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Honduran post-coup gov't optimistic about overcoming economic difficulty
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13:26, August 03, 2009

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Economists have estimated that the political crisis in Honduras could deepen the country's recession, but the post-coup authorities seem quite optimistic about its ability to overcome the difficulty.


Honduras-based economists, who had predicted a 1-percent decline in the country's gross domestic product (GDP) before the June 28 coup, said the political crisis could result in a two-digit drop in the country's GDP.

Figures in the Honduran business circle have said that the country has lost some 100 million U.S. dollars in trade due to highway closures and other protests that have taken place since June 28, when President Manuel Zelaya was ousted to Costa Rica in a coup.

The nation's main aid contributors have frozen their promised cash. The European Union suspended 65 million euros (93 million dollars) in aid it pays directly to the Honduran government, while the United States has halted 16.5 million dollars in military assistance.

The political crisis has also dealt a blow to tourism. European airliners have suspended planned flights to the Caribbean islands belonging to Honduras, and hotel occupancy rates are some 40 points lower than the average of past years, according to Ana Abarca, who is in charge of tourism in the post-coup government.

U.S. clothing firms that own factories in Honduras have said the political crisis is hurting them too.

Last week, companies including Nike, Adidas and Gap jointly sent a letter to U.S. Secretary of State Hillary Clinton, calling for a swift return to democracy in Honduras.

"We are deeply worried by the continuation of violence if the dispute is not immediately resolved," the letter said.

Honduras was plunged into a political crisis when Zelaya was forced into exile after some 200 soldiers surrounded his official residence and forced him to board a plane to Costa Rica on June 28.

The Congress appointed Roberto Micheletti as the country's acting president.

A referendum scheduled for the same day to change the country's constitution put Zelaya at odds with the military, the courts and the legislature.

The opposition accused Zelaya, whose current term expires next January, of seeking reelection through the referendum, while the Supreme Court and the attorney general said that the vote was illegal.

The coup, however, has failed to win international recognition. Both the United Nations and the Organization of American States (OAS) have condemned the coup and called for an immediate reinstatement of Zelaya.

Costa Rican President Oscar Arias Sanchez has tried to broker a deal between Zelaya and the interim government, but the latter has repeatedly refused Zelaya's return to serve out his presidency.


Micheletti, who heads the interim authorities, said the nation can survive the economic difficulties as it has enough basic foodstuff.

He told media last week that his government had sufficient foodstuff for the next six months.

"Basic grains in the country will last until February of next year, possibly March, so we are not afraid of being hit by shortages," he told media.

"Private companies, who support the country, have said they are going to freeze prices for the basic basket of goods ... for as long as is necessary," he said.

He also said Honduras was "proud" to resist international isolation and that he believed the political crisis would soon be solved.

Source: Xinhua/Agencies

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