UN DESA | DPAD | Development Policy Analysis Division
Capacity Development and Advisory Services
UN-DESA • UNDP Honduras • Central Bank of Honduras
30 October 2013
DPAD completed its capacity development activities in Honduras with the presentation of the accomplishments of the project in Honduras and the work produced by experts from the Central Bank of Honduras trained in the framework of the project. The presentations demonstrated the successful transfer of capacities on the use of the modelling tools needed for the design of policies to achieve human development goals.
The workshop was attended by 35 participants representing different institutions of Honduras’ Government and UNDP who had previously participated in the project’s training activities to learn the use of macro‐micro modelling tools to assess policy issues. The workshop included a keynote address by UNDP’s Resident Representative in Honduras, Mr. Edo Stork, followed by a summary of the project’s accomplishments.
Three substantive presentations were also made during the workshop on MDG financing strategies and different growth paths post-2015 in Honduras (Marco V. Sanchez-Cantillo from DESA), the effectiveness of public policies for development in Honduras (Marcelo LaFleur from DESA), and the impact of investments in public infrastructure on the MDGs in Honduras (David Pineda from the Central Bank of Honduras). The following messages emerged from these presentations, respectively:
It is not feasible to achieve the MDGs in Honduras by 2015. The country should rather pursue a strategy in which the target year is, for example, 2025, in which public spending will have to be scaled up significantly and financing will have to come from a mix of sources (financing borrowing, grant aid and higher tax revenues). The fiscal cost of achieving the goals will decline substantially should the efficiency of spending increase and economic growth be maintained around a rate of 5%.
The efficiency of public spending tools that aim to affect changes to development indicators is varied. Often the results of the estimated relationship between policy and outcome show that there is room for improvement in efficiency through more targeted spending, enacting non-spending reforms, and identifying bottlenecks. A key lesson of study presented is that the tools provide a way to analyze public spending efficiency, but that more detailed data is needed. Efforts should be made to continue this analysis. It is also clear that the impact of the availability of infrastructure and of economic growth can at times be more significant than public spending. Policies that increase household incomes, including transfers, are often much more effective in improving development.
The country may opt for a strategy of investing heavily on public infrastructure – more than spending on the MDGs. Scenario analysis shows that 7% of GDP in additional investment in public infrastructure would spur economic growth but, more importantly, it would enable achievement of MDGs by 2025 without additional stepping up public social spending. This is because of the effect that public infrastructure would have on access to education centers and health facilities.
The workshop is the final in a series of training events under the project "Strengthening Macroeconomic and Social Policy Coherence through Integrated Macro-Micro Modelling", conducted by DPAD, in close collaboration with UNDP's Office in Honduras and the Government of Honduras. The activities of the project succeeded at strengthening the capacity of Honduran policy makers to assess and maximize the use of support measures and strategies that contribute to human development, and to become better prepared to anticipate and respond to global economic crises and other external adversities that may affect human development. This includes experts from the Central Bank but also from a number of other government institutions.
- 20–21 December 2010—Inception workshop (Tegucigalpa, Honduras)
- 10 –11 July 2012—Inception workshop (Tegucigalpa, Honduras)
- 11–12 December 2012—Training workshop (Tegucigalpa, Honduras)
- 7 July – 10 May 2013 —Training workshop Tegucigalpa, Honduras
- 16 July – 18 July 2013 —Training workshop Tegucigalpa, Honduras