Honduras Crisis Affecting Costa Rican Trade
October 5th, 2009 | by admin |The political crisis in Honduras is having a crippling effect on trade in Costa Rica as well as other Central American nations like Guatemala, El Salvador and Nicaragua, losing millions of dollars of trade every day.
Because of its geographical position, practically all goods traded in the region have to pass through Honduran territory, whose movement have been hampered since the crisis began at the end of June and especially with last week’s curfew, which is still partially in place.
Two weeks ago, the de facto government leader, Roberto Micheletti, closed off the country’s borders and shut down the airports, with the arrival of elected president, Manuel Zelaya, returning to Honduras.
Although the restrictions on the borders and airports have been lifted since, the suspension of civil liberties continues, causing political instability in the country and affecting trade.
“It’s untenable,” the director of the Costa Rican Chamber of Foreign Commerce, Fernando Monge, tells BBC Mundo.
The closing of the Honduras border affected the ability of trade to flow uninterrupted between Guatemala, Mexico to the north and Nicaragua, Costa Rica and Panama to the south.
The greatest losses reported are in food, especially in perishable products, spoiling in trucks sitting at border crossings. The movement of other items like clothing, plastics and household goods is also affected.
Passenger transport through the region has also been severely affected. From Costa Rica, Tica Bus offers bus travel throughout the region, from Panama to Mexico and have had to alter their schedules to avoid the conflict, including the suspension to Honduran cities.
The problem also lies in manufactured goods and materials coming out of Honduras to the region. Honduras is Guatemala’s third largest trade partner and it is estimated that the curfew in Honduras costs Guatemalan businesses almost us$8 million dollars a day.
And that’s not all. Dozens of commercial contracts have failed to be met, and hundreds of people working in companies within the border zones have stopped turning up to work because of the recent border closures.
In neighbouring El Salvador, the picture is not quite so bleak.
The major concern for trade in the region is the risk of riots, especially in Honduras’ capital city of Tegucigalpa, as unrest continues while Zelaya is taking refuge in the Brazilian embassy in that city, and supports calling for his reinstatement.
Unless some settlement is reached, then the political crisis will continue to affect trade across Central America.
