La Jornada
January 5, 2001
By Roberto Gonzalez Amador
Translated by Alyse Schrecongost and Craig Adair

The federal government has an ambitious economic development program for Mexico's marginalized Southeastern region. The program aims to pull the zone forward economically from being the region with the highest rate of poverty in the country.

Designed with the help of businessman Alfonso Romo, president of the Pulsar Group, the plan concentrates on the petroleum industry, the construction of hydro-agricultural infrastructure, and means of communication. Part of the new program involves the re-launching of a long-forgotten project to modernize the Trans-Isthmus Railroad. The railroad crosses the Isthmus of Tehuantepec from Salina Cruz, Oaxaca on the Pacific coast to Coatzacoalecos, Veracruz on the coast of the Gulf of Mexico.

The plan to develop the Southeast involves the states of Guerrero, Oaxaca, Chiapas, Quintana Roo, Yucatan, Campeche, Tabasco and Veracruz. It is just one part of a larger plan that intends to create, with the participation of the Central American countries, a corridor of development from Puebla to Panama.

The central idea behind the development program is to generate economic conditions that will bring opportunities in international trade via petroleum, tourism, and maquiladora industries to the people of this geographically strategic region -- people who essentially survive on subsistence agriculture.

The Fox administration's document outlining the development strategy for the eight Southeastern states points out that while the region accounts for 24% of national territory and more than 22.4 million Mexicans (23% of the country's total population,) the region contributes only 14.3% to gross domestic product (GDP.)

"The plan deals with a region that is significantly behind the rest of the country socially with higher rates of poverty, marginalization, infant mortality, and illiteracy. The rural population is very important. Small villages and towns scattered throughout the region lack even basic services," states the document.

The project objectives are primarily economic. Current information indicates that the development plan does not take into consideration the region's unique social and cultural characteristics -- those of being a predominantly indigenous region.

With traces of Alfonso Romo's influence, whose agro-biotechnology company, Pulsar, is active in 120 countries around the world, the project outline asserts that "to ensure that the fruits of globalisation reach every corner of Mexico, the current administration has designed a strategic and far reaching plan whose objective is to promote medium-term structural changes in the Southeastern states."

According to the document, the project is part of a wide-range plan to eliminate obstacles which have previously prevented such a project from being profitable. In addition, the plan is to provide a catalyst for development and to promote integration of the region into international markets in the United States, Canada, and other Central American countries. The accomplishment of these goals will enable the region to take advantage of international trade and investment agreements which have recently been negociated.

The government's coordinator of Plan Puebla-Panama, Florencio Salazar Adame, explained that the project budget was $80 billion pesos and is to be completed within the next 20 years.

Four Aspects

The Southeastern regional initiative constitutes a multi-year project that will require fiscal resources beyond the year 2001. The project will simultaneously address four different program areas.

The first area focuses on a 2.1 billion peso investment in transportation infrastructure this year in an effort to resolve the region's "grave shortcomings" in this area.

Resources budgeted for 2001 will be used to modernize stretches of highway in the region as well as to compliment projects in Puerto Progreso, Yucatán, which is slated to receive an additional 106.8 million pesos.

The document states that these investments should reduce costs of transporting merchandise and people from local to national and international markets by 18 to 25%.

The second area consists in making a "decisive push" to develop the agriculture in the region to "make rural farms into profitable businesses." The government will spend 654.3 million pesos to improve hydro-agricultural infrastructure for technical seasonal projects, irrigation and access to underground water tables in Campeche, Chiapas, Guerrero, Oaxaca, Quintana Roo, Tabasco, Veracruz and Yucatán. The plan will incorporate 220 thousand hectares into technical agricultural production systems.

The document indicates that highway infrastructure work and hydro-agricultural work, slated to begin this year, are part of an investment program designed by the current administration to develop the region's productive capacity and to integrate the region with Central American and other world markets.

Infrastructure investments in the Trans-Isthmus Railroad along with those intended for the ports of Salina Cruz and Coatzacoalcos, "combined with effective operations, could turn the Isthmus into a trade route to Europe for businesses located on the Pacific Coast and to the East for businesses located on the Gulf of Mexico."

According to the document, the third program area will compliment investment efforts with a series of actions designed to support micro, small, and medium-sized businesses. This area will be carried out by the Secretary of Economy via a fund created ex profeso. Additionally, the government will set forth initiatives to offset the cost for businesses to locate in the region.

Finally, the fourth area of the plan would tap into the region's potential for tourism, principally through highway infrastructure projects.