As Honduras celebrates its 194th year of independence from Spanish colonial rule, the Center for Economic Policy and Research released a new report on Tuesday warning that the Central American nation could face prolonged economic problems as a result of International Monetary Fund imposed policies.
The new publication highlights the negative economic implications of an agreement signed last December between the Honduran government and the IMF, which will grant the country access to a total of US$189 million in financing over three years.
The financial agreement, “includes many austerity measures, despite the weak labor market and growing poverty, and provides almost no protections for the most vulnerable sectors of society,” the CEPR press release states.
Under the terms of the agreement, the Honduran government will introduce a limit on social spending of 1.6 percent of GDP that is insufficient in both size and scope.
This is particularly alarming since less than 50 percent of Honduran workers occupy jobs that pay wages, according to the Economic Commission for Latin America and the Caribbean (ECLAC).
Honduras’ struggling economy has exacerbated external migration in the country.
Last week, migrant organizations in the country said that economic insecurity, along with violence, has pushed both children and adults to flee Honduras with their sights set on the United States, hoping to escape the country’s unresolved problems with violence, poverty and lack of opportunities.