The Inter-American Development Bank today announced the approval of a $10 million soft loan to Honduras for a program to promote business competitiveness and strengthen the Central American nation’s institutional capacity to negotiate and manage trade agreements.
The resources will help Honduras take a participative approach to formulating and implementing shared strategies designed to foster competitiveness and expand trade. The program will put into practice a new institutional mechanism for coordination between Honduran productive sectors, civil society and the government.
One of the program’s components will bolster the country’s technical capacity to participate in negotiations for the United States-Central America Free Trade Agreement, as well as for the Free Trade Area of the Americas, the Doha Round of the World Trade Organization, and other trade negotiations of strategic importance for Honduras.
Another component will strengthen Honduras’ technical capacity to promote its exports through the preparation and implementation of a National Export Promotion Plan to be coordinated and executed jointly by the public and the private sectors.
The program will also support the establishment of a permanent mechanism to hold consultations between the government, the private sector and civil society on Honduras’ trade negotiations, the observance of international commitments and the promotion of trade and investment.
To complement the trade-related components, the program will provide resources for activities to improve the business climate in Honduras and implement its National Competitiveness Strategy. The program will give priority to measures to raise productivity in the agribusiness and forestry sectors, promote linkages between small- and medium-size enterprises and business clusters, and establish a Competitiveness Fund to co-finance productivity-boosting projects.
The program, which is being coordinated with the World Bank and the Central American Bank for Economic Integration, reflects the IDB’s strategy of supporting Honduras in its efforts to reduce poverty by promoting sustainable, competitiveness-led growth.
The loan from the IDB’s Fund for Special Operations was granted for 40 years, with a 10-year grace period. The annual interest rate will be 1 percent during the first decade and 2 percent thereafter.