The multilateral model is in vogue throughout Latin America these days, and the hope is that linking every road in the region will lay a concrete foundation for expanding trade. The new multilateralism helped spawn the Mercosur trading bloc in South America in the 1990s and is driving current talks over a hemisphere-wide Free Trade Area of the Americas. Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica opened talks with the Bush administration earlier this year over a Central America Free Trade Agreement, and those negotiations are scheduled to end in early 2004. In a region perhaps best known to the outside world for its 1980s-era guerrilla wars and death squads, the grand building plan is touted as something more than a Big Dig. Along with new trade agreements, it “can secure economic and social development and contribute to stability and democracy,” says Alvaro Trejos, the Costa Rican representative to the eight-nation board of commissioners that oversees the project.
The brainchild of Mexican President Vicente Fox, the initiative is being run out of IDB headquarters in Washington, and its sheer size has already drawn flak from many quarters. Launched in June 2001, the centerpiece of the scheme is a $7.5 billion plan to create a 9,000-kilometer network of new and existing roads, including a modern Pacific Corridor highway from the Mexican city of Puebla to Panama City. This would be connected by a separate maze of roads to an Atlantic Corridor running from the Yucatan Peninsula to Belize and Honduras. The IDB figures the combination of better cargo routes and new treaties could boost annual trade flows in Central America from $5.1 billion today to $8.5 billion in 2010. To critics, that’s precisely the problem. The Plan Puebla-Panama “means the construction of dams, highways and port expansions… that advance the expansion of multinational corporations in the region,” says Mexican indigenous-rights activist Carlos Beas Torres. “This means the immediate expulsion of our communities from our lands.”
The anti-global crowd has been mobilizing. Last October thousands of demonstrators blockaded highways and staged rallies from the southern Mexican state of Chiapas to the Costa Rican capital of San Jose. They charge that the Atlantic Corridor will inevitably slice through Mayan Indian reserve lands in northern Guatemala, a charge project officials deny. The activists also take aim at another big-ticket item: $417 million to run 1,800 kilometers of new 230-kilovolt power lines, tying together eight national power grids that now share few links. The idea is to create a regionwide grid with greater capacity, attracting new investment to larger power plants designed to serve the entire region. The protesters consider this an invitation for outsiders to build hydroelectric dams in river valleys now inhabited by indigenous communities, an assertion project leaders also dismiss.
The justification for Plan Puebla-Panama is pretty straightforward: Latin America’s economies are a mess, and its roads and ports are in terrible shape. Much of the money will go for basic repairs like filling potholes and installing new highway signs in a region where an estimated 70 percent of the roads are in poor condition. According to economist Pablo Rodas Martini, the lousy roads explain in part why it costs as much to ship a product from Guatemala to Costa Rica as from Guatemala to Western Europe. At border crossings in El Salvador and Nicaragua, the bad roads and regulations create a tableau of inefficiency: unemployed locals fill potholes with clumps of dirt to attract tips from truckers, as drivers sleep on their rigs in the long lines leading to customs offices awash in bureaucratic forms. “Imagine if a truck took 24 hours to complete a 130-kilometer trip through three states in the U.S.,” says IDB spokesman Peter Bate. “Those are the sort of conditions Central America is trying to overcome.”
The basic aim of the highway plan is to reduce travel time. Consider a 92-kilometer stretch of the Pacific Corridor slated for reconstruction under a $37 million loan that the IDB recently approved for Panama. When the work is done, says Bate, heavy vehicles will shave 35 minutes off the nearly two hours it now takes them to cover that distance. That in turn will reduce vehicle operating costs by about 18 percent and sharply boost commercial traffic.
In any event, the scheme is already too far advanced to stop. Most of the funding is already on its way from the participating countries and international development banks. In addition to the road and power projects, more than $2 billion is slotted for upgrading ports, promoting tourism, linking telecommunications and improving natural-disaster relief. To date, financing has been secured for 54 percent of the road budget, and all 28 projects in the budget have been approved. Eventually, planners say, the new network might be linked to a similar vision for South America that is being promoted by Brazilian President Luis Inacio Lula da Silva.
That should give the protesters pause, since there is no president more sympathetic to their cause than Lula, a former labor leader. Nonetheless, recent experience in Latin America suggests that leaders who push grand building ambitions without grass-roots approval do so at their own peril. A series of sometimes violent protests in the Mexican town of San Salvador Atenco forced the government to scrap plans to build a new international airport there earlier this year. The target of that uprising, President Fox, is also the father of the plan to repave from Puebla to Panama, and some of his peers along that road don’t enjoy as much democratic legitimacy as he does. If they want this road to lead to stability, they’d better build with care.
