Speeding Up.

Author:Wilson, James (Agriculturist)

TEGUCIGALPA--HE WAS CRITIcized for a slow start when he took office in January, but President Carlos Flores of Honduras has since moved decisively on several fronts to try to increase his country's attractiveness as a place to invest.

In April, Flores' new team brought out a big package of fiscal adjustments in a bid to stimulate growth. Legal reforms are planned to further entice investors to one of Latin America's most underdeveloped nations.

Privatizations in telecoms. electricity and airports are also expected as Honduras seeks IMF and Paris Club support for a structural adjustment of the economy and debt reduction.

Eduardo Facusse, president of the powerful Honduran Private Enterprise Council (COHEP), says Flores inherited a situation where there "was hardly any investment, public or private." Now, says Luis Cosenza, the executive president of the Foundation for Investment and Export Development (FIDE), "the government is laying the ground for more development."

The private sector applauds April's tax measures that raised value-added tax but have cut corporate income tax from 42% to 30%, falling to 25% next year. Jacqueline Foglia, president of the American Chamber of Commerce in Honduras and the vice minister for tourism, says it will make a big difference--pointing to high taxes as a reason that investment has been scarce. "We are trying to tax consumers and not tax producers. We need to emphasise production," she says. "It makes lots of difference in our competitiveness with...

To continue reading