Background Consultative Process. Following the devastation of Hurricane Xxxxx in 1998 and the subsequent reconstruction effort, Honduras now enjoys a window of opportunity to capitalize on the democratic reforms begun in the 1980s, the economic liberalization of the 1990s, and increasing regional integration, trade liberalization and the promise of The Dominican Republic-Central America-United States Free Trade Agreement. Honduras has begun to seize this opportunity and use its strategic location to generate economic growth, particularly in light manufacturing, non-traditional agriculture and tourism. However, Honduras needs to ensure that growth extends to the rural population, where most of its poverty is concentrated, by enhancing agricultural development and linking its large rural population to markets. The Honduran Poverty Reduction Strategy (“PRS”)1 describes the macroeconomic, structural and social policies and programs needed to promote growth and reduce poverty. Among its priorities, the PRS seeks to improve agricultural productivity and access to markets. These two objectives of the PRS are essential to increasing exports, particularly in light manufacturing and non-traditional agriculture, which are the two sectors that have accounted for most of Honduras’ recent economic growth and poverty reduction. To reduce rural poverty, the PRS contemplates increasing production and improving the efficiency and competitiveness of rural producers by providing them with better access to market-support services throughout the production cycle (e.g., market research, production, post- harvest and processing technical assistance), financing (e.g., credit from traditional and non- 1 The Honduran Poverty Reduction Strategy is articulated in the Poverty Reduction Strategy Paper developed in 2001, and a Poverty Reduction Strategy - Implementation Plan for 2004 – 2006 developed in 2004. traditional financing sources), technology (e.g., on-farm irrigation systems), and infrastructure (e.g., building and maintaining rural roads, improving the efficiency of property registries). The PRS also seeks to integrate the Honduran economy into channels of world trade by completing (i) the main Honduran highway artery that directly connects Puerto Xxxxxx (Honduras’ Atlantic port) to Puerto Cutuco (El Salvador’s Pacific port), major production centers within Honduras, and the country’s Central American trading partners, and (ii) the access roads that feed into this artery. The goal is to guarantee the access o...
Background Consultative Process
