IRC Americas Program Special Report

The Plan Puebla-Panama Revived:
Looking Back To See What's Ahead

By Miguel Pickard | June 2004

Americas Program, Interhemispheric Resource Center (IRC)

During a tour of three Central American countries last March 24-26, Mexican President Vicente Fox formally relaunched the Plan Puebla-Panama (PPP). Originally launched in Mexico with great fanfare in March 2001, the Plan had since languished for a year and a half, dying according to some, dead according to others. The announcement of the ambitious plan for the economic integration of the region immediately sparked controversy but remained pegged to the drawing board as the government stalled on implementation and government offices maintained silence regarding its true intent and probable future.

How has the PPP actually evolved over the past three years' What impact has the opposition among civil society groups throughout Mesoamerica had' Can the relaunch, replete with a new designer image created with the help of marketing experts, really revive the Plan' Finally, what lessons have grassroots movements learned from the PPP'1

The PPP hatches and nearly dies within a year

According to Fox, the objective of the PPP is to overcome the existing underdevelopment of a particularly poor part of the American continent, consisting of the nine southeastern states of Mexico and seven Central American republics. This region has scarce private and public investment, and its socio-economic indicators are above only those of Haiti and Bolivia in this hemisphere.2

Fox draws on concepts that were in vogue half a century ago, stating that "underdevelopment" is attributable to a lack of inputs, principally technology and capital. The PPP is designed, then, to build, or improve, large infrastructure projects (toll highways, airports, deep-water ports, electrical and telecommunications grids), that, together with on-going projects (hydroelectric dams, "dry" trans-isthmus canals), would motivate large private companies to locate there. Private investment, together with the capital, technology and jobs it brings, will supposedly lead to "development." To stimulate these decisions, PPP infrastructure projects are designed to overcome the bottlenecks that might cut into companies' profits and provide incentives for investment.3

Fox's PPP is not, however, a new agenda, but rather a handy "conceptual umbrella" that brings together several large projects that have been ongoing, or in the pipeline, for years. The Plan tries to link infrastructure projects in Mexico's southeast with those of its Central American neighbors, in order to jump-start the region's insertion into corporate globalization.

Yet this 'developmentalist' vision has long been questioned, both by new theories as well as on-the-ground practice, since it downplays the structural problems of underdevelopment related to concentration of economic and political power in the hands of elites and the corresponding lack of opportunities for the majority.4

Early on, it was clear to many civil society groups in Mexico and Central America that the infrastructure projects scheduled under the PPP were not concerned with social development. These groups reject the notion that 'development' is the exclusive reserve of bureaucrats and the private sector, and demand a perspective that takes into account who benefits, who pays, and who decides the nature of development.

Plainly put, it's also a question of democracy. If most of the funding is to come from public coffers, and if taxpayers will be required to pay off loans, plus interest, for generations, then an informed civil society should have a say in deciding on 'development' done supposedly on its behalf.

The PPP area covers approximately one million square kilometers and 65 million people in eight countries, around 50% of whom are classified as being in extreme poverty.5 Contrary to the impoverishment of its inhabitants, the area is rich in natural resources (water, timber, oil, gas, various minerals, plentiful biodiversity) and well suited for generating hydroelectric power. For inhabitants of the PPP area, the Plan was yet another neocolonial form of extracting its natural wealth and exploiting the cheap and abundant labor force of its population. It was also easy to detect the PPP's conceptual links to other large-scale neoliberal plans to promote corporate interests in the region, particularly the FTAA (Free Trade Area of the Americas), a continent-wide counterpart of NAFTA (North American Free Trade Agreement).

The PPP was born with several additional problems, not the least of which was its antiquated notion that people, especially the poor, are objects of 'development', never its subjects. The PPP's creators, bureaucrats at the Inter-American Development Bank (IDB), the World Bank, and the Mexican government, hammered out the scheme without so much as a single consultation to measure people's feelings on the matter.

Second, the PPP ignored not only the opinion, but also the make-up of the people who inhabit the region, particularly the specific circumstances of the nine million indigenous people who live in the region. Their cultures, local economies and conditions are scarcely considered, despite the fact that many communities have lived in the area for millennia.

Third, and most important, the PPP's promoters underestimated the rejection that the Plan would encounter among large sectors of the region's population. Two months after the official launch of the PPP, Mesoamerican civil society already had held its first regional gathering to analyze the Plan. In May 2001, over 300 representatives of Mesoamerican civil society met in Tapachula, Chiapas to exchange information, create or strengthen relationships and networks, and begin to think about activities and alternatives. The PPP was, and continues to be, an important catalyst for compelling Mexicans and Central Americans to think beyond local and national issues and overcome their separation.

The PPP made it evident that the corporate globalization driving this type of mega project affects all countries, albeit in different ways, and therefore grassroots groups should respond as one. Since the Tapachula meeting, this regional gathering (now called 'With Globalization the People Come First') has been held in three Central American cities, with greater participation every time. The next encounter will be held in July 2004 in San Salvador.

The PPP was also a catalyst and motive for several other regional and topic-based gatherings. There have been forums on dams, biodiversity, water, agrotoxins, genetically-modified substances, militarization, autonomy, grassroots economics and others. It has also sparked local, national and regional coordinating bodies against the PPP and neoliberalism. In Chiapas, for example, the Chiapas Gathering on Neoliberalism was formed in October 2002, charged with the task of not only resisting the PPP and neoliberalism but also coming up with alternatives. In Mexico, in March 2002 the Mexican Alliance for People's Self-Determination (AMAP) was created by uniting dozens of organizations in the nine-state area covered by the PPP. AMAP networks with similar nationwide coordinating bodies in Central America and with anti-neoliberal groups throughout the hemisphere.

Elitist in its origin, undemocratic in its implementation, promoter of corporate interests, exclusive of social concerns, particularly of indigenous people, it's no wonder that the PPP stoked the embers of grassroots resistance. Grassroots activism throughout the PPP area soon led the Fox government to backpedal. In early 2001, when the PPP was little more than a declaration of intent from the Fox transition team, the EZLN (Zapatista Army of National Liberation) had already declared its opposition. In July 2003 Subcommander Marcos repeated the message of resistance, 'At the very least in the mountains of southeastern Mexico, its implementation will not be permitted for any reason.'6

Concurrently with the mobilization and organization that the PPP stirred up in southeast Mexico and Central America, a struggle broke out among the campesinos (communal farmers) in Atenco, some 10 miles northeast of Mexico City, when in October 2001 President Fox expropriated 15 thousand hectares (37 thousand acres) of their land to build a new airport for the country's capital. The nine-month struggle that ensued as campesinos defended the lands won through the 'blood shed by our grandparents' in the Mexican revolution 90 years before was an example of what grassroots organization, resistance and mobilization could achieve, even in the face of billion-dollar mega projects.

When the Atenco struggle ended in victory for the campesinos, with the government rescinding the expropriation order in August 2002, it became clear that Fox's schemes of 'development,' through mega projects by imposition and decree, would never work. The option most feared, violence from police forces, was eschewed by the government, given Fox's image abroad as a reformer and the prospect of a prolonged and politically costly conflict with local residents. The nature of the opposition'multisectoral, multiclass, multinational, and growing'led to a noticeable disheartening of the Fox administration towards its much-touted PPP, which led to several political measures.

In 2002, the head office of the PPP was banished from the Office of the Presidency to a subsecretariate in the Secretary of Foreign Relations.

At first the new office claimed it did not even have funds for a locale. Likewise, the first PPP coordinator, the controversial Florencio Salazar, was fired and later accused of disseminating 'erratic and inaccurate information' on the PPP in its first year.7 A moratorium on official declarations on the PPP was declared, and the Plan's web site, the only official source of information reasonably accessible to the public, disappeared. Thus the PPP entered a sort of limbo, since Mexican bureaucrats didn't deny its existence, but they said nothing about it, and generated no public information.

Another factor dampened the Plan's aspirations: in spite of the publicity that was stirred up by the fanfare at the PPP's inauguration, it was unable to obtain the financing that the government sought. There were several reasons: the plunge of the Mexican (and world) economy after September 11, the refusal of the IDB to grant financing to the Mexican government for the PPP at the preferential rates conceded to the Central American countries for the same purpose, in addition to the contractionary effects of reductions in the Mexican government's budget when the economy failed to grow and the country entered a recession. Funding from the private sector also failed to appear.

Forced to face reality, the government downsized its expectations, since it would now have to finance the infrastructure projects in Mexico from national coffers and/or through the limited funding already obtained elsewhere. But no fresh funds were forthcoming, neither from private or multilateral banks, nor from other potential sources, such as the European Union, in which Fox held high hopes in 2002.

For about a year and a half (June 2002-November 2003), publicity on the PPP was virtually frozen, since signaling an infrastructure project was tantamount to mobilizing civil society against it and risking blockage, delay or cancellation. In fact, this occurred on several occasions when organized communities blocked highways and infrastructure projects throughout the PPP territory. The interim strategy, while another was being designed, was to proceed with the infrastructure projects to the extent that financial and social considerations allowed, but not to call attention to them. Once finished and inaugurated, the projects could be attributed to the PPP, as Fox did during his recent tour of Central America.

The PPP's new publicity strategy

During this year-and-a-half freeze, the PPP's 'new image' was being designed. It was first necessary to quell the opposition among the governors of the states participating in the PPP, who had unleashed criticism due to what they called 'misinformation,' delays in financing, and 'centralism' inherent in the project. Governors largely objected to the PPP not because they disagreed with the aims but due to the 'marginalization to which they had been subjected in the decision-making process.'8

In fact, in April 2003, the governor of Oaxaca, José Murat, declared that the PPP 'is rotten,' and 'only exists in the imagination of those who are given to drawing up projects with propagandistic purposes.'9

At the official launching of Mexico's portion of the Mesoamerican Biological Corridor, in March of the same year, the governor of Chiapas, Pablo Salazar, withheld his state's participation in the MBC until its links to the 'controversial PPP' could be cleared up.10 In response, a few months later the Secretary of Foreign Relations, Luis Ernesto Derbez, called together the nine governors in an effort to align them by creating a 'coordinating commission,' whose public role would be to oversee meetings and agreements between the federal and state governments, but also to unite declarations. The governors suppressed their disagreement, and even the rebellious Murat said afterwards that it was 'indispensable to maintain the [PPP] as it presently is, in order for it to receive financing from international organizations.'11

Nine months later, in March 2004, the Mexican government sought the same show of unity at the 6th Meeting of the Tuxtla Mechanism for Dialogue with the Central American presidents. One of the reasons for the meeting, according to Marcelo Antinori, PPP coordinator at the IDB in Washington, was to 'seek consensus on the PPP with the presidents.'12 The absence of four of the seven Central American leaders was interpreted in various ways, but Fox's declarations put the accent on the unity of economic interests between Mexicans and Central Americans.

The next step was to create a friendlier image for the PPP. The IDB called in the U.S.-based advertising agency Fleishman-Hillard for the purpose, for a fee said to have been close to one million dollars. On the basis of its recommendations, the strategy consisted in raising the profile of declarations having to do with social aspects, particularly regarding indigenous peoples and the need to hold public consultations on the Plan. For example, in Guatemala Fox recently declared, 'The PPP is a regional development process which has to do mainly with people, families and, particularly, with indigenous communities'. Days later, before Central American leaders in Managua, he declared: We are united by concrete development plans and projects, in which our indigenous communities participate in their design and application. In Mexico, for example, we have held more than fifty direct consultations of 36 indigenous peoples, since we want development without discrimination, a balanced and just development with a human face, development that respects the culture and practices of these communities.13

Notwithstanding the speeches, there is no record in Mexico of these 'consultations' on the PPP or any 'concrete development plan' designed and implemented by indigenous people in Mexico.14 It is true, however, that the Mexican government is holding consultations with indigenous communities, through the offices of the National Commission for the Development of Indigenous Peoples (Conadepi), at the behest of the Secretary of Foreign Relations. But these consultations are 'rigged,' according to Gabriela Rangel of the Mexican Action Network on Free Trade (RMALC), since the Commission makes no reference to the PPP in its convocations and thus participants arrive unprepared to debate the matter in full. Teodocio Angel, a member of UCIZONI, an indigenous-rights organization in the Isthmus of Tehuantepec, who participated in one such 'consultation' in December 2003, agrees. 'It was all rigged' says Angel, since 'the majority of the nearly 100 participants at the December meeting were CONADEPI employees, or beneficiaries of CONADEPI handouts. They loaded the auditorium with their own people and asked leading questions such as 'Would you approve if the PPP were to bring greater funding for your region'' The nature of the consultations, unfortunately, does not seem to have changed, since indigenous people continue to receive the customary treatment of passive recipients of what are little more than Power Point presentations.15

Another aspect of the new image is the removal of the most controversial projects from the PPP, which are now classified as 'secondary projects.' The most notorious example in this regard is the construction of dams. Notwithstanding the undeniable interest of the Mexican government in building dams on the Usumacinta River, which straddles Chiapas and Guatemala, the official line from the PPP is to deny that the Plan has anything to do with dams.16 Similarly, the Mesoamerican Biological Corridor, at first part of the PPP, has since been separated, since the MBC hopes to promote 'sustainable ecological development,' while the PPP only wanted to incorporate the MBC as its 'green arm' for what is basically a 'project of cementification', according to Tania Carrasco, specialist in social development at the World Bank in Mexico City.17

The pronounced drop in the federal government's budget for the PPP (from US$677 million in 2002 to US$78 million in 2004, a decrease of 88.5%), coincides with the relabeling of certain projects and general reductions imposed by the Secretary of the Treasury (SHCP).18 Certain construction projects no longer labeled as part of the PPP continue to advance, with funds channeled through the ministry in charge. So what is the official budget for the entire PPP region and what does it cover? Unfortunately there is still little clarity. The Mexican government handles a total figure of US$4.4 billion, but it is far too low, according to InterAction, a Washington-based consortium of NGOs, which calculates that US$10 billion would be needed over ten years, based on projects already approved and in the pipeline.19 Officially, there are 28 mega projects for the eight components of the PPP, listed below. (The percentage of funds from the total budget assigned to each component appears in parenthesis): 1- Highways (85.2% of the total budget) 2- Electrical interconnection (11.1%) 3- Promotion of tourism (1.3%) 4- Human development (0.8%) 5- Prevention and mitigation of disasters (0.7%) 6- Trade facilitation (0.6%) 7- Sustainable development (0.4%) 8- Integration of telecommunication services (0.03%)20

As seen in the figures, highway construction takes top priority within the PPP, and this has been true since its inception. One of the most strategic links is the Atlantic Corridor that runs around the Gulf of Mexico, site of some of the largest oil and gas reserves in the region.

By means of this Atlantic highway corridor the region will be connected directly to the United States by modern toll roads, to be run through private concessions. Similarly, the second most important component, electrical interconnection or SIEPAC (System of Electrical Integration for the Countries of Central America), will in the end create one integrated energy grid from Canada to Panama, to facilitate the sale of electricity to, principally, the 'energy- starved U.S. economy.'21

Yet the grid will not stop in Panama. Colombian president Alvaro Uribe recently expressed interest in having Colombia's electrical grid linked to the PPP's. The president's wit led him to suggest that the PPP's initials should now mean 'Plan Puebla-Putumayo,' for the country's southern-most province. 'We want total integration of Colombia into the Plan Puebla-Panama,' Uribe said. 'This would begin with the electrical interconnection line between Colombia and Panama, whose initial studies will be made available to us in April [2004], and the second project would be the construction of a gas pipeline, with the expectation that not only Colombia should be joined to Panama, but also to Venezuela. This is necessary in order to link the continent from the United States to the Patagonia.'22

Can the Plan Puebla-Patagonia be far away?

In summary, the PPP's new image cannot hide the obvious: in essence, nothing has changed. Perhaps there will be some adjustments in presentation, with renewed interest in projecting an image of unity, openness, transparency, and decisions made by consensus with civil society. But the basic fact remains'it continues to be a custom-designed initiative for big-money interests and to advance the strategic interests of the United States.

There may be more consultations in the future but so far they lack substance. Grassroots discontent and rejection of the PPP will persist, but today the task before the Plan's administrators will be to channel it towards vacuous and innocuous exercises. An example is the Mexican government's web page on the PPP, available on the Internet once again after a year-and-a-half absence ( with a virtual forum where visitors can express their opinions on the PPP. Opinions expressed there are largely critical of the PPP, but this channel of expression, along with merely cosmetic consultations is not likely to change anything.

Will the PPP endure beyond Fox's six-year mandate' Sources close to the government have opposing opinions. César Bustamante, in charge of the PPP at the IDB offices in Mexico City, believes it will, not only in Central America, but also in Mexico. The Plan today, he states, has changed into 'more of a political mechanism for economic and energy integration.' On the other hand, Fernando Cuevas, head of the Energy Unit at the UN's ECLAC (Economic Commission for Latin America and the Caribbean) office in Mexico City, says that the PPP is 'Fox's idea that will fall apart at the close of his administration.' There is no one behind it, Cuevas believes, not in his party, not in his government. But the PPP will continue in Central America, because it was there that the IDB put its money. In Mexico, it will continue only for those companies who win contracts, for example to build highways in Panama, Cuevas concludes.23

Lessons from the PPP for the grassroots movement

The PPP Coordinator at the IDB Marcelo Antinori said it clearly last February: 'Now it is more explicit that the PPP means Mesoamerican Economic Integration.'24 He was seconded by Harry Brautigam, president of the Central American Bank of Economic Integration (BCIE): 'For the BCIE, the PPP means an indispensable complement for the economic expansion of the region and a platform to prepare Central America for its entry into the Central American Free Trade Agreement (CAFTA).'25

Not surprisingly, the declarations are identical to what the Plan's opponents pointed out three years ago: the PPP cannot be separated from the logic behind economic integration plans for the region, and the world, as conceived by the ideologues of neoliberalism and expressed in NAFTA, FTAA or the WTO.

The grassroots movements will have to focus on these wider issues, to disseminate information and awareness to greater sectors of the population. The details of the PPP'its specific projects and changing budgets'are relatively less important in the face of the threat posed by neoliberalism's concept of development and view of the future. The threat of such a vision, the struggles that await Latin American civil society and the challenges for grassroots activists and educators in creating awareness on these topics go beyond the PPP, NAFTA or the FTAA.

The larger problem resides in the 'deep integration' with the United States that is presently being prepared by elites. Mexico and Canada are on the front line. Deep integration as an idea has been making the rounds among strategists since at least the beginning of this century. Fox picked up on it after his election, called the idea 'NAFTA-plus' and sent up conceptual trial balloons.26 It has been well debated in Canada, at least in academic circles.27 It picked up new meaning after the September 11, 2001 attacks, with the 'double- time' incorporation of Mexico and Canada into the U.S. armed forces' Northern Command.

At its simplest, deep integration means the creation of a new space, the 'North American continent,' where Mexico, Canada, and the United States would be integrated, obviously under the tutelage of the latter.

Apart from a single North American military force, there would be a common border, a single currency, homogeneity in economic, security, migration and refugee policies, a single identification card, i.e., the fusion in almost all respects of the three countries. The Mexican economist Alejandro Alvarez says that 'the Community of North America is the single greatest challenge for Mexico in the 21st century.'28 Canadian, Mexican and Latin American citizens must recognize and respond to the threat to sovereignty and liberty inherent in 'deep integration'. The PPP provides a case study for educating and alerting civil society to the negative impact of top-down economic integration on our lives in the short term. But most importantly, it shows the urgent need to link these plans to the future that awaits us all under neoliberalism if these plans are not perhaps the most urgent task at hand.

Miguel Pickard is an economist and researcher, co-founder of CIEPAC (Centro de Investigaciones Económicas y Políticas de Acción Comunitaria in San Cristóbal de Las Casas, Chiapas, Mexico and an analyst with the IRC Americas Program. A previous version of this article was published in La Chronique des Amériques Avril 2004 No 12.

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