Business & Economy

Honduran private sector: Join forces to rebuild country

Tegucigalpa, Jan 18 (efe-epa).- The Honduran private sector is in a “state of calamity” due to the coronavirus pandemic, which has resulted in 134,111 confirmed cases and 3,354 deaths nationwide, and the effects of the tropical storms Eta and Iota, such that it rejects the idea of a new lockdown to stem the uncontrolled spread of the virus.

“Private business is in a state of calamity. We had 10 months of confinement and going out (to work) at half-steam due to Covid-19 and in November we were affected by two tropical storms,” the president of the Honduran Private Business Council (Cohep), Juan Carlos Sikaffy, told EFE in an interview.

The natural phenomena mainly affected the Sula Valley, in the Caribbean province of Cortes, extending into a part of neighboring Yoro province, which produces 45 percent of the country’s GDP, all of which has had “very serious consequences” for Honduras, he said.

Eight of every 10 Hondurans have “serious problems in acquiring their resources,” and thus they live in a “precarious” situation, which – he said – concerns the private business sector.

Ninety percent of the country’s business sector consists of micro and small firms, and these are two of the sectors most affected by the coronavirus and the storms, and the “big limitations” have not allowed for their reactivation, he added.

Sikaffy rejected the idea of imposing a new lockdown on Honduras, a measure that authorities have been planning in the face of the increasing number of Covid-19 cases across the country.

A quarantine is “out of context. We have to take care of ourselves, with each one of us taking responsibility,” he emphasized, adding that a quarantine “will send many more people back into poverty,” with the informal economic sector having increased in size.

“There are people who go out on the street to work today, to eat today or tomorrow. If that income source is cut off, it throws more people into poverty. That is very serious. We could see an unprecedented social breakdown in the country,” he said.

Honduras is at an “inflection point” and right now there is “a great opportunity to rebuild the country,” with international organizations offering financing, and so the government and businessmen should craft projects that have “greater impact” on the public, he said.

Honduras, a country with 9.3 million residents, has been experiencing a resurgence in the pandemic since December and, as a result, its healthcare system is on the verge of collapse.

Almost all economic sectors were shut down last March, but the lockdown stemmed the spread of the virus at that time and enabled the reopening of the most essential sectors at the end of July.

However, the economic reactivation has been slow, and Sikaffy is demanding that the government “join efforts” with all other sectors to “rebuild the country together.”

The main challenges to Honduran private business are to rehabilitate and rebuild what was destroyed by Eta and Iota last November, and to reactivate the economy, he said.

Reactivating the country’s weak economy means “providing businesses with loans, guaranteed funds that the government should provide to be able to recover,” he said, adding that businessmen also need to reinvent themselves to be able to resume their activities.

The crisis about which businessmen are warning can be seen in the unemployment figures, with a million people from the formal sector out of work and more than 1.5 million people with “serious income problems” in the informal sector.

The damage left by Eta and Iota adds up to some 46 billion lempiras ($1.9 billion), according to a report by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) cited by Sikaffy.

He said that the Covid-19 pandemic has hit the Honduran economy hard and has resulted in losses of at least 18 percent of GDP, equivalent to 120 billion lempiras (just under $5 billion).

In Sikaffy’s opinion, the National Reconstruction Plan announced by the government should prioritize attacking “the human tragedy, the rehabilitation of what was destroyed by the storms and the reactivation of the economy.”

To do that, Honduras needs to attract foreign investment, but the country should move along “a road to reconstruction where it is not so vulnerable to climate change,” he said.

The government also should guarantee that foreign investors have “certainty, clear rules, strong institutions so that they have the security of knowing that their investments in the country are safe.”

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