Economic revival and job creation, elected Honduran President’s challenges

Photo: EFE

For the Honduran Private Enterprise Council, legal certainty for the installation of companies will be key. 

For Honduras, Xiomara Castro's presidency represents an opportunity to improve the lives of its citizens through economic reactivation and the creation of new opportunities that will prevent Hondurans from migrating.

In this sense, the president of the Honduran Private Enterprise Council (COHEP), Juan Carlos Sikaffy, points out that Castro's new government must create the conditions to attract foreign investors, taking advantage of opportunities such as nearshoring or friendshoring.

"COHEP is ready to work together for the country. Seeking to improve the country's indicators and looking for the socio-economic development of Honduras," says the president of the business association.

What are the key challenges that the incoming government will have to face to accomplish a major economic transformation? 

The new government has significant challenges to face to achieve the transformations needed in the country, mainly oriented towards the generation of jobs and economic reactivation.

To reactivate the economy, it is essential to support sectors that generate jobs, such as agriculture, tourism, construction, and housing.

In addition, we need to create the conditions to attract foreign investors and take advantage of nearshoring or friendshoring opportunities, promoting a more fluid commercial relationship with the USA, our largest partner in exports and imports.

The search for a systematization of procedures, administrative simplification, and, finally, achieving an electronic government, is another significant challenge that facilitates investment and promotes transparency, time, and cost reduction.

We must also make better use of state resources. For this reason, it is necessary to re-profile the debt that consumes approximately 60% of GDP and debt service with salaries eats up over 90% of tax revenues, which leaves very little room for investment, especially in education and health.

Also, it is necessary to strengthen the rule of law, fight against corruption, promote accountability and transparency, to generate an environment of certainty.

From your perspective, what economic and private sector demands should the incoming government address? 

As we have already indicated, there has to be an improvement in the business climate to attract more investment, both national and foreign. To achieve this, it is necessary to provide legal certainty, simplify processes, promote digital government, boost the productive sectors, tax justice, trade facilitation and improve the quality of public investment.

The re-profiling of the Debt and the situation of the Empresa Nacional de Energía Eléctrica (ENEE) are also issues that must be addressed urgently.

How should the private sector be supported? 

We are convinced that the public and private sectors must work hand in hand to generate welfare for the country. The public sector acts as the facilitator of processes, and the private sector as the generator of jobs and wealth.

Support must be mutual, working as a team. They seek to improve the conditions for doing business, which includes public policies that simplify or make it easier for companies to work.

COHEP is ready to work together for the country. Seeking to improve the country's indicators and looking for the socio-economic development of Honduras.

Honduran entrepreneurs believe in the country and that is why we are the ones who generate 80% of the GDP, taxes, and over 90% of the jobs.

Can you tell us about COHEP’s relationship to promote the country’s productive sectors together with the new government?  

Before the election, we indicated we were going to work with any candidate elected by the people. We told this to the President-Elect when we met with her and her team.

As we promised the day after the general elections, COHEP met with Mrs. Castro’s team to begin the dialogues, the creation of agendas and teams that will jointly formulate the work route to achieve the promotion of the productive sectors of the country, leading to the socio-economic growth that Honduras requires providing opportunities for the wellbeing of all, especially our youth.

How should communication between the private sector and Xiomara Castro’s government be?  

It should be a sincere and permanent communication so that together we can generate structural changes that impact and positively benefit all sectors and actors in the country. We believe that communication with the President-Elect and her team has been very good, and we are sure we will continue to work in this way for the good of Honduras.

COHEP is the highest business organization that represents and watches over the interests of the companies that produce, invest, and believe in the country, so we are always ready to work for it.

In five points, what should be the strategy for economic reactivation in Honduras?

 The elected government has been kind enough to build together with COHEP a plan, a working route, a strategy to achieve the economic reactivation of Honduras. Working groups have been set up to overcome the country’s structural obstacles and barriers in different areas so we can create an enabling environment that will allow business investment, massive job creation, and improve the well-being of the Honduran family economy.

Issues such as reduction of the rampant foreign debt, quantity and quality of electricity, personal and business security, rule of law, freedom, and ease of operation, capacity building and consumption of domestic production, credit, and improvement of human capital should be priorities for economic recovery.

Source: Israel Pantaleón. (2022, January 5). Reactivación económica y generación de empleos, retos de Xiomara Castro. Forbes Centroamérica. Retrieved January 6, 2022, from https://forbescentroamerica.com/2022/01/05/reactivacion-economica-y-generacion-de-empleos-retos-de-xiomara-castro/