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DEVELOPMENT
PROGRESS
Honduras
has one of the highest incidences of poverty and inequality in the western
hemisphere. The situation of the poor, who usually live off small-scale
agriculture in rural areas, was aggravated by the disaster caused by
Hurricane Mitch in 1998. After this massive loss of life and assets, Honduras
embarked on a very ambitious Poverty Reduction Strategy (PRS) in consultation
with civil society and donors, agreeing to a set of actions aimed at reducing
the incidence of extreme poverty by half by 2015.
The World Bank’s Country Assistance Strategy
(CAS) for Honduras supported the PRS by contributing to the restoration of macro-economic
stability and a sound framework for public sector financial
management. Since 2003 the pace of growth has picked up with a forecast
of over 5 percent for next year. Core inflation has stabilized below 10
percent. The real exchange rate has remained fairly stable. These
improvements are largely attributable to the continued growth in remittances
and strong export performance, particularly by the maquila sector.
Although the
incomes of 50 percent of Hondurans remain below the poverty line,
increased public spending on health and education has shown significant
results. Over the past decade:
- Vaccination
programs reached virtually the entire population;
- Maternal
mortality fell from 182 per 100,000 live births to 108 per 100,000, a 38
percent reduction;
- Chronic
malnutrition in children aged 1-5 fell from 44 percent in 1987 to less
than 33 percent in 2001; and
- Primary school
attendance rose from 78 percent in 1980 to 85 percent in 2002.
In 2005 Hondurans elected José Manuel Zelaya
as President in the seventh successive peaceful, democratic change of
government since 1982. The Zelaya administration has made poverty
reduction its top priority, endorsing the Poverty Reduction Strategy Paper. The four pillars identified by the
President for his administrative mandate (Jan. 2006 to January 2010) are:
- Equitable
economic growth for employment generation
- Good
governance through state modernization and civic participation
- Environmental
protection and risk management
- development
of human capital
CHALLENGES AHEAD
Honduras
remains vulnerable to external shocks. The agricultural sector has lost about
one third of its purchasing power in the past two decades, largely due to the
decline in prices for bananas and coffee. Small farmers were
hardest hit. Honduras
is susceptible to hurricanes and droughts. In 1998 Hurricane Mitch
caused 5,750 dead and losses amounting to nearly 40 percent of GDP.
Although Honduras’ trends on most
indicators have been favorable for the past decade, the prospects for meeting
the targets laid out in the Millennium Development Goals are
uncertain. Progress is on track
for: universal primary enrollment; reducing maternal mortality by
three-quarters; and reducing the share of the population without access to an
improved water source by half. However,
current trends fall short in four areas: reducing extreme poverty by
half, reducing under five malnutrition by half, and reducing under five and
infant mortality by two-thirds.
Further
progress in achieving the MDGs in Honduras will require improvements
in governance and in the quality of and access to economic and social
services. Bank studies have
highlighted the importance of improvements in the quality of education.
They also argue that progress will need to be made in increasing rural
productivity and diversifying the sources of rural incomes, since most
of the country's poor live in rural areas and are dependent on agriculture
for their livelihood.
TASKS
1.
Use Cmap Tools to create a picture of
the development challenges, priorities and opportunities present in this
case.
2.
Your table represents a team of development
professionals working for a large International NGO. The Bank has invited your
organization to design and implement a small
project ($500,000 per year for 3 years) that will address some (not all) of the needs and priorities identified by the national
government and incorporated into the Poverty Reduction Strategy Paper. The
focal point of your efforts should be approximately five coffee-producing communities
that are located relatively close to one another. Develop a logframe for the
project you will propose.
3.
Incorporate a strong rationale for your project into
your map.
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