The Big Loser in the Honduras Political Crisis? the Economy

By Sara Miller Llana - writer; Mike Faulk - Correspondent | The Christian Science Monitor, November 3, 2009 | Go to article overview

The Big Loser in the Honduras Political Crisis? the Economy


Sara Miller Llana - writer; Mike Faulk - Correspondent, The Christian Science Monitor


Doris Midence, a snack bar employee at La Tigra National Park outside the Honduran capital, Tegucigalpa, has the empty gaze of someone with too much time on her hands.

"Customers are down by half," she says, reorganizing gum and candy bars. "Between curfews and protests, people are not leaving their homes."

The Honduran political crisis - at four months and counting, after ousted President Manuel Zelaya was arrested and deposed by the military June 28 - could finally be coming to an end. Both sides have signed a deal that calls on Congress to decide whether Mr. Zelaya gets to return to office. But even if the curfews are being lifted, the economic ramifications of Latin America's worst crisis for decades could endure much longer.

Tourists who typically visit the northern Bay Islands, for example, are opting for other places in the Caribbean to scuba dive. Foreign investment has dropped. Cuts in aid have stalled construction of roads. And the nation's consumers, some facing their own unemployment or simply saving in the face of political instability, are no longer buying shoes or furniture or other non- essentials.

"Since June 28 demand has declined dramatically," says Jose Enrique Nunez, the president of the country's national association of small and medium-sized businesses. "It has created chaos, and that chaos is causing us to collapse."

No quick fix for the economy

Hours after Zelaya was kicked out of Honduras for allegedly pushing for a constitutional change to relax presidential term limits - a charge he denies - a new government led by Roberto Micheletti took over. Since then, the two men - Mr. Zelaya in the Brazilian embassy, where he sought refuge after sneaking back into the country Sept. 21, and Mr. Micheletti in the presidential palace - have battled over who should be governing the country. Now they have left the decision up to the Congress, but their resolution will be no quick fix to the economy.

In September, the London-based polling company Consensus Economics reported that Honduras's GDP would decline by 2.6 percent this year, readjusted from a .7 percent decline forecast made just months earlier. Rebeca Patricia Santos Rivera, the finance minister for Zelaya who continues to represent Honduras on the international stage, has said that GDP this year could fall by 4 percent or more. And by some estimates the economy has lost $200 million in investment since June 28 alone.

By and large, despite intermittent protests, life on the streets of Tegucigalpa continues on, as it hums on in San Pedro Sula, the industrial center of Honduras, and the rest of the nation. It is a sense of "normalcy" that Micheletti supporters like to point out. But life is far from normal for many sectors of society.

Tourism down

Anna Rossivel Cruz, head of statistics for the acting Tourism Ministry, says the government cannot precisely estimate how much the political crisis has hurt tourism, but that the numbers of those visiting is down since July after increasing by 7 percent in the first half of the year.

"It has affected us negatively, but we think this drop-off will stop at the end of the year," Ms. …

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