Rolling out the red carpet for the corporations in Central America and Mexico

By Gloria Pereira–Papenburg

Children and the elderly are dying of hunger and hunger–related diseases in Central America. About half of the population of El Salvador, Honduras, and Nicaragua earns less than US$2 per day. Mexicans fleeing from poverty are risking their lives attempting to illegally cross the border into the USA.

In a region such as this, with poverty, insufficient access to health and sanitation services, low literacy levels, malnutrition and high infant mortality rates, the governments have decided to implement a development plan that prioritises economic growth, with very little attention paid to the human aspect of development. The area affected by this plan stretches from the northern Mexican state of Puebla south to Panama, hence the name, Plan Puebla–Panama (PPP). Also known as Mesoamerica, it has a population of almost 64 million people and extends over one million square kilometres.

The PPP has a budget in excess of six billion US dollars. The financial motor of this plan is the Inter–American Development Bank (IDB), which is supported by other financial institutions (such as the World Bank) and international development agencies (such as the USA Agency for International Development – USAID), and organisations from Europe and Asia.

This plan was launched on June 15, 2001. According to its proponents, the PPP is a foreign investment led development policy. Supporters argue that the PPP will attract international investors by building physical infrastructure throughout Mesoamerica. The theme of physical integration, as a necessary pre-requisite for trade integration, seems to be the main concern for the IDB. The first priority for the PPP – both chronologically and according to the budget allocations – is regional highway, electricity, and fibre optic telecommunications networks.. The highways will receive 90% of the budget, the electricity network, 6%, and the fibre optic network, 1.6%. Everything else will receive less than 1%, including the "Human development" item allocated a mere 0.66%. Within "Human development" a program called "Basic adult education" is still without any allocation at all. These figures speak volumes about what is really important for the governments. There are several other projects within this plan, including one called "Information, consultation and participation". Added several months after the official launching of the PPP and it too does not have a budget yet. This addition happened after grass–roots, human rights, and popular organisations, complained about the absence of adequate information, let alone any form of participation.

As one of the central factors in the PPP, the issue of highways requires specific attention. The plans call for highways along the Pacific and partially along the Atlantic coast. "Land bridges" are planned across the Isthmus, one at the narrowest part of Mexico, another one at the Guatemala/Honduras border, and, possibly a third one crossing Nicaragua. (These traversing highways will complement the function of the Panama Canal, which is becoming congested by increasing trade volumes, and which is too small for the modern ships used to transport these goods. These goods will be assembled in local export processing zones – sweatshops – and / or simply be transported across the isthmus to be loaded on ships destined for Pacific rim markets to the west, or North American or European consumers to the east.

In addition to the items mentioned in the official publication of the IDB, there are other projects such as upgrading of ports on either side of the Central American Isthmus (in El Salvador and in Honduras) to allow the docking of larger ships. There are also plans for many more export–processing zones; they are known as maquilas or "sweatshops" due to their notorious lack of respect for labour rights. This seems to be especially true in El Salvador, where the previous president had promised to convert the whole country into "one giant maquila".

Most of the budgetary funds come from new loans granted to countries whose economies are already heavily taxed with previous loans. The burden of servicing existing debt is such that some countries cannot afford essential services for their population. A dengue epidemic hit in several Central American countries in July 2002. Honduras was one of the most heavily affected, but the Health Ministry publicly acknowledged that they did not have the resources to adequately protect the population. Furthermore Honduras is classified by the World Bank and the International Monetary Fund, as a heavily indebted poor country (HIPC), and is now taking on even more debts.

All these activities require energy and it here that the electricity networks come into play. Up to 70 hydro–electric dam projects are mentioned in some PPP reports. A proposed site for at least one of the dams is the Usumacinta river, which runs through a biologically diverse area of the Peten forest on the Guatemalan – Mexican border. Information about the dam (or dams) on the Usumacinta has been simultaneously confirmed (by the Mexican government) and denied (by the Guatemalan government). Guatemalan human rights groups and environmentalists groups oppose these plans stating to build one kilometre of new highway destroys or endangers, at least, 60 square kilometres of forest. The Highways item in the PPP calls for a total of, almost, 9,000 Km of highways.

People in the region are also voicing a strong concern about the privatisation of public services will be exacerbated by the PPP.

The privatisation of natural resources threatens bio–diversity and damages the environment. There are further implications for indigenous peoples such as displacement from their ancestral lands, and miss–appropriation and patenting of their traditional plants and uses.

Human rights violations.

United Nations' statistics clearly indicate that socio–economic rights are contravened across Mesoamerica. According to the latest Human Development Report (http://hdr.undp.org) half the population of Honduras, Nicaragua, and El Salvador lives on US$2 per day or less. The right to an adequate standard of living, as defined in the International Covenant on Economic, Social, and Cultural Rights – ICESCR , is certainly not being realised in these countries. The PPP does not give us much hope that any steps will be taken in the near future to correct this situation.

Most workers in the maquilas do not enjoy their right to just and safe conditions of work as recognized in the ICESCR. The countries of this area have all ratified the ICESCR, except Belize which signed, and are therefore obliged to respect, protect and fulfil these rights.

As stipulated in the Maastricht guidelines these obligations extend to influential countries members of international organisations. This includes Canada and the United States who are members of the Inter–American Development Bank (IDB).

The Guidelines state:

"It is particularly important for States to use their influence to ensure that violations do not result from the programmes and policies of the organisations of which they are members".

The PPP will leave its mark for years to come. Its consequences include an increased debt burden and environmental degradation resulting from construction of new highways, hydroelectric dams, bigger ports, etc. The lack of participation by affected communities is a clear violation of the right to be part of the decision making process enshrined in the Declaration on the Right to Development. As up to 60% [Guatemala] of populations are indigenous this is also a violation of the 1989 International Labour Organisation (ILO) Convention 169 on Indigenous and Tribal Peoples Convention.

Who will benefit? Who pays?

The type of development brought by the PPP emphasises corporate–driven export–led growth, privatisation, and labour flexibility (a euphemism for "partial or non compliance with labour rights"). During the past twenty years this model of development has been associated with slowed economic growth, especially in middle– and low–income countries. This has been particularly true in Latin America where Gross Domestic Product (GDP) per capita grew by 75% from 1960 to 1980, and only 6% from 1980 to 1998. Income distribution, within both the industrialised countries and the developing world, and between nations has worsened.

The widespread presence of export–processing zones, as planned in the PPP, will perpetuate dependence on low wage export goods and reduce the likelihood of domestic economic growth.

The trading "advantage" of having cheap labour works only as long as the country, or the region, has the cheapest labour. Howeve, that advantage seems to be slipping away from Central America as the maquilas are relocating to cheaper labour markets in China. Those who left school or traditional employment to work in the maquilas are then left with no transferable skills and no jobs.

People organising to resist

There have been three international meetings, one in Tapachula, Mexico (May 2001), in Quetzaltenango, Guatemala (November 2001) and one in Managua, Nicaragua (July 2002), where hundreds of organisations denounced this model of development and called for alternatives.

Activists are busy fighting the PPP at local levels. In Mexico, the privatisation of one airport was stopped, and workers said it was thanks to the protests. In El Salvador, health care workers are also fighting privatisation. In Guatemala, organisations are opposing the dams on the Usumacinta River.

US and Canadian organisations have come together to form a coalition, the "Network to Oppose the Plan Puebla Panama" – NO PPP. The Social Justice Committee is a member.