The Honduras Mess and Nearshore/Offshore Risks

| Contact Center/CRM Views and Analysis

The Honduras Mess and Nearshore/Offshore Risks

The recent military coup in Honduras illustrates one of the risks of locating contact centers and other operations in other, and poorer countries where there are great income and other social disparities between classes, and that is political instability.

A firm that sets up centers in such nations must calculate the odds that its employees could be injured or killed and their buildings damaged, destroyed, or taken over, and business lost. Customer/client data could be endangered too if it is stored on computers.

It is truly unfortunate in Honduras's case that the political situation had deteriorated thought not well to begin with. The country, which has nearly 8 million people, could stand to benefit greatly from the nearshoring trend, and the many well-paying high-status BPO jobs it can bring, which has boosted the economy of next door Guatemala.

The CIA World Factbook reports that Honduras, "the second poorest country in Central America, has an extraordinarily unequal distribution of income and high unemployment. The economy relies heavily on a narrow range of exports, notably bananas and coffee, making it vulnerable to natural disasters and shifts in commodity prices; however, investments in the maquila and non-traditional export sectors are slowly diversifying the economy."

Political instability and military coups have been all too common in this region and in other poorer areas, such as Africa. One reason is that the rulers and ruling classes have long relied on the natural resources and their willingness to be Cold War pawns to funnel in cash to keep their states and status going.

Those conditions are quickly changing, and one hopes that the powerful elites get the message. The Cold War has longed ended and U.S. Barack Obama has signaled that he will not support nor blind eye tolerate any such destructive instability.

Moreover, and more importantly the world's increasingly technology-based economy means that companies go to sources located in other countries, which for contact centers can be done at a flick of the switch. Savvy buyers have done just that by spreading out their suppliers. Taking their income, spending, taxes,--and bribes--with them.

The upside is if and hopefully when the situation in Honduras stabilizes to the point where investments and staff can be safe, that contact centers and back office processing, can quickly locate there and in doing so making the country better by giving its people and the nation a brighter future.

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