SEATTLE — The causes of poverty in Honduras continue to result from a lack of a democratically elected leader and government, which has led to constant social upheaval and the worst economic inequality in all of Latin America.
In recent years, economic conditions for Hondurans do not appear to have improved. According to the 2013 World Bank Honduras report, 63 percent of citizens were living in poverty, and six in ten households were living on less than $2.50 per day. In the World Bank’s 2016 Honduras report, one in five Hondurans were reported to be living in extreme poverty, meaning surviving on less than $1.90 per day. Also, the poverty rate increased to 66 percent during this year.
The causes of poverty in Honduras are similar to that of other impoverished countries and primarily stem from income inequality, extreme violence, political instability and corruption and a high susceptibility to natural disasters.
Prior to a 2009 military coup that overthrew elected president Manuel Zelaya, the country’s economy was improving, with notable increases in economic equality and decreasing rates of unemployment and poverty, according to the Washington Center for Economic and Policy Research.
Following this coup in 2010 and 2011, the country’s income inequality quickly became the highest in all of Latin America. During this time, all reported income gains were distributed to the country’s wealthiest 10 percent of the population and as of 2017, the World Bank ranked Honduras sixth in the world in terms of income inequality.
Economic inequality is often measured by determining a GINI coefficient, a ratio that reflects the degree of equality of income distribution in a given region, where zero indicates perfect equality among citizens, while a GINI coefficient of one would indicate that a single individual owns all of the country’s wealth. As of 2012, Honduras had a GINI coefficient of 0.537.
Of all of the causes of poverty in Honduras, the most ostensible is indisputably the widespread violence that has been plaguing the country for years. In 2011, the country saw an average of 82 homicides per 100,000 people, prompting the United Nations Office on Drugs and Crime to label the country the murder capital of the world. Fortunately, this problem appears to be slowly improving; in 2014, this number fell to 67 murders per 100,000 people, and as of 2016, the number decreased to 59 murders per 100,000 people.
Among other causes of poverty in Honduras, according to the 2015 U.S. State Department Investment Climate report for Honduras, are problems with foreign investment and trade. Currently, the U.S. is Honduras’ largest trading and economic partner and more than 200 U.S. companies operate in the country.
Unfortunately, potential investors face considerable obstacles when considering the prospect of putting their money into the country, simultaneously aware of the rampant corruption and violence taking place, weak judicial systems, political instability, poor educational systems, degraded infrastructure and little access to adequate transportation.
In addition to this, another challenge for some foreign investors is that from their perspective, it lacks economic practicality to attempt to provide consumer goods to a country in which nearly 70 percent of the population is in poverty.
Another one of the major causes of poverty in Honduras is its geographic location. Located just north of Nicaragua and east of El Salvador, the country experiences consistent, but generally mild earthquakes, but is also a prime location for severe hurricanes, floods, wildfires and droughts.
In October 1998, Honduras underwent what can probably be called the worst natural disaster in the country’s history. Hurricane Mitch, which took place between October 27-29, is known as the worst hurricane to take place in the entire western hemisphere in the last 200 years and devastated the landscape of Honduras and its surrounding regions to this day.
The event was estimated to have claimed 10,000 lives and left approximately three million people severely impacted, displaced or homeless. The force of the hurricane caused entire mountains to collapse, resulting in what were once relatively thriving urban areas being almost entirely erased from the map.
While these factors are certainly not the only causes of poverty in Honduras, they should serve as a summary of the largest underlying factors that are restricting the country from achieving economic prosperity. trategic policy could tremendously help the country to prepare for these inevitable natural disasters, but also
Strategic policy from a democratically elected government could tremendously help the country to prepare for these inevitable natural disasters, but also policy that would reduce murder rates, political corruption, poverty and unemployment. This would not only improve the lives of Honduran citizens, but it would also improve the economy in many ways, particularly by making foreign investment a safer and more comfortable prospect.
– Hunter McFerrin