Honduras - Basic report on the economy

RESTRICTED TM, Ti CurE'Y Report No. CA-19a This report is for official use only by the Bank Group and specifically authorized organizations or persons. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. l. i TMTrTPT A rTnIO A T rO A MRE COV Pl?VNSTNRUC1TT!OTN A MT) ThV1XIPT nVMDN 4Tw TXTTrDNT A TTCW A T TnhN7T r)PMAMrT A CQCnT A TTnM BASIC REPORT ON THE ECONOMY OF HONDURAS June 27, 1972 Centrnl Amerirn nnd Caribbean Department  CURRENCY EQUIVALENTS US$ 1.00 = 2.00 Lempiras (L) L 1.00 = $ 0.50 SDR 1.00 = $ 1.09 SDR 1.00 = L 2.17  This report is based on the findings of an economic mission to Honduras in October/november i971 composed oI: Pedro-Pablo Kuczynski mission chief Euric Bobb deputy mission chief Jos6 Datas investment analyst Donna Dowsett social sectors, tourism Herminia Neufeld industry, regional integration Richard wneeler Consultant - agriculture Raquel Owen Secretary   HONDURAS TAdLE OF CONUTENTS Page No. INTRODUCTION AND SUMMARY (in English) ........................... i - xii (in Spanish). xiii-xxvi I. BACKGROUND AND MAJOR OUTSTANDING ISSUES .... .......... 1 The Government's Role ........................... 1 Economic Growth Trends .......................... 2 Major Issues .................................... 3 II. SECTORAL ISSUES AND POLICIES ..... .................... 10 A. MAIN ECONOMIC SECTORS ........... .. .............. 10 Agriculture ..................................... 10 Background ................................. 10 Land Tenure and Intensity of Land Use ...... 12 Farm Services .............................. 13 Irrigation ................................. 15 Prospects .................................. 16 Manufacturing ................................... 17 Growth and Structure ....................... 17 Industrial Investment and its Financing .... 18 Government Policies ........................ 19 Prospects .................................. 20 Tourism ......... ................................ 22 B. SOCIAL PROBLEMS AND POLICIES ..... ............... 23 Population . . ...... .. Employnent..._ Education ....................................... 25 Public Health ....... ............................ 26 Nutrition ................ ......... .............. 27 Water Supply and Sewerage ... ............... 28 Housing ......................................... 29 III. PUBLIC FINANCE AND INVESTMENT ........................ 31 Introduction ....................... .... ...... . 31 Public Sector Current Operations ................ ..... 31 Public Investment ....... ............................. 36 Recent Trends ..... .............................. 36 Transport and Power ...... ........................ 38 Financing Public Investment ..... ..................... 38 Prospects ............................................ 39  TABLE ~ ~ OFCOT ^S(onti-nued) IV. MONEY, CREDIT AND BALANCE OF PAYMENTS .... ............ 45 A. MONEY AND CREDIT ................................ 45 B. BALaNCE OF PAiA TS ......'....................... Imports ........ ............................ 48 Exports ........ ............................ 50 External Debt .............................. 51 Prospects and Creditworthiness .53  STATISTICAL APPENDIX I. Ponulnation and Emnlovment II. National Akooilnts ITl. Balance of Payvments an-d External Trade TVI Ex,eArnal nhbt V, Abhlic- Setor' Finanes V_. Money and Credit VTT-A . - .4giil + re VIII. Industry IX. Prices, W.ges and IncoT".e Distrih11+ . J ALa U. U LA   5<y/8 t~~~~~~~~~~~ oirboreza v lslane ~~~~~~~~~~~~~~~~~~~~~~~~Co Jr 'b b e oa n Se a / ~~G/Jl} Of HIOiVDURAS < | 5''';'? i't W :g>S R AiL'48"' 'SS ,, - i S~~~~~1,W t9\ C O C A NIS.No-ata \g , k S , _ , _ ,/ w X -55er d I~~~~~~~~TWILL , 9ANTA RO9NB t t "z< g Uinn 1 , / ~ ~ ~ ~~~- / ,<T j 2 | \ v A --' ,- CS M A Y A G U A 9 X \x X JUTICAIWA/> g / r .J n~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~S t g Ol;oq|Jt e>GRACIA', ^ ~~~~~~~ s-< 9 5 W rI > L S g > ) , \E113 <ErErzuE~~~~~~~~~~~~~~o Z s1NT A_-_ 4vAtU's0 -4 G IrO \-7 1 ot t' 1. PAZ C,4!x,(-;; ,Szm ''s ,/ (\ X Bt lS )~~~~~~~~c 0 <~ ~ ~ ~ ~ ~ ~~~S PEDRI X / \ EGCGLA r4 7 . t___ a K/ _14