The World Bank Group is a family of five international organizations that has provided leveraged loans and monetary assistance to the Central American country of Honduras in order to assist with the funding of critical tasks needed to ensure security of Honduran access to financing, expansion of social program coverage, and rural development.[1] The country is the second poorest in Central America and its high poverty rate of 66% in 2016 has prompted an increased focus on the importance of diversification of rural income sources, quality education, and targeted social programs as a way of spurring economic growth.[citation needed]
Operating with investments from the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA), the World Bank manages an investment portfolio of over $990 Million US dollars in Honduras in its effort to promote the development of the private and public sector through foreign investment and economic activity.[1] Recent efforts by the World Bank in Honduras have included the Country Partnership network (CPF) finalized December 15, 2015 as a joint effort between the World Bank Group and its IDA, MIGA, and IFC subsidiaries, who have contributed US $169 Million, US $327 million, and $494 million to the Honduran portfolio, respectively.[2] The CPF has seven primary objectives that were formed to "promote inclusion, strengthen growth conditions, and reduce vulnerabilities in the country."[1]
Strategic partnership
editIDA
editThe International Development Association's (IDA) portfolio in Honduras currently holds US $354 million in investments operating through a total nine lending operations spanning a variety of sectors in the region such as public sector management, citizen security, rural development, and social protection. Despite the promising potential that access to $300 has represented for the region, political risk within groundwork by the institution along with problems with implementation logistics have threatened to leave nearly US $100 million in assistance undisbursed with only 5 full-time projects being implemented, including the Improving Public Sector Performance project and the Rural Infrastructure Project, both of which have generally been classified as moderately unsatisfactory in their operation yet nonetheless seen as a positive trend with their relative increase in performance according to IDA standards.
IFC
editInvestments by the International Finance Corporation (IFC) in Honduras also include from $639.7 million in commitment to projects targeted toward Honduras' renewable energy sector, the expansion of the financial sector, and bolstering a competitive climate within agricultural business in rural communities. Operating as the second largest portfolio in Central America with over $630 million, Honduras has experienced growth through 29 successful public-private partnerships in infrastructure projects, as well as investments in four large scale renewable energy projects that are intended to help strengthen Honduras' electronic grid and assist in the development of a strong economy backed by a reliable infrastructure.[3] The IFC has received criticism for providing funding to the palm oil company Dinant due to allegations that the company has engaged in lethal attacks against several co-operatives.[4] The institution has also faced criticism over a 2011 $70m investment to Banco Ficohsa, Honduras' largest bank, with critics stating that the money would be indirectly supplied to Dinant.[5][6] In a December 2013 audit the IFC's ombudsman found that the institution did not perform due diligence when examining the potential social and ecological risks associated with Dinant.[7]
However, in its 2015 report on Honduras, the International Criminal Court stated that "criminal organisations and international drug cartels are deeply involved in local businesses and criminal activities in the region and seem to be involved in most of the alleged crimes in the Bajo Aguán, including unlawful occupations of land and robbery of African palm fruits, in order to retain control of the region and to continue to operate in total impunity."[8]
A class action lawsuit was filed in March 2017 by the NGO EarthRights International on behalf of approximately a dozen anonymous farmers looking for compensation from the World Bank, who they claim “knowingly profiting from the financing of murder” by financing Dinant via the IFC.[9]
In October 2017, the IFC confirmed that Dinant had fully repaid the balance of its outstanding loan and that Dinant had achieved material compliance with IFC’s Performance Standards. The IFC also acknowledged that Dinant had made progress, particularly in implementing the Voluntary Principles on Security and Human Rights (VPSHR) security force protocols.[10]
In November 2017, Dinant defended its former relationship with the World Bank, stating, “The IFC’s loan to Dinant was granted to help us increase production capacity, upgrade our distribution network, enhance the surrounding natural environment, and expand economic opportunities for local communities, particularly in rural areas like the Aguán. Of course, we must continue to improve but, by all these measures and more, the IFC’s loan to Dinant has been a tremendous success. Dinant is now widely recognized as an international benchmark in how to operate a successful business transparently and honestly in one of the most challenging regions in the world.”[11]
MIGA
editOperating through three major projects totaling over $US 326 million, the Multilateral Investment Guarantee, or MIGA has also brought potentially major changes in transport and energy sectors. Just recently, as of September 25, 2015, MIGA committed to $187 million in investment guarantees to support the construction of a major effort to connect San Pedro Sula, currently Honduras' 2nd largest city, and La Ceiba near its coast.[12] Honduras will potentially be able to manage more tourist traffic and support it with another MIGA-backed project granting over $80 million US dollars that will expand Honduras' current power grid capacity from 102 megawatts to 126 megawatts with the implementation of a wind farm and massive photovoltaic, (Solar power) projects.[13]
Targeted projects
editOperating to improve inclusion, bolster conditions for growth, and reduce vulnerabilities, the Country Partnership Framework's Areas of Engagement have expanded possibilities within the region.[2] A new, targeted approach through a variety of programs in social protections in labor and medicine, rural competitiveness projects in agriculture, and risk disaster management has created some positive outlook for areas across the region prone to lasting damage from hurricanes and typhoons that threaten local and regional farmlands, roads and disrupt economic activity. Projects like the Rural Competitiveness Project managed by the IDA, the IBRD's Nutrition and Social Protection Project, and the Second Project for Highway Reconstruction and Improvement have helped boost Honduras' economic productivity following its slow recovery from the 2008-2009 global recession. Secured agriculture, access to safe infrastructure, and reliable response capacities of local emergency authorities have sparked regional competitiveness and activity in the local economy. The Rural Competitiveness Project alone has created over 9,000 jobs and is responsible for productive partnerships with local business leaders in agricultural production, such as coffee and fruit, some of Honduras' leading exports upon which the livelihood of a vast percentage of the Honduran citizens depend.[14] On May 18, 2017, the World Bank Board of Directors approved a US$25 million loan in additional financing for the Rural Competitiveness Project, focusing on increased adaptation to climate change which has had a direct impact on food insecurity and poverty rates in the region. Should the implementation of new technologies, an estimated 5,500 new rural housing units, and arrangement of 70 business plans be successful in their targeted goals, programs are set to potentially serve directly to local communities in efforts advancing a vibrant economy backed by a strong infrastructure and thriving agricultural competition.[15]
COVID 19 and Current Projects
editCovid-19 Impact on GDP
editIn 2020, the Central American state's economy diminished due to the Covid-19 pandemic and Hurricane Eta and Iota.[16] The GDP (Gross Domestic Product) of various Central American states decreased causing a recession, Hondura's GDP decreased by -6.5%.[17] Unemployment rates and inequality throughout the state escalated to [17] 10.7%.[18] Starting March 2020 a significant amount of monthly revenue decreased compared to other Central American states during the pandemic.[19] The World Bank provided emergency programs to prevent GDP and unemployment rates from decreasing during the Covid-19, they were insufficient.[20] Covid-19 has delayed the state agenda which consisted of increase GDP, and lowering inequality and poverty by 2023.[20]
In 2020 an emergency project was created and approved with the purpose of combating the Covid-19 pandemic. The World Bank committed US$20 million in an effort to finance the state.[21] The US$20 million were disbursed to two main areas of the project. One, increase surveillance and diagnostic within the SESAL (Secretariá de Salud) health commission in Honduras.[22] Second, to increase reinforcement for the personnel in the public health sector. Reinforcement as in medical equipment for ICUs as a precaution against the COVID-19 pandemic. The project is set to close on April 30, 2023.
As of April 16, 2021 there are seven approved projects by the World Bank.
editProject ID: P176015
Approved on: April 16, 2021
The status of the project is active with no set closing date with an estimation of US$20 million amount, dedicated to the public administration health sector. The purpose of the project is to help combat Covid-19 by providing adequate training, vaccinations, and supplies.[24]
Project ID: P175718
Approved on: June 15, 2021
Associated Projects: P152057
The status of the project is active with no set closing date with an estimation of US$70 million amount.[25] The project's purpose is to increase social protection programs for the vulnerable and in need. It will directly benefit 72,000 households throughout the state by financing state programs.[26]
Project ID: P174328
Approved on: June 15, 2021
The status of the project is active with a set closing date of June 15, 2027, with an estimation of US$146.10 million amount. The project has several goals, including increasing job opportunities in the agricultural sector and Investments, as well as, acquiring market access and climate aware attitude.[27]
Project ID: P177149
Approved date: June 29, 2021
Associated Projects: P148737
The status of the project is active with no set closing date with an estimated cost of US$5.45 million amount with a US$0.00 million commitment amount. The project focuses on the Corredor Seco area of Honduras. 65% of people in this area live below the poverty line[28] with a high percentage of malnutrition the project aims to implement a sustainable strategy for agriculture.[29]
Project ID: P175896
Approved Date: December 13, 2021
The status of the project is active with no set closing date with an estimated cost of US$0.90 million with a US$0.00 million commitment amount.[30] The project targets specific areas to improve water management and resources, as well as, increase investment.[31]
Honduras Second Disaster Risk Management Development Policy Credit with a Catastrophe Deferred Drawdown Option (CatDDO)
editApproved Date: June 16, 2022
The status of the project is active with a set closing date of June 30, 2025, with a commitment amount of US$110.00 million. The objective is to broaden financial, policy, and regulatory institutions' frameworks to effectively act in disasters.[33] To solidify state institutions to create an effective response during natural disasters[34] and disease outbreaks.[33]
Project ID: P176532
Approved Date: June 16, 2022
The status of the project is active with a set closing date of November 30, 2028, with a commitment amount of US$60.00 million. The purpose of the project is to improve health services and emergency preparedness.[35] Areas of concentration are child health and reproductive services.[35]
See also
edit
References
edit- ^ a b c "Honduras Overview". World Bank. Retrieved 2017-06-08.
- ^ a b "Global Reach Map". Maps.worldbank.org. Retrieved 2017-06-08.
- ^ "PPP Units Around the World". Public private partnership World Bank. Retrieved 2017-06-08.
- ^ Donnan, Shawn (March 8, 2017). "Honduran farmers accuse World Bank arm of 'profiting from murder'". Financial Times. Retrieved 2017-06-08.
- ^ Yukhananov, Anna (August 11, 2014). "World Bank again criticized for investments in Honduras". Reuters.com. Retrieved June 8, 2017.
- ^ Provost, Claire (2014-05-01). "World Bank loan to Honduran bank comes under scrutiny". The Guardian. ISSN 0261-3077. Retrieved 2017-06-08.
- ^ "CAO Audit of IFC Investment in Corporación Dinant S.A. de C.V., Honduras" (PDF). Compliance Auditor Ombudsman. 2013.
- ^ International Criminal Court (October 2015). "Situation in Honduras" (PDF).
- ^ Provost, Claire (2017-03-08). "Farmers sue World Bank lending arm over alleged violence in Honduras". The Guardian. ISSN 0261-3077. Retrieved 2017-06-08.
- ^ "Update on Dinant - October 2017". International Finance Corporation. October 2017.
- ^ "Dinant fully repays IFC loan; company meets requirements of IFC Performance Standard 4 and Enhanced Action Plan". Corporacion Dinant. 27 November 2017.
- ^ "News & Events - Multilateral Investment Guarantee Agency - World Bank Group". Miga.org. Retrieved 20 February 2019.
- ^ "Environmental & Social Sustainability - Multilateral Investment Guarantee Agency - World Bank Group". Miga.org. Retrieved 20 February 2019.
- ^ "Projects : Disaster Risk Management Project | The World Bank". Projects.worldbank.org. Retrieved 2017-06-14.
- ^ "The World Bank Approves US$25 Million to Improve Rural Competitiveness in Honduras". World Bank. Retrieved 2017-06-14.
- ^ http://southernvoice.org/wp-content/uploads/2021/08/Guatemala-Honduras-El-Salvador-COVID-19-poverty-and-inequality-Oliva-et-al-2021.pdf [bare URL PDF]
- ^ a b "Unemployment, total (% of total labor force) (national estimate) - Honduras | Data". data.worldbank.org. Retrieved 2022-07-23.
- ^ "Honduras Unemployment Rate - 2022 Data - 2023 Forecast - 1974-2021 Historical - Chart". tradingeconomics.com. Retrieved 2022-07-23.
- ^ "Revenue Statistics in Latin America and the Caribbean 2022 | READ online". oecd-ilibrary.org. Retrieved 2022-07-23.
- ^ a b José Andrés Oliva Cepeda; Carolina Alas de Franco; Maynor Cabrera; Cristina Carrera; Patricio Larroulet (2021-08-02). "The impact of the COVID-19 crisis, and its emergency response programmes, on poverty and inequality in Guatemala, El Salvador, and Honduras". Southern Voice. Retrieved 2022-07-23.
- ^ a b "Development Projects : Honduras COVID-19 Emergency Response Project - P173861". World Bank. Retrieved 2022-07-22.
- ^ "Inicio". www.salud.gob.hn. Retrieved 2022-07-23.
- ^ "El Banco Mundial apoya a Honduras a fortalecer la preparación para emergencias de salud y reducir la vulnerabilidad". World Bank. Retrieved 2022-07-24.
- ^ "World Bank approves additional US$70m for vaccination rollouts in El Salvador and Honduras «". www.caribbean-council.org. 26 April 2021. Retrieved 2022-07-23.
- ^ "Development Projects : Additional Financing to the Social Protection Integration Project - P175718". World Bank. Retrieved 2022-07-24.
- ^ "Honduras seeks to improve the quality of life of the poorest population with IDB support | IADB". www.iadb.org. Retrieved 2022-07-23.
- ^ "Productive Alliances Promote Rural Agricultural Competitiveness in Honduras". World Bank. Retrieved 2022-07-24.
- ^ "ACS-PROSASUR". Home. Retrieved 2022-07-23.
- ^ "Food security for the southern dry corridor (ACS-PROSASUR) | SNV". snv.org. Retrieved 2022-07-23.
- ^ "Development Projects : Supporting Resilient Water Resources Management and Water Services Project - P175896". World Bank. Retrieved 2022-07-24.
- ^ "BDRP: Supporting Resilient Water Resources Management and Water Services Project". Climate Investment Funds. 2021-05-25. Retrieved 2022-07-24.
- ^ "Fortalecer los sistemas sanitarios para mejorar la salud de la madre y del recién nacido", Estado Mundial de la Infancia 2009, Estado mundial de la infancia, UN, pp. 67–90, 2009-12-31, doi:10.18356/76c9a189-es, ISBN 978-92-1-059823-1, retrieved 2022-07-24
- ^ a b "Development Projects : Honduras Second Disaster Risk Management Development Policy Credit with a Catastrophe Deferred Drawdown Option (Cat DDO) - P177001". World Bank. Retrieved 2022-07-24.
- ^ Martinez-Diaz, Leonardo; Sidner, Lauren (2021-02-03). "Confronting Simultaneous Climate, Public Health, and Economic Shocks in Developing Countries".
{{cite journal}}: Cite journal requires|journal=(help) - ^ a b "Development Projects : Restoring Essential Services for Health and Advancing Preparedness for Emergencies Project - P176532". World Bank. Retrieved 2022-07-24.