Skip to main content

IDB chairs Consultative Group for the reconstruction and transformation of Honduras after Hurricane Mitch

TEGUCIGALPA – The Consultative Group for the Reconstruction and Transformation of Central America opened a two day meeting today with calls for continued international support for Honduras’ recovery effort from the destruction of Hurricane Mitch.

Honduran President Carlos R. Flores inaugurated the meeting, which brought together delegates from more than 40 donor nations, multilateral development and financial institutions, as well as representatives of the Honduran government and its civil society.

In the opening ceremony, senior officials of the Inter-American Development Bank, which organized and chairs the meeting, recognized the progress achieved by the people and the government of Honduras in rebuilding their country after it was hit by Hurricane Mitch late in 1998.

The Bank also urged the international community to maintain its support for Honduras’ Master Plan for the National Reconstruction and Transformation, which aims to modernize the country’s economy and its institutions and foster sustainable development based on democracy and social equity.

“The people of Honduras face the daunting challenge of rebuilding and transforming their nation,” said the chairman of the Consultative Group, Miguel E. Martínez, the IDB’s regional manager for Central America, Mexico, the Dominican Republic and Haiti. “They have laid a firm foundation on which, with the generous and timely help of the international community, we will build a better Honduras.”

The delegates are following up on the May 1999 meeting of the Consultative Group for the Reconstruction and Transformation of Central America held in Stockholm. At that meeting the international community pledged to provide Honduras, the country worst-hit by Mitch, some $2.8 billion in assistance over the course of four years. That amount includes humanitarian aid as well as long-term financing and debt relief.

In Tegucigalpa, delegates are analyzing the progress of the Honduran recovery plan, seeking ways to deepen its reforms by strengthening the country’s public institutions to enable them to speed up the execution of projects and the disbursement of international aid.

A better Honduras

Honduras’ achievements in the 14 months since the hurricane are all the more impressive against the backdrop of the destruction caused by Hurricane Mitch in Central America and the adverse weather conditions the country had to endure during 1999.

The hurricane unleashed massive flooding and landslides that killed more than 13,000 people in Honduras. The hurricane caused $3.6 billion in economic losses and damage to the country’s infrastructure and left hundreds of thousands of Hondurans without homes or jobs.
Thanks to its people’s efforts and the international community’s support, Honduras has rebuilt hundreds of kilometers of roads and highways, bridges, schools, clinics, water systems and other essential infrastructure. Farming output has risen and other key productive sectors are showing signs of recovery.

This progress was achieved in a context of commendable macroeconomic stability. Through prudent macroeconomic management and the inflow of international aid, in 1999 Honduras’ gross domestic product contracted less than what was feared right after the hurricane. This year, it is expected to post a moderate increase in economic growth of about 3 or 4 percent of GDP.

In order to ensure increasing flows of international support for Honduras’ reconstruction projects and its institutional and political reform programs, donors will work closely with the Honduran government and its civil society organizations. They will be guided in those efforts by the principles of the Stockholm Declaration: a strong and open democracy and respect for human rights, good governance and transparency in the management of public funds, decentralization and local government development, and the reduction of social and environmental vulnerabilities.

The IDB expects that, by building on its capacity to execute the Master Plan for National Reconstruction and Transformation and set its priorities, Honduras will be able to speed up its projects and the disbursement of foreign aid. Those efforts, coupled with the Honduran government’s programs to reduce poverty and improve the efficiency and transparency in public sector procurement, will set the country on a path of sustainable and equitable development.

The IDB’s role

As the leading source of multilateral financing for Latin America and the Caribbean, the IDB plans to devote a substantial flow of resources to Honduras. Since Hurricane Mitch the Bank has approved $270.2 million in new loans for the country. Over the next four years, the IDB expects to approve some $500 million in concessional lending for projects in the country.

These resources support programs that benefit the poorest Hondurans. IDB lending has supported the reconstruction of roads and bridges, schools, health, and water and sanitation systems, as well as housing, community development and rural programs. Future loans will support poverty reduction efforts, education and health sector reforms, watershed management programs and private sector development.

Jump back to top