Political climate in Honduras is costing its economy

The Latin Americanist has been reporting on the political turmoil in Honduras for months now. While politically, Brazil has played a role by allowing ousted President Manuel Zaleya to take refuge in its embassy in the Honduran capital of Tegucigalpa, the U.S. plays a much larger role in terms of economics. The United States is Honduras' chief trading partner. It purchases 70% of Honduran exports, is responsible for 2/3 of it's foreign direct investment, provides tourism, and contains most of the Honduran population living abroad who send remittances back to their home country.

Honduras is one of the poorest countries in the Americas.

Honduras was one of the original banana republics, dominated for years by the United Fruit Company. Even today, US multinationals Dole and Chiquita control a big share of the country's farm output.

Coffee, bananas and other crops remain big earners in a mainly agricultural economy. But these days, they are rivalled by Honduras's thriving sideline in "maquiladoras" - factories that import textiles from the US and export finished items of clothing.

With American consumers cutting back on spending, Honduran maquiladora workers who provide clothing for stores like the Gap and Walmart, have lost their jobs.

Online Sources: BBC News, U.S. Department of State

Image: Kirsten Hubbard, About.com

For more information about bananas in Central America, worker exploitation, and the role of Dole, click here.