Given the economic turmoil in the US these days and the overall financial crisis worldwide, it should come as no surprise that some analysts are forecasting a “stormy outlook” for Honduras in 2009. In a recent article written for the Inter Press Service (IPS) news agency, Thelma Mejia notes that the UN’s Economic Commission for Latin America and the Caribbean (ECLAC) is projecting 2% growth for the Honduran economy this year… down significantly from the 6.3% forecasted when the Zelaya administration began its four-year term in 2006.

Mejia cites several factors that will contribute to this more modest reality, including the Zelaya government’s limited access to new sources of credit due to its inability to negotiate a new agreement with the International Monetary Fund (IMF) and a drop in remittances from Hondurans abroad and revenue from tourism.

To make matters worse, it appears that Honduras’ foreign debt may again be nearing or surpassing the $4 billion mark, according to Mauricio Díaz, coordinator of the Honduran Social Forum on Foreign Debt and Development. As part of the IMF/World Bank’s Heavily Indebted Poor Countries (HIPC) initiative launched in 1996, Honduras had more than $4 billion of its foreign debt pardoned several years ago.

From the standpoint of fiscal responsibility, the government’s lack of success in talks with the IMF may not be such a bad thing. The problem is that the Honduran government still has huge demands on its budget and almost nowhere to turn to for capital.

Where, for example, does the government anticipate it will find the funds it needs to finance the increases in wages and subsidies it promised in 2008 to Honduran workers in the public and agricultural sectors? Given growing tensions between the government and Honduras’ business sector over issues such as the newly-mandated increase in the minimum wage (from $157 to $289 per month), it’s unlikely that these funds will come from rising revenue as a result of more private investment.

It’s no wonder that the Zelaya government has found it impossible to refuse Venezuela’s offer of foreign aid in return for participation in the so-called Bolivarian Alternative for the Americas (ALBA) being pushed by Hugo Chavez. Of course, now with oil prices down to nearly $40 per barrel, Venezuela is not nearly so awash in cash as it was when the price of sweet crude reached a record high of $147.27 last summer. So you have to question how forthcoming Mr. Chavez will be under these new circumstances.

As always, there are no easy answers for Honduras. One reason for this is that the country continues to look almost exclusively to traditional models of development based on infusions of financial capital, which usually comes with strings attached and often comes in quantities that is difficult for Honduras’ public institutions to effectively process, deliver, and account for.

Benjamin Franklin once said that, “The definition of insanity is doing the same thing over and over and expecting different results.” Hmmm…

Please mark September 24-26, 2009 on your calendar and plan to participate in the 10th annual Conference on Honduras in the town of Copán Ruinas. There are other forms of capital besides the financial kind.

An alternative model of development based on “human capital” (expertise, experience, talents, energy and contacts) located, mobilized and channeled by information and communications technology (ICT) is the essence of the event. As always, the themes are education, healthcare and community building.