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The Honduran government and the Inter-American Development Bank (IADB) have signed an agreement to collaborate on an initiative to improve the business climate in Honduras.

The IADB launched this initiative last year to complement its competitiveness programmes in Latin America and the Caribbean. According to studies, among the factors that can stifle growth and private sector investments in developing countries are macroeconomic instability, legal uncertainty, corruption, scarcity of credit and a burdensome bureaucracy.

Under the initiative, the IADB will help the Honduran government diagnose obstacles to the development of appropriate conditions for long term investments. Based on those studies, which will be consulted with Honduran civil society groups, an action plan to eliminate barriers will be drafted.

The plan will provide a framework to guide IADB programmes, loans and technical assistance to foster private sector competitiveness. The bank and the Honduran government will also choose indicators to gauge progress towards the initiative’s goals.