Plan Puebla Panama

September 25, 2007

The British came to southern Mexico nearly a century ago to build the railroad that slices across Oaxaca’s Tehuantepec Isthmus connecting the Atlantic and Pacific Oceans, which are separated by less than 200 miles at this point. Six years ago, the Mexican government announced the Trans-Isthmus Megaproject, the latest incarnation of the same trans-oceanic corridor dream. With the Panama Canal now extremely overburdened and out of U.S. hands, global capital is searching for new routes. Mexico, Nicaragua, Honduras and EI Salvador have all put out proposals for highway, rail, and even waterbased trans-oceanic connections. Now Mexican President Vicente Fox has made Mexico’s Trans-Isthmus Project, or "dry canal," a central part of what the Financial Times called his "revolutionary plan"—the Plan Puebla–Panama (PPP).[1]

The plan includes new superhighways along the Pacific and Gulf coasts of the country, connecting southern Mexico to the north and also to Central America. These two new routes will be linked by an expanded highway across the Isthmus of Tehuantepec. In its essence, the PPP has three goals: (1) increase the transit and industrial infrastructure of the region, improving the capacity for export industries, (2) catalyze a shift of the region’s economy from agriculture to assembly plant maquiladoras and manufacturing, and (3) expand private control over the vast natural resources in the region.

Southern Mexico still is not really part of the nation that joined the North American Free Trade Agreement (NAFTA) in 1994.[2] Economically, the region’s most important export is probably the thousands of young people that migrate to northern Mexico and the United States in search of work each year. Under pressure from the U.S. government, Fox hopes to start shifting the maquiladora sector south, stemming the human flood and reducing the social and environmental problems that plague the U.S.-Mexico border region. In many ways, southern Mexico now has more in common with Central America than it does with central and northern Mexico. Oaxaca has almost the same illiteracy rate as Honduras, nearly one quarter of the adult population. In El Salvador, the infant mortality rate is 16.5 per thousand live births. In the Mexican state of Yucatan, it is 17.1.[3]

The first hint of Fox’s plans for southern Mexico appeared three months before his December 2000 inauguration. A front-page article in a Oaxaca newspaper announced that he would travel to Central America to promote the Free Trade Area of the Americas (FTAA) and to "lobby for an ambitious regional development proposal."[4] A week later in Guatemala City, Fox named his new proposal: "The Three P, Plan Puebla-Panama," named for the geographic region it would encompass: all seven Central American countries and the Mexican states of Campeche, Chiapas, Guerrero, Oaxaca, Puebla, Quintana Roo, Tabasco, Veracruz, and Yucatan. The day before he was inaugurated, Fox announced that the budget for the PPP during his administration would be four billion dollars. He anticipated funding from the World Bank, Inter–American Development Bank and the Central American Development Bank.

The funds would be invested in the new highways, port and airport expansion, telecommunications, and gas and oil pipelines. The PPP would work hand-in-hand with the FTAA, providing the physical infrastructure and cheap labor force needed for the post-FTAA pried-open markets of the Americas.

The president of the Inter-American Development Bank, Enrique Iglesias, heads the PPP Financing Commission, which also includes several World Bank and United Nations agencies.[5] The commission has made slow but steady progress—in spite of the U.S. war and economic recession. Just one week after the September 11 disaster, Mexico’s Foreign Trade Bank (Bancomext) announced it would invest $300 million in the PPP region: half for hotel development and half for textile and manufacturing industries. In November 2001, Japanese investors agreed to support a huge energy interconnection program in Central America, based on fossil fuels and big dams. On December 15, 2001, the Central American Economic Integration Bank announced it would loan $135 million to El Salvador’s government to rebuild a port and construct several highways.

The PPP was proposed in an essay by Santiago Levy called "The South also Exists." Levy, formerly an official in the long-ruling Institutional Revolutionary Party (PRI), and now a Fox administration official, prepared the document before the July 2000 elections, hoping to convince PRI presidential candidate Fernando Labastida to make it part of his national program. When Labastida lost the election, Levy turned, successfully, to Fox. One of the essay’s key points concerns PROCEDE, a government land-certification program that often converts communally owned land into individual, private holdings. Conversion can mean that any title holder can sell to people outside the community, or, indirectly, to foreigners. As it becomes harder and harder to earn a living as a small-scale farmer in rural Mexico, privatization becomes more likely, as farmers give up and sell off their land. Land privatization underpins the PPP and is the key to achieving its goals of expansion of manufacturing and increased private control over the region’s natural resources.

But the PPP’s success depends on indigenous Mexicans’ willingness to abandon their rural homes and farms, something they may well refuse to do. Shortly after the PPP was officially presented, representatives of 131 organizations from southern Mexico, Guatemala, Nicaragua and El Salvador gathered in Tapachula, a city on the Chiapas-Guatemala border to develop a coordinated response. In a joint statement they said, "Given that any development plan must be the result of a democratic process and not an authoritarian one, we firmly reject the Plan Puebla-Panama.... We condemn all strategies geared toward the destruction of the national, peasant and popular economy, and/or food self-sufficiency."

1."Fox addresses regional development," Financial Times, March 26, 2001.

2. See Carlos Salas, "Mexico’s Have and Have-Nots: NAFTA Sharpens the Divide,"NACLA Report, XXXV, No. 4, Jan-Feb 2002. Available online at

3."Integración de carencias," Reforma, México City, September 26, 2000.

4. "Presenta Fox Programa de Desarrollo Sur Sureste," Noticias: Voz e Imagen de Oaxaca, September 5, 2000. For more on FTAA, see Claudio Katz, "FTAA: NAFTA Marches South," NACLA Report, XXXV, No. 4, Jan-Feb 2002. Available online at

5. Press conference at PPP summit meeting, San Salvador, El Salvador, June 15, 2001.

Tags: Mexico, transportation, Plan Puebla Panama, development, neoliberalism

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