STRONGER TOGETHER

Costa Rica 2017 | DIPLOMACY | GUEST SPEAKER

TBY talks to Juan Orlando Hernández Alvarado, President of Honduras, on strengthening four key pillars of the economy and what that could mean for Costa Rica.

Juan Orlando Hernández Alvarado
BIOGRAPHY
Juan Orlando Hernández Alvarado studied at the National Autonomous University of Honduras where he became a graduate in law and social sciences notary, lawyer. He also earned a master's degree in public administration with emphasis on US legislation. As a professional of laws, Hernández has been a member of several law firms and Professor of Constitutional Law at the Faculty of Law and Social Sciences of the National Autonomous University of Honduras. In January 2010, the full Congress chose Hernández as the provisional president of the board of that state power. Before leaving Congress to pursue his presidential campaign, Hernández introduced a bill to create Integral Unity Government Takes Special Response Security.

What efforts is the current administration taking to improve the investment climate and promote employment creation?

The country's economic growth is based upon the strengthening of institutions, infrastructure development, macroeconomic stability, and the development of our human capital. This is why our efforts have been focused on these four essential pillars to develop the basis of the second part of our program. To do so, we launched the 20/20 Honduras Project, which aims to improve the business climate, while focusing on the development of the following areas: agribusiness, textiles, business services (call centers), tourism, intermediate manufacturing, and housing. Taken together, we hope this initiative will generate 600,000 jobs, attract investments of USD13 billion, and boost exports. These six economic sectors are where the Honduran economy really has the potential to take off and generate enough jobs to meet the needs of the population. We already have a solid growth of 3.6% of GDP, but we think we can reach more with the implementation of the 20/20 Honduras Project. We are also organizing a scholarship system that will allow us to train and develop our human resources with priority given to areas related to the 20/20 Honduras Project.

How will the government increase the country's competitiveness inside and outside the region?

The elements for increasing our competitiveness all lay within the four previously mentioned pillars. In the short term, investment in infrastructure will be one of the most important elements because it will turn Honduras into a logistics corridor for all of Central America. To do so, we are building a series of corridors and improving port facilities in the Caribbean and the Gulf of Fonseca, which gives us access to the Pacific Ocean. We also have a plentiful and potentially well-qualified workforce that has already shown its strength in the maquila manufacturing industry and in rendering various business services. Furthermore, we have made important changes in the electricity sector. Since our energy production is increasingly based on renewable sources, foreign investors can be confident that their production does not jeopardize the environment. Finally, we have made various legislative advances that enhance foreign investors' legal protections, not to mention improved our competitiveness, both of which are reflected in our international rankings. For example, we moved up 23 places in the World Economic Forum's global rankings from 111th in 2014 to 88th in 2016. We know this is a difficult and long-term process, but our goal is to continue moving forward and make the country more competitive.

Compared to 2014, Foreign Direct Investment in Honduras grew by 5.2% in 2015. Which economic sectors are most attractive for Costa Rican investment and which have the greatest potential for growth?

Our economy is growing steadily in most of the key economic sectors, especially telecommunications, energy, finance, and construction. While these four have the potential to continue growing even more, we also need to incentivize labor-intensive sectors that generate employment, since the aforementioned sectors, with the exception of construction, do not generate mass employment. Nonetheless, it is important to highlight that we will continue promoting these sectors, as they are essential pillars for fostering the productivity and growth of other sectors, and can help strengthen this country's total productive capacities. There is a plan underway in the construction sector to invest more than USD2 billion, with which we will lay the foundations of economic expansion and the creation of thousands of jobs.

You have expressed your desire for Costa Rica to rejoin the Central American Integration System (SICA). How is this process developing and what would be the impact for Costa Rica?

We were able to reintegrate Costa Rica into SICA after it had left the organization during a summit in El Salvador. Costa Rica is a crucial component for regional integration, and my efforts helped bring about these positive results. Central American countries must be united and devote themselves to economic and political integration.