Honduras News – Daily News about Honduras

William Chong, upon taking up his new post as Honduras’ Finance Minister, has said that the new government is inheriting a bankrupt country, with only “about $50 million in government coffers”.

Chong said the country is bankrupt following months of isolation and cut offs of international aid prompted by the political crisis. He added that President Lobo’s administration will have to approach international lending agencies like the World Bank and International Monetary Fund for loans.

That may not seem as difficult as previously thought, as Craig Kelly, US Deputy Assistant Secretary of State, said that Honduras has made significant headway in returning to democratic constitutional rule, and that it deserved a chance to normalize international relations.

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The World Bank heads the list as the main creditor of Honduras. As of September 30, 2009, the balance of the debt to the Bank reached 489 million dollars, according to a report by the Ministry of Finance (MoF), equivalent to 19.9% of Honduras’ total external public debt, which was 2,457 million dollars.

The second and third largest creditors are the Inter-American Development Bank (IDB), with $455 million, and the Central American Bank for Economic Integration (BCIE), with $405 million.

Bilateral creditors include Spain, with $263 million, and Venezuela, with $196 million.

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President Jose Manuel Zelaya has launched the Plan for Supply of Basic Grains and the Technological Productive Bond (BTP), in order to produce enough basic grains this year to feed the population of 7.3 million people. There will be provision of some basic inputs in terms of agricultural credit at low interest rates (lowered from 24% to 9%), seeds, technology, etc.

“We have to support these reforms so the nation can once again become the granary of Central America,” he said, referring to Honduras’s past status as a key regional food producer.

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Fidencio Alvarez abandoned his bean and corn farm in southern Honduras because of the rising cost of seeds, fuel and food. After months of one meal a day, he hiked with his wife and six children to find work in the city.

“We would wake up with empty stomachs and go to bed with empty stomachs,” said Alvarez, 37, who sought help from the Mission Lazarus aid group in Choluteca in January. “We couldn’t afford the seeds to plant food or the bus fare to buy the food.”

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