Honduras - Domestic policy

Maduro faces serious economic challenges. In June 2002, debt-reduction benefits from the World Bank's Initiative for Heavily Indebted Poor Countries (HIPC) ended, thus making Maduro responsible for repaying the foreign debt. He must find new sources of financing or face a widening deficit. One measure he announced was to veto a bill in Congress, which would allow legislators to import a car duty free, costing the state US $1.56 million. The president of a major business group called on Maduro to fire 30,000 government employees as a way of reducing governmental expenditures.

Maduro plans to reduce Honduras' housing shortage, for at least a million Hondurans have no, or substandard, housing. He also wants to spend more on preschool and primary education, and less on higher education. Maduro wants to spend more on basic healthcare in rural areas and less in urban ones.

Maduro has asked the U.S. government to extend legislation allowing undocumented immigrants from Honduras to receive temporary residence and work permits for 18 months. The legislation was first enacted in 1998 in response to the hardship wrought by Hurricane Mitch, and it expired in July 2002. Maduro is also pressing for a projected U.S.-Central American free trade agreement.

Honduras expected approval of a loan from the Inter-American Development Bank in mid-2002 for a US $80 million project to upgrade its national highway network and ports. It is considered to be a priority for Maduro's administration. In April 2002 he created a national water commission to find a solution to Tegucigalpa's water crisis.

In May 2002, Maduro denied rumors circulated by resort promoters on the Internet that the Honduran Swan Islands were for sale. These are tiny Caribbean islands that were previously inhabited by pirates and claimed by the United States. The resort promoters' lawyer was claimed to have been a relative of Maduro, and this complicated matters, although the lawyer denied any involvement.

Maduro faced criticism from small farmers and indigenous people who protested against an agricultural reform law passed by Congress that was due to be signed by Maduro in May 2003. The farmers claimed the law would provide debt relief to large landowners and congressmen, and benefits banks instead of small producers. Small business owners also faced dismal economic prospects in mid-2003; 2,500 small businesses closed in early 2003, and their owners claimed the government's economic policies benefitted big corporations. Honduran businesses have to pay 35% interest on commercial loans, as opposed to a mere 6% in El Salvador, for example. High import taxes also prevent local businesses from producing cheaper and high quality goods, because they are unable to update their machinery. Maduro will have to balance the concerns of small farmers and business owners against the corporate interests with which he is more familiar, in both reforming the economy and ensuring a degree of equal access to economic success for Hondurans.

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