The News Mexico
February 25, 2002
By David Shields

Hopes are high some 20 highway projects in southern Mexico and Central America, as well as a major power transmission line to interconnect all the nations in the region, can get under way this year, as soon as authorization is given for a group of loans totaling 3.5 billion dollars, which are currently being put together under the auspices of the Inter-American Development Bank (BID).

At least, that was President Vicente Fox's message this week, as he received Guatemalan President Alfonso Portillo on a state visit to Mexico. These projects are part of the Puebla-Panama Plan, a regional development program which Fox has pursued and promoted globally.

Commitments to the plan, which provides eight basic guidelines for developing and modernizing infrastructure throughout Central America and in the south of Mexico, were signed by the presidents of all the nations involved at a regional summit in June 2001.

Fox was particularly upbeat in announcing that in June of this year there will be a formal presentation of major investment opportunities, which will be attended by the presidents of Central American countries and by the governors of all the states in southern Mexico.

"This year, we will begin to see many infrastructure projects become reality, from major highways to ports and airports," Fox said.

Some observers ask: Will it really happen?

Previous governments promised major economic and social development in the south of Mexico, especially as part of the so-called Megaproject of the Isthmus of Tehuantepec. However, nothing ever really got off the ground, while the gap in living standards between the north and the south of Mexico widened noticeably.

So, at least, Fox cannot do any worse. It is also much to his credit that he has successfully lobbied for the project with the BID and among major European governments - particularly Spain - in the hope of attracting financing and investment.

The first project to get under way this year will be the electricity grid interconnection, said Florencio Salazar, Fox's coordinator of the Puebla-Panama Plan. The first stage will interconnect the grid from Panama to El Salvador.

Shortly after, work on a second transmission line project going south from Mexico through Guatemala will get under way. The whole interconnect will require 320 million dollars in investments and should be ready in three years, Salazar said, and it will strengthen the grid in the region and make power supplies more reliable.

It is fair to say, despite poverty and backwardness, the Central American region has always been looked upon by the United States as a geopolitically strategic region of the world. This is because of the Panama Canal, Mexico's oil industry and other natural resources, and because of the major source of biodiversity in the tropical forests. The Isthmus of Tehuantepec also has potential for a major canal link between the Atlantic and the Pacific oceans.

Now that hopes rise anew for new investments and growth in the region, it is worth noting a new book, called "Reflections on the Megaproject in the Isthmus of Tehuantepec" has just been published by the Autonomous Metropolitan University (UAM) in Mexico City. The book looks back at plans and ideas for development that emerged in past years and reproduces some of the best of them.

The topics dealt with range from the global context and oil and petrochemicals to transport projects, government structures, environmental impact, Indian peoples and traditional medicine. The topics and ideas set out in the book continue to be relevant going forward, now new investment ideas are about to be outlined and new projects are to be proposed for the so-called "Mexican chapter" of the Puebla-Panama Plan.