Trade and Commercial Law Assessment - Honduras - Economic ...

More documents

Recommendations

Info

TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004 HONDURAS Observations and interview results indicate that Honduras has consistently experienced marginal success in implementing its infrastructure investment programs. This pattern of marginal success can be attributed to frequently shifting national priorities, resulting from the turnover of the central government administration during election years. Interviews also indicated that a large number of the public positions responsible for implementin g many of the nation’s trade infrastructure components are als o rotated when the administration changes. This practice has produced an environment in which priorities shift frequently, res ulting in little momentum behind infrastructure improveme nt projects with durations spanning multiple administrations. A key to realizing significant infrastructure improvement within Honduras is the reduction of direct central government involvement in infrastructure implementation. It is recommended that concerted efforts be made to decentralize many of the existing infrastructure components and to involve the private sector in the ir implementation as appropriate. Priority areas include electricity, telecommunications, and seaport operations. The nation has recently privatized the operations of its airport facilitie s; however, interviews indicated mixed success in this area. Consequently, the nation has exhibited trepidation concerning continued privatization of its national assets. It is highly recommended that efforts be made to build public awareness of the benefits of privatization. In terms of infrastructure capacity and service improvemen ts, Honduras should focus on the following areas. 1. Roadways Honduras’s roadway infrastructure requires significant upgrades along its primary north-south corridor connecting the nation’s Caribbean coastal communities of San Pedro Sula and Puerto Cortez to its major consumption zone at Tegucigalpa. Current improvement plans include upgrades to this corridor, with a fair amount of funding already secured. In addition, the nation requires development of bypass corridors around major population centers. This need is particularly pronounced at Tegucigalpa. Plans are under way to develop a strategic logistics corridor from Comayagua to the El Salvador frontier. This 100-kilometer corridor should be considered a national priority, considering the port development initiatives under way at Port Cutuco in El Salvador. a. Seaports Honduras’s seaport infrastructure is critical to the nation, as well as to the overall region. The facility has not seen significant investment over recent years, despite the level of economic activity near it. To grow, the facility will require an infusion of capital to complete ongoing projects and execute its capacity-building master plan. To allow flexibility in the plan’ s implementation, Honduras must minimize central government involvement in port operations. Port privatization has been an ongoing subject of discussion; however, successful execution has not occurred. Support is required to develop a port privatization program, enabling the implementing institution to develop the port into a highly efficient facility. XV-3
TRADE AND COMMERCIAL LAW ASSESSMENT DECEMBER 2004 HONDURAS b. Airports Honduras’s airport infrastructure is mixed in capacity and service levels. Although San Pedro Sula is considered a solid facility, the nation’s primary international terminal at Tegucigalpa is considered old and inadequate to facilitate trade going forward. Efforts should be made to develop a new international airport facility to serve the Tegucigalpa population zone. Technical support in transportation economics and facility planning will be required going forward. c. Railroad Currently, Honduras has no operating rail network. d. Border Crossings Honduras’s border crossing facilities are considered serviceable; however, experience shows bottlenecks at approach points outside the immediate jurisdiction of the implementing institution. Honduras should consider enacting and enforcing policy to prevent vehicle parking along highways approaching the nation’s border crossings. Because regional initiatives include removal of border crossing facilities, in Honduras, as in other Central American countries, little to no investment is currently contemplated for the country’s borders. e. Electricity Honduras’s electricity sector suffers from comparatively high electricity costs and organizational inefficiency. The nation’s power generation capacity is highly dependent on fossil fuel thermal generating plants, resulting in highly variable input costs. Promotion of new generation facilities based on renewable energy sources, such as hydroelectric power, is recommended going forward. Honduras’s energy sector also suffers from significant cost impacts from technical and non-technical distribution losses, currently estimated at 27 percent. Finally, the nation’s electricity service provider is a government-run entity with monopolistic control over power transmission and distribution. This entity is considered highly inefficient in executing its services. It is now widely thought that privatization of portions of the energy sector is required to improve services. Support of privatization of the nation’s electric company is recommended. f. Telecommunications Honduras’s telecommunications sector currently operates within a monopolistic environment for fixed lines and international calls. There is a significant disparity between Honduras and other countries in the region with respect to the costs associated with local and international calls. Going forward, Honduras will face significant challenges in rebalancing rates while building teledensity within the nation. Significant support will be required to involve the private sector in the nation’s telecommunications market. B. LEGAL FRAMEWORK Honduras maintains a highly centralized government infrastructure implementation structure. Consequently, most of the implementing institutions for the nation’s trade infrastructure exhibit the characteristics of inefficient government-run agencies and lack the flexibility and agility to meet the demands of the nation’s constituents. Reform is currently being explored through the XV-4
Page 1 and 2:
TRADE AND COMMERCIAL LAW ASSESSMENT
Page 3 and 4:
Page 5 and 6:
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
Page 19 and 20:
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82: TRADE AND COMMERCIAL LAW ASSESSMENT
Page 131: TRADE AND COMMERCIAL LAW ASSESSMENT
Page 161 and 162: T H RADE AND COMMERCIAL LAW ASSESSM
show all

Trade and Commercial Law Assessment - Honduras - Economic ...

Create successful ePaper yourself

Delete template?

Save as template?