The big loser in the Honduras political crisis? The economy.
Honduran businesses have taken a beating since President Manuel Zelaya was ousted in June. One official estimates that GDP will fall 4 percent this year.
(Page 2 of 2)
Indeed, Ms. Midence is not the only person with spare time these days. Angelica Rodriguez, a clerk at Hotel Granada in downtown Tegucigalpa, says occupancy is down by 30 percent – what she attributes to both the global economy and the political crisis. Jorge Montoya, the manager of Hotel Plaza Real, a popular backpacker hotel near the international bus terminals in Tegucigalpa, says the hotel has lost about 80 percent of its business since June 28.Skip to next paragraph
Subscribe Today to the Monitor
Most of his guests are Europeans and North Americans, he says, which might explain the dramatic dip in demand. The US State Department, in the days following Zelaya's ouster, issued a travel alert recommending American citizens to defer unnecessary travel to the country.
The importance of US business ties
Yet dependence on the US does not just come in the form of sun-lotion-lathered tourists. Since the days of dominance in the 1900s of the United Fruit Company and others that turned Honduras into the cliché "banana republic," the nation has depended on and fed US business interests. The majority of Honduran exports today head to the US; factories throughout the country churn out garments for American consumers. And ties have only grown in recent years. The Central America Free Trade Agreement known as DR-CAFTA accounted for $46 billion in trade last year, an increase of 30 percent in three years. Exports from the US to the region increased 55 percent in the same time period, according to the Honduran American Chamber of Commerce.
In September, US trade associations sent a letter to US Secretary of State Hillary Clinton urging the US to work to bring stability to Honduras, as the crisis has the potential to disrupt billions of dollars in trade and tens of thousands of jobs. Central America had already lost $1 billion in textile and apparel orders since January, due to the global economic crisis. The Honduran political crisis has confounded the problem.
"The crisis has caused commercial traffic to falter dramatically and textile and apparel plants in United States and Honduras are already being idled and workers told to go home," stated the letter, signed by such groups as the American Apparel and Footwear Association (AAFA) and National Council of Textile Organizations (NCTO).
"The country is paralyzed," Mario Canahuati, a businessman and strategist for presidential contender Porfirio Lobo, said last month. He says that the poorest Hondurans suffer most. "The big companies will survive," he says.
The smaller ones might not. Mr. Nuñez says his business association generates about 30,000 jobs but since June 28, according to a survey of its members nationwide, 35 percent of those jobs have been lost. He says that intermittent curfews that force people into their homes, unemployment, and general anxiety are keeping people away from stores, which is having a ripple impact all the way down the chain. "No one is paying more for the crisis than small companies," he says.