Latin America: Not Everyone on Board with Mesoamerica Development Plan

(IPS) – Ten years after its launch under a different name, the Mesoamerica Project, which involves major investments in energy, telecommunications, housing, health and other areas, is moving ahead slowly and continues to face scepticism that it will have a real impact against poverty.

“Projects carried out at a regional level take longer, and coordination between countries is much slower,” Elayne Whyte, executive director of the Mesoamerica Project – formerly the Puebla Panama Plan (PPP) – told IPS.

Nevertheless, she added, “significant advances were made between 2008 and 2011, not only in terms of electrical interconnection, which is one of the flagships of the project, but also with respect to physical integration, telecommunications and health.”

In 2001 the leaders of the seven countries of Central America – Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama – and Mexico held a summit in the southern Mexican city of Tuxtla to adopt the PPP under a “mechanism for dialogue and agreement” that set goals for 2015 with the support of several multilateral institutions.

The development and integration initiative is aimed at promoting investment in transport, energy, tourism, telecommunications and other areas, to improve quality of life for the more than 70 million people living in the area covered by the plan: Central America and Mexico’s nine southernmost states.

But in 2008, the PPP was overhauled and relaunched as the Mesoamerica Project by the governments in the region at a summit in Villahermosa in southeast Mexico, when the Dominican Republic and Colombia joined in as well.

“More than 100 projects were purged, in order to focus on two strategic areas: physical and economic interconnection and cooperation for social progress,” which was expanded to include housing and health, Whyte said.

Colombia and the Dominican Republic joined because they share “the same principal trading partner, the United States, and a strategic location between the north and the south of the Americas, and between the east and the west in the flow of international trade,” she explained.

So far the initiative, whose highest-profile project is the Electric Integration System for Central America (SIEPAC), has absorbed hundreds of millions of dollars.

SIEPAC consists of the construction of a 1,800-km 230 kV power line with a planned capacity of 300 MW and 15 substations stretching from Mexico to Colombia.

The project, “which will help cut electricity rates, will be ready in 2012, although some stretches are already operating, such as the connection between Mexico and Guatemala,” Whyte said.

Similar progress has been made by the project to make broadband Internet services available, while the investment plan for the Pacific Corridor, another of the regional initiative’s flagship projects, has been completed.

Ninety-five percent of all commercial goods in the region are transported along the Pacific Corridor, a 3,200-km network of highways running from Panama to Mexico.

On the social front, 142 million dollars will be spent on promoting maternal-child health and nutrition and combating malaria and dengue fever starting in 2012, while 7.1 million dollars in microloans have been made available for purchasing and improving housing in El Salvador and Nicaragua, Whyte said.

The Mesoamerica Project is financed with government funds as well as loans or technical aid from multilateral lenders such as the Inter-American Development Bank (IDB), the Central American Bank for Economic Integration (BCIE), the World Bank, the Central American Integration System (SICA), and the Pan American Health Organisation.

Other focuses of the Mesoamerica Project’s lengthy list of programmes are biofuels, competitiveness, natural disasters, the environment, fruit-growing, and trade facilitation, all of which “are catalysts for bringing benefits to the population as a whole,” Whyte said.

She reported that 654 million dollars are being invested in regional power grids, health and technical cooperation under the Mesoamerica Project itself, while the governments of the countries involved in the project have also unilaterally arranged an unspecified amount of financing from the regional banking sector for the construction of roads and energy grids.

But the initiative faces myriad challenges.

Guillermo Rodríguez, the Guatemalan president’s commissioner for the Mesoamerica Project, told IPS that the biggest challenge is “to ensure that the macro-level benefits of the projects trickle down to the population at large.

“What good will it do to facilitate trade if it’s not going to bring benefits to the population? That’s why we are discussing novel aspects, like creating binational municipal markets in border towns,” he said.

“Another important aspect is that the governments of Central America have a very limited capacity for indebtedness,” which restricts their possibilities for investing in these mega-projects, he added.

The project has also run into other hurdles, such as the theft of some 15.5 million dollars of power cables from SIEPAC in El Salvador and Guatemala, Rodríguez said.

In neighbouring Honduras, meanwhile, hardly anyone even knows about advances made by the Mesoamerica Project.

“It has made the most progress at the political level, but the infrastructure or energy projects still have to translate into concrete results,” the deputy foreign minister of Honduras, Alden Rivera, told IPS. “However, the government has given the project a new impulse, in order to make the integration process more agile.”

This viewpoint is shared by representatives of the private sector. Armando Urtecho with the Honduran Council of Private Enterprise (COHEP) commented to IPS that the project “is well-intentioned, but…we have only heard political speeches, and advances haven’t really been felt on the ground.”

But not everyone is convinced that the initiative will be a good thing for the poor.

“It has never been focused on benefiting the poor in the region; it is designed to cater to the interests of U.S.-based multinationals,” Salvadoran social activist Ángel Ibarra told IPS.

According to Ibarra, the Mesoamerica Project is turning the region into a logistics corridor to facilitate U.S. trade, in response to that country’s aim of competing with trading giants like China and other countries in Asia.

He said that in El Salvador, the only thing the Mesoamerica Project has done is to build the Cutuco port on the Pacific Ocean.

“But the port has become a white elephant, because it made sense as part of a ‘dry canal’ if a road was built to Cortés port, Honduras’ main maritime terminal – but that wasn’t done, so today it’s generating major losses.

“And that’s not all. Construction on the El Chaparral hydroelectric dam in the north of the country has come to a halt due to corruption,” he added.

Natalia Atz with the Ceiba Association, a community development NGO in Guatemala, is also critical of the Mesoamerica Project, which she said “benefits multinational corporations and some national companies.

“They tell us these things will bring jobs, but that doesn’t compensate for the destruction, pollution and degradation of the land caused by the projects,” she remarked to IPS.

Atz cited the case of the mining industry in Guatemala, which leaves the countries “just one percent in royalties, on top of the destruction and pollution, while the local people are still poor.”

Atz, a Cakchiquel Maya Indian, believes it is possible for communities to leave behind poverty and malnutrition, but with a different kind of development.

“We want local communities to receive public services like health, education and roads, but with a different focus, based not on mega-projects but on community development,” she said.

Agroecology and achieving self-sufficiency in food production are some of her proposals to curb poverty, which will only continue to perpetuate itself unless measures are taken, she said.

* With reporting by Thelma Mejía in Tegucigalpa.