HONDURAS MOVES TO CREATE A VIABLE CONSUMER BASE.Incoming Honduran president, Ricardo Maduro Ricardo Rodolfo Maduro Joest (born April 20, 1946 in Panama) is a former President of Honduras and Bank of Honduras chairman. Maduro graduated from the Lawrenceville School and later Stanford University. , a successful businessman turned politician, has taken several steps aimed at developing a viable private sector consumer base. To date, poor distribution of wealth has severely limited the purchasing power Purchasing Power1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase. 2. of most Honduran households. Maduro promised to adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. the nation's International Monetary Fund (IMF IMF See: International Monetary Fund IMF See International Monetary Fund (IMF). ) commitment, which includes a pledge to privatize state companies and cut back on the number of government employees. Honduras also recently froze the cost of basic food items for 45 days. The government set a maximum retail price on 59 basic food products including beans, corn, dairy goods, meat, rice, and wheat. This move was aimed at forestalling an expected rise in prices amid growing pressure to raise the minimum wage. According to Finance Minister Gabriela Nunez, the Honduran government approved a US$1.7 billion federal budget for 2002, with about 49 percent of spending destined des·tine tr.v. des·tined, des·tin·ing, des·tines 1. To determine beforehand; preordain: a foolish scheme destined to fail; a film destined to become a classic. 2. for social programs. "This is a balanced budget Balanced budget A budget in which the income equals expenditure. See: budget. balanced budget A budget in which the expenditures incurred during a given period are matched by revenues. that adheres to the accords and macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. goals established with the International Monetary Fund for 2002," Nunez said in a recent meeting with reporters. The Maduro regime is giving priority to programs aimed at assisting the nation's poorest households to enter the consumer market. As is the case with many other nations of the region, money urgently needed for private sector stimuli is being drained off for debt service. During 2002, about US$236.2 million of the budget will go to paying down public debt, with between 30 and 35 percent of that earmarked for paying down foreign debt, which stands at roughly US$4.2 billion. Under a 1999 IMF debt relief program for highly indebted poor countries, Honduras will be forgiven about US$1 billion of its external debt over 10 years, beginning in December 2003. That debt relief should make it possible to pour more funds into programs that will stimulate private sector consumption. Until then, any improvement in consumption of imported goods will mainly be driven by the industrial sector. |
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