ABSTRACT
Honduras and Nicaragua are two small neighbouring Central American countries with a common history and similar economies. Together with other countries in the region, both countries are emerging from decades of civil war and unrest; they are in the process of consolidating democratic governments, and have embraced a market-oriented growth strategy. This strategy stresses privatization of state enterprises and trade liberalization. It attaches special importance to export growth and diversification as the main pillar of development. Both countries have been members of the Central American Common Market (CACM) since its creation in the early 1960s and recognize the importance of regional integration for their development strategies.
