Wednesday, December 28

Honduran Economic News

For those interesting in following Central American politics and economics, there was good news and bad news coming from Honduras. Honduras.com reports minimum wage increase is being pushed by Union leaders. I am not in favor of minimum wage laws, as they only serve to depress the demand for labor, and cause unemployment. The Honduran economy would be better served if free market forces where allowed to play out, and if the government removed barriers to entrepreneurship.
Minimum wage negotiations will begin Friday, December 23rd. The Tripartite Commission confimed this decision with the Government, workers and industrialists yesterday.

Union members indicated Tuesday that they will ask for a 500 lempira cost of living increase. This is the 21st set of negotiations on minimum wage since they began in 1978. Altagracia Fuentes, representative of the working sector, said that they will do everything possible to avoid confrontations. The last round of negotiations lasted three months.

Also to be discussed is the possibility of creating a foundation to construct houses for workers who yield the minimum wage.
Honduras This Week Online is reporting that a delay to the implementation of CAFTA is being denied.
There is no intention to modify the date for the Treaty of Free Commerce (TLC) with the US and Dominican Republic, better known as CAFTA, despite it being subject to delays in the passing of reforms and economic laws.

National businesses, through their advisor, Enrique Mejía Uclés, warned that without its approval, businesses will be unable to best take advantage of the commercial agreement.

Similar declarations were made in Costa Rica, assuring that Robert Portman, representative of the Commercial Office of the United States, would analyse a prorogation for April 1 and not January 1, as was agreed.

The director of Political Commerce in Industry and Commerce, Melvin Redondo, stated that "we have no official information from the US that they are analysing a prorogation, we will keep working for the use of the TLC from the first of January".