Maquilas

The nation’s most dynamic economic sector is the maquila industry of San Pedro Sula and the north coast. The maquila boom began with the passage of the Puerto Cortés Free Zone law in 1976, which was extended to Amapala, Tela, Choloma, Omoa, and La Ceiba three years later. By 1998, further legal modifications allowed for the creation of free zones (called ZIPS) anywhere in the country.

Taking advantage of the favorable laws, as well as inexpensive labor and a strategic location close to the United States, some 180 factories, mainly clothing producers, have since opened. While the first factories were in Puerto Cortés and Choloma, with a few in La Ceiba, new ones have begun springing up in La Lima, Villanueva, Comayagua, Naco, and Choluteca, and more are planned. Growth has been explosive, with maquilas increasing their contribution to Honduras’s balance of payments from US$96 million in 1994 to US$510 million in 1999 and US$800 million in 2004. By 2007, maquilas employed 130,000 workers (two-thirds women). CAFTA will likely give a significant shot in the arm to the export-manufacturing sector.

The Lempira

Honduras’s national currency, the lempira, has dropped steadily in value over the past several years due to the country’s bleak economic outlook, but does enjoy periods of relative stability from time to time. Inflation put a severe strain on Hondurans, and those who can afford it took to buying dollars as a safeguard. It is now possible to hold dollar accounts in local banks. Dollars are widely accepted at tourist establishments in Roatán and can often be used in a pinch elsewhere. At the time of writing, the lempira was trading at 19.1 to the dollar. A good website for checking the current rate is www.xe.com.

© Chris Humphrey and Amy E. Robertson from Moon Honduras, 5th Edition