Background:
Part of Spain's vast empire in the New World, Honduras became an independent nation in 1821. After two and one-half decades of mostly military rule, a freely elected civilian government came to power in 1982. During the 1980s, Honduras proved a haven for anti-Sandinista contras fighting the Marxist Nicaraguan Government and an ally to Salvadoran Government forces fighting against leftist guerrillas. The country was devastated by Hurricane Mitch in 1998, which killed about 5,600 people and caused approximately $2 billion in damage.

Economy - overview:
Honduras, one of the poorest countries in the Western Hemisphere with an extraordinarily unequal distribution of income and massive unemployment, is banking on expanded trade privileges under the Enhanced Caribbean Basin Initiative and on debt relief under the Heavily Indebted Poor Countries (HIPC) initiative. While the country has met most of its macroeconomic targets, it has failed to meet the IMF's goals to liberalize its energy and telecommunications sectors. Growth remains dependent on the status of the US economy, its major trading partner, on commodity prices, particularly coffee, and on reduction of the high crime rate.

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