.8 1.1 1.2 1.6 1.6 1.8 1.8 1.7 2.2 2.8 2.3Vehicle licenses o.4 o.4 o.4 0.5 o.6 0.7 0.8 0.8 0.9 1.0 1.1 1.2 1.3 1.3 1.5 1.7Consumption -- -- -- -- -- -- -- -- 1.4 2.1 4.4 0.1 -- - _Sugar 0.8 0.8 0.8 0.8 1.0 1.1 1.1 1.4 1.3 2.0 1.3 2.0 2.2 2.1 2.1 2.3Other 2.2 2.4 2.7 2.9 3.1 3.6 4.0 4.3 4.7 4.1 5.4 6.o 7.5 8.7 10.5 10.5
Taxes on foreign trade 37.1 37.3 38.2 39.9 39.9 46.3 45.8 45.5 50.3 44.8 50.4 54.5 57.7 67.6 72.2 86.2
Import taxes 33.7 34.3 34.8 35.7 35.6 41.0 40.7 41.1 43.8 39.2 44.6 48.2 51.7 56.2 64.9 62.6Export taxes 3.4 3.0 3.4 4.2 4.3 5.3 5.1 4.4 6.5 5.6 5.8 6.3 6.o 11.4 7.3 23.7
Coffee 2.5 2.1 2.6 3.4 3.0 3.9 3.7 2.8 4.6 3.4 3.7 4.o 3.6 6.6 4.6 7.9Banana 0.3 0.3 0.3 0.3 0.3 0.4 0.5 o.6 o.6 0.6 o.6 0.8 0.7 0.7 0.7 15.0Silver, lead and zinc __ __ __ __ 0.3 0.2 0.1 0.2 0.3 0.2 0.3 0.3 0.3 0.4 1.3 o.6Wood 0.6 0.6 0.5 0.5 0.7 0.7 0.7 0.7 0.9 1.3 1.0 1.0 1.4 3.4 0.5 --Other 0.1 0.1 0.1 0.1 0.1 0.2 0.2 -- 0.3 0.2 0.2
Miscellaneous taxes o.4 0.1 0.2 0.1 -- -- 0.1 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.2
Non-Tax Revenue 6.1 8.7 7.3 7.5 9.5 11.4 14.4 10.8 12.0 16.9 31.6 23.0 31.9 32.6 31.4 27.8
Public sector transfers -- __ 1.0 1.0 1.2 2.6 2.0 1.8 1.8 1.9 3.9 4.3 8.5 4.7 4.2Other 1/ 6.1 8.7 6.3 6.5 8.3 8.8 12.4 9.0 10.2 15.0 27.7 18.7 23.4 27.9 27.2 27.8
1/ Includes funds from government enterprises, semi-official institutions, cooperative projects and others which beginning in 1970 are classified under Central Governmentin the Consolidation of the Public Sector.
Page 2 of 2
Table 5.3: HONDURAS: CENTRAL GOVERNMENT CURRENT REVENUE, 1960-75 ACTUAL AND 1976-81 PROJECTIONS
(millions of current lempiras)
1975 1976 1977 1978 1979 1980 1973
Current Revenue 272.2 336.0 385.5 438.6 520.3 600.7 671.8
Tax Revenue 244.4 304.0 351.3 400.8 479.2 555.9 623.0
Taxes on income and property 75.8 92.3 108.1 127.1 146.6 175.2 198.2Banana companies -- -- W _ 6 .0 7.0 1 1 .OOther companies 54.2 69.2 78.3 89.o 101.4 119.3 128.7Personal income 18.8 20.2 22.8 26.0 31.1 35.7 41.3Inheritance and gift 0.9 0.9 0.9 1.0 1.0 1.1 3.2Property 1.8 1.9 2.0 2.1 2.1 6.1 7.0Other 0.1 0.1 0.1 3.0 4.0 5.0 7.0
Taxes on domestic transactions 82.2 98.6 105.7 113.2 131.7 156.3 180.3
Sales 16.7 19.1 21.6 24.2 37.5 48.4 54.5Beer 16.0 22.6 22.9 23.2 23.5 25.9 29.1Alcohol 12.9 15.0 15.5 16.0 16.5 19.0 21.2Cigarettes 7.3 9.1 9.4 9.6 9.8 12.1 13.0Petroleum products 12.5 15.0 16.9 19.0 21.3 25.8 29.0New vehicles 2.3 2.3 2.3 2.4 2.4 2.4 2.5Vehicle licenses 1.7 1.7 1.8 1.8 1.9 1.9 2.5Consumption -- -- -- -- -- -- --Sugar 2.3 2.3 2.3 2.4 2.4 2.5 3.0Other 10.5 11.5 13.0 14.6 16.4 18.3 25.5
Taxes on foreign trade 86.2 112.9 137.5 160.3 200.7 224.0 244.5
Import taxes 62.6 71.3 79.0 84.5 116.5 136.6 150.4Export taxes 23.7 41.4 58.5 75.8 84.2 87.4 94.1
Coffee 7.9 16.8 26.2 34.6 35.8 36.9 39.0Banana 15.0 21.7 29.2 37.8 45.0 47.0 50.0Silver, lead and zinc 0.6 2.8 2.8 2.9 2.9 3.0 3.5WoodOther 0.2 0.3 0.3 0.3 0.3 0.3 1.6
Miscellaneous taxes 0.2 0.2 0.2 0.2 0.2 0.4 0.8
Non-Tax Revenue 27.8 32.0 34.2 37.8 41.1 44.8 48.8
Public sector transfers -- -- -- -- -- -- --Other 1/ 27.8 32.0 34.2 37.8 41.1 44.8 48.8
1/ Includes funds from government enterprises, semi-official institutions, cooperative projects andothers which beginning in 1970 are classified under Central Government in the Consolidation ofthe Public Sector.
Source: Ministry of Finance through 1974 and mission estimates for 1975-81.
Table 5.4: HONDURAS: CENTRAL GOVERNENT EXPENDITURE BY ECONOMIC CLASSIFICATION, 1960-74
(millions of current Lempiras)
1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974
TOTAL EXPENDITURE 8o. 78.0 80 4 83.9 97.1 111.1 1305 144- 160.9 204.9 223.7 225.7 243.2 251.2 307.6
Current Expenditure 63e 65g2 67j 72_j 82.3 93.6 103.6 113.4 125.9 154 3 158.1 164.2 192.8 188.6 214.3Wages and salaries 39.8 40.1 440.2 41-8 47.5 56.o 58-3 64.9 66.0 77.0 ) l227 141.9 162.3 159.4 17-3Goods and services 12.8 13.8 11.9 13.0 14.7 17-4 21.8 19.8 28.3 33.7 )Interest 2.1 2.2 2.7 2.9 4.0 3.6 4.0 4.3 4.8 5.4 7.4 10.3 12.6 14.2 14.7Domestic debt (1.3) (1.3) (1.5) (1.7) (1.7) (2.1) (2.1) (2.7) (2.8) (2.9) (3.7) (7.4) (5.2) (5.8) (6.3)External debt (0.8) (0.9) (1.2) (1.2) (2.3) (1.5) (1.6) (1.6) (2.0) (2.5) (3.7) (2.9) (7.14) (8.4) (8.14)
Transfers 8.8 9.1 12.9 14.6 16.1 16.6 19.5 24-4 26.8 24.4 19.5 12.0 17.9 15.0 26.3To private sector (2.3) (2.4) (2.8) (2.8) (2.6) (3-1) (3.8) (5.4) (5.3) (5.2) (7.2) (-) (5.3) (5.0) (5.0)To public enterprises (-) (-) (-) (-) (-) (-) (-) (-) (-) (- ) (0.9) (1-4) (-) (1.0)To autonomous institutions (4.9 (6.0 (9.2 (10.1) (11.7) (12.4) (13.3 (17.1) (19.7) (17.5) (10.4) (8.8) (9.5) (9.0) (19-3)To municipalities (.7) (0.2 (0.3 (0.7) (0.5) (0.2) (1.0 (0.3) (0.1) (0.1) (0.5) (0.8) (0.2) (-) (0.1)Abroad (0.9 (0.5 (0.6 (1.0) (1.3) (1.1) (1-4) (16) (1.7) (1.6) (1.4) (1.5) (1.5) (1,0) (1,0)
Emergency expenditure - - - - - - - - - 13.8 8.5 - - - -
Investment expenditure 16.8 12.8 12.7 16.8 114.8 175 26.9 31.1 35Q0 50.6 65.6 61.5 50.4 62.6 93.5Fixed capital 13.2 9T.4 10.6 114.8 11.6 12.7 19.7 19.6 22.7 38.6 50.0 - T 37.6 140.9 73.1Financial 0.1 0.1 0.1 - - 0.1 0.1 0.2 1.0 0.2 0.4 0.2 0.3 0.2 0.3Transfers 3.5 3-3 2.0 2.0 3.2 4-7 7.1 11.3 11.3 11.8 15.2 14.7 12.5 21.6 20.1
To private sector (-) (-) (-) (-) (-) (-) (-) 0.1 () (0.2 (0.4) (0.5) (0.2) (0.2) (-)To public enterprises (0.5) (0 (0.9) (1.0) (1.2) (2.7) -) ( 14.7 5-3 (4.2) (2.7) (1.2) (4.0) (6.0)
To state banks ~0- 05 -) 1-) . 27) R- 1.34(0.9) (0.3) (1.0) (4.0) (60.)To autonomous institutions (1.0) (1.O 1- ) 11 11 1 (14) (3.9) (7.2) (8.6) (11.0)To municipalities (- -) () (- - (- (- 14? 51-5 (1.3 (0-9) (0-3) (1-0) (0-5) (0-5)To state banks (2.0) (1.8) (1.1) (1.0) (2.0) (2.0) (2.0) 4.0 40 4-.0 (8.3) (7.8) (2.9) (8.2) (2.6)
Source: Ministry of Finance.
Table 5.5: HONDURAS: CENTRAL GOVERNMENT GENERAL ADMINISTRATION CURRENT EXPENDITURES BY MAJOR FUNCTION, 1960-74
(millions of current lempiras)
1960 1965 1966 1967 1966 1969 1970 1971 1972 1973 1974
CURRENT EXPENDITURE 63.5 93.6 103.6 113.4 125.9 154.3 162.2 167.2 183.2 174.7 190.6
General Services 29.0 30.8 34.5 41.7 48.6 68.2 70.7 68.5 80.4 68.9 69.7General administration 12.8 12.5 14.7 21.1 26.7 30.2 31.1 33.2 26.9 20.7 13.9Defense and police ) 141 11.4 12.3 12.3 12.9 14.1 19.1 20.2 31.7 26.3 32.8Justice 1 3.3 3.5 4.0 4.2 4.7 4.6 4.8 11.5 7.3 8.0Interest on public debt 2.1 3.6 4.0 4.3 4.8 5.4 7.4 10.3 10.3 14.6 15.0Other - - - - - 13.8 1/ 8.5 1/ - - - -
Social Services 24.1 38.8 44.8 46.4 50.3 58.2 65.9 74.0 76.5 82.6 90.1Education 14.3 25.8 29.1 28.4 31.0 35.9 42.3 47.0 50.5 52.9 59.7Health 6.5 7.3 8.o 10.9 12.5 15.1 16.3 19.0 7.3 21.7 20.9Social welfare 1.7 4.8 6.o 6.8 6.5 6.8 7.3 7.5 18.2 7.0 8.5Other 1.6 0.9 1.7 0.3 0.3 0.4 - 0.5 0.5 1.0 1.0
Economic services 14.5 17.1 18.9 17.3 20.4 21.5 24.5 24.7 26.3 23.2 30.8Agriculture 2.5 4.4 5.8 6.1 6.8 7.4 8.5 8.2 12.4 7.5 8.3Communications 3.1 4.3 4.3 4.4 4.8 5.1 5.3 5.4 )Transportation 6.2 6.2 6.6 5.8 7.4 7.6 9.0 9.6 ) 12.0 13.6 19.1Other 2.7 2.2 2.2 1.0 1.4 1.4 1.7 1.5 1.9 2.0 3.4
Adjustment 2/ -4.1 6.9 5.4 8.0 6.6 6.4 1.1 - - - -
GDP 671.3 1017.3 1099.9 1196.2 1293.6 1336.0 1429.6 1515.5 1634.3 1798.0 1936.6
1/ Emergency expenditure connected with the July 1969 war between Honduras and El Salvador.2/ Difference between Planning Council and Ministry of Finance data.
Source: Planning Council and mission estimates through 1971 and Ministry of Finance for 1972-1974 data.
Table 5.6: HONDURAS: SUMMARY OF PUBLIC SECTOR INTRA-SECTORAL TRANSFERS
(millions of current lempiras)
1960 1965 1970 1971 1972 1973 1974 1975 1/ 1976 1977 1978 1979 19t0 1951
I. Transfers from the Central Government
TOTAL TRANSFERS 7.1 15.3 18.4 17.4 20.5 22.1 38.6 39.5 41.3 51.5 55.8 77.3 94.1 102.3Current Transfers .6 126 1. 10.5 11.1 7Y7 20.3 -75 2T MW 7 44.5 *575Municipalities 0.77 02 0. -- 0 -- -- -- -- -- -- --
Autonomous institutions 4.92/ 12.41/ 10.4 8.8 9.5 9.0 19.2 21.5 25.4 29.7 34.2 39.9 44.5 50.0
National Social Welfare Board -- 1.2 3.7 1.8 2.8 3.1 5.3 6.o 7.0 7.9 9.0 10.3 11.6 13.6National University 1.5 1.9 5.0 5.6 6.o 5.9 9.0 9.5 10.4 11.8 13.2 14.6 15.9 19.0
National Agrarian Institute -- 1.4 1.7 1.4 0.7 -- 3.9 6.o 8.O 10.0 12.0 15.0 17.0 17.4Professional Development Institute -- -- -- -- -- -- 1.0 -- -- -- -- -- -- --
Social Security Institute -- 0.8 -- -- -- -- -- -- -- -- -- -- -- --
Public enterprises -- -- -- 0.9 7.4 -- 1.0 -- __ __ __ __ __ __Capital Transfers 1.5 2.7 6.4 6.9 9.4 13.1 18.3 18.0 15.9 21.8 21.6 37.4 49.6 52.3Municipalities -- __ 0.9 0.3 1.0 J7 0.5 5. 6 13. 7 iT b7 572Autonomous institutions 1.0 __ 1.4 3.9 7.2 8.6 11.0 4.4 3.0 2.0 4.0 4.7 9.0 7.0
National Social Welfare Board -- -_ -_ 5 T- 1. 2 -- -- -- -- -- -- --
National University -- -- -- -- -- 0.9 1.2 -- 1.0 -- -- -- 0.9 --National Agrarian Institute -- -- 1.4 3.1 6.8 6.o 4.o 4.1 2.0 2.0 4.0 4.7 8.1 7.0Professional Development Institute -- -- -- -- -- -- 2.6 0.3 -- -- __ __ _
Social Security Institute 1.0 -- -- -- -- -- 1.2 -- -- -- -- -- -- --
Public enterprises 0.5 2.7 4.1 2.7 1.2 4.0 6.8 8.1 6.7 6.2 7.7 18.6 24.4 27.8National Water and Sewerage Service -- i7T 7 7W TT T T7 -T 7. 1.5-T 7 4.9National Housing Institute 0.5 1.0 2.3 o.8 0.1 0.7 5.6 3.1 2.7 3.7 5.2 4.5 5.5 6.0National Electric Power Company -- 0.3 -- 0.5 -- -- -- -- -- -- -- 10.0 15.0 17.0
II. Transfers from Public Enterprises
TOTAL TRANSFERS 3.5 4.0 3.9 4.3 3.1 0.2 -- -- -- _ -- -- -- --
Current Transfers 3.5 T7 3.9 4. 3.1 0 _ __ __ __ __ __ __ __
Natiomal Child Welfare Institute 3.5 4.0 -- -- -- -- -- -- -- -- -- -- -- --
Central Government -- -- 3.9 4.3 3.1 0.2 -- -- -- -- --
III. Transfers from Autonomous Institutions
TOTAL TRANSFERS __ 2.6 -- -- 5.4 4.5 4.2 _- _- __ __ __ __ __
Current Transfers -- TT T- -- --- -- --
Central Government __ 2.6 -- -- 5.4 4.5 4.2 __
l Estimate.2/ Includes transfers to semi-official institutions and decentralized agencies which became part of the Central Government in 1970.
Source: Appendix Tables 5.2 and 5.7.
Page 1 of 6Table 5.7: HONDURAS: SUMARY TRANSACTIONS OF MAJOR PUBLIC ENTITIES
(millions of current lempiras)
1960 1965 1970 1971 1972 1973 1974 19751/ 1976 1977 1978 1979 1960 1961
I. Public Enterprises
NATIONAL ELECTRIC PONER COMPANY (ENEE)
Current revenue 2.7 7.2 16.7 18.3 21.3 24.6 27.5 40.5 47.0 54.0 63.1 70.4 79.6 84.1Current expenditure 1.6 4.2 9.1 10.6 12.4 13.9 15.8 28.9 28.7 32.0 35.7 39.2 45.6 48.7Current surplus (+) or deficit (-) 1.1 3.0 7.6 8.3 8.9 10.7 11.7 11.6 18.3 22.0 27.4 31.2 34.0 35.4
Capital receipts - 0.3 0.1 0.5 1.4 0.5 1.1 0.4 0.4 0.8 1.0 10.9 15.9 17.0(Transfers from Central Government) ( - ) (0.3) ( - ) (0.5) ( - ) ( - ) ( - ) ( - ) ( - ) ( - ) ( - ) (10.0) (15.0) (17.0)
Investment 1.8 2.0 24.4 10.9 14.3 28.6 25.1 35.8 49.4 143.9 44.0 102.6 1140.4 128.0
Overall surplus (+) or deficit (-) -0.7 1.3 -16.7 -2.1 -4.0 -17.4 -12.3 -23.8 -30.7 -21.1 -15.6 -60.5 -90.5 -75.6
External financing, net 1.3 1.1 12.4 7.6 5.2 12.8 9.1 14.2 22.7 19.7 17.7 58.7 31.8 64.7Disbursement 1.3 2.3 14.0 9. 6 17. 114.2 I 16.1 22.7 20.3 61.5 39.4Amortization - 1.2 1.6 2.0 3.6 4.8 5.1 1.9 2.1 3.0 2.6 2.8 7.6 3.3Domestic financing, net -o.6 -2.4 4.3 5.5 -1.2 4.6 3.2 9.6 8.0 1.4 -2.1 1.8 14.4 10.9Venezuelan oil fund - - - - - - - - - - 44.3 -
NATIONAL PORT AUTHORITY (ENP)
Current revenue 6.6 7.7 7.8 8.3 9.8 10.6 12.0 13.3 14.0 15.0 15.9 17.0Current expenditure 2.6 3.7 6.8 4.3 5.5 5.7 7.8 8.9 9.9 10.1 11.0 12.0Current surplus (+) or deficit (-) 4.0 4.0 1.0 4.0 4.3 4.9 4.2 4.4 4.1 4.9 4.9 5.0
Capital receipts - - - 1.8 - - - - - - - -
Investment 7.1 1.0 0.4 5.8 15.7 15.1 21.7 12.6 4.o 2.2 3.0 7.0
Overall surplus (+) or deficit (-) -3.1 3.0 0.6 - -11.4 -10.2 -17.5 -8.2 0.1 2.7 1.9 -2.0
External financing, net 3.0 -0.2 - 0.8 4.0 9.6 11.9 7.6 2.4 1.0 1.2 3.7Disbursement 3.0 - 0.2 4 07 10.1 12.5 8.2 3T 1. 7 1 .9 T.5Amortization - 0.2 0.2 - - 0.5 o.6 o.6 o.6 0.7 0.7 o.8Domestic financing, net 0.1 -2.8 -o.6 -o.8 7.4 0.6 5.6 o.6 -2.5 -3.7 -3.1 -1.7
NATIONAL WATIER AND SEWERAGE SERVICE (SANAA)
Current revenue 0.7 2.2 2.3 3.4 2.5 2.7 3.0 4.9 6.5 8.o 9.4 10.2 11.1(Transfers from Central Government) (- ) ( - ) (0.1) (0.8) ( - ) ( - ) ( - ) ( - ) ( - ) ( - ) ( ) ( - ) ( - )Current expenditure 0.9 2.2 2.0 2.8 2.1 2.2 4.2 5.7 7.1 8.5 9.8 11.0 12.3Current surplus (+) or deficit (-) -0.2 - 0.3 0.6 0.4 0.5 -1.2 -0.8 -o.6 -0.5 -0.4 -o.8 -1.2
Capital receipts' 1.4 1.8 1.4 1.1 3.6 1.2 5.0 4.0 2.5 2.5 4.1 3.9 4.8(Transfers from Central Government) (1.4) (1.8) (1.4) (1.1) (3.3) (1.2) (5.0) (4.0) (2.5) (2.5) (4.1) (3.9) (4.8)
Investmsent 3.5 2.0 1.2 1.5 1.3 1.1 18.6 14.6 15.0 14.0 12.0 12.0 16.o
Overall surplus (+) or deficit (-) -2.3 -0.2 0.5 0.2 2.7 o.6 -14.8 -11.4 -13.1 -12.0 -8.3 -8.9 -12.4
External financing, net 2.1 0.2 -0.4 -0.2 -0.4 - 12.4 8.3 9.3 8.8 6.9 6.4 9.1Disbursement 2.1 0.2 -- - -T.7 -T7 7.5 7.0 T 9.Amortization - 0.4 0.2 0.4 - 0.4 0.4 0.5 0.5 0.6 o.6 0.7Domestic financing, net 0.2 - -0.1 - 2.3 -0.6 2.4 3.1 3.8 3.2 1.4 2.5 3.3
1/ Estimate.
Page 2 of 6
Table 5.7: HONDURAS: SUMMARY TRANSACTIONS OF MAJOR PUBLIC ENTITIES
(millions of current lempiras)
Actual Projections1960 1965 1970 1971 1972 1973 1974 1975 1 1976 1977 1970 1979 1900 19o0
I. Public Enterprises (cont)NATIONAL HOUSING INSTITUTE (INVA)
Current revenue - - 1.1 1.9 1.6 1.0 1.2 2.4 2.9 3.5 4.3 5.3 6.4 7.0Current expenditure 0.2 0.6 1.8 1.4 1.5 1.5 1.8 2.6 3.0 3.8 4.8 5.9 7.0 7.5
Current surplus (+) or deficit (-) - 0.2 -0.6 -0.7 0.5 0.1 -0.5 -o.6 -0.2 -0.1 -0.3 -0.5 -0.6 -0.6 -0.5
Capital receipts 0.5 1.1 5.4 1.4 0.7 0.7 5.6 3.1 2.7 3.7 5.2 4.5 5.5 6.0(Transfers from Central Government) ( 0.5) ( 1.0) (2.3) (0.8) (0.1) (0.7) (5.6) (3.1) (2.7) (3.7) (5.2) (4-5) (5-5) (6.0)
Investment 0.3 2.4 3.9 2.2 1.1 o.6 3.8 6.0 6.3 8.0 10.0 10.0 12.0 14.0
Overall surplus (+) or deficit () - -1.9 o.8 -0.3 -0.3 -0.4 1.2 -3.1 -3.7 _4.6 -5.3 -6.1 -7.1 -8.5
External financing, net - 1.9 -0.4 -0.4 -0.4 -0.4 -0.3 2.4 2.1 3.1 3.4 413 5.2 6.5Disbursement - 1.9 - _ - - _ 2.7 2 .8 3 3 .7 5 .5 TOAmortization - - 0.4 0.4 0.4 0.4 0.3 0.3 0.7 0.4 0.3 0.3 0.3 0.5
Domestic financing, net - - -0.4 0.7 0.7 O.o -0.9 0.7 1.6 1.5 1.9 1.8 1.9 2.0
NATIONAL RAILWAY COMPANY (FNH)
Current revenue 1.9 3.8 4.3 3.7 4.2 3.5 3.3 3.7 4.2 4.8 5.3 6.o 6.8Current expenditure 1.9 2.5 2.8 2.9 3.1 3.2 3.0 3.4 3.9 4.3 4.9 5.4 6.6
Current surplus (+) or deficit (-) - 1.3 1.5 0.8 1.1 0.3 0.3 0.3 0.3 0.5 0.4 o.6 0.2
Capital receipts - - - - - - - - - - - -(Transfers from Central Government) ( - ) ( - ) ( - ) ( - ) ( -
Investment 0.1 1.3 1.2 0.4 0.1 0.3 2.8 1.8 0.7 o.6 0.2 0.3 -
Overall surplus (+) or deficit (-) -0.1 - 0.3 0.4 1.0 - -2.5 -1.5 -0.4 -0.1 0.2 0.3 0.2
External financing, net - 3.2 0.4 0.8 -0.8 - 1.0 o.6 0.2 0.1 - - -0.2Dicbursement -3.T 0.4 0.2 - 1.4 9 0.9 W. _ _ _Amortization 0. - - 1.0 - 0.4 0.3 0.2 0.2 - - 0.2
Domestic financing, net 0.1 -3.2 -0.7 -1.2 -0.2 - 1.5 0.9 0.2 - -0.2 -0.3 -
NATIONAL LOTTERY (LNB)2"
Current revenue 8.0 11.2 13.6 14.9Current expenditure 8.0 10.7 13.6 13.8
(Transfers to general government) ( 3.5) ( 4.0) (3.9) (4.3)Current surplus (+) or deficit (-) - 0.5 - 1.1
Capital receipts _ _
Investment 0.4 - 0.2 0.2
Overall surplus (+) or deficit (-) -0.4 0.5 -0.2 0.9
External financing, net _ - _DisbursementAmortization
Domestic financing, net 0.4 -0.5 0.2 -0.9
1/ Estimate.
2/ In 1972 LNB was reclassified as an autonomous institution, from 1970 LNB includes PANI
1/Page 3 of 6Table 5.7: HONDURAS: SUMMARY TRANSACTIONS OF MAJOR PUBLIC ENTITIES -
(millions of current lempiras)
1974 1975 1976 1977 1978 1979 1980 1981
I. Public Dhterprises (con't)
NATIONAL FORESTRY CORPORATION (COHDEFOR)
Current revenue 19.2 85.2 96.2 109.0 123.2 159.8 214.6 225.0
Current expenditure 6.5 72.4 86.6 97.2 115.9 145.3 197.8 202.0Current surplus (+) or deficit (-) 12.7 12.8 9.6 11.8 7.3 14.5 16.8 23.0
Capital receipts 2.9 - 2.0 2.5 3.0 3.0 3.0 3.0
Investment 13.9 12.0 12.5 13.5 49.7 50.2 41.6 56.0
Overall surplus (+) or deficit (-) 1.8 0.8 -0.9 0.8 -39.4 -32.7 -21.8 -30.0
External financing, net - - - 9.2 39.5 34.5 _29. 30.0Disbursements - - - 9.2 39.5 34.5 29.0 30.0Amortization _ _ _ _ _ _ _
Domestic financing, net -1.8 -0.8 0.9 -10.0 -0.1 -1.8 -7.2 -
1/ The 1974 figures are from the Liquidacion of the Contadura General de Honduras. Fhom 1975 forwardcurrent account estimates are based on anticipated gross export sales and recurrent expenditures.
Page 4 of 6
Table 5.7: HONDURAS: SUMMARY TRANSACTIONS OF MAJOR PUBLIC ENTITIES
(millions of current lempiras)
_______ ______ ______ Actual Pro e ti ns1960 1965 1970 1971 1972 1973 1974 1975I1/ 19 1 179 190 11
II. Autonomous Tnst,itutio nsNATIONAL SOCIAL WELFARE BOARD (JNBS)
Current revenue 1.3 4.2 1.9 3.0 4.4 5.3 6.0 7 0 7 9 9.0 10.3 11.6 13.6(Transfer from Central Government) ( 1.2) (3.7) (1.8) (2.8) (3-1) (5.3) (6-0) (7.0) (7.9) (9.0) (10.3) (11.6) (13.6)
Current expenditure 1.1 2.7 2.8 2.9 2.9 5.2 4.2 4.9 5.5 6.3 7.2 8.1 9.0Current surplus (+) or deficit (-) 0.2 1.5 -0.9 0.1 1.5 0.1 1.8 2.1 2.4 2.7 3.1 3.5 4.6
Capital receipts - 0.1 0.8 o.8 1.7 2.0 - - - - - - -(Transfer from Central Government) - (0.8) (0.4) (1.7) (2.0) - - - - -
Investment - 1.4 1.3 0.9 0.2 0.5 1.0 1.1 1.3 1.5 1.8 2.0 2.5
Overall surplus (+) or deficit (-) 0.2 0.2 -1.4 - 3.0 1.6 0.8 1.0 1.1 1.2 1.3 1.5 2.1
Domestic financing, net - 0.2 -0.2 1.4 - -3.0 -1.6 -0.8 -1.0 -1.1 -1.2 -1.3 -1.5 -2.1
NATIONAL CHILD WELFARE INSTITUTE (PANI)
Current revenue 3.5 4.0(Transfer from public enterprises) ( 3.5) ( 4.0)
Current expenditure 1.0 3.5(Tranfer to Central Government) ( - ) ( 2.6)Current surplus (+) or deficit (-) 2.5 0.5
Capital receipts - -
Investment 2.5 0.4
Overall surplus (+) or deficit (-) - 0.1
Domestic financing, net - 0.1
NATIONAL AGRARIAN INSTITUTE (INA)
Current revenue 1.5 1.9 1.8 1.4 0.4 4.2 6.6 8.7 11.2 12.3 15.3 17.5 18.0(Transfer from Central Government) ( 1.4) (1.7) (1-4) (0.7) ( - ) (3-9) (6.0, (8.0) (10.0) (12.0) (15.0) (17.0) (17.4)
Current expenditure 1.0 2.0 3.6 3.1 4.0 5.3 8.5 10.7 13.2 16.3 20.0 24.6 26.0Current surplus (+) or deficit (-) 0.5 -0.1 -1.8 -1.7 -3,6 -1.1 -1.9 -2.0 -2.0 -[.0 -4.7 -7.1 -8.o
Capital receipts - 1.4 3.1 6.8 6.o 4[. 5.1 2.0 2.0 4.0 4.7 8.1 7.0(Transfer from Central Government) (1.4) (3-1) (6.8) (6.0) (4.0) (4-1) (2.0) (2.0) (4.0) (4.7) (8.1) (7.0)
Investment 0.5 1.9 1.9 0.2 1.5 2.8 4.1 2.8 3.0 3.0 7.0 11.0 15.0
Overall surplus (+) or deficit (-) - -0.6 -0.6 4.9 0.9 0.1 -0.9 -2.8 -3.0 -3.0 -7.0 -10.0 -16.0
External financing, net 1.4 2.2 o.6 0.8 3.3 0.9 1.8 2.0 2.0 4.2 6.6 12.4Disbursement - 1.4 2.2 0.6 0.8 3.3 0.9 1.9 2.2 2.3 4. 7.1 13.0Amortization - - - - - 0.1 0.2 0.3 o.[ 0.5 0.6
Domestic financing, net - -0.8 -1.6 -5.5 -1.7 -3.4 - 1.0 1.0 1.0 2.8 3.4 3.6
1/ Estimate.2/ From 1970 onward PANI is included under LNB.
Page 5 of Table 5.7: HONDURAS: SUMMIARY TRANSACTIONS OF MAJOR PUBLIC ENTITIES
(millions of current lempiras)
Actual Prorections1960 1965 1970 1971 1972 1973 1974 1975 1/ 1976 1977 197 1979 19o0 1981
II. Autonomous Institutions (con't)SOCIAL SECURITY INSTITUTE (IHSS)
Current revenue - 4.6 5.5 5.5 7.0 13.6 23.1 24.3 27.6 31.1 35.0 39.4 44.0 49.0(Transfer from Central Government) ( 0-:)(0.8) ( - ) ( - ) ( - ) ( - ) ( - ) ( - ) ( - ) ( - ) ( - ) ( - ) ( ) (- )
Current expenditure 0.2 2.5 5.0 5.6 6.9 9.0 18.0 15.8 18.0 20.2 22.7 25.5 28.5 31.9Current surplus (+) or deficit (-) - 0.2 2.1 0.5 -0.1 0.1 4.6 5.1 8.5 9.6 10.9 12.3 13.9 15.5 17.1
Capital receipts 1.0 - 1.3 1.0 0.3 1.6 - - - - - -(Transfer from Central Government) (10) ( - ) ( -) ( - ) ( - ) ( - ) ( - - )) ( - ) ( - ) ( - ) ( - ) ( - ) ( - )
Investment 0.4 0.1 1.5 0.5 0.1 1.5 o.6 0.7 2.0 4.o 2.4 2.0 3.0 3.5
Overall surplus (+) or deficit (-) 0.4 2.0 -1.0 0.7 1.0 3.4 6.1 7.8 7.6 6.9 9.9 11.9 12.5 13.6External financing, net - - 0.2 - - - - - - - - - -
Domestic financing, net - 0.4 - 2.0 0.8 -0.7 -i.0 -3.4 -6.1 -7.8 -7.6 -6.9 -9.9 -11.9 -12.5 -13.6
NATIONAL UNIVERSITY (UNAR)
Current revenue 1.6 2.2 5.8 6.6 7.3 9.2 10.6 10.6 12.4 14.0 15.6 16.8 18.9 20.0(Transfer from Central Government) ( 1.5) ( 1.9) (5-.) (5.6) (6.0) (5.9) (9.0) (9.5) (10.4) (11.8) (13.2) (14.6) (15.9) (19.0)
Current expenditure 1.2 1 1.9 5.9 7.2 6.9 9.9 10.7 10.6 13.3 14.5 16.0 17.0 19.4 21.0Current surplus (+) or deficit (-) 0.4 0.3 -0.1 -o.6 0.4 -0.7 -0.1 ( - ) -0.9 -0.5 -0.4 -0.2 -0.5 -1.0
Capital receipts - - - - - 1.0 1.2 - 1.0 - - - 0.9 -(Transfer from Central Government) ( -) ( - ) ( - ) ( - ) ( - ) (0.9) (1.2) ( - ) (1.0) - - - (0.9) _
Investment 0.3 0.4 1.1 0.9 0.7 1.0 1.2 1.3 0.9 - 0.5 1.0 1.0 1.5
Overall surplus (+) or deficit (-) 0.1 - 0.1 -1.2 -1.5 -0.3 -0.7 -0.1 -1.3 -0.8 -0.5 -0.9 -1.2 -0.6 -2.5
External financing, net - 0.1 o.8 o.8 0.4 0.6 0.9 0.7 0.5 - 0.3 0.5 0.5 1.0Disbursement - 0.1 E 0.8 0. 0 ° - 0.3 0. 0. 1.0Amortization - - - - - -
Domestic financing, net - 0.l - 0.4 0.7 -0.1 -0.1 -0.8 o.6 0.3 0.5 o.6 0.7 0.1 1.5
NATIONAL LOTTERY (LNB).2"
Current revenue 14.8 15.5 12.2 9.4 10.4 12.0 13.7 16.2 18.1 21.7
Current expenditure 15.3 16.7 13.3 1o.4 11.5 13.2 14.8 15.2 18.5 21.0(Transfer to Central Government) (5.4) (4-5) (4.2) ( - ) ( - ) ( - ) ( - ) ( - ) ( - )Current surplus (+) or deficit (-) -0.5 -1.2 -1.1 -1.0 -1.1 -1.2 -1.1 1.0 -0.4 0.7
Capital receipts - 1.4 1.2 - - - - - - -_(Transfer from Central Government) (1.2)
Investment 0.2 0.2 0.1 0.7 0.5 1.5 1.5 1.0 1.2 1.0
Overall surplus (+) or deficit (-) -0.7 - - -1.7 -1.6 -2.7 -2.6 - -1.6 -0.3
External financing, net 0.2 Disbursement - - - -Amaortization- - - - _ __
Domestic financing, net 0.5 1 - 1.7, 1.6 2.7 2.6 2.0 1.6 0.3
1/ Estimate.2/ Up to 1972 LNB was considered a public enterprise; from 1970 onward it includes PANI.
Page 6 of 6
Table 5.7: HONDURAS: SUMMARY TRANSACTIONS OF MAJOR PUBLIC ENTITIES
(millions of current lempiras)
-_______________1975_____11974 1975 1976 1977 1978 1979 1980 1981
II. Autonomous Institutions (con't)
PROFESSIONAL DEVELOPMENT INSTITUTE (INFOP)
Current revenue 3.6 3.8 4.h h.8 5.4 6.1 6.8 7.7(Transfer from Central Government) (1.0)
Current expenditure 2.h 2.0 2.4 5.0 8.0 10.0 12.0 12.6Current surplus (+) or deficit (-) 1.2 1.8 2.0 -0.2 -2.6 -3.9 -5.2 4-.9
Capital receipts 2.6 0.3 - - - - - -(Transfer from Central Government) (2.6) (0.3) ( - ) ( - ) ( - ) ( - ) ( - ) ( - )
Investment 0.6 0.9 3.5 0.9 1.0 1.0 1.0 1.5
Overall surplus (+) or deficit (-) 3.2 1.2 -1.5 -1.1 -3.6 -h.9 -6.2 -6.4
External financing, net - - - - - - - 1.0Disbursements - - - - - - - 1.0Amortization - - - - - - - -
Domestic financing, -3.2 -1.2 1.5 1.1 3.6 h.9 6.2 5.4
1/ Estimate.
Source: Central Bank through 1975 and mission estimates for 1975-1981 data.
Table 5.8: HONDURAS: FINANCING OF PUBLIC SECTOR CAPITAL EXPENDITURES, ACTUAL AND PROJECTIONS
(millions of current lempiras)
1960-64 1965-69 1970 1971 1972 1973 1974 1975k/' 1976 1977 1978 1979 1980 1981
Central GovernmentCurrent Revenue 79.4 133.2 188.1 184.0 200.2 227.0 252.1 272.2 336.0 385.5 438.6 520.3 600.7 671.8
Yield of 1974 and 1975fiscal measures -- -- -- -- -- -- -- -- 41.5 54.9 68.o 76.9 75.8 81.7
New fiscal measures -- -- -- -- -- -- -- -- -- -- -- 35.3 72.2 80.7Current Expenditures 57.5 118.2 158.1 164.2 192.8 188.6 214.3 239.0 287.4 336.2 385.1 443.7 507.7 572.5Current Savings 15.9 15.0 30.0 19.8 7.4 38.4 37.8 33.2 48.6 49.3 53.5 76.6 93.0 99.3
Rest of Public SectorCurrent Savings -0.5 12.2 15.7 14.7 11.7 20.4 37.4 41.4 43.0 46.2 41.8 54.6 54.0 63.9
Public SectorCurrent Savings 15.4 27.2 45.8 34.5 19.1 58.8 75.2 74.6 91.5 95.5 95.3 131.2 147.0 163.2Capital Income 0.7 1.3 5.2 3.4 3.4 4.9 5.6 1.4 2.4 3.6 4.0 3.9 3.9 3.0Capital Expenditures 28.4 51.2 107.5 80.9 64.8 94.9 151.8 173.3 264.2 290.0 302.0 327.0 358.0 400.0Deficit 12.3 -22.7 -56.5 -43.0 -42.3 -31.2 -71.0 -97.3 -170.3 -190.9 -202.7 -191.9 -207.1 -233.8
Net foreign financing 11.0 15.1 34.4 44.4 26.0 32.2 35.6 83.6 130.2 150.3 150.0 158.0 133.2 181.2Net domestic financing 1.3 7.6 22.1 -1.4 16.3 -1.0 35.4 13.7 14.1 15.2 17.7 19.7 20.2 28.3
Gap to be financed byVenezuelan oil funds -- -- -- -- -- -- -- -- 26.0 25.4 35.0 114.2 53.7 24.3
As percent of GDP
Central GovernmentCurrent Revenue 10.0 11.2 13.1 12.1 12.2 12.6 13.0 13.4 14.6 14.8 15.0 15.9 16.4 16.1Yield of 1974 and 1975
fiscal measures -- -- -- -- -- -- -- -- 1.8 2.1 2.3 2.3 2.1 2.0New fiscal measures -- -- -- -- -- -- -- -- -- -- -- 1.1 2.0 1.9
Current Expenditures 7.2 9.9 11.0 10.8 11.8 10.5 11.1 11.8 12.5 12.9 13.2 13.5 13.8 13.8Current Savings 2.0 1.3 2.1 1.3 0.4 2.1 2.0 1.6 2.1 1.9 1.8 2.4 2.6 2.3
Rest of Public SectorCurrent Savings 0.0 1.0 1.1 1.0 0.9 1.1 1.9 2.0 1.9 1.8 1.4 1.7 1.5 1.5
Public SectorCurrent Savings 1.8 2.3 3.2 2.3 1.3 3.3 3.9 3.7 4.0 3.7 3.2 4.1 4.1 3.8Capital Income 0.1 0.1 0.3 0.2 0.2 0.3 0.3 0.1 0.1 0.1 0.1 0.1 0.1 0.1Capital Expenditures 3.6 4.3 7.5 5.3 4.0 5.3 7.8 8.6 11.5 11.2 10.3 10.0 9.8 9.6Deficit -1.5 -1.8 -4.o -2.8 -2.5 -1.7 -3.7 -4.8 -7.4 -7.4 -7.0 -5.8 -5.6 -5.7
Net foreign financing 1.4 1.3 2.4 2.9 1.6 1.8 1.9 4.1 5.7 5.8 5.2 4.8 3.6 4.4Net domestic financing 0.1 o.6 1.6 -0.1 0.9 -0.1 1.8 0.7 o.6 o.6 o.6 o.6 o.6 0.7
Gap to be financed byVenezuelan oil funds -- -- -- -- -- -- -- 1.1 1.0 1.2 0.4 1.4 o.6
GDP 796.2 1188.1 1429.6 1515.5 1634.3 1798.0 1936.6 2025.1 2300.0 2600.0 2920.0 3280.0 3670.0 4160.0
1/ Estimate.
Source: IBRD Basic Report on the Economy of Honduras, 1972; Banco Central de Honduras and CONSUPLAN, September 1975; and mission estimates for1976-1981.
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Table 5.9: HONDURAS: PUBLIC FIXED INVESTMENT, ACTUAL 1974,ESTIMATED 1975, AND PLANNED 1976-81 (INCLUDING EL CAJON)
Footnotes
1/ Where categorization is by specific project, total project cost is shown,although the disbursement period of the project may not fall entirelywithin the 1974-81 period. Where the categorization is by agency program,total cost represents expenditures in the 1974-80 period.
2/ Not including interest during construction.
3/ Includes transmission lines for Cajon, Aguan Valley extension and ruralelectrification.
4/ Fixed investment portion only, including access roads to be built by SCOPT.
5/ Fixed investment only.
6/ $30.2 million in suppliers' credits.
Sources
A. 1974-78
Highways - CONSUPLAN, Ministry of Communications, Public Works and Transport(SCOPT), and mission estimates.'
Ports - ENP and mission projections.
Other transport - CONSUPLAN.
Power - ENEE.
Agriculture - CONSUPLAN, mission estimates.
Communications - CONSUPLAN, IDB estimates.
Education - Ministry of Education, CONSUPLAN and mission estimates.
Water and Sewer - CONSUPLAN, mission estimates.
Housing - INVA and mission estimates.
Health and Welfare - Ministry of Health and mission estimates.
Forestry - Simons, "Industrialization of the Olancho Forest Reserve" (projec-tions as modified by IBRD).
Tourism - Robert Nathan, "Tornasal Project Report."
Urban Development - CONSUPLAN.
B. 1979-81 - Projections based on:
CEPCIES - "Informe Final Segunda Reunion Interagencial Especial sobre Honduras,Anexo II," and mission estimates.
Table 5.10: HONDURAS: SCALED DOWN PUBLIC FIXED INVESTMENT 1976-1981
(millions of lempiras)
1976 1977 1973 1979 1980 1981 TOTAL
(a) Total with El Caj6n 230.0 322.3 346.3 380.1 419.3 39h.0
(b) Estimated GDP 2,300.0 2,600.0 2,920.0 3,280.0 3,670.0 h!,160.o
(c) Public investment as apercent of GDP (a?.b) 10.1 12.3 11.9 11.6 11.4 9.5
(d) Cost of Ea Cajon andrelated transmission 5.7 62.3 90.9 162.4 208.2 130.0 659.5 1/
(e) Investment excluding ELCajon (a-d) 230.0 2/ 260.0 255-.1 217.7 211.1 262.0
(f) Investment limited to 10%of GDP in 1976-1977 anddeclining to 9% from1978-1981 230.0 2,0.0 280.0 310.0 340.0 380.0
(g) Balance available forpower sector expansionin 1977-1981 3/ -0- -0- 2h.6 92.3 128.9 116.0 361.8
1/ This does not add to L 800 million because 1982 investment and interest during construction (of aboutL 140 million) are not included.
2/ Not reduced since L 5.7 expenditure for feasibility study and design already contracted.3/ The distribution of power investment shourn here is not intended to represent the actual disbursement
pattern for an alternative project.
Source: Mission estimates.
Table 5.11: HONDURAS: PUBLIC FIXED INVESTMENT BY SECTOR, ACTUAL AND PROPOSED
(as a percent of total investment) 1/
1965-67 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981
Infrastructure 47.9 62.7 71.8 78.2 74.6 76.4 76.9 61.8 54.6 55.6 53.2 47.4 52.2 57.2 51.4
Transportation 36.9 48.4 52.6 54.2 58.7 47.4 38.5 40.6 30.6 28.3 24.9 21.8 15.0 14.4 16.1Power 9.8 12.7 18.4 22.9 14.9 23.2 33.0 18.2 21.8 21.5 13.0 15.7 33.1 41.3 33.7Communications 1.2 1.6 0.8 1.1 1.0 5.8 5.4 3.0 2.2 5.8 15.3 9.9 4.1 1.5 1.6
(Total) (16.0) (34.1) (61.2) (72.3) (54.2) (47.1) (66.6) (74.5) (89.7) (127.9) (138.3) (132.7) (161.8) (194.4) (195.0)
Social Sectors 46.3 35.8 25.5 13.9 22.2 22.6 20.0 33.0 38.3 35.2 31.1 24.6 21.6 20.3 21.5
Education 4.6 3.9 4.8 3.7 5.0 6.5 6.7 5.6 8.3 10.7 5.1 4.8 4.8 4.7 4.2Health 4.8 7.0 5.4 2.0 3.2 3.6 3.8 3.3 4.9 8.2 10.0 5.9 4.2 3.2 3.9Water and Sewerage 11.0 7.0 4.9 1.5 1.6 2.4 1.5 11.0 11.3 6.3 5.8 5.0 3.9 3.5 4.2Housing 7.7 9.5 5.8 2.3 3.0 1.8 0.7 4.0 3.6 2.6 3.0 3.5 3.2 3.6 3.7Urban Development 18.2 8.4 4.6 4.4 9.4 8.3 7.3 9.1 10.2 7.4 7.2 5.4 5.5 5.3 5.5
(Total) (15.6) (19.5) (21.7) (12.9) (16.1) (13.9) (17.3) (39.9) (63.0) (81.0) (81.0) (68.9) (67.0) (69.0) (82.0)
Productive Sectors 5.8 1.5 2.7 7.9 3.2 1.0 3.1 5.2 7.1 9.2 15.7 28.0 26.2 22.5 27.1
Agriculture 5.8 1.5 2.7 7.9 3.2 1.0 3.1 5.2 7.1 8.3 7.2 5.1 6.5 7.1 10.0Forestry - - - - - - - - - - 5.2 17.8 16.2 12.2 14.7Tourism - - - - - - - - - 0.9 3.3 5.1 3.5 3.2 2.4
(Total) (1.8) (O.8) (2.3) (7.3) (2.3) (0.6) (2.7) (6.3) (11.7) (21.1) (40.7) (78.4) (81.2) (76.6) (103.0)
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
(Total proposed fixedinvestment) (33.4) (54.4) (85.2) (92.5) (72.6) (61.6) (86.6) (120.7) (164.4) (230.0) (260.0) (280.0) (310.0) (340.0) (380.0)
As a percent of GDP 3.0 4.2 6.4 6.5 4.8 3.8 4.8 6.2 8.1 10.0 10.0 9.6 9.5 9.3 9.1
(Total fixed investmentincluding El Cajon) (232.5) (320.4) (346.3) (380.1) (419.3) (390.0)
As a percent of GDP 10.1 12.3 11.9 11.6 11.4 9.4
1/ Figures in parentheses are in millions of lempiras.
Source: Central Bank, CONSUPLAN for data through 1975, and mission estimates for 1976-81 data.
Page 1 of 6
Table 6.1: HONDURAS: SUMMARY ACCOUNTS OF THE BANKING SYSTEM
(millions of lempiras)
End of Year_1960 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975
I. Central Bank
International reserves, net 21.8 38.3 46.9 49.6 61. 57.3 39.9 43.7 73.4 85.4 47.6 82.9
Foreign assets 26.6 4.8 5 45.6 58.6 52.4 42.5 45.9 74.6 73.4 977 201.5
Net IMF position -4.4 -7.5 -5.5 4.5 4.5 9.5 __ __ -_ 15.1 -4O.l -40.1
Short-term liabilities -0.4 -0.1 -2.4 -0.5 -1.6 -4.6 -2.6 -2.2 -1.2 -3.1 -7.0 -78.5
Domestic assets 27.4 31.7 26.4 31.0 26.9 46.7 82.0 91.9 74.1 94.3 130.0 210.8
Credit to Central Government, net 10.1 3. -3.1 -1.6 -9.3 TT. 26.1 41.8 28.9 26.0 20.1 3Y
Credit 13.7 15.6 14.1 20.6 5.1 26.2 37.3 53.1 50.5 50.1 66.8 63.1
Deposit.s -3.6 -12.0 -17.2 -22.2 -14.4 -21.8 -11.2 -11.3 -21.6 -24.1 -46.7 -27.5
Credit to rest of public sector, net -1.3 -0.7 -2.1 -1.4 -3.2 -4.O 2.8 8.0 10.7 11.9 15.7 13.9
Credit -- 3.8 3.2 3.3 4.2 4.4 9.1 12.3 16.9 20.0 21i.L 28.2
Deposits -1.3 -4.5 -5.3 -4.7 -7.4 -8.14 -6.3 -4.3 -6.2 -8.1 -8.7 -14.3
Official capital and reserves -4.o -7.8 -10.0 -12.4 -15.2 -18.8 -17.1 -19.9 -22.7 -26.1 -30.5 -31.9
Credit to Development Fund -- -- _- __ __ __ __ -3.4 -9.6 -3.9 2.0 1.8Credit to private sector -- -- -- -- 0.1 0.1 0.1 0.2 0.2 0.3 0.3 0.3
Credit to banks 8.3 15.3 18.3 17.9 22.7 32.7 37.6 36.4 35.8 54.5 81.9 117.6
National Development Bank 6.6 10.5 12.0 12.8 11.4 13.9 12.9 16.0 15.4 23.2 34.2 48.oCommercial banks 1.7 4.2 5.9 5.0 9.8 15.7 20.4 19.)4 19.2 30.1 46.7 67.7
Specialized credit institutions and BMA -- 0.6 0.11 0.1 1.5 3.1 4.3 1.0 1.2 1.2 1.0 1.9
Subscriptions to international agencies ) ) 35.9 145.6 52.1 52.1 53.1 63.1 65.8 77.2 91.2 95.2 98.2
Deposits of international agencies ) 3.3) -27.8 -35.1 -38.8 -38.0 -38.9 -48.7 -52.1 -63.1 -77.2 -72.4 -70.6
Unclassified assets, net 11.0 13.2 12.8 15.2 17.7 18.1 18.1 15.1 16.7 17.6 17.7 45.9
Assets 11.4 1lh.3 14.9 16.4 19.0 18.9 20.0 17.5 20.0 21.2 22.4 95.0
Liabilities -0.4 -1.1 -2.1 -1.2 -1.3 -0.8 -1.9 -2.4 -3.3 -3.6 -4.7 -49.1
Allocation of SDRs _ __ __ _ 6.)4 11.7 18.5 20.5 20.5 20.5
Foreign liabilities (medium- and long-term) -- 0.6 0.9 0.9 1.0 1.0 o.8 0.4 1.8 4.4 6.8 103.4
Liabilities to banks 13.8 19.7 19.6 25.0 27.0 29.1 38.2 43.6 37.1 42.1 41.1 53.7
Cash in vaults 2.7 W7 *.1 7.1 -T 5 9.7 10.3 11.1 12.5 15.4 17.5
Deposits in national currency 9.4 11.0 8.8 17.9 19.0 19.4 27.9 32.5 24.6 26.7 23.6 38.1
Deposits in foreign currency 1.6 3.9 5.7 -- -- -
Liabilities to private sector 35.4 49.7 52.8 54.7 60.4 73.9 76.5 79.9 90.1 112.7 109.2 116.1
Money 35.2 ,L9.F4 52.2 5).3 59.9 72.1 75.3 773.9 88T.6 1 T1 a 106.6 115.0Currency in circulation 35.1 49.2 52.1 53.8 59.6 71.7 75.1 78.h 88.1 110.0 106.3 113.1
Sight deposits 0.1 0.2 0.1 0.5 0.3 o.4 0.2 0.5 0.5 0.4 0.3 1.9Time and savings deposits 0.2 0.3 0.6 0.4 0.5 1.8 1.2 1.0 1.5 2.3 2.6 1.1
Page 2 of 6Table 6.1: HONDURAS: SUMMARY ACCOUNTS OF THE BANKING SYSTEM
(millions of lempiras)
End of Year________________ __- _-- 6 1967--191W 1969 1970 1971 1972 1973 1974 1975
II. Commercial Banks 1/
International reserves, net -0.1 -1.4 -6.0 -15.3 -6.4 -10.3 -16.4 -10.9 -15.9 -20.0 -17.7 -15.7Foreign assets 1.9 2.8 2.2 .1 3.4 T4.0 4.2 7. 6.0 4.5 ThTT 1.4Short-term liabilities -2.0 -4.2 -8.2 -18.4 -9.8 -14.3 -20.6 -18.4 -20.9 -24.5 -25.1 -29.8
Claims on Central Bank 10.7 17.3 16.9 20.2 24.7 28.3 33.7 40.14 34.5 38.2 40.7 53.8Cash in vaults 1.9 3.6 3 3. 6.3 8. _ T- 9. 3 10.5 13.2 14.9 13.9Deposits in national currency 7.2 9.9 7.7 15.2 18.4 20.3 25.1 31.1 24.0 25.0 25.8 39.9
Domestic assets 56.3 108.3 127.7 163.1 199.9 243.5 279.6 328.7 383.7 472.3 528.2 610.3Credit to Central Government, net 7.3 10.9 11.0 11.9 17.0 19.0 22.0 2.0 Y 7 9 5$6.3 6 3. 7
Credit 7.3 10.9 11.0 11.9 17.1 19.7 22.8 26.6 49.1 54.3 58.6 65.9Deposits -- -- -- -- -0.1 -0.2 -0.8 -1.6 -2.4 -2.4 -2.3 -2.2
Credit to rest of public sector 0.5 1.3 1.2 1.0 1.0 0.9 0.9 0.9 0.9 2.7 __ __Credit to private sector 43.6 81.6 102.1 129.6 158.2 198.9 234.3 278.7 304.5 377.9 426.8 504.2Credit to National Development Bank __ 0.5 0.8 _0.2 -- -- -= __--__________
Credit to Development Fund, net -- -- -- -- -- -- -- -- 5.5 4.8 1. W.Credit to rest of banking system -- 0.7 0.5 0.2 0.2 0.2 1.1 0.6 1.7 2.6 6.9 8.3Credit to nonbank financial intermediaries -- -- -- -- -- -- -- 0.2 0.1 -- 0.3 0.2Deposits of international agencies -- -- -2.5 -3.3 -3.1 -2.6 -0.6 -2.9 -2.5 -0.5 -_ __Unclassified assets, net 4.4 13.0 15.2 23.7 26.6 26.6 21.9 26.2 26.8 32.9 33.3 29.5
Assets 6.5 15.0 17.8 26.9 31.8 59.3 73.7 98.1 129.7 203.4 293.7 332.7Liabilities -2.1 -2.0 -2.6 -3.2 -5.2 -32.7 -51.8 -71.9 -102.9 -170.5 -260.4 -303.2
Foreign liabilities (medium- and long-term) -- 17.0 19.8 31.0 34.4 35.2
Liabilities to Central Bank 1.7 4.2 5.9 5.0 9.6 15.9 19.4 19.0 18.7 29.8 45.2 67.4
Liabilities to nonbank financial intermediaries -- -- 2.5 4.8 7.2 6.0
Liabilities to specialized credit institutions& BMA -- 0.1 0.1 -- -- 0.4 0.5 1.2 1.1 2.2 10.8 21.3
Liabilities to private sector 65.2 119.9 132.6 163.0 208.6 245.2 277.0 321.0 360.2 422.7 453.6 518.5Sight deposits 25.9 50.3 649.0 607 G9. 79.1 O5 T7- 101.3 12T47 132.2 TITT.Quasi-money 20.3 45.6 56.3 67.9 100.3 125.1 151.0 181.2 202.2 236.8 252.8 294.6
Time and savings deposits 18.6 41.8 49.6 60.2 75.6 92.2 116.2 135.6 151.5 183.3 193.5 218.7Specialized savings -- -- -- -_ 10.2 15.6 17.3 17.5 18.5 19.6 22.5 25.9Deposits in foreign exchange 1.6 3.7 5.6 6.3 9.4 9.8 10.6 13.7 18.8 19.0 20.5 26.8Bonds 4.0 7.7 8.4 9.5 9.9 11.9Other obligations 0.1 0.1 1.1 1.4 5.1 7.5 2.7 6.7 5.0 5.4 6.4 8.1
Capital and reserves 19.0 24.0 27.3 34.4 38.8 41.0 45.7 52.0 56.7 61.2 68.6 79.5
Page 3 of 6Table 6.1: HONDURAS: SUNMARY ACCOINTS OF THE BANKING SYSTEM
(millions of lempiras)
____ ______- End of Year_96o0 • 1 965 -66 -19-67 1968 1969 1970 1971 1972 1973 1974 1975
III. National Development Bank
International reserves, net 0.1 -1.3 -0.7 -6.0 -1.9 0.2 -3.8 -3.4 -3.8 -5.5 -6.5 -10.1Foreign assets 0.3 0.3 0.3 07 5 .5 0.5 77 0.6 0.7 1.3 1.1 0.9Short-term liabilities -0.2 -1.6 -1.0 -6.5 -2.4 -0.3 -4.2 -4.0 -4.4 -6.8 -7.6 -11.0
Claims on Central Bank 2.0 3.0 2.7 3.0 3.9 1.7 2.4 2.4 3.5 5.2 4.9 6.7Cash in vaults 0 1.2 l.l 1.7 1.5 1 T- 1 1. 2.0 2.3 fTDeposits in national currency 1.2 1.8 1.3 1.3 2.4 0.2 0.8 0.8 1.7 3.2 2.6 5.3
Domestic assets 10.5 30.5 36.2 44.0 46.4 54.5 58.3 53.4 59.8 72.4 93.0 136.9Credit to Central Government, net 0.2 -- 0.1 0.1 0.9 0.3 0.1 -2.9 -2.7 -2.0 -0.7 Tl77
Credit __ __ __ __ __ __ 0.1 0.1 0.1 0.3 0.7 0.7Deposits -- -- -- -- -- -- -- -3.0 -2.8 -2.3 -i.4 -15.3
Credit to rest of public sector, net -- -- -- 0.1 0.1 0.1 0.1 -3.6 -5.2 _4.2 -5.5 -8.oCredit -_ __ __ __ __ __ 0.1 0.2 0.2 -- 0.5 3.7Deposits -- __ __ __ __ __ __ -3.8 -5.4 -4.2 -6.0 -11.7
Official capital and reserves -16.4 -20.3 -22.5 -26.3 -30.4 -35.7 -42.1 -46.7 -52.2 -56.9 -60.3 -67.4Credit to Development Fund, net -- -- -- -- -- -- __ __ -2.0 -5.0 -4.0 --Credit to nonbank financial intermediaries -- -- -- -- -- -- -- -- -- -- 0.9 0.3Credit to private sector 12.2 34.9 42.4 52.1 58.2 69.7 76.1 90.3 89.8 103.7 121.5 137.9Deposits of international agencies -- -- -3.2 -2.5 -1.8 -0.9 -0.5 __ __ __ __ __Unclassified assets, net 14. 1. 9 ]9.) 20.5 19Ab 21.0 24.6 26.3 32.1 36.8 40.1 88.7
Assets 16.5 22.0 25.4 29.4 27.4 38.7 39.6 46.6 49.7 68.7 77.1 147.2Liabilities -2.0 -6.1 -6.0 -8.9 -8.0 -17.7 -15.0 -20.3 -17.6 -31.9 -37.0 -58.5
Foreign liabilities (medium- and long-term) 0.8 13.2 17.7 19.4 27.4 30.0 30.8 24.1 28.3 27.7 34.4 61.7
Liabilities to Central Bank 6.6 10.5 12.0 12.8 11.5 V1).0 12.9 16.0 15.4 23.8 34.2 48.9
Liabilities to rest of banking system 1.0 0.9 0.3 --- __ _ 0.2 0.2 0.6 0.1 -- 1.5
Liabilities to nonbank financial intermediaries -- -- -- -- -- -- -- -- _ -- __ 1.0
Liabilities to private sector 4.2 7.6 8.2 8.8 9.5 12.)4 13.0 11.8 15.2 20.5 21.8 20.4Sight deposits 2. TF. 4.6 7.0- T.T 5.3 T.T 4T 6 TY 5. 6.7 66 .Quasi-money 1.14 3.0 3.6 3.8 4.1 7.1 7.9 7.2 9.7 13.8 16.2 14.0
Time and savings deposits 1.0 2.3 2.9 3.2 3.7 6.5 7.5 6.7 6.9 9.1 9.5 9.4Bonds 0.2 0.3 0.2 0.1 0.1 0.1 __ __ 2.0 3.3 5.0 2.4Other obligations 0.2 0.4 0.5 0.5 0.3 0.5 0.4 0.5 0.8 1.4 1.6 1.5Deposits in foreign exchange -- -- -- -- -- -- -- -- -- -- 0.1 0.7
Page 4 of 6Table 6.1: HONDURAS: SUMMARY ACCOUNTS OF THE BANKING SYSTEM
(millions of lempiras)
________________ hd of Y ear__ _ _ _ _ _ _ _ _ _ _ _ _ _
__________ _6__-__9__ __9 1966 1967 19-6J919 1970 1971 1972 1973 1975
IV. Specialized Credit Institutions
International reserves, net -0.1 -0.6 -0.2 0.1 -0.6 -1.2 -1.8 -0.3 -0.5 -- 0.1 0.2Foreign assets -- 0.2 0.3 0.5 0.3 0.1 0.2 -- -_ -_ 0.1 0.2Short-term liabilities -0.1 -0.8 -0.5 -0.4 -0.9 -1.3 -2.0 -0.3 -0.5 __ __ __
Claims on Central Bank 0.7 0.9 1.3 1.1 0.4 0.5 0.7 0.3 0.4 0.6 0.5 0.7Cash in vaults -0.1 0.2 -02 0.2 0.2Deposits in national currency 0.7 1.2 0.9 0.4 0.4 0.5 0.7 0.2 0.3 0.4 0.3 0.5
Deposits with rest of banking system - 0.1 0.1 -- -- 0.2 0.4 0.2 0.2 -- 0.1 0.1
Domestic assets 13.3 22.5 30.3 37.2 26.4 29.4 38.2 8.6 17.7 27.1 36.7 53.7Credit to Central Government 0.6 1.2 1.4 T1 0.5 0.1 0.3 0.2 0.3 hT T0.5 1.9Credit to rest of public sector 0.4 0.2 0.1 0.3 0.1 0.2 0.2 -- -- -- o.4Credit to rest of banking system 0.5 0.1 0.1 -_ __ 0.2 0.1 0.6 0.4 1.1 3.5 4.1Credit to private sector 11.1 18.2 24.9 30.5 23.8 26.8 33.8 6.8 16.4 24.1 31.0 45.8Deposits of international agencies -- -- -- -- -- -- -0.3 -- -- -- -- --Unclassified assets, net 0.7 2.8 3.8 4.6 2.0 2.1 3.6 1.0 0.6 1.5 1.7 2.3
Assets 2.0 7.0 5.5 8.4 3.2 6.2 11.7 3.2 4.2 5.1 7.2 7.7Liabilities -1.3 -4.2 -1.7 -3.8 -1.2 -4.1 -8.1 -2.2 -3.6 -3.6 -5.5 -5.4
Foreign liabilities (medium- and long-term) -- 4.5 9.0 11.9 14.5 16.9 16.4 3.6 8.7 10.6 13.4 16.3
Liabilities to Central Bank -- 0.6 o.4 0.1 1.5 2.8 4.6 0.4 0.5 0.5 0.6 1.2
Liabilities to rest of banking s 0.4 0.3 0.1 -- 1.5 0.1 0.7 2.2 4.1 5.8
Liabilities to private sector 14.0 17.4 21.8 26.3 10.2 9.2 15.0 4.7 7.9 14.4 19.3 31.4Quasi-money -- 13.6 1-7 195.3 4.2 2.2 6.3 -75 -4.5 10.8 1TW 23.1
Time and savings deposits 0.4 1.9 3.4 4.0 0.2 0.3 0.9 1.5 2.3 2.9 3.8 8.8Specialized savings 12.2 11.4 12.0 13.3 3.9 -- -- -- 0.1 0.2 -- --Bonds 2.9 __ 2.0 7.5 10.3 13.9Other obligations 0.2 0.3 0.14 2.0 0.1 1.9 2.5 0.1 0.1 0.2 0.3 0.4
Capital and reserves 1.2 3.8 6.0 7.0 6.0 7.0 8.7 3.1 3.4 3.6 4.9 8.3
Page 5 of 6
Table 6.1: HONDURAS: SUTMARY ACCOUNTS OF THE BANKING SYSTEM
(millions of lempiras)
-____ __ _End of Year -
__ ____91965 1966 - _1967 i96F7I_1 9 1969 1970 1971 1972 1973 1974 1975
V. Municipal Bank 2/
International reserves, net - - _ _ 0.1 0.1 0.2 - 0.1 - -
Foreign assets - - - 0.1 0.1 0.2 - 0.1 - -
Claims on Central Bank 0.2 0.2 0.5 0.4 o.6 0.6 0.4 0.6 0.5 0.2 O3Cash in vaults - 0.1 .2 0.1 0.1 0.1 0.1 0.2Deposits in national currency 0.2 0.1 0.3 0.3 o.4 0.5 0.3 0.5 0.4 0.1 0.1
Domestic assets 0.2 0.2 0.1 0.3 o.6 0.9 2.1 2.3 2.1 0.8 0.6Credit to Central Government, net 0.1 -- - 0.2 0.2 0.2 0.1 0.2 0.7 0.1 -
Credit to rest of public sector, net 1.5 2.3 1.5 1.1 1.2 0.6 0.6 0.3 0.1 -0.8 -0.hCredit 2.2 2.9 2.2 1.9 1.9 1.6 1.5 1.1 1.0 3.0 4.1Deposits -0.7 -0.6 -0.7 -0.8 -0.7 -1.0 -0.9 -0.8 -0.9 -3.8 -4.5
Credit to rest of banking system - - - - - 0.9 0.3 0.5 1.1 1.2 1.9Credit to private sector 0.6 0.7 1.6 2.3 3.2 3.0 3.0 2.5 1.5 1.2 1.5Official canital and reserves -2.8 -2.9 -3.7 -4.2 -4.3 -4.7 -4.7 -7.2 -7.7 -8.3 -8.9Deposits of international organizations - - - - -0.1 - - - - - -Unclassified assets, net 0.8 0.1 0.7 0.9 o.4 0.9 2.8 6.0 6.4 7.4 6.5
Assets 1.1 1.0 1.4 2.2 2.3 2.7 4.8 15.9 15.9 11.5 11.2Liabilities -0.3 -0.9 -0.7 -1.3 -1.9 -1.8 -2.0 -9.9 -9.5 -4.1 -4.7
Liabilities to Central Bank _ - - 0.7 0.7 0.7 0.h 0.a
Liabilities to private sector 0.4 0.4 0.6 0.7 1.3 1.6 2.0 2.2 2.0 0.6 0.5Sight deposits 0.1 0.1 0.2 0.4 0.9 0.6 0.3 0-3 0.2 0.3 0.3Time and savings deposits 0.3 0.3 0.4 0.3 0.4 0.9 1.7 1.9 1.8 0.2 0.2Bonds - - - - - 0.1 - - - - -Other obligations _ _ _ _ _ - _ _ _ 0.1 -
Page 6 of 6Table 6.1: HONDURAS: SUMMARY ACCOUNTS OF THE BANKING SYSTEM
(millions of lempiras)
End of Year____________________________________ l9C5--l9_Z C6-19-9 -T-7 1-968 1969 1970 T971 1972 1973 1974 -1975
VI. Bankinp 9stem
International reserves, net 21.7 35.0 40.0 28.4 52.6 46.1 18.0 29.3 63.2 60.0 23.5 57.3Foreign assets 28. 50.1 57.6 49.7 62.8 57.1 777 542 80.2 79.3 103.3 216.7Net IMF position -4.4 -7.5 -5.5 4.5 4.5 9.5 15.1 -40.1 -40.1Short-term liabilities -2.7 -7.6 -12.1 -25.8 -14.7 -20.5 -29.4 -24.9 -27.0 -34.4 -39.7 -119.3
Domestic assets 98.2 178.3 203.4 257.2 279.7 343.8 419.5 447.2 502.0 611.3 698.5 877.6Credit to Central Government, net 18.2 15.8 9_. 12.2 9.3 24.5 49.2 47.2 73.4 77.0 76.3 8.Credit 21.8 27.8 26.6 34.4 23.8 46.5 61.2 80.1 100.2 105.5 126.7 131.6Deposits -3.6 -12.0 -17.2 -22.2 -14.5 -22.0 -12.0 -15.9 -26.8 -28.5 -50%4 -45.0
Credit to rest of public sector, net -0.4 2.3 1.5 1.5 -0.9 -1.6 4.6 5.9 6.7 10.5 9.4 -0.6Credit 0.9 7.5 7.4 6.9 7.3 7.5 11.9 14.9 19.1 23.7 27.9 36.0Deposits -1.3 -5.2 -5.9 -5.4 -8.2 -9.1 -7.3 -9.0 -12.4 -13.2 -18.3 '-36.6
Official capital and reserves -20.4 -30.9 -35.4 -42.4 -49.8 -58.8 -63.9 -71.3 -82.1 -90.7 -103.1 -117.4Credit to Development Fund, net -- -- -- -- -- -- -- -3.4 -6.1 -4.1 2.6 6.2Credit to nonbank financial intermediaries -- -- __ -- -- -- -- 0.2 0.1 -- 1.8 0.5Credit to private sector 66.9 135.3 170.1 213.8 242.6 298.7 347.3 369.0 413.4 507.5 581.1 697.0Subscriptions to international agencies, net ) ) 8.1 4.8 7.5 9.2 10.6 13.0 10.8 11.6 10.5 22.8 27.6Subscriptions to international agencies ) ) 35.9 45.6 52.1 52.1 53.1 63.1 65.8 77.2 91.2 95.2 98.2Deposits of international agencies ) 3.3) -27.8 -40.8 -14.6 -42.9 -42.5 -50.1 -55.0 -65.6 -77.7 -72.4 -70.6
Unclassified assets, net 30.6 45.7 51.3 64.7 66.6 68.2 69.1 71.4 82.2 95.2 100.8 170.2Assets 36.4 59.4 64.6 82.5 83.6 125.4 147.7 170.2 219.5 314.3 412.6 603.0Liabilities -5.8 -13.7 -13.3 -17.8 -17.0 -57.2 -78.6 -98.8 -137.3 -219.1 -310.5 -482.8
Interbank float __ 2.0 1.7 -0.1 2.7 2.2 0.2 0.4 2.8 2.4 7.4 7.5
Allocation of SDRs __ __ __ __ _ _ 6.4 11.7 18.5 20.5 20.5 20.5
Liabilities to nonbank financial intermediaries -- -- -- -- -- -- -- __ 2.5 4.8 7.2 7.7
Foreig liabilities 0medium- a.8 18.3 27.6 32.2 42.9 47.9 48.0 45.4 58.6 73.7 89.0 216.6Liabilities to CONADI -- -- -- -- -- -- -- -- -- -- -- --
Liabilities to private sector 115.8 195.0 215.8 253.4 289.4 342.0 383.1 419.4 175.6 572.3 605.3 690.1Money 3T7 1-07.7 1 7.7 120. -13.2 157.1 161.3 171.6 195.7 212.6 2- -Currency in circulation 35.1 49.2 52.1 53.8 59.6 71.7 75.1 78.4 58.1 110.0 106.3 113.1Sight deposits 28.4 55.2 53.8 66.4 75.6 85.7 86.2 93.2 107.6 132.0 138.4 153.0
Quasi-money 35.1 62.8 76.6 91.8 109.4 136.6 167.4 192.7 219.8 265.5 287.1 336.2Time and savings deposits 20.5 46.6 56.8 68.2 80.3 101.2 126.7 146.5 161.1 199.1 209.6 238.4Specialized savings 12.2 11.4 12.0 13.3 14.1 15.6 17.5 17.5 18.6 19.8 22.5 25.9Deposits in foreign exchange 1.6 3.7 506 6.3 9.4 9.8 10.6 13.7 18.8 19.0 20.5 27.5Bonds 0.2 0.3 0.2 0.1 0.1 0.1 7.0 7.7 12.4 20.3 25.2 28.2Other obligations 0.6 0.P 2.0 3.9 5.5 9.9 5.6 7.3 5.9 7.0 9.2 16.2
Capital and reserves 17.2 27.0 33.3 41.4 44.8 48.0 54.4 55.1 60.1 64.8 73.5 87.8
1/ In November 1971 Financiera Hondurenia, until then a specialized credit institution, became a commercial bank.2/ Established in 1962.Source: Central Bank of Honduras and mission estimates.
Table 6.2: HONDURAS FINANCING CAPACITY OF THE BANKING SYSTEM, 1965-75
(In millions of Lempiras)
1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975
Net international reserves 35-o 40.0 28.4 52.6 46.1 18.0 29.3 53.2 60.0 23.5 57.3
Domestic assets 178.3 203.4 257.2 279.7 343.8 1131 435.5 481.0 586.0 670.8 8h19.14Public sector, net =181 10.9 13.7 TT7 22.97538 70.1 T0T1 87T 5 T5T7 80To
(Central Government, net) (15.8) ( 9.4) (12.2) ( 9.3) (24.5) (119.2) (64.2) (73.4) (77.0) (76.3) (86.6)(Rest of public sector, net) ( 2.3) ( 1.5) ( 1.5) (-0.9) (-1.6) ( 14.6) ( 5.9) ( 6.7) (10.5) ( 9.14) (-0.6)
Private sector 135.3 170.1 213.8 242.6 298.7 347.3 369.0 413.14 507.5 581.1 697.0Subscription to international
agencies 35.9 45.6 52.1 52.1 53.1 63.1 65.8 77.2 91.2 95.2 98.2Unclassified assets, net -11.0 -23.2 -22.4 -23.4 -30.9 -51.1 -69.14 -89.7 -100.2 -91.2 -25.8
Assets = Liabilities 213.3 243.4 285.6 332.3 389.9 1431.1 1464.8 534.2 6146.0 6914.3 906.7Money 104.4 105.9 120.2 135.2 157.7 1 1-3 171.6 19•77 242.0 2L IU7 66YiQuasi-money 62.8 76.6 91.8 109.4 136.6 167.4 192.7 219.8 265.5 287.1 336.2Foreign liabilities (medium- and
long-term) 18.3 27.6 32.2 42.9 47.9 48.0 45.14 58.6 73.7 89.0 216.6Other liabilities 27.8 33.3 41.4 44.8 48.0 54.4 55.1 60.1 64.8 73.5 87.8
GNP 991.1 1068.9 1153.8 1247.4 1298.8 1384.4 1466.1 1579.3 1731.6 1909.3 i9148.6Excports 256.14 288.8 311.6 361.6 341.14 356.2 3914.0 427.0 536.4 595.0 562.8Money as pereent of GNP 10.5 9.9 10.4 10.8 12.1 12.1 12.3 13.2 11h.6 13.5 13.7Quasi-money as percent of GNP 6.3 7.2 8.0 8.9 10.5 12.1 13.1 13.9 15.3 15.0 17.3Total liquid assets as pereent
of GNP 16.8 17.1 18.4 19.7 22.6 24.2 25.4 27.1 29.9 28.5 31.0Change in quasi-money as percent
of GNP 0.9 1.3 1.3 1.4 2.1 2.2 1.7 1.7 2.6 1.1 2.5
Percentage change in priv. crd. 29.7 25.7 25.7 13.5 23.1 16.3 6.3 12.1 22.7 14.7 19.9Percentage change in publ. crd. -25.2 -39.8 25.7 -38.7 172.6 134.9 30.5 11.1 9.2 -2.1 0.4Percentage change in exports 34.7 12.6 8.0 16.1 -5.6 4.3 10.6 8.4 25.6 10.9 -5.4Percentage change in GNP 7.6 7.8 7.9 8.1 4.1 6.6 5.9 7.7 9.6 10.3 2.0
Note: Assets and liabilities are end-of-year stock figures; GNP and exports are flows during the year.
Source: Appendix Table 6.1.
Table 6.3: HONDURAS: NET CHANGES IN THE ASSETS AND LIABILITIESOF THE BANKING SYSTEM, 1966-75
(In millions of Iempiras)
1966 1967 1968 1969 1970 1971 1972 1Q73 1974 1975
Foreign assets (net) - 4.3 -16.2 13.5 -11.5 -28.0 13.9 10.7 -8.3 -51.8 -93.8International reserves (net) 5.0 -116 24.2 - 6.5 -28.1 11.3 23.9 6.8 -36.5 33.8Medium and long-term liabilities - 9.3 - 4.6 -10.7 - 5.0 -0.1 2.6 -13.2 -15.1 -15.3 -127.6
Domestic assets 19.6 4 19.1 60.9 62.7 21.7 L2.5 100.3 76.1 164.3Public sector, net - 7.2 2. - 5.3 17.5 30.9 16.3 10.0 7.4 -1.8 0.3(Central Government, net) (- 6.4) (2.8) 4- 4.3) (15.2) (24.7) (15.0) (9.2) (3.6) (-0.7) (10.3)(Rest of public sector, net) (- 0.8) ( - ) (- 1.0) (- 0.7) (6.2) (1.3) (0.8) (3.8) (-1.1) (-10.0)
Private sector 34.8 43.7 28.8 56.1 48.6 21.7 44.4 94.1 73.6 115.9Other assets, net 1/ - 8.0 - 0.8 - 4.4 - 9.7 -16.8 -16.3 -13.9 -1.2 4.3 48.1
Total assets = total liabilities 1 29.5 32.6 49.4 34.7 35.6 1.2 92.0 24.3 70.5Money 1 14.3 15.0 22.2 3.9 10.3 241.1 4.73 2.7 2-1f4Quasi-money 13.8 15.2 17.6 27.2 30.8 25.3 27.1 45.7 21.6 49.1
1/ Includes subscription to international organizations, net unclassified assets and other liabilities fromTable 6.2.
Source: Tables 6.1 and 6.2.
Table 6.4: HONDURAS: DISTRIBUTION OF BANK CREDIT TO THE PRIVATE SECTOR 1/
Outstanding at the End of the Period
(millions of lempiras)
1960 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 2/
Agriculture 12.9 40.6 50.8 61.0 74.5 90.7 106.2 116.8 129.2 149.8 176.2 228.1Bananas 0.3 0.7 1.1 0.8 1.3 0.9 1.7Coffee 44.2 7.6 10.3 12.3 12.1 13.3 15.7 19.1 16.0 14.4 21.9 23.8Tobacco 3.9 4.8 4.8 5.4 5.0 5.8 6.0 7.4Cotton 2.7 11.5 10.4 10.1 10.1 14.4 8.6 8.6 10.4 10.1 13.0 18.4Sugarcane 4.1 5.4 5.2 6.1 5.7 7.5 7.4Grains 6.9 7.4 9.2 10.7 11.5 13.7 18.5 35.7
Other 3.4 8.5 13.4 13.3 3.5 4.6 8.5 8.9 8.9 12.1 13.3 45.2Cattle 2.6 12.1 15.6 20.0 27.4 34.3 42.0 47.7 56.3 68.6 76.3 82.6Fish and Fowl 0.8 1.1 1.4 5.3 5.7 10.5 9.9 13.3 16.4 16.7 22.4
Industry 6.4 21.5 31.2 38.8 45.8 59.8 79.9 87.0 84.3 102.8 119.7 138.0Manufacturing 4.2 19.3 28.0 34.6 45.1 58.9 76.5 85.1 82.7 101.3 118.6 136.8Mining 2.2 2.2 3.2 4.2 o.6 1.1 1.4 1.9 1.6 1.5 1.1 1.2
Services 2.9 9.4 12.3 13.6 20.2 23.6 23.3 26.2 22.7 28.7 49.7 64.8Transport and Communications 12.4 12.7 10.1 11.3 7.8 9.0 11.2 14.3Other 2.9 9.4 12.3 13.6 7.8 11.1 13.2 14.9 14.9 19.7 38.6 50.5
Rfeal Estate 22.9 21.9 25.1 31.3 39.4 49.5 54.7 60.1 73.3 89.0 105.9 115.3Construction 14.8 14.2 17.7 23.5 31.5 38.8 43.1 48.o 58.3 62.1 78.2Transfers 2.9 4.6 4.7 5.3 6.9 9.6 10.8 11.7 14.4 26.7 27.3Other 5.2 3.2 2.8 2.6 1.0 1.2 0.7 0.4 0.5 0.2 0.4
Commerce 16.3 29.8 36.2 48.9 38.7 47.6 52.8 45.5 65.3 92.3 83.2 107.5
Consumption 3.7 5.8 8.3 12.9 11.9 14.7 18.3 17.3 23.3 25.3 21.4 24.7
Other - - 2.4 2.3 2.3 1.9 1.8 1.8 3.4 5.0
TOTAL 65.1 129.1 164.0 206.14 233.1 288.1 335.5 354.8 399.7 489.7 559.5 683.4
1/ Includes only loans and discounts.2/ Estimate.source: Central Bank and mission estimates.
Table 6.5: HONDURAS: BANKING SYSTEM DISTRIBUTION OF NEW LOANS
(millions of lempiras)
1965 1966 1967 1968 1969 1970 1971 1972 1973 1974
Agriculture 44.6 49.4 51.5 60.1 83.6 115.7 121.3 144 .5 153.1 142.8Bananas - - - - - 0.9 1.0 1.2 1.4 1.5Coffee 8.5 9.8 10.7 12.5 24.4 33.8 33.5 28.7 34.3 30.8Tobacco 1.7 3.0 3.8 1.9 2.1 2.4 1.9 4.8 3.8 4.0Cotton 18.7 14.6 10.7 10.2 8.2 5.0 3.3 5.6 7.9 10.2Sugarcane - 4.o 1.7 1.7 3.9 4.3 5.1 4.2 6.1 5.4Rice - 0.9 1.5 0.9 0.9 1.9 2.5 2.7 2.8 3.9Corn - 2.2 2.6 2.0 4.0 4.6 4.3 4.6 4.4 6.9Beans - 0.6 0.6 0.4 0.6 1.0 0.9 1.1 1.0 1.8Other 7.3 3.0 4.0 8.8 10.5 9.9 9.6 8.0 9.9 9.8Cattle 7.7 10.2 14.2 18.3 24.8 40.1 47.3 68.8 63.2 51.7Fish and Fowl 0.7 1.1 1.7 3.4 4.2 11.6 12.1 14.7 18.5 17.0
Industry 24.8 31.1 47.3 51.9 75.3 lo4.0 103.9 102.4 137.3 128.7Manufacturing 23.2 28.6 41.2 51.6 72.1 102.5 102.3 102.0 137.0 128.6Mining 1.6 2.5 6.1 0.3 3.2 1.5 1.6 0.4 0.3 0.1
Services 13.0 15.7 17.3 20.9 28.0 28.9 34.9 27.8 31.6 65.6Transport and Communications 12.7 14.4 10.1 10.9 11.6Other 16.2 20.5 17.7 20.7 54.o
Real Estate 14.0 17.1 26.4 31.8 4l.0 58.9 60.3 65.2 70.7 71.0Construction 48.8 49.7 47.9 50.9 57.0Transfers 7.9 10.6 17.0 19.7 13.9Other
Commerce 45.1 54.4 73.8 60.9 72.3 85.0 71.0 109.1 147.0 169.9Internal 22.4 25.1 33.6 33.6 56.1 81.7 99.6Ex-ports 5.0 10.5 9.7 7.5 13.3 18.3 26.5Imports 33.5 36.6 41.6 29.9 39.7 47.1 43.8
Consumption 8.3 12.6 19.9 18.5 24.3 29.9 25.9 33.2 35.4 31.2
Other - - - 1.5 2.h 2.2 1.9 1.8 1.5 9.6
TCOAL 149.8 180.3 236.2 245.6 326.9 t22.5 419.2 483.9 576.6 618.8
Source: Central Bank.
Table 6.6: HONDURAS: NEW LOANS OF THE BANKING SYSTEM TO THE INDUSTRIAL SECTOR
( Million of Lempiras )
Industrial Subsector 1960 1969 1970 1971 1972 1973 1974
Food Products 11.2 14.7 18.4 20.3 20.2 20.1Beverages 0.7 1.7 2.7 5.7 2.7 2.5Tobacco - 0.3 0.1 0.5 0.1 0.1Textiles - 2.5 4.3 2.5 5.2 7.7 / 8.9Apparel & Footwear - 4.3 5.5 6.3 8.9 9.7 9.5Wood & Products - 16.9 21.0 14.1 12.9 22.2 6.4Furniture - 3.1 3.9 4.1 3.3 4.2 8.4Paper & Products - 1.3 1.3 1.4 L/ 1.5 4.1 3.5Chemicals - 1.9 4.1 o.8 4.4 3.2 3.8Other _ 33.4 47.2 53.5 39.7 62.6 65.5
Total Loans to Industry 4.0 75.3 104.0 103.9 102.4 137.3 128.7
Total Banking System 61.6 326.9 422.5 419.2 483.9 576.6 618.8
Industrial Loans/Total loans(Percentages) 6.5 22.5 24.2 24.4 21.1 23.7 20.8
1/ Industrial subsector breakdown not available.
Source: Central Bank.
Table 6.7: HONDURAS: BANKING SYSTEM INTEREST RATES
PercentTpheryear)
A. Bank Lending Rate
1. Loans up to L 2,500 13.5-16.0
2. Loans over L 2,500
(a) Commerce and personal 13.0(b) Production, services, transport and communications 11.0(c) Real estate (less than ten years) 10.0(d) Construction
(i) Housing10-15 years 11.0more than 15 years 12.0
(ii) Other construction 11.0
3. Small scale industry 9.0
4. Expert credits for coffee, cotton, tobacco, meat, wood, shrimpand lobster with resources from term deposits with maturitiesof six months or over and no smaller than L 100,000 negotiable
5. Non-tradition export credit 10.0
B. Bank Borrowing Rates (maximum allowed)
1. Savings 6.o
2. Term deposits (Savings and Loan Association) 7.0
3. Certificates of deposit(a) 3-6 months 7.5(b) 6-12 months 8.0(c) 12-18 months 8.5(d) 18-24 months 9.0(e) over 24 months 9.5
4. Certificates of deposit larger than L 100,000(a) 3-6 months 8.0(b) over 6 months negotiable
5. Bonds or mortgage certificatesover 10 years only b.5
Source: Central Bank, October 1975.
Table 6.8: HONDURAS: NEW INDUSTRIAL LOANS BY TERM (1969-1972)
(millions of Lempiras)
1969 1970 1971 1972L. L. % L. % L. %
Short term (up to one year) 53.7 71.3 69.4 66.7 69.5 66.9 68.0 66.4
Medium term (1 - 5 years) 15.0 19.9 25.1 24.2 24.9 2h.0 25.0 2h.4
Long term (over 5 years) 6.6 8.8 9.5 9.1 9.5 9.1 9.4 9.2
Total 75.3 100.0 10h.0 100.0 103.9 100.0 102.4 100.0
Source: Central Bank
Table 7.1: HONDURAS: AGRICULTURAL PRODUCTION,SELECTED PRODUCTS, 1952-75
(000 MT)
CropYears Bananas Coffee Corn Sorghum Beans
1951-52 531.8 14.0 189.1 50.4 21.91952-53 507.4 14.9 185.8 45.4 21.21953_54 537.0 17.9 188.6 48.1 22.01954-55 399.3 17.7 158.5 47.8 20.81955-56 349.7 17.5 18105 49.2 23.01956-57 561.4 17.8 202.9 48.3 27.01957-58 508.3 20.1 215.8 4702 31.11958-59 591.8 21.6 23300 46.9 34.51959-60 557.8 22.0 247.1 47.8 36.0
1960-61 577.4 23.1 243.1 48.2 39.41961-62 671.2 21.5 258.4 46.9 42.51962-63 628.9 27.9 280.4 50.2 44.81963-64 610.1 2900 284.2 51.7 49.81964-65 641.7 29.3 332.8 53.1 57.81965-66 922.0 35.5 333.8 53.4 42.81966-67 1180.2 28.5 315.9 47.9 50.11967-68 1280.7 40.3 335.4 43.6 56.91968-69 1350.9 31.2 353.0 46.4 62.81969-70 1280.4 39.9 339.2 47.9 54.7
1970-71 1441.7 35.6 273.5 47.2 39.31971-72 1546.4 L2.2 281.8 33.8 35.01972-73 1389.4 41.9 332.0 53.2 54.51973-74 1365.5 51.0 343.0 38.9 31.61974-75 1182.3 49.2 317.0 52.3 34.1
Source: Central Bank and Ministry of Natural Resources.
Table 7.2: HONDURAS: POPULATION AND AGRICULTURALPRODUCTION INDICES, 1952-75
(1965-66=loo)
PopulationCrop Years Bananas Coffee Corn Sorghum Beans 1966=loo
1951-52 58 39 57 94 51 671952-53 55 42 56 85 50 691953-54 58 50 57 90 51 711954-55 43 50 47 90 49 731955-56 38 49 54 92 54 751956-57 61 50 61 90 63 781957-58 55 57 65 88 73 801958-59 64 61 70 88 81 831959-60 60 62 74 90 84 85
1960-61 63 65 73 90 92 881961-62 73 61 77 88 99 901962-63 68 79 84 94 105 921963-64 66 82 85 97 116 951964-65 70 83 100 99 135 971965-66 100 100 100 100 100 1001966-67 128 80 95 90 117 1031967-68 139 114 100 82 133 1051968-69 147 88 106 87 147 1081969-70 139 112 102 90 128 111
1970-71 156 100 82 88 92 1141971-72 168 119 84 63 82 1171972-73 151 118 99 100 127 1201973-74 148 144 103 73 74 1231974-75 128 139 95 98 80 127
Source: Central Bank and Ministry of Natural Resources.
Table 7.3: HONDURAS: PROJECTED PRODUCTION, DOMESTIC CONSUMPTICNAND EXPORTS OF PINE
( In 1000 m3 of Sawnwood)
Production 7= Domestic Exports
Olancho Other Total Consumption
Existing Mills New Mills
1975 82 _ 503 585 99 486
1976 86 _ 503 589 104 485
1977 90 _ 503 593 109 484
1978 95 _ 503 598 114 484
1979 100 64 503 667 120 547
1980 105 164 503 772 126 646
1981 110 227 503 840 132 708
1982 115 361 503 979 138 841
1983 121 414 503 1038 145 893
1984 127 468 503 1098 152 946
1985 134 468 503 1105 160 945
/ Output grows at 5 percent per year.
j Three major new sawmills are expected to start producing respectivelyin 1979, 1980 and 1982 with a capacity of 127,40o m3 for the first twoand 213,600 m3 for the third (Data from H. Simmors Report on the Indus-
trializationof the Olancho). Capacity utilization is 50% in year 1,75% in year 2 and 100$ in year 3.
/ Constant output, improved conversion efficiency is expected to be offsetby more difficult and costly access to wood.
/ Grows at 5 percent per year.
Source: H. Simons Report on the Industrialization of the Olancho, 1975, andmission estimates.
Table 7.4 : H{ON1WJRAS: FARM WNITS BY SIZE AND AREA
Yeti Size Farm Units Total Area(mz 1/) (number) (percent) (thousand mzl/) (percent)
1 26,677 15.0 27 0.82 25,284 14.2 5° 1.43 17,869 10.0 54 1.64 14,202 8.0 57 1.6
5-9 36,371 20.4 239 6.910-19 27,115 15.2 360 10.420-)j9 19,970 11.2 589 17.050-99 6,439 3.6 427 12.4
100-199 2,3463 1.4 324 9 .200-499 1,293 0.7 382 11.05C--999 401 0.2 273 7.9
1000-2499 193 0.1 281 8.1503 lInd more 73 - 399 11.5
TOTAL 178,350 100.0 3,462 100.0
r1z (manzana) 0.699 hectare
DI';C c: Ag.ricultural Census, 1965-1966. Statistical Office.
l/Table 8.1: HONDURAS: GROSS VALUE ADDED IN MANUFACTURING
(millions of 1966 lempiras)
Estimates Rate of Growth471960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1960-65 1965-70 1970-73 1960-73
Industry
Consumer oods 44.64 43.84 45.58 48.20 50.05 53.64 56.28 58.34 60.79 61.97 66.22 69.02 75.88 83.70 n.a 3.7 4.3 8.1 5.oFood pro ucts =T7 1 M7 = 2b.20 76l. 1T M-67 TE7 73I77M 7 T4 = 7- TR 5 7Beverages 11.32 11.79 11.85 12.03 12.37 11.76 12.21 12.70 12.84 10.63 lo.99 11.40 13.25 14.40 0.7 (1.5) 9.5 1.9Tobacco 3.12 2.75 2.72 3.00 2.67 2.88 3.06 3.65 4.13 4.44 4.55 4.68 4.50 4.74 (1-5) 9.5 1.4 3.2Textiles 2.19 2.01 3.43 3.08 3.88 4.85 5.07 4.37 4.31 5.34 5.38 5.73 6.97 7.82 17.2 2.1 13.2 10.3Apparel 1.57 1.80 3.02 3.86 4.80 4.46 4.75 4.68 4.97 4.46 4.36 4.92 5.54 6.12 23.2 0.0 7.0 11.0Footware 0.97 0.97 0.95 0.96 0.96 0.96 0.99 0.99 o.96 o.89 o.91 1.17 1.47 1.96 O.0 (1.2) 29.0 5.6Furniture 0.74 1.14 1.26 0.92 0.96 1.43 1.65 1.50 1.45 1.35 1.33 1.42 1.86 2.37 4.0 4.o 19.4 9.4Printing 2.23 2.20 2.18 2.37 2.50 2.72 3.22 3.09 3.10 2.96 3.30 4.11 4.76 5.61 2.9 11.0 17.6 7.4Other 0.33 0.50 0.26 0.32 0.37 0.38 0.50 0.42 0.36 o.48 o.64 0.78 0.87 1.04 1.9 11.0 16.2 9.2
Intermediate goods 21.61 20.40 21.69 21.82 24.34 24.58 25.27 27.24 30.80 32.28 34.20 36.76 39.89 440.8 n.a 2.6 6.8 8.8 5.6Lumber and products 9 LT8.r22 . 78 9.91 10.17 10.37 19. 72 10.45 10.52 12.06 12.57 13- 17 0.7 5 7 3.0Paper and products 2.27 2.10 2.01 2.07 1.99 1.83 1.90 1.99 2.02 1.98 2.59 3.64 3.78 3.85 (4.3) 7.2 14.1 4.iLeather o.81 0.82 0.85 0.84 0.86 0.92 0.93 o.85 0.78 0.76 0.78 0.98 0.89 1.07 2.6 -35) 11.1 2.2Rubber and plastic products 0.77 0.76 1.28 0.76 1.70 1.93 2.45 2.65 3.06 2.55 3.06 3.54 3.89 4.26 20.0 9.6 11.7 14.1Chemicals 5.36 5.80 5.80 5.56 5.37 4.84 4.69 5.01 7.13 8.86 9.60 9.16 9.57 11.08 (2.0) 14.7 4.8 5.8Non-metallic minerals 2.94 2.70 2.97 3.86 4.51 4.89 4.93 6.20 8.og 7.68 7.65 7.38 9.19 9.94 10.7 9.4 9.1 9.8
Capital goods 3.71 3.97 3.68 3.66 3.69 3.83 3.98 4.38 4.51 4.68 5.85 6.27 7.05 8.01 n.a o.6 8.8 11.0 6.1Meta pructs 3.30 3.5s 3.26 3.22 3.26 3 .35 3.-T 73 3.96 5.61 33 -. Bl -37 7 1.3Machinery and equipment 0.41 0.41 0.42 o.k44 o.3 o.48 0.50 0.62 0.59 0.72 0.72 o.66 0.72 1.15 3.2 8.5 16.9 8.3
Total Factory ManufacturingL/ 69.96 68.21 70.95 73.68 78.08 82.05 85.53 89.96 96.10 98.93 106.27 112.05 122.82 135.79 n.a 3.2 5.3 8.5 5.3
Handicraft Production- 35.55 36.51 37.58 38.36 38.75 38.96 40.40 42.96 43.83 45.21 45.83 48.35 50.o8 51.11 n.a 1.9 3.3 3.7 2.8
TOTAL MANUFACTURING 105.51 104.72 108.53 112.04 116.83 121.01 125.93 132.92 139.93 144.14 152.10 160.40 172.90 186.90 186.20 2.8 4.7 7.1 4.5
1/ At factor costs.2/ Establishments with S or more workers.3/ Establishments with less than 5 workers.flY Rate of growth total manufacturing 1970-1974 = 5.2%
1973-1974 = -0.5%
Source: Central Bank
1/Table 8.2: HONDURAS: GROSS DCMESTIC PRODUCT AND VALUE ADDED IN MANUFACTURING
(In millions of 1966 lempiras)
1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 197h
GDP 738.4 757.4 801.0 830.9 874.2 949.8 1,005.0 1,061.6 1,124.5 1,133.5 1,lS3.1 1,207.8 1,254.9 1,317.3 1,318.1
Manufacturing Value Added 105.5 104.7 108.5 112.0 116.8 121.0 125.9 132.9 139.9 144.1 152.1 160. 4 172.9 186.9 186.2
Percentage manufacturingin GDP 14.3 13.8 13.5 13.5 13.4 12.7 12.5 12.5 12.4 12.7 13.1 13.3 13.8 14.2 14.2
Percentage annual growthof manufacturing - 0.0 3.6 3.2 4.3 3.6 4.0 5.6 5.3 3.0 5.6 5.5 7.8 8.1 (0-3)
1/ GDP and value added at factor cost.
Source: Central Bank.
Table 8.3: HONDURAS: GROSS VALUE OF INDUSTRIAL PRODUCTION
(Millions of 1966 lempiras)
PreliminaryIndustry 1960 1965 1966 1967 1968 1969 1970 1971 1972 1993
Consumer Goods 129.4 157.5 166.6 176.6 184.9 191.6 198.4 213.2 230.1 254.2
Food products 63.5 66.1 72.5 78.9 84.6 95.9 102.6 111.9 116.3 127.5Beverages 33.8 35.6 38.4 40.2 42.6 36.4 39.4 41.1 47.o 51.4Tobacco 9.4 9.8 10.8 12.9 15.1 16.3 15.3 16.8 16.1 16.9Textiles 7.7 25.7 23.2 23.3 21.5 22.4 18.9 18.7 22.2 25.3Apparel 4.8 8.6 9.7 9.4 9.2 8.9 9.7 10.6 12.0 13.3Footware 1.9 1.9 2.0 2.2 2.3 2.4 2.5 2.7 3.3 3.5Furniture 2.1 3.2 3.5 3.3 3.1 3.0 2.9 3.1 3.9 5.2Printing 5.2 5
.4 5.3 5.1 5.2 5.0 5.6 6.3 7.2 8.5Other 1.0 1.2 1.2 1.3 1.3 1.3 1.5 2.0 2.2 2.7
Intermediate goods 81.8 87.1 90.3 94.4 106.2 117.5 130.8 135.9 144.4 159.5
Lumber & Products 26.9 27.7 28.5 30.1 31.9 34.0 36.5 41.2 44.0 47.9Paper & Products 27.2 24.2 25.2 26.4 26.9 25.4 28.1 30.3 31.5 32.1Leather 2.5 2.9 2.9 2.7 2.3 2.5 2.5 2.6 2.3 2.8Rubber products!/ 2.0 5.2 7.7 8.4 9.1 8.8 9.7 10.8 11.8 12.9Chemicals 15.6 15.9 15.5 15.1 23.8 32.9 39.8 36.4 37.0 44.3Non-metallic minerals 7.6 17.2 10.5 11.7 12.2 13.5 14.2 14.6 17.8 19.5
Capital goods 10.7 10.7 10.7 12.1 13.5 12.9 14.9 18.6 20.9 29.3
Metal products 9.7 9.5 9.5 10.8 12.2 11.6 13.1 15.7 17.6 19.1Machinery and equipment 1.0 1.2 1.2 1.3 1.3 1.3 1.8 2.0 3.3 5.2
Total factory manufacturing 221.9 255.7 267.7 283.1 304.6 322.0 344.3 367.7 395.6 438.o
Handicraft Production 144.0 124.6 123.7 127.4 131.2 135.2 140.6 144.8 149.8 1554.3
Total Manufacturing 365.9 380.3 391.4 410.5 435.8 457.2 484.9 512.5 545.5 592.4
1/ Includes plastic products
Source: Central Bank
Table 8.4: HONDURAS: SHARE OF VALUE ADDED IN GROSS VALUE OF PRODUCTION
(Percent)
1960 1965 1970 1973
Consumer Goods 34.5 34.1 33.4 32.9
Food Products 34.9 36.6 33.8 31.1Beverages 33.4 33.1 27.9 28.1Tobacco 33.2 29.4 29.7 29.4Textiles 28.4 18.9 28.9 30.9Apparel 32.7 52.3 44.9 46.oFootwear 50.8 50.3 36.2 56.0Furniture 35.3 44.7 45.9 45.6Printing 42.3 48.2 58.9 66.0Other 32.8 31.4 42.5 37.7
Intermediate Goods 26.4 28.2 26.1 27.6
Lumber& Products 35.2 36.7 25.5 29.1Paper & Products 8.3 7.6 9.2 8.3Leather 32.3 31.8 31.4 38.2Rubber Products 38.5 36.5 31.5 33.3Chemicals 33.9 30.4 24.1 25.0Non-metallic Minerals 38.6 43.7 53.9 51.0
Capital Goods 34.7 35.8 39.3 32.9
Factory Manufacturing 3_ 30.9 31.0
Handicraft Production 24.7 32.1 32.6 33.1
Total Manufacturing 28.8 31.8 33.3 31.5
Source: Tables 8.1 and 8.3.
Table 8.5: HONDURAS: EMPLOYMENT AND PRODUCTIVITY
(000 of workers and 1966 lempiras)
1965 1970 1972
Economically Active Population 668.9 774.3 830.0
Total Employment 628.1 712.4 763.6
Manufacturing Employment 52.2 64.6 70.7Factory 19.4 25.5 28.7Handicraft 32.8 39.1 42.0
Total Value Added Per Dlbrker 2,318.0 2,353.0 2,445.0Total Manufacturing Value Added 4,223.0 4,171.o 4,282.0
Consumer goods 5,040.0 4,412.0 4,501.0Intermediate goods 3,170.0 3,879.0 4,340.0Capital goods 3,722.0 3,539.0 4,234.o
Source: Investigacion Industrial, 1965, 1969, 1971, CONSUPLAN andCentral Bank.
Table 8.6: HONDURAS: EXEMPTIONS GRANTED UNDER THE INDUSTRIAL DEVELOPMENT LAW
HONDURAS
NEW INDUSTRIES Basic Necessary Convenient
Import Duties
Raw materials and 100% 100% 100%intermediate goods (10) (10) (3)
Machinery and equipment 100% 100% 100%(10) (5) (5)
Fuels and lubricants 100% 100% 100%(except gasoline) (lO) (10) (3)
Construction materials lO% 100% 100%(10) (5) (5)
Containers, etc. - -
Service and maintenance goods 100% 100% 100%(10) (5) (5)
Income Tax
Fi,rst half of contract period loO%/ lO%O/ 50W(5) (3) (5)
Second half of contract period 7 5, 50%(5) (3)
Capital tax for capital 100% 100% 100%invested in project (5) (3) (3)
Exportation tax 100% 100% 100%(lO) (5) (5)
Establishment tax 100% 100% 100%(5) (5) (3)
Production and sales tax 100% 100% 100%(5) (5) (3)
ESTABLISHED INDUSTRIES
Import Duties
Raw materials and 100% 100% 100%intermediate goods (5) (5) (3)
Machinery and equipment 100% 100% 100%(5) (5) (3)
Fuels and lubricants 100% 100% 100%(except gasoline) (5) (5) (3)
Construction materials 100% 100% -(5) (5)
Containers, etc. - -
Service and maintenance goods 100%(5)
Income Tax
First half of contract period 100%(3)
Second half of contract period 50 5°
Capital tax for capital 100% -invested in project (3)
Exportation tax 100% 100% 100%(5) (5) (5)
Establishmcnt tny lO% l'O% 10%(3) (3) (3)
Production -nd sales tax 100% 100% 100%
a/ Numbers in parenthesis indicate number of years for which exemptionis granted.
&/ Must be reinvested in fixed assets of the same firm.
Source: Ministr, of Fconomy.
Table 8.7: HONDURAS: FISCAL INCENTIVE CONTRACTS, 1960-1975
June1960-1971 1971-1975
Central AmericanIndustrial Development Agreement on FiscalLaw Incentives
New Industries 123 New Industries 2Basic 3T A 1Necessary 58 B 1Convenient 27
Established Industries 165 Established Industries 170Basic 7-3 A 93Necessary 104 B 21Convenient 38 C 56
TOTAL 288 TOTAL 174
Source: Central Bank and Ministry of Economy
Table 8.8: HONDURAS: FISCAL INCENTIVE CONTRACTS BY SECTOR
(1971 - June 1975)
Food Products 46Beverages 2Tobacco 2Textiles 15Apparel, footware 17Furniture 7Printing 5
Wood and Products 13Paper and Products 3Leather and Products 5Chemicals 14Rubber and Plastic 11Non-metallic Minerals 11Basic Metals 2Metal Products 16Other 7
Total 176
Source: Ministry of Economy
Table 8.9: HONDURAS: IMPORT DUTY EXEMPTIONS BY MANUFACTURING SUBSECTOR
(Thousands of Lempiras)
Table 8.9: HONDURAS: IMPORT DUTY EXEMPTIONS BY MANUFACTURING SUBSECTOR1962-65 1966-69 1970 1974
Lempifas (IVous5 ftpiADiempqsi7 Lempiras (%) Lempiras (M)Industry
Food, beverage,tobacco 1,820.7 13.2 7,269.5 18.8 2,456.3 20.8 7,682.6 26.22wtiles,appare1,1eather,fttware 3,36.6 24.8 f ,495.7 11.7 1,355.6 11.5 5,03h.5 17.1Wood products & furniture 9 2865 37:69 1.2 52-270 O 5 6 4 1.6Paper & products, printing Le#pMc7 (8)5.3 Le42D7 .1 (%)6.4 Le%p$t6Sl M3 7 Lempft.2 ( 6 5
D>IA* ra19 _ 2.555.7 18.5 7.978.1 20.2 -1650.1 1.0 _ -. 263.3 1h.5Nonmetalic minerals 0.8 0.1 648.8 1.7 109.2 0.9 654.8 2.2
F 4h bWa8e-b9cppbducts 1,8259. 7 13.R.3 7,0R41.6 18.0.o 2,45032 5 20. .9 7,02*3 2612.22¶M"p,apparel,leather,2Dtware 3,h36j5.2 24-6.1 h,4095%.6 11.4.o 1,35583.9 11.1.7 5,0W-4 174AL.7Wood products & furniture 005 3. T T0.3 1.2 o9.5 T7bPaper ,t&Wpucts, printing 4hi ,,fl.o 34o0.0 1439?5f9;.8 3f q.o 5iLiPA. 4h39.o 0737X978.6 2fs6.oChemicals 2,5557 18.5 7,978.1 20.2 1,650.1 14.o h,263.3 14.5Nonmetalic minerals 0.8 0.1 648.8 1.7 109.2 0.9 654.8 2.2Machinery & metal products 595.7 ).3 3,447.6 9.0 931.5 7.9 3,278.3 11.2Other 15.2 0.1 25d.6 1.0 b2.9 0.7 215.4 0-7
Sofi&e1 Central Bank and Mini09hoi Ec&%m6#u. 38,595.8 100.0 11,799.1 100.0 29,378.6 100.0
Source: Central Bank and Ministry of Economy.
Table 8.10: HONDURAS:
VALUE OF IMPORT DUTY AND INCOME TAX EXEMPTIONS IN MANUFACTURING
(Millions of Lempiras)
Raw Materials Machinery & Total Duty Income TotalEquipment Exemptions Tax
1960 0.17 0.03 0.20 - 0.20
1961 0.13 0.04 0.17 0.03 0.20
1962 o.42 0.16 0.58 0.04 0.62
1963 2.01 0.37 2.38 0.07 2.45
1964 4.27 o.64 4.91 O.24 5.16
1965 5.43 0.59 6.02 0.h0 6.42
1966 7.80 1.38 9.18 0.55 9.73
1967 8.53 0.62 9.15 0.77 9.92
1968 9.52 o.63 10.15 0.76 10.91
1969 9.63 0.69 10.32 0.59 10.91
1970 12.L1 o.68 13.09 0.85 13.9L
1971 16.00 2.17 18.17 n.a 18.17 2/
1972 21.19 0.57 21.76 n.a 21.76 2/
1973 20.76 2.31 23.07 1.11 24.18
1974 27.59 1.79 29.38 1.02 30.40
TOTAL 1h5.86 12.67 158.53 6.43 164.96
1/ Including construction materials and fuels and lubricants2/ Total excluding income tax exemptions.
Source: Central Bank and Secretary of Economy.
Table 8.11: HONDURAS
IMPORT DEPENDENCE OF THE MANUFACTURING SECTOR
1962 1965 1971
Consumer Goods 39.7 45.9 33.2
Food Products - 30.5 21.8Beverages - 57.7 58.3Tobacco _ 37.9 29.8Textiles _ 49.9 48.4Apparel - 90.8 95.9Footwear _ 65.2 30.4Furniture _ 45.0 42.2Printing - 91.7 98.8Other - 92.,5 64.2
Intermediate Goods 42.3 67.8 73.6
Lumber & Products - 3.0 3.6Paper & Products 99.9 99.7Leather 43.3 59.7Rubber Products 79.3 82.5Chemicals 80.2 94-3
Non-metallic Minerals 56.o 22.3
Capital Goods 97.6 93.8 95.3
Total 42.0 56.0 52.5
1 Imported raw materials as percent of raw materials used.
Source: Investigaci6n Industrial 1965, 1971. Direcci6n General de Estadisticay Censos and CONSUPLAN.
Table 9.1: HONDURAS: GENERAL CONSUMER PRICE INDEX BY GROUPS
(1966 = 100)
1967 1968 1969 1970 1971 1972 1973 1974 January-4August January-August____ ____ ___ ____ ____ ___ ____ ____ ___ ____ ___ ____ ____ ___ ____ ____ ___ ____ ___1974 1975
Food 102.2 103.8 104.8 110.2 113.7 119.1 125.3 146.7 145.3 158.5
Housing 101.1 102.7 104.0 108.4 109.3 111.9 116.5 131.1 129.4 139.0
Clothing 103.1 106.7 108.5 109.6 111.5 115.0 124.7 134.4 132.7 140.0
Health 101.6 102.7 104.0 106.9 115.0 115.6 116.0 118.1 117.6 123.5
Personal Care 103.4 107.3 111.2 111.2 116.7 122.2 126.6 139.7 136.5 150.8
Beverages and Tobacco 103.3 104.2 106.9 112.7 112.8 116.3 119.3 123.0 120.9 128.0
Miscellaneous 101.3 103.1 103.7 104.5 104.9 105.8 106.4 117.4 116.4 127.0
GENERAL INDEX 102.1 104.0 105.3 109.1 111.6 115.4 120.7 136.2 134.7 145.4
Souroe: Central Bank.
Table 9.2: HONDURAS: MONTHLY HOUSEHOLD INCOMES AND AFFORDABILITYOF HOUSING BY INCOME AND LOCATION
Monthly House- San Pedro Other Average Cost of Affordhold Income Total Tegucigalpa Sula Urban 'TRural azle H-lousing Unit
Less than 42 65.1 13.1 14.6 25.6 85.6 Up to US$400
42-83 13.7 23.6 29.4 26.6 8.1 Up to US$1,525
84-195 11.2 27.9 27.1 21.6 5.2 Up to US$2,750
196-208 3.8 12.6 12.9 10.5 0.3 Up to US$4,500
209 - 291 2.9 8.8 7.1 7.2 0.7 up to US$6,850
291 and above 3.3 14.0 8.9 8.5 0.1 More than US9,0oo
1/ Recent income distribution figures are not availaole, so the 1967-68 data is usedhere for purposes of analysis.
2/ Estim ted on the basis of the following terms and assumptions:(a) 8-11 percent interest, 15-20 year repapnent period, 5-10 percent downpaywient.(b) As monthly income increases, the proportion allocated for housing (and
the affordable unit cost) increases. Accordirg to the 1967-68 Survey ofIncome and Ex;penditures, the percent of income allocated to housing inHonduras ranges from about 10 percent to about 25-30 percent; for theincome categories above, the percentages varied within t.his range.
3ources: Survey or Inconie and Exoenditures, 1967-68, and AID, Honduras - HousingSector Analysis, August 1974.
Table 9.3: HONDURAS: CHARACTERISTICS OF HOUSING STOCK, 1974
Total Urban Rural
A. Number of Units./ 536,537 162,266 374,271
B. Number of Occupied Units 453,600 140,616 312,984
C. (1) Percent with earthen floors 61.5% n.a. 87.0%(2) Percent with precarious roofs 22.9% n.a. n.a.(3) Percent with adobe or bahareque
(mud and straw) walls 53.0% n.a. n.a.
D. Percent with 1 or 2 rooms (equiv-alent to 3 or more persons perroom) 60% n.a. n.a.
E. (1) Percent with no access topiped water supply 60% 11% 85%
(2) Percent with house connection 22% 64% 7%(3) Percent with access to public
standpipe 18% 25% 8%
F. (1) Percent with no access towaterborne excreta disposalsystem 80% 40% 95%
(2) Percent with flush toilets 14% 42% 1%(3) Percent with other forms of
sanitary excreta disposal(septic Tanks, drainablelatrines) 6% 18%
/ According to the Census Bureau, the difference between the total housingstock and the number of occupied units is largely due to (a) the 73,000 or soSalvadoreans who left after the 1969 conflict; (b) Honduran refugees from the borderprovinces with El Salvador who fled the area during the conflict, and (c) theopening up of new settlement areas in the North by Ii-,A, leading to some rural-to-rural migration, and abandonment of rural homes.
Sources: Direccion General de Estadistica y Censos, Censo de Poblacion y Vivienda,1974 - Resultados Nuestras July 1975 an! mission estimates based on informationfron SaNAA {Mational iater and Sewerage Service) and the draft IBRD/PAfO
tEr 3.pjy >d Sanitation Sector Study, Oo #ber 1974.
Table9.4: KEALtTI INDICATORS II. SELECTE;D LATI1N AKi5;2!O,N C(0;U-),'2".I
General InfantMort 1aty Izortality L fe . xr,ec t ,ncv
at B1 th_(per lCO( (per 1000
country inhabitants) live b- ths) (yelr.s
Honduras Lii.2 117.6
Argentina 9.2 65.2 65. 7
Costa Rica 5.2 59.0 67.8
Coloirbia 8.3 67 .9 694.
Gnatemala i4.1 8.1 52.I
Source: Ml4inistry of Public Health and I D3, "H..,nduras: tt.diona1 r'Oalth Se,r-vices ProgramI' pI Septe nber 1.975, and :'iinist.erio de Salud ;di..c-ica, in'j.arJ- istaiisti.co, 2973.
Table 95: HOSPITAL SERVICES AND TFIEIRUTILIZATIO1'j IN SE,ECTED LATIN AMERICAN COUN'ITRIES
Beds/ No. of Discharges Consultations1000 discharges per 100 Avg. Occupanc.v per inhab
Country inhab Abed/year inhab _ stay (Percent) per year
Honduras 1.2 22 2.6 12.0 71 0.27
Argentina 5.7 - - - - o.66
Colombia 2.0 39 - 7.0 76 c.h6
Costa Rica 3.9 29 11.3 10.0 79 2.15
Guatemala 2.4 - - 12.0 - 0.33
Nicaragua 2.5 28 4.7 9.4 72 0.76
Panama 3.2 30 7.1 7.9 66 1.68
Source: Iinictry of Public Health and IDB, "Honduras - Nati.onal IHealuh Ser-vices Program", SeptemDer 1975.
Table 10.1: HONDURAS: EDUCATIONAL PROFILE OF THE LABOR FORCEOF 10 OR MORE YEARS OF AGE
Levels & years 1961 197of Education No. No*
University 3.884 0.7 9.885 L1--3 95 2 3sId3 ii4-6 3,230 .4 5s761 .87+ 698 .1 941 .1
Secondaryv 25,p363 4s55 58,86o i1-3 usf ;01712.54-6 130907 2.5 40s099 5.2
Primary 229.324 40.4 378.f719 49b421-3 156a1C4 27.9 203 952 2 e74-6 71,220 12.5 174,767 22.8
No formal education 294M635 18 310.69 40.6
Unknown 14,786 2.6 6.779 0.9
Total 567,988 100.0L 932-~~~ ~ ~~ ~ __- _ _ __L
Source: Caracteristicas &on6micas de la Poblaci6nj 1961. Direcci6nGeneral de Estad.stica y Consos, and ST/CONSUPLAN based on a10% sample analysis of the 1974 oensus.
Table 10.2: HONDURAS: EDUCATIONAL ENROLLMENT, 1975
1/ Enrollments (tOOO) GraduatesRate- 0of of tof in 197
Level Ages Population (%) Total Public Rural Girls ('000)
Pre-primary 4-6 16.1 84 - 50 _
Primary 7-13 566 81 459.3 94 57 50 26.5
Secondary 13-19 375 18 66.1 26 - 45 -
lower Secondary 13-16 269 17 47.0 24 - 45 8.5
General 45.9 22 - 46 -
Industrial .8 100 - 0 -
Agricultural .2 100 - 0 -
Other .1 - - 100 -
Upper Secondary 16-19 238 8 19.1 31 - E5 -
General - - - 4.7 20 - 30 17
Industrial - - - .4 100 - 0 - 2/
Agricultural - - - .1 100 - 0 - 2/
Commercial - - - 9.2 27 - 34 n.a.
Secretary - - - 2.7 0 - 100 n.a.
Teacher - - - 2.0 100 - 71 1.0
Higher 3 19-24 309 3 10.3 100 - 33 0.4
University - - - 9.2 100 - 30 0.2
Teacher Training - - - 1.0 100 - 67 0.2
Fbrestry - - - .1-/ 100 - 0 -
1/ This is the gross enrollment rate figure which includes students outside therelevant age groap.
2/ Negligible.3/ Excludes one Latin America Regional Agricultural School operated by a non-
profit making private school (EAP).4/ Including peritos (secondary level).
Source: Ministry of Education.
Table 10.3: HONDURAS: ENROLLMENTS AND RECURRENT EXPENDITURE
(1000 students)
1968 1973 1980Enrollment Enrollment Enrollment US$ ooo
Primary
Total enrollments 377.0 433.9 663.3- public 354.9 406.6 630.4 28,268.o- private 22.1 27.3 32.9
- urban 159.9 192.3 256.3- rural 217.1 241.6 407.0
Secondary
Total enrollments 34.3 57.6 134.0 /1- public 8.9 16.4 80.0 12,4o4.o-- private 25.4 41.2 54.o
- lower 20. 5/1967 35.8/1972 85.5- upper 10.1/19 14.3/1972 48.5
Higher
Total enrollments 3.4/1967 8.4/1972 24.3- teacher training 12.0 0.4 1.2 960.0/2- UNAH 2.5 7.3 23.1 627.6-- social service college 0.7 0.7 -
Sub total 42,359.6
Central Administration and Others 4,706.6
Adult Education and Rural Training
/1965 /1973 /3 /4Total enrollments 18.04C 6 31.9 63.0 3,150.0-/ 3,000.0"
Without radio program 9.8 18.3 37.8
50,216.2 53,066.2
In 1975 prices (lempiras) L100,432.4 106,132.4
In 1980 prices (lempiras) L145,627.0 153,892.0
1/ Students ('000) uS$(oo00) 2/ L 627.6 = L 601.7 m. x 3% + 1.45.commercial 45.o 6,300 3/ Based on US$150 per person.vocational 3.3 462 / Based on 145,000 persons, which is atechnical 2.1 1,512 revised target.teacher 9.5 1,330general 20.0 2,800
Source: Ministry of Education.
Table 10.4: HONDURAS: EFFICIENCY INDICATORS
I. Completion Rate of Cohort
Level Co2letion Rate % Period
Primary 16 21 1966-71 1969-74
Urban 30 41
Rural 8 12
Lower Secondary 58 60 1968-70 1972-74
Upper Secondary
General 49 80 1970-71 1973-74
Industrial 34 65 1970-72 1972-74
Agriculture - 75 - 1972-74
Commercial 28 61 1969-71 1972-74
Normal 73 89 1969-71 1972-74
Higher 22
II. Progression RateProgreesion
Level Rate % Period
From primary to lower secondary 80 1973-7474 1972-73
From lower secondary to upper secondary 91 1973-74
From secondary to higher 58 1973-7465 1974-75
Source: Ministry of Education, UNAH.
Table 10.5: HONDURAS: DISTRIBUTION OF PRIMARY SCHOOLS BY NUMBEROF GRADES OFFERED: URBAN AND RURAL, 1974
Urban RuralCummulative Cummu lative
Grades Offered No. 9/0 No. %
Only 1 grade - - 1o6 2.7
Up to 2 grades 3 0.5 272 9.6
Up to 3 grades 5 1.4 861 31.7
Up to 4 grades 4 2.1 855 53.6
Up to 5 grades 7 3.4 609 69.2
All 6 grades 512 100.0 1,188 100.0
Total 531 3,891
Source: Ministry of Elucation
Table 10.6: HONDURAS: ENROLLMENT AND OUTPUT - UNIVERSITY EDUCATION, 1974
Courses Enrollment as % % Femilea % Parttime Output
Total 9.226 .100.0 30.0 (&&.l 178
Law 1s196 13.0 29.0 38.0 70Public Administration 163 1.8 50.3 52.2 -Journalism 73 o.8 39.7 39.7 2Econanics 1,132 12.3 27.5 65.1 28Business Administration 1,341 14.5 26.0 66.4 5Aocounting 697 7.5 33.4 79.1 1Medicine 1,115 12.1 24.9 8.6 10Pharmaceutical Science 280 3.0 67.1 20.7 3Dentistry 125 1.3 50.4 9.6 8Nursing 119 1.3 98.3 28.6 1Microbiology 158 1.7 80.4 25.3 7Clinical Lab. Technician 40 o.4 74.4 20.0 -Psychology 274 3.0 80.7 45.6 1Civil Biginearing 1,092 11.8 11.7 23.2 19Agricultural Engineering 509 5.5 2.4 7.7 14Forestry Engineering 44 0.5 2.3 6.8 -Mechanical ehgineering 177 1.9 3.9 26.0 2Chemical Engineering 145 1.6 31.0 15.9 3Electrical Engineering 249 2.7 1.2 24.5 2Topography 2 0.02 - 100.0 -Pedagogy 45 0.5 80.0 66.7 1Mathematics 54 o.6 37.0 35.2 1Physics 4 o.o4 25.0 25.0Biology 25 0.3 40.0 40.0Chemistry 8 o.l 50.0 12.5Mathematics Teaching 5 0.1 40.o 20.0Chemistry/Biology/Teaching 3 0.04 100.0 66.7'bcial Work 151 1.6 79.5 21.2
Source: UNAH - Statistios Section of Academic Department.
Table 10.7: HONDURAS: GOVERNMENT EDUCATION EXPENDITURE, 1975
(L '000 it 1975 Prices)
1975Total Recurrent % CaDital
Central Govt. Education Expenditure 83,688 70,564 (100) 13,124
as % of GNP 4.2' 3.6% 0.6%as % of Central Govt. Expenditure 27.0% 43.0% 9.0%
Ministry of Education Expenditure 80.018 68,330 (97) 11.688
Primary 39,658 6,354 (56 11Secondary General 16,959 39,647 (9 10,605*Secondary Vocational 1,917 1,873 (3 45Literacy and Adult Educ. 600 593 (1 7Secondary Teacher Training 1,598 1,598 (2 -University, etc. 11,632 11,632 (17 Art and Culture 657 617 1 40School Maintenance 1,276 710 1 565Central Administration 5,721 5,306 8 415
Ministry of Natural Resources
Agricultural-Secondary 2,115 792 (1) 1,323University 100 100 (-) -
COHDEFOR
Forestry School 1,000 887 (1) 113
Ministry of Labor
Vocational Training (INFOP) 425 425 (-)University 30 30 (-)
* Includes capital expenditure for. secondary teacher training.
SOURCE: Consuplan; Ministries of Education, Natural Resources, Labor;Mission estimates.
* Includes capital expenditure for secondary teacher training