Honduras: IMF ends boycott, resumes loans

The International Monetary Fund (IMF) made an agreement in principle in Tegucigalpa on Sept. 10 for a standby loan to the Honduran government. This gives the country immediate access to $196 million and will clear the way for loans of $80 million from the Inter-American Development Bank, $40 million from the World Bank, $52 million from the European Union (EU), $7 million from Germany and an unspecified amount from Taiwan.

Przemeck Gajdeczka, who headed the IMF’s delegation to Tegucigalpa, said the Honduran government had made a commitment to “improve the administration and collection of taxes; monitor expenses, including salaries; focus social spending on the poorest; and improve the financial position of the main public enterprises and the pension funds.”

The last standby loan agreement was made with former president José Manuel (“Mel”) Zelaya Rosales (2006-2009) on April 8, 2008, but the Zelaya government failed to comply with the agreement’s requirement to cut public spending. Along with other international institutions, the IMF suspended loans to Honduras after Zelaya’s overthrow in June 2009. The IMF loan is one of current president Porfirio (“Pepe”) Lobo Sosa’s main successes in restoring relations with international groups since he took office on Jan. 27. Efforts to have Honduras readmitted to the Organization of American States (OAS) remain blocked by leftist and center-left Latin American governments. (El Universal, Caracas, Sept. 11, from AFP)

From Weekly News Update on the Americas, Sept. 12.

See our last post on Honduras.