Weekly Report - 23 March 2004

HONDURAS | Debate over high fuel taxes. The government of President Ricardo Maduro is under heavy pressure to reduce the tax load on fuels. According to data recently released by Sieca, the secretariat for Central American economic integration, Honduras currently has the highest fuel prices in the subregion. This is partly due to increases in the world price for oil (with the exception of Guatemala, Central America imports all of its oil-based fuels), but also reflects the high rate of taxation in Honduras.

Maduro insists that he will not lower the taxes. They are, he says, `devoted to the execution of social programmes, and sacrificing that revenue would be tantamount to sacrificing the people.' He says prices should be lowered by narrowing profit margins.

PANAMA | Canal hits traffic record. Last week the Panama Canal hit a new record, transporting 1,005,551 tonnes of cargo in a single day (16 March). The previous record was 934,000t, reached on 3 July last year. 

Panama is invoking its success as a manager of the Canal (which it got back from the US in 1999) as an argument in its bid to become the seat of the Free Trade Area of the Americas (FTAA). It is competing with Miami for this.

JAMAICA | Public debt warning. Opposition senator Bruce Golding predicts that, if the current rate of borrowing continues, Jamaica's public debt will exceed J$1,000bn by December 2006. His warning came just after the senate passed a bill raising the government's borrowing limit to J$650bn from the previous ceiling of J$400bn set in 2002. Before that, during the 1990s, the ceiling stood at J$170bn (current rate: US$1=J$60.9).