HONDURAS, with 9.9 million inhabitants and an annual per capita income of US$2,340 in 2020, remains the second-poorest country in the Western Hemisphere after Haiti, with almost one in six Hondurans living on less than US$1.90 a day, according to a World Bank study.

The study, which was presented as part of the Country Private Sector Diagnosis (CPSD) by the International Finance Corporation (IFC) — the private sector arm of the World Bank Group — also indicates that the growth of annual per capita income has averaged only 1.2 per cent in Honduras since 1960 .

It adds that a heavy reliance on agriculture; a high rate of informality in all sectors; high vulnerability to external shocks including natural disasters combined with high rates of crime and violence; political instability; and a weak political and economic environment; in addition to slowdown in economic growth perpetuate structural poverty in Honduras.

Strong foreign investment has generated limited cross-sector spillovers, while inefficient public investment management and onerous regulatory requirements limit the development of new economic opportunities.

Furthermore, slow economic growth and a limited distribution of returns exacerbate crime and encourage migration, contributing to a vicious cycle of persistent poverty and underdevelopment.

Despite the difficulties, the World Bank Group (WB) report indicates that promoting the participation of the private sector can accelerate the growth of the Central American country.

The IFC’s manager for Central America, Sanaa Abouzaid said that “the private sector can play an important role in the effort to promote inclusive economic growth”.

He added that the Private Sector Diagnosis “aims to offer tools to guide Honduras in how to better take advantage of key industries that can attract investment, diversify exports, create jobs and accelerate economic recovery”.