CARIBBEAN PROPERTY MAGAZINE
Living, Working and Investing in the Caribbean
C O U N T R Y F O C U S : HONDURAS
An Interview with His Excellency Roberto FLORES Bermudez
Caribpro.com Interview with His Excellency
Roberto FLORES Bermudez
Ambassador from The Republic of Honduras
to the United States of America
By Carter L. Clews, Latin America Correspondent
CC: Thank you, Mr. Ambassador, for setting aside this time for our readers. Invariably, when we receive queries about Honduras, they revolve around three areas: the first is safety and security; the second is the investment environment; the third is the overall lifestyle. And it’s those topics I’d like to talk with you about today.
RF: It’s my pleasure; let’s do it.
CC: First, the safety of the streets – crime. The US State Department has warned: “Crime in Honduras is endemic.” Yet, according to a recent San Diego State University study, “The crime rate in Honduras is low compared to industrialized nations.” And Interpol reports that in terms of violent crime per 100,000 citizens annually, the US has 4,600, Japan has 1,400, and Honduras has only 238. What’s the real story?
RF: The United States government, of course, has a responsibility to its citizens, so it’s warning is understandable. Let me say, however, as ambassador from Honduras that, as with many places, it depends on where you go and what time you’re there. Overall, we have highly safe areas, and they are the ones that people travel most frequently.
In Copan, where you have the Mayan ruins and, of course, the Bay Islands, they have their own tourist police, as well as the national and local police. In Tegucigalpa, the capital city, in the areas where you have the wonderful museums and cultural events, and in the nearby areas where they make crafts, pottery, and such, it is very safe. In the developments where most re-settlers from other countries actually buy homes, they normally have their own security forces, as well.
So, in a nutshell, while I would not shy away from the crime problems that all countries have today, I would say that overall Honduras has a high degree of safety.
CC: Thank you. Now, let’s shift to security of the government and the democratic process. Free elections in 1981; seven consecutive free elections since; a new, very strong, Constitution in 1982; a fully independent Supreme Court since 1998 – democracy in Honduras seems firmly in place. How can investors and re-settlers be sure that your country is going to continue having the guarantees of freedom that it has now?
RF: In Honduras, we have gone through a historic process that insures that democracy is irreversible. What you will find in my country is the fact that the people are participating in the decision-making process. At the same time, you have a military sector of the country that knows what its place should be, up to the point where the past three defense ministers have all been civilians.
Our president and assembly members are only elected for single four-year terms, we have a highly independent legislative branch, and we have a judiciary that serves terms different from the administration. [ED. NOTE: Under the Supreme Court Nomination Law of 2001, the judiciary terms expanded from four years to seven years, so that they no longer coincide with the terms in the executive or legislative branches.]
We also have two distinct political parties, which is something that doesn’t happen in the rest of Central America. They have been the majority political parties in Honduras for hundreds of years. Basically what this shows is that the electorate is not interested in disruption and wants to stay in the center. And it shows a political culture that provides a tremendous sensitivity that will always be there to protect elected, legitimate government.
CC: Am I correct in saying that Honduras has never had a civil war, unlike most other countries in the region?
RF: You are absolutely right; we have never had an internal armed conflict. And one of the bases for that is that the polarization of society has never occurred here. We have joked about it way in the past, saying, “Well, that’s because the poverty is equally distributed among all of the classes.” Now, what we are saying is that we have a middle class that has grown and is still growing; and this is what tends to provide the economic, social, and political stability for our country.
In Honduras you will find that we have entered into a new era of opportunity. For example, when you have industrial investments from the United States, which we have, it generates a whole new circle of economic growth with new cottage industries springing up for the workers. That liberates a lot of resources and leads to improvements in every aspect of Honduran life. This past year, poverty in Honduras fell six percent. That is a significant achievement we are committed to expanding upon. And it contributes greatly to a stable political environment.
CC: And I might add, if I may, that also contributes to the very warm and friendly attitude of the people – and a sense of self-sufficiency -- which I have found throughout Honduras. So, you are to be congratulated.
RF: I thank you on behalf of my people. The fact is, in Honduras, you will find a very healthy informal economy at work and, as you say, a self-sufficiency, particularly in the rural areas.
CC: That’s another area the readers are highly interested in: the overall economy. Last year you had a six percent growth in the GDP, which is exceptional. You have emerging new export industries. You’re a signatory of CAFTA and the HIFC, both of which help assure continued economic growth. Still we see a nine percent inflation rate and high unemployment. People want to know what the future holds; where is the economy headed?
RF: I am confident your readers can look for continued economic growth. We already have announcements of investments in Honduras for the first semester of 2008 for over four million dollars from US companies. We have an extraordinary presence of US companies that have already been in Honduras for more than 10 years. And we have agreements in place with Europe for investments from seven countries.
At the same time, let me put a little perspective in this: Honduras has the best places for the industrial development in all of Central America. We have access to the best port, Puerto Cortes. For 100 miles around this port, the area is flat. And the countryside is populated with an energetic workforce. We have set up institutions tailor-made to support industry in this area, including the Polytechnic Institute of Central America in San Pedro Sula. So, when you put all of this together, we have the best of circumstances to attract core investments.
CC: Perhaps that’s why, in part, in 2004, Honduras became one of the first two countries in the world – and the only country in Latin America -- to qualify for grants under the United States’ Millennium Challenge Account, known as the “Gold Standard of foreign aid.” The qualifications are extremely stringent for economic development, protections of private property, democratic stability – and much, much more. What does that mean to your country, and to those who may wish to move or invest there?
RF: I would say that this is an extraordinary measure of foreign policy from the United States, especially to a country so close by as Honduras. It means that we have access to a large amount of financial resources that usually would not be available to the traditional international community.
These resources have been earmarked for two strategic development purposes: One has to do with infrastructure and the other with capacity building for agricultural purposes. Why are these important?
Infrastructure, because what we’re dealing with here is the creation of a high-speed highway that will communicate Puerto Cortes [ED. NOTE: Puerto Cortes, on the Caribbean, is the principal port of Central America.] with a port in El Salvador in the Pacific. And this is considered an important complementary route for the Panama Canal. This would mean that you could tie together two strategic and key ports – one in the Caribbean and one in the Pacific – and that you could have rolling time for a container going from one port to the other in eight hours.
This is a major contribution to the international transportation of merchandize. There might very well be huge developments around industrialization close to the ports to avail companies of this tremendous opportunity. And that’s a major incentive for investment.
That’s one of the results of this new United States foreign policy. The second has to do with the capacity-building of the farmers. Honduras has been a traditional agricultural country that has exported goods for centuries. And this is not going to stop. What we are going to do is to complement the agricultural aspect of production with new jobs that would be geared to the markets that are now open to us.
So, instead of producing beans, rice, and maize and seeing where we sell them, what we’re going to do is find out what is needed in the markets worldwide and meet those needs. In fact, with the Millennium Challenge Account, we have a company that is already undertaking this project in 16 of the 18 provinces of Honduras.
CC: That brings me to another aspect of economic development in Honduras: the Heritage Foundation’s annual rating of economic freedom indices. This past year, Honduras rated higher than the US in terms of Fiscal Freedom – freedom from burdensome taxation – and Freedom from Government – freedom from what many feel are onerous rules and regulations. And it scored nearly equal on Financial Freedom, which paves the way for investment. Again, those who may invest, or move, to Honduras want to know whether the country will continue such policies?
RF: This leads back to stability; it leads back to a level playing field for investments currently in Honduras and for more to come here. The answer to your question is the practical side of the equation: If you punish the investor, you cannot expect more investment, because the offer and competition for the investor is present throughout the whole world right now. So, I don’t see any significant changes in the taxation or regulatory systems.
CC: Now for the number one question among people who are thinking of investing or moving to Honduras – buying property, as it were: What’s to keep the government from confiscating my property through eminent domain?
RF: According to Honduran practice and Honduran law, that cannot be done. The checks and balances that we have established in Honduras under our Constitution prevent such actions.
Now, please allow me to add that there are certain conditions, of course, when something like that could happen – and let me give you an example. With the Millennium Challenge Account, we must build the road I mentioned earlier. So we have had to relocate some families. But, when that happens, certain requirements must be met and that involve compensation. We are obliged to offer those familes better conditions, and that applies to businesses, too.
The same would apply to foreign investors, or foreign persons who want to relocate here. In fact, under our agreements like CAFTA and the MCA with foreign governments, we cannot and would not under international law appropriate property. In Honduras, both political parties have embraced the principle of private property. So that is not a problem.
CC: You have been very generous with your time, Mr. Ambassador, and so I hasten to close. But, before I do so, I must ask you about one other aspect of Honduran life I know concerns many of our readers. Some 78,000,000 Baby Boomers are retiring in the US alone, at a rate of about 8,000 a day. As they do so, they are looking for somewhere they can afford to live well that has good medical care. How is the medical care in Honduras?
RF: You are obviously talking about private hospitals, and from that point of view, we have very good hospitals in our country, and also facilities that are linked back to medical centers in Houston and Florida.
You will find doctors in Honduras that are graduates of Harvard Medical School and from many other universities in the United States. They have a good knowledge of the way of life of the American people because of their exposure to them. Plus they speak English. This is a major asset.
At the same time, you will find medical equipment that is readily available and up to par with the United States. And the communications are very good, as well. Access to the United States is available around the clock for consultation.
CC: I appreciate what you are saying. I have had friends who have had open-heart surgery and a variety of other major medical treatments in Honduras. And they have done extremely well. But, I must ask you, why is medical treatment so much less expensive in Honduras than in the United States? A doctor’s visit is $15. A day in the hospital is $40. And prescriptions are 75% less.
RF: Well, that has to do not with the quality of the treatment, but with the general condition of the economy of the world. For example, if you bought a bottle of perfume in Paris, it would be much more expensive than if you bought it in Vancouver. The reason is that it’s the local market that fixes the price. That’s why you find that Americans who come here are so happy with the prices. You get a great deal for your money.
CC: And that answer segues perfectly into my final question, Mr. Ambassador: What would you say to an American who is thinking of making the move to Honduras? Are they welcome? What kind of lifestyle would they find?
RF: Oh, they will find that the Honduran people pride themselves on having an American friend. It’s a major asset; it’s an enjoyable relationship – especially when you find so many Hondurans who have been to the United States to study or do business. There is a cultural affinity.
And the lifestyle – well, you will find that whatever you buy in the United States, you will find here also. For less money, of course. So, you can assure your readers that when they come to Honduras, they will find a good quality of lifestyle and, most importantly, a warm welcome.
CC: Thank you, sir, for honoring us with your presence in our country and for welcoming us to yours.
END OF INTERVIEW