While the ongoing protests and political instability in Honduras certainly pose potential business interruption issues for the country's commercial sector, the Honduran coup has also now indirectly posed the same threat in neighboring countries Nicaragua, Guatemala and El Salvador.
On Sunday June 28, 2009, Honduran president Manuel Zelaya was escorted from the presidential palace by the national military and put on a plane to Costa Rica. His ouster has led to protests, numerous arrests, general unrest and public condemnation from the United States and from other Latin American governments. Among the steps taken by other Latin American governments, Guatemala, Nicaragua and El Salvador, the three Central American nations that border Honduras, announced that they would close their borders to commerce with Honduras for at least the next forty-eight hours, the time period after which Zelaya is expected to return to Honduras in an attempt to retake his place as President.
Although perhaps a powerful political statement, the closure of these nations' borders with Honduras for even a short time (much less if they remain closed unless and until Zelaya is returned to the presidency), poses significant problems for these countries' trade not only with Honduras (one of the largest trading partners for each of these countries), but also with the United States, Europe and the rest of the world. For example, nearly all of Nicaragua's exports to Guatemala and El Salvador normally pass through Honduras, and 46% of the nation's exports to and 30% of its imports from the United States and Europe pass through Puerto Cortes in Honduras. While it might be possible to re-route these imports and exports through alternative ports in Nicaragua, Costa Rica and Panama, the costs to do so would be significant.