This information comes from the assessment conducted in country for the Honduras report, which was published in January 2005.
Honduras faces both challenges and opportunities. There is in Honduras a particular urgency in pursuing the current economic reforms: assuming the Central American Free Trade Agreement (CAFTA) is ratified, implementation of the agreement is imminent, a series of high-profile initiatives pertaining to property rights are being implemented, and new demands on ineffective or corrupt institutions are challenging the country to take even greater strides toward meaningful change.
The near future will show whether Honduras is to be pushed forward by the energy, commitment, and forward-thinking acts of many of its officials or whether self-interested groups will obstruct these critical reforms and dominate the economic landscape for the remainder of this decade.
Overriding themes in Honduras’ commercial law and institutional reform (CLIR) and trade environment that should be incorporated into reform programs on a crosscutting basis include:
- The significance of the enactment in 2004 of the Ley de Propiedad (LdP) and other real property reforms, and the long-term importance of monitoring and supporting their implementation;
- A lack of public confidence in the judiciary;
- Difficulties in establishment and growth faced by small and medium-sized enterprises (SME), due particularly to the lack of access to capital;
- A series of constraints against foreign direct investment; and
- Difficulties Honduras may face in preparing for implementation of the CAFTA.
