Financial Times
Monday, June 18, 2001, p. 9
Fox plan aims to give boost to Central America
By Andrew Bounds
Panama City — If President Vicente Fox of Mexico had
conducted his three-day tour of Central American neighbours
by road rather than private jet, it would have taken more
than a week, possibly a few hundred dollars in bribes and
courage against the threat of armed robbers.
Mr Fox, who left Panama on Saturday after a raucous
reception, wants to end that situation. His "Plan
Puebla-Panama" aims to transform the impoverished and
fragmented region, spreading the benefits of Mexico's links
with the US economy further south, mainly through huge
infrastructure projects. The plan could "end the
backwardness of the region in order to incorporate it fully
in the corridors of world commerce", Mr Fox said at a summit
with seven central American countries last Friday. The
countries signed an agreement to implement the plan
promoting trade, tourism, education, the environment and a
single power grid across nine southern states of Mexico and
central America.
President Francisco Flores of El Salvador hailed the plan,
which would include new roads and better ports and
telecommunications links, as a new era "marked by a vision
that we all share - a vision of integration".
Amid criticism that the plan so far exists only on paper,
the summit agreed to set up a commission to identify
concrete projects within 90 days and find financing for
them. The aim is to attract private investors.
Enrique Iglesias, head of the Interamerican Development
Bank, the regional multilateral lending institution, will
act as chairman. The IADB has already pledged Dollars 2bn
(Pounds 1.4bn) to the plan, the bulk to finance electrical
interconnection.
Mr Fox hopes eventually for a single grid from Panama to
Canada with electricity generated from Mexican gas. The plan
covers 28m people in Mexico and 37m in Guatemala, El
Salvador, Honduras, Belize, Nicaragua, Costa Rica and
Panama.
Central America has been working towards integration along
European Union lines since civil wars ended in the early
1990s. But old rivalries and insecurity have undermined the
process. Nicaragua has territorial conflicts with Honduras
and Costa Rica, El Salvador has one with Honduras and
Guatemala with Belize.
Nicaragua has fractured the Central American Common Market
with a 35 per cent "sovereignty tax" on Honduran imports and
the two have clashed militarily. It is hoped the
intervention of their large northern neighbour will help
overcome such differences.
"We sometimes need someone to knock our heads together,"
said one Central American foreign minister. Central America
is enjoying the most world attention since the civil wars of
the 1980s, in which the US intervened, fearing communism in
its backyard.
The threats the US now sees from the region include drugs,
illegal migration, money laundering and social instability.
Not all Latin leaders support the US and Mexican strategy.
Grass-roots groups, environmentalists and others have
attacked it as neo- colonialism, laying Central America bare
to developers wishing to exploit its biodiversity and cheap
workforce.
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