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Honduras reached the HIPC decision point in July 2000, and attained the necessary conditions for HIPC completion point in 2004. The Government of Honduras (GoH) prepared a Poverty Reduction Strategy Paper (PRSP) in October 2001. The PRSP’s six pillars are:
- accelerating equitable and sustainable growth;
- reducing rural poverty;
- reducing urban poverty;
- raising investment in human capital;
- strengthening social protection for vulnerable groups; and
- ensuring the strategy’s durability by improving governance and environmental management.
The first annual PRSP progress report was completed in December 2003 after an extensive consultative process including government, civil society and donors. As a result, the PRSP was updated for the period 2004-07.
In 2001-02, the top five donors of gross ODA were USA (the largest donor), IDA, Japan, IADB and Spain. Bilateral donors' share of gross ODA in this period was over 60 percent with approximately 32 percent in the social sectors (of which the share in education and health sectors was about 8-9 percent each) and in debt related areas respectively.
The Government of Honduras (GoH) is interested in moving on the harmonization agenda with the active donor group in the country. The PRSP has provided a framework for donors to organize their programs around country-owned priorities. This strategy offers a clear division of labor among external assistance agencies, with lead responsibility for dialogue in individual sectors being shared according to comparative advantages. The World Bank and Inter-American Development Bank (IADB) have worked together on analytic and sector output, and also share information and audit tools on financial management. For example, recently they prepared a Country Financial Accountability Assessment (CFAA) and work on a joint Country Procurement Assessment Review (CPAR) was undetaken nearly in parallel with the CFAA. However, a comprehensive harmonization program and action plan remain to be defined.
GoH and 15 development partners (CABEI, Canada, EC, Germany, IADB, IMF, Italy, Japan, the Netherlands, Spain, Sweden, United Kingdom, UNDP, United States, and World Bank) are committed to align external cooperation with the country’s PRS; and to take concrete steps to advance harmonization, with the objective of improving the efficiency and effectiveness of the investments, that will include activities oriented towards: (i) Implementation of Sector Programs (SWAPs) as the main mechanism of coordination, initially in the sectors of education, health, agro-forestry, water and sanitation, and safety; (ii) Synchronization with the multi-annual procedure of the national budget; (iii) Alignment of mechanisms, procedures and instruments; (iv) Implementation of joint activities of investigation, planning and evaluation; (v) Improvement of exchange and management of information; (vi) Use of national administrative systems rather than parallel systems.
GoH and the 15 donors have agreed to prepare a 4-year Action Plan, to support the implementation of the PRS and the harmonization agenda. This is scheduled to be completed in December 2003, and its implementation to start in January 2004. To this end, a Joint Commission is being created, linked to the PRS Consultative Council, that will be responsible for preparing and following up the above mentioned Plan.
Poverty and Social Impact Analysis (PSIA) was undertaken on electricity reform and work is ongoing on a PSIA for analyzing the re-distributive impact of the tax reform packages approved by congress in 2002. The PSIA work on tax reform has been initiated by the WB in close coordination with the United Nations Administrative Tribunal (UNAT), with technical and financial support provided by the WB. Two other PSIAs are under consideration in coordination with UNAT, one on public investment program and another on public social service delivery.
Honduras is an Education for All Fast Track Initiative (EFA -FTI) pilot. FTI partners and the Government of Honduras signed an MoU in June 2003. The EFA-FTI MoU outlines terms and procedures for implementing mechanisms and harmonized programming, monitoring, evaluation, communication and consultation, as well as support for the Strategic and Technical Coordination of Education for All Unit (ST-EFA), and for the Secretariat of Education (SEDUC) Strengthening Plan. The memorandum reflects the principles of the Honduras EFA-FTI. Bilateral funding agreements entered between the government and the individual donors remain respected.
IADB sponsored the Latin America and Caribbean Regional Workshop on Harmonization and Alignment for Development Effectiveness and Managing for Results which was hosted by GoH in Tegucigalpa on November 8-10, 2004. The workshop prepared participants for the Second High-Level Forum (HLF-2) on Harmonization and Alignment in Paris, Feb. 28-March 2, 2005.
IADB supported a country case study of progress in harmonization and alignment in Honduras. The case study was prepared for the workshops.
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| Environmental and Social Impact Assessments |
Major flows of international cooperation funds are targeting sustainable development in all countries of Mesoamerica. The Mesoamerican Biological Corridor (MBC) initiative is a multilateral and multi-sector effort at promoting sustainable development through investment, employment creation, income generation and poverty reduction; and an instrument to articulate investments for sustainable development in an efficient manner. The eight participating countries are Belize, Costa Rica, El Salvador, Guatemala, Honduras, Mexico - the five southernmost states, Nicaragua, and Panama . Their coordinating institution is the Central American Commission for Environment and Development (CCAD).
The MBC initiative provides a programmatic framework for national and multilateral programs to integrate conservation, economic development and human development. The main objective at the multilateral level is to increase collaboration between the stakeholders and build the capacity of the organizations responsible for the administration of protected areas and promoting sustainable agricultural development and ecotourism.
In response to the Governments’ requests, the WB is discussing, preparing and negotiating with the eight countries participating in the MBC. Priority areas for the region are conservation and biodiversity, management of forest resources, watershed management and land administration.
Poverty and Social Impact Analysis (PSIA) was undertaken on electricity reform and work is ongoing on a PSIA for analyzing the re-distributive impact of the tax reform packages approved by congress in 2002. The analysis is integrated into the government’s monitoring and evaluation efforts of PRS policies and programs.
The PSIA work on tax reform has been initiated by the WB in close coordination with the United Nations Administrative Tribunal (UNAT), with technical and financial support provided by the WB. The analysis will also explore implementation, such as tax compliance (an area receiving support from USAID), and complementary measures to maintain neutrality or slight progressivity of taxation and complementary measures for progressive public spending.
Two other PSIAs are under consideration in coordination with UNAT, one on public investment program and another on public social service delivery.
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