LA UNIÓN, El Salvador – The political crisis in Honduras, which has cost Central American exporters millions in economic losses since last June, is forcing neighboring countries in the region to seek alternative shipping solutions.
Although temporary border closings in Honduras and military curfews in June and September caused only brief disruptions in trade, they have provoked lingering instability in one of Central America’s main shipping routes.
Though the border closings lasted for only several days at a time – thanks to pressure from Central American business chambers, which urged politicians not to turn the political crisis into an economic one – the uncertainty over the future of the Honduran conflict has caused some exporters to seek new shipping routes.
Honduras, which lies in the heart of the isthmus, is a crossroads for Central America’s $8 billion commercial market, and home to one of the region’s largest deep-water Caribbean ports, Puerto Cortés.
Puerto Cortés, which operates 24-hours a day under normal circumstances, is one of the main seaports handling U.S. imports to Central America, as well as regional exports originating from Honduras, El Salvador and Nicaragua.
Since the June 28 military ouster of Honduran President Manuel Zelaya, and the nearly four months of instability that have followed, the port’s activity has dropped and a $250 million expansion project has been canceled.
In the case of neighboring Nicaragua, which has the most deficient port infrastructure in Central America, importers and exporters have been scrambling to find alternatives to Puerto Cortés, which normally handles 50 percent of Nicaragua’s shipping demands.
Enrique Zamora, president of the Nicaraguan Association of Producers and Exporters (APEN), told The Nica Times this week that Nicaraguan exporters are now using Costa Rica’s Puerto Limón with increased frequency, as well as Nicaragua’s much smaller Puerto El Rama, which has seen a 9 percent increase in shipping since the Honduran crisis began in June.
El Rama, which handles smaller container ships that traverse the EscondidoRiver to the Caribbean Sea, has “improved substantially” in the past few years, Zamora said.
And now it’s taking advantage of those improvements by increasing its shipping volume. The Caribbean port is still capable of growing another 15 to 20 percent based on its current infrastructure, Zamora said.
Though Nicaraguan exports are expected to dip by 15 percent this year – due in large part to the global economic crisis – Zamora says the political crisis in Honduras is presenting more of a “concrete problem” for Nicaraguan exporters.
Ironically, that’s not the case in Honduras, according to Medardo Galindo, manager of the Honduran Federation of Agricultural Exporters.
Galindo said Honduran exporters are used to operating in crisis mode, and that the temporary problems caused by the border closings have affected neighboring countries more than Honduran businesses, which continue to ship their exports out of Puerto
However, Galindo admitted, the Honduran political crisis, coupled with the global financial crisis, is making it very hard for Honduran agricultural producers to secure the financing they need for the next harvest cycle.
“Both the internal and external situations are a problem for us, but the international financial crisis is the bigger problem for us,” Galindo told The Nica Times in a phone interview from San Pedro Sula.
In the case of Guatemala, which has its own deep-sea port on the Caribbean side (Puerto Barrios), the Honduran crisis has not affected international shipping as much as its regional trade with Honduras.
Guatemala exports some $2 million a day in manufactured goods to Honduras – a daily flow that was disrupted by commercial blockades and border closings, according to Anayté Guardado, director of competitiveness for the Guatemalan Exporters’ Association.
“The impact was very short-term and was resolved through negotiation,” Guardado said in a phone interview from Guatemala City. “The commercial blockade of Honduras was not the most adequate solution to the problem there. The situation needs to be resolved diplomatically and politically, not through trade pressure.”
Puerto La Unión
While the crisis in Honduras has caused some doubts about the future of the region’s largest deep-water port on the Caribbean side, on Central America’s other coast, El Salvador is preparing to inaugurate what will soon become the region’s largest Pacific seaport north of Panama.
Construction on El Salvador’s $157 million Puerto La Unión finished last December, but the port facility is still awaiting the final purchase of equipment as well as electrical hookups before it starts to operate next March, according to Mauricio Tovar, head of communications for the El Salvador’s Port Authority (CEPA).
During a recent site inspection of the new port facilities, CEPA president Guillermo López said that getting the La Unión Port up and running is a “top priority” of the new Salvadoran government of President Mauricio Funes, since maintaining the idle port is costing the government $3 million a year.
The new port, which will provide Central America with an important gateway to Asian markets, will be connected to Nicaragua, Honduras and Guatemala through a series of new roadways that are being built.
The La Unión Port will be operated by CEPA until El Salvador’s legislature can pass a new port concession law, expected to happen sometime in the next three years.
“Operating a port is a very delicate issue and we have to do it in the best possible way for El Salvador,” López said.