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Plan Puebla Panama
Mark Connolly Thu May 31, 2001 1:57 pm


The Ecologist, June 2001

Sophie Style reports on the Mexican government's plan to open its doors even further to multinational corporations.

The Plan Puebla Panama, or PPP, is a vast project intended to open up Central America to free trade. But opposition to it is growing. It is the next stage in the "globalisation" of Central America. It is happening with little fanfare, but its implications are huge.

On March 12th, Mexico's new president Vicente Fox launched the Mexican chapter of the "Plan Puebla Panama" - the latest step in the creation of a vast "Free Trade Area of the Americas" - in other words, the corporate colonisation of Latin America. The $8 billion mega-project that is the PPP will create a "development corridor" from Mexico's central state, Puebla, through six Central American countries down to Panama. It is being promoted as the key to eliminating poverty and bringing peace in the region. But behind the official discourse lurks the bitter fruits of corporate imperialism in an area of strategic importance for the US export industry, and according to Mexican analyst Carlos Fazio, the final stage of a counter-insurgency plan to combat indigenous resistance in the South-East.

Until recently, very little was known about the PPP. It is based on a document designed under the previous Mexican government, by Santiago Levy, sub-secretary of the Treasury Department and advisor to the World Trade Organisation and World Bank. It is this global lending institution, together with the Inter-American Development Bank, that is providing the key impetus for the Plan.

Subsidising "free" trade

Of all the 181 countries which are indebted to the World Bank, Mexico's debt is the largest; and the PPP will increase it. As with most World Bank loans, the primary focus of the loan Mexico has been given for the PPP is the modernisation of infrastructure across the nine less-industrialised states of the Mexican southeast - effectively subsidising transnational corporations and opening the way for further privatisations. The Plan includes the expansion and construction of motorways, ports, airports and railway systems, to be completed by the end of Fox's six-year term. This year alone, $420 million has been designated for over 2,200 kilometres of motorways, and work will begin on two hydroelectric dams in Guerrero, a state that has already been the site of widespread environmental destruction.

In the state of Chiapas, christened by Fox as the "central axis" in his vision to integrate southern Mexico with the neighbouring economies of Central America, the spotlight is on derelict Puerto Madero. The president (the ex-head of Coca-Cola in south America) has been using his keen marketing skills to woo US capital to invest in this crumbling 25 year-old harbour and transform it into a regional gateway - complete with industrial park and free-trade zone for fisheries. The government claims that these developments are needed to improve the health and education services in indigenous communities. In fact, they have more to do with facilitating the transportation of cheaply produced goods and natural resources out of this region, and increasing the influx of corporate goods and services for the 27 million "consumers" in the region.

The export trampoline

The location of these communications networks is not accidental. "We need to relate the PPP to the current needs of the US economy and its lagging export industry", says Andres Barreda, researcher at Mexico's Autonomous University (UNAM). He argues that, with production concentrated in the East Coast, including up to half the world's cars and grain, and a shift in the global economy from the Atlantic (Europe) to the Pacific (Asia), it is of primary importance to the US to be able to efficiently transport goods to the West Coast. With the Rocky Mountains presenting an overwhelming obstacle, Mexican and Central American territories gain strategic importance, providing a trampoline for the US to Asian markets. The Panama Canal has fulfilled this function but is now saturated with cargo ships.

The PPP's emphasis, then, is on relaunching a long-standing American dream - to link the Coatzacoalcos port on the Gulf of Mexico with the Salina Cruz port on the Pacific coast across the Isthmus of Tehuantepec; the shortest stretch of land between the two oceans in this region. The PPP document explicitly refers to infrastructure investments which "could convert the Isthmus into an exit channel to Europe for companies located in the Pacific, and to the East for those in the Gulf of Mexico". So far, PPP investments involve modernising the trans-Isthmus railway line and building an eight-lane motorway from port to port. These projects are guaranteed to meet with strong resistance from local indigenous inhabitants who refuse to be mere pawns in the US battle to compete with Japan and Europe in the global economy. As the Zapatista caravan wound it way through the state of Oaxaca at the end of February, Subcomandante Marcos echoed the voices of local groups declaring that "the Isthmus is not for sale".

Green gold, black gold

Commercial eyes are also on the region for its combination of subsoil resources and rich biodiversity. Oil and gas deposits, as well as sites for hydroelectric production, are plentiful, as is the array of "genetic resources" to fuel biotechnology developments. The PPP will facilitate access by TNCs to both of these. Investments of approximately $7 billion are proposed for "energy projects", including gas and oil production in Tabasco, Chiapas and Campeche. As well as the two hydroelectric dams in Guerrero, 71 sites for new dams in Chiapas have been located, mostly in the Zapatista autonomous zones. The energy is needed to drive new industrial complexes in the region, and to be exported to the US.

A hidden element of the PPP is the opportunity for gene giants Monsanto, Syngenta, Diversa, Pulsar and others to carry out "biopiracy" in central America. Under the banner of "biodiversity conservation and management", the World Bank - along with private investors and so-called environmental NGOs - is promoting the creation of national protected areas across the South-East in the "Mesoamerican Biological Corridor Project", now part of the PPP. There is growing concern that these alliances are being used to gain access to plants and micro-organisms, without the informed consent of local indigenous populations. One example is the collaboration between Pulsar and Conservation International in the Lacandon rainforest. The Pulsar Group, which includes one of the largest transgenic seed companies in the world, is headed by multi-millionaire Alfonso Romo, a close ally of Fox and key promoter of the PPP. Conservation International, in spite of its name, is well-known for its collaboration with pharmaceuticals in some of the most biodiverse countries in the world, in search of medicinal plant remedies, some of which are later patented. Indigenous groups in Chiapas and Oaxaca have spoken out against these projects, describing them as "a robbery of our traditional indigenous knowledge and resources".


As a way of drawing the indigenous populations out of these areas, and to contain immigration to the US, a further aspect of the PPP is to create industrial corridors to expand the maquiladora model to the South. The majority of these tax-free assembly plants are now located on the Mexico-US border, but companies have recently begun to threaten to move elsewhere due to perceived high costs of production, excessive regulation, increasing labour costs and inadequate infrastructure. To prevent them leaving the country, Fox has been trying to entice them to the southeast. Here, companies are assured of cheap labour, with salaries up to 40% less than in the north, and will find generous subsidies and infrastructure provisions. This year, 92 maquiladoras will move to the region, creating 37,000 jobs.

A related aspect of the PPP is the drive to turn the countryside "into a profitable business". This year, there will be investments of $65 million in irrigation systems covering 220,000 hectares in the eight southernmost states of Mexico, primarily for large monocultures. Another project proposes that small farmers go into "partnerships" with business investors and put their land up as capital, with the option of continuing to work on it for a salary. The close involvement of Romo in the PPP suggests the strong likelihood of more genetically-modified plantations across the region. The World Bank, for example, sees Chiapas as "an interesting trial area for genetic engineering".

All of these point to the concentration of land ownership in the hands of big multinational companies, as small producers are forced to rent or sell their small plots or communally-held ejidos. Since the onset of neoliberal reforms in the 1980s, and especially under NAFTA, it often makes more financial sense for indigenous campesinos to leave their corn or coffee rotting in the fields than to sell it at rock-bottom prices on the market. As more and more abandon their land, and with it many of their traditions, the options are clear. Rather than migrating to the US, they can now become exploited salaried workers in maquiladoras, or in the oil or agriculture industries, at the same time opening the way to corporations appropriating their land and the valuable resources in it.

Two birds with one stone

If the indigenous populations refuse to leave their lands or give up control of these resources, military repression may follow. The states of Guerrero, Oaxaca and especially Chiapas are simultaneously the sites of greatest resistance and guerilla organisation, abundant natural resources and the most intense militarisation in Mexico. Since the Zapatista uprising in 1994, indigenous communities in Chiapas have undergone seven long years of low-intensity war. While striving to give an image of peace (which will help attract investors back to the region) Fox has already made it clear that there will never be a full withdrawal of soldiers from Chiapas, because they are needed to combat drug-trafficking and illegal immigration. The PPP implies granting maximum security for corporations - both in terms of infrastructure and land tenure, as well as military protection. Given the economic importance of natural resources in this area, Gustavo Castro at the Centre for Economic Research and Community Action Policies (CIEPAC) predicts an increase in what he describes as "biomilitarisation" and "petromilitarisation".

Meanwhile, the US Congress has approved the financing of 38 military operations this year, which involves sending around 100,000 soldiers to 21 countries in Central America, South America and the Caribbean. The aim is to support national armies in the fight against drug-trafficking and guerillas, under the guise of humanitarian assistance. The US says it is needed to protect some of the "weakest democracies" in the area. In this sense, the PPP can kill two birds with one stone - promoting economic globalisation and providing a justification for increased military presence.

Grassroots opposition

The Plan Puebla-Panama - with projects that imply the eviction of indigenous communities from their lands to make way for roads, airports, industrial centres, plantations, protected areas and military bases - is bound to encounter strong grassroots opposition. Across the southeast, communities are already fighting specific projects at a local level, whether it is the resistance of midwives and healers to biopiracy in Chiapas, communal defence of forests in Oaxaca and Guerrero, protests against the industrial corridor across the Isthmus of Tehuantepec, or opposition to the expansion of eucalyptus plantations and the entry of transgenic crops. The PPP is being promoted as a plan which will "emerge from the people" after a nationwide consultation. But what if the people decide they don't want it? And why has work already started?

At the Third National Indian Congress, held on the route of the recent Zapatista caravan in the central state of Michoacan, representatives of more than 40 indigenous groups got together and agreed on the following, landmark declaration:

"For us, Indian peoples, our Mother Earth is sacred, and so are all the beings which inhabit her. They are not a commodity which can be bought or sold. For this reason, we cannot accept the destruction of our territories through the imposition of mega-projects by the federal and state governments in our various regions throughout the country. We demand a moratorium on all projects that involve bioprospecting, mining, water mega-projects, and all biopiracy activities taking place in our lands and in our country, until the Indian peoples have discussed in their own time the issues related to the control of their resources."

It's clear then, what the indigenous people, at least, think of the PPP. How the government responds is another matter entirely.


For more information, see
With thanks to the Centre for Economic Research and Community Action Policies (CIEPAC), and the Mexican Network for Action Against Free Trade (RMALC).

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