Left opposition in Honduras plans relations with China, debt restructuring | World information

By Mitchel On Sep 5, 2021

TEGUCIGALPA (Reuters) – Honduras’ main left-wing opposition party, led by ousted former President Manuel Zelaya, said Sunday that if it wins the November presidential election it will seek to “re-regulate” the country’s debt and diplomatic relations to include China.

Zelaya’s Liberty and Refoundation Party (LIBRE) presents his wife Xiomara Castro as a candidate for the second time, who presented her plans at a press conference in a hotel in Tegucigalpa.

“I will order an international review of domestic and foreign debt and its adjustment,” said Castro, 61, without elaborating on what steps this would entail.

Honduras currently has diplomatic relations with Taiwan, but if it wins, Castro said it will “immediately establish diplomatic and trade relations with mainland China”.

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At the end of 2020, according to the Treasury Department, Honduras had a national debt of more than 13 billion US dollars, which corresponds to 55 percent of gross domestic product (GDP).

Of this, $ 8.45 billion is foreign debt and over 30 percent of the state budget is earmarked for debt payments.

Reliable polls have not yet been released for the election in which Castro and several other candidates will run against Nasry Asfura, the mayor of Tegucigalpa, who is backed by outgoing President Juan Orlando Hernandez, a Conservative.

Hernandez’s rule was followed by allegations of election fraud when he was re-elected in 2017 and allegations in U.S. courts – which he denies – of his links with drug traffickers.

But he remains an influential figure and his National Party is still the most powerful force in Honduran politics.

One of the poorest countries in America, Honduras suffered a 9% drop in GDP last year during the coronavirus pandemic and was badly devastated by two major hurricanes that devastated Central America last November.

For this year, the central bank of Honduras is forecasting economic growth of between 3.2% and 5.2%.

(Reporting by Gustavo Palencia; editing by Sandra Maler)