Page "Economy of Honduras" Paragraph 40
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Throughout the 1960s and most of the 1970s, the military-led governments of Honduras ran a state-sponsored and state-financed economy.
The governments provided most guarantees for loans to a strong but patronage-dominated and somewhat corrupt public sector that included recipients of graft extracted from foreign and domestic investors, and to costly state-developed enterprises.
By 1989 and the election of President Callejas, however, a heavy toll had been taken by regionwide economic recession, civil war in neighboring countries, the drying up of most external credit, and capital flight equaling more than US $ 1. 5 billion.
Callejas began to shift economic policy toward privatizing government-owned enterprises, liberalizing trade and tariff regulations, and encouraging increased foreign investment through tax and other incentives.
Rather it changed the government's objectives by focusing on reducing public-sector spending, the size of the public-sector work force, and the trade deficit.
Overall economic planning became the responsibility of the National Superior Planning Council, directed by the minister of economy and commerce.
President Callejas, a United States-trained economist, brought new professionalism and technical skills to the central government as he began the arduous task of long-term economic reform.
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