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ii CONTENTS LIST OF ABBREVIATIONS ---------------------------------------------------------------------------------------------------- 1 EXECUTIVE SUMMARY ------------------------------------------------------------------------------------------------------- 3 I. INTRODUCTION -------------------------------------------------------------------------------------------------------------- 9 II. REPORT CONSULTING PROCESS ------------------------------------------------------------------------------------13 A. Organization and Participating Sectors --------------------------------------------------------------------------------- 13 B. Results of the Consultation ------------------------------------------------------------------------------------------------ 14 C. Incorporation of the Results into the Report ---------------------------------------------------------------------------- 16 III. MACROECONOMIC FRAMEWORK --------------------------------------------------------------------------------17 A. International Panorama --------------------------------------------------------------------------------------------------- 17 B. National Economy ---------------------------------------------------------------------------------------------------------- 17 a. Macroeconomic overview --------------------------------------------------------------------------------------------- 17 b. Growth, investment and competitiveness---------------------------------------------------------------------------- 18 c. Fiscal Performance ----------------------------------------------------------------------------------------------------- 20 d. Monetary and Credit Policy ------------------------------------------------------------------------------------------- 21 e. Financial System-------------------------------------------------------------------------------------------------------- 22 f. Debt Sustainability ----------------------------------------------------------------------------------------------------- 22 g. Medium-term Implementation of the PRGF ------------------------------------------------------------------------ 23 IV. THE STATE OF POVERTY, PRSP GOALS AND GLOBAL INDICATORS ----------------------------25 A. Poverty and Inequality ----------------------------------------------------------------------------------------------------- 25 B. Global Performance Indicators------------------------------------------------------------------------------------------- 27 V. TRENDS IN POVERTY SPENDING --------------------------------------------------------------------------------31 A. Evolution of Poverty Spending-------------------------------------------------------------------------------------------- 31 B. Utilization of HIPC Funds------------------------------------------------------------------------------------------------- 36 a. Interim HIPC Debt Relief received----------------------------------------------------------------------------------- 36 b. Assignment of Debt Relief -------------------------------------------------------------------------------------------- 38 c. Remaining HIPC Debt Relief for the PRSP ------------------------------------------------------------------------- 39 VI. PROGRESS BY PROGRAMMATIC AREA --------------------------------------------------------------------41 A. Area I: Equitable and Sustainable Economic Growth ----------------------------------------------------------------- 41 B. Area II: Reducing Poverty in Rural Zones ------------------------------------------------------------------------------ 43 C. Area III: Reducing Poverty in Urban Zones ---------------------------------------------------------------------------- 45 D. Area IV: Investing in Human Capital------------------------------------------------------------------------------------ 46 E. Area V: Strengthening Protection for Specific Groups ---------------------------------------------------------------- 51 F. Guaranteeing the Strategy’s Sustainability ----------------------------------------------------------------------------- 53 VII. MEDIUM- AND LONG-TERM PLANNING ---------------------------------------------------------------------59 A. Medium- and Long-term Strategic Planning---------------------------------------------------------------------------- 59 B. Harmonizing Cooperation------------------------------------------------------------------------------------------------- 60 VIII. MONITORING AND EVALUATION ------------------------------------------------------------------------------63 A. the prsp information system ----------------------------------------------------------------------------------------------- 63 B. Impact Evaluation ---------------------------------------------------------------------------------------------------------- 64 IX. CHALLENGES FACING PRSP IMPLEMENTATION --------------------------------------------------------69 ii LIST OF ABBREVIATIONS ADEL Local Development Association AFE State Forestry Administration AIEPI Comprehensive Care for Common Childhood Diseases AIN Comprehensive Care for Children AIN - C Comprehensive Community-Based Care for Children AMHON Honduran Municipalities Association BANADESA National Agricultural Development Bank BCH Central Bank of Honduras BCIE Central American Bank for Economic Integration CAD Teacher Education Center CAFTA Central American Free Trade Agreement CAMEL Test Capital Adequacy, Asset Quality, Management, Earnings and Liquidity. CARE Cooperative for Assistance and Relief Everywhere CCERP Consultative Council for the Poverty Reduction Strategy CCPET Consultative Council of the Program for Efficiency and Transparency in State Procurements and Hiring CDA Center for Agro-Business CDC Commonwealth Development Corporation CEOT Territorial Planning Executive Council CEPREB Preschool Education Center CESCCO Center for the Study and Control of Contaminants CEVS Sula Valley Executive Commission CIF Price including cost, insurance and freight CIP Comprehensively Planned Tourism Center CNB National Primary School Curricula CNBS National Banking and Insurance Commission COHDEFOR Honduran Forestry Development Corporation CONADEH National Human Rights Commissioner CONATEL National Telecommunications Commission COPECO Permanent Contingencies Commission CPI Consumer Price Index DFID Department for International Development of the U.K. DGA Department of Environmental Management DICTA Department of Agricultural Science and Technology DPD Honduras Decision Point Document EFA Education for All Program ENCOVI Standard of Living Survey ENEE National Electricity Company ENESF National Epidemiological and Family Health Survey ENIGH National Household Income and Spending Survey EPHPM Permanent Multi-Purpose Household Survey FHIS Honduran Social Investment Fund FOB Free On Board FONAPROVI National Fund for Production and Housing FOSEDE Deposit Insurance Fund FSAP Financial Sector Evaluation Program FTA Free Trade Agreement GDP Gross Domestic Product G17 Group of 17 donors to Honduras H & A Harmonization and Alignment HIPC Heavily Indebted Poor Country HIV/AIDS Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome HONDUTEL Honduran Telecommunications Company HDI Human Development Index IBRD International Bank for Reconstruction and Development IDA International Development Association IDB Inter-American Development Bank IFAD International Fund for Agricultural Development IMF International Monetary Fund INE National Statistics Bureau INICE National Institute for Educational Research and Training ISV Sales Tax MAFOR Sustainable Management and Use of Softwood Forests MARENA Management Program for Natural Resources in Priority Watersheds 1 MDG Millennium Development Goals MIPYME Micro, Small and Medium Enterprises NFPS Non-Financial Public Sector NIR Net International Reserves ODA Official Development Assistance OMO Open-Market Operations ONCAE Normative Office for State Hiring and Acquisitions OPEC Organization of Petroleum Exporting Countries PACTA Land Access Project PANE VPN Percentage of Nominal Effective Debt Relief in terms of Current Net Value PAPIN Support Program for Indigenous and Black Populations PARA Rural Areas Administration Project (now PATH) PATH Honduran Land Administration Program PEC School Improvement Plans PEDM Strategic Municipal Development Plan PEGAH Gender Equity Policy for Honduran Agriculture PMRTN Master Plan for National Reconstruction and Transformation PPA Priority Protected Area PRRAC Central American Regional Reconstruction Program PRAF Family Allotment Program PRGF Poverty Reduction and Growth Facility PRIESS Institutional Reorganization and Extension of Health Care Services Program PRIMHUR Urban Renewal Program PROBAP Biodiversity Project for Priority Areas PROCUENCA Management Program for Renewable Natural Resources in the Cajón Reservoir Watershed PRODDEL National Decentralization Program PRODERT Sustainable Rural Development Project in Ecologically Fragile Zones in the Trifinio Region PROHECO Honduran Community Education Program PROMANGLE Management and Conservation Project for Mangroves in the Gulf of Fonseca PRONADERS National Sustainable Rural Development Program PRONOT National Territorial Organization Program PRSC World Bank Poverty Reduction Support Credits PRSP Poverty Reduction Strategy PSIA Poverty and Social Impact Analysis RENOT Registry of Territorial Organization Norms RNP National Registry of Persons SANAA National Water and Sewerage Service SEFIN Secretariat of Finance SERNA Secretariat of Natural Resources and Environment SIAFI Integrated System
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