Honduras - Unlocking economic potential for greater opportunities : systematic country diagnostic

Honduras is Central America’s second-largest country with a population of more than 8 million and a land area of about 112,000 square kilometers. It has coastlines on both the Caribbean Sea, including the three Bay Islands, and the Pacific Ocean via the Gulf of Fonseca. Its inland territory is largely mountainous, with plains along the coast, and its rain forests, cloud forests, savannas, pine forests and the Mesoamerican Barrier Reef System boast a wealth of biodiversity. The country’s two largest cities, Tegucigalpa and San Pedro Sula, are home to almost a quarter of its population, yet approximately half of the population lives in rural areas, where most are engaged in semi-subsistence agriculture. This Systematic Country Diagnostic (SCD) explores the drivers of these development outcomes in Honduras, and reflects on the policy priorities that should underlie a development strategy focused on eradicating poverty and boosting shared prosperity. After identifying a number of critical factors affecting the country’s development outcomes, the SCD concludes that there is a need for a comprehensive agenda that tackles simultaneously the problems that have kept the country in a low development equilibrium for many decades, as well as emerging challenges that have the potential not only to prevent progress but also worsen the current situation. The SCD also argues that the policy agenda needs to be ambitious and move away from marginal interventions in order to move Honduras from a situation where its economic potentials are just potentials to another where they become actuals.