November 2009, Jose Antonio Cordero
This paper looks at the Honduran economy, including longer-term trends, the pre-crisis years, and recent developments since the June 28th coup. It finds that poverty and inequality decreased significantly during the Zelaya administration, with rapid growth of more than 6 percent during the first two years. The government also increased school enrollment significantly by abolishing school fees, expanded school lunch programs, and raised the minimum wage by 60 percent. Some expansionary monetary policy was used to counter-act the global downturn in 2008.
The paper finds that more recently, the Honduran economy has become especially vulnerable to the combined impacts of the world recession and the political crisis that has followed the military coup of June 28, 2009.
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