Honduras

Chapter 3. The Economy

[GIF]

Headdress of a noblewoman atop a stela, Copán

HONDURAS IN 1993 remained one of the poorest nations in the Western Hemisphere. Since colonial times, the Honduran economy has, for the most part, been based on one commodity--minerals before 1900 and bananas throughout the first half of the twentieth century. As is true for most underdeveloped countries whose livelihood depends on one export item, the Honduran economy depends on world prices for its main export product. Despite attempts at agricultural diversification, bananas remained the country's primary export in the early 1990s, leaving the country at the mercy of market fluctuations. The government has attempted to stimulate the manufacturing sector and expand assembly operations, but these efforts have been only moderately successful. The country hence still lacks a dependable source of economic growth.

Lack of resources, lack of arable land, and a small domestic market continue to impede economic progress in Honduras. Most significantly, Honduras lacks abundant natural resources; only land appears to be plentiful and readily exploitable. But the presence of apparently extensive land is misleading because the nation's rugged, mountainous terrain restricts large-scale agricultural production to narrow strips on the coasts and to a few fertile valleys. Honduras's manufacturing sector has not yet developed beyond simple textile and agricultural processing industries and assembly operations. The small domestic market and competition from more industrially advanced countries in the region have inhibited more complex industrialization.

Data as of December 1993