Trade

In the early 1990s, the United States was by far Honduras’s leading trading partner, with Japan a distant second. United States exports to Honduras in 1992 were valued at US$533 million, about 54 percent of the country’s total imports of US$983 million. Most of the rest of Honduras’s imports come from its Central American neighbors.

Despite its status as beneficiary of both the Caribbean Basin Initiative (CBI) and the Generalized System of Preferences (GSP) — both of which confer dutyfree status on Honduran imports to the United States — Honduras has run a long-standing trade deficit with the United States.

Total exports of goods and services by Honduras in 1992 were US$843 million, of which about 52 percent went to the United States. The current account deficit, however, continues to rise, from US$264 million in 1992 to an estimated US$370 million deficit in 1993.

Foreign Investment

With the exception of relatively recent, Asian-dominated investment in assembly firms along Honduras’s northern coast, the country remains heavily dependent on United States-based multinational corporations for most of its investment needs in the early 1990s.

Overall investment as a percentage of GDP declined dramatically during the 1980s, from about 25 percent in 1980 to a meager 15 percent in 1990. Dole Food Company and Chiquita Brands International together have invested heavily in Honduran industries as diverse as breweries and plastics, cement, soap, cans, and shoes.

As Honduras enters the 1990s, it faces challenging economic problems. The solutions relied on in the past—traditional export crops, the maquiladora assembly industry, and 1980s’ development schemes—appear unlikely to provide enough new jobs for a rapidly growing population. The major economic challenge for Honduras over the next decade will be to find dependable sources of sustainable economic growth.