The problems with Eclac's US$45bn Mexico and CentAm infra plan
Several obstacles stand in the way of implementing the US$45bn infrastructure plan of the UN Economic Commission for Latin America and the Caribbean (Eclac).
“Without a doubt, Eclac’s proposal is relevant, but if there is no commitment from the governments, international cooperation will not flow,” José Ignacio Martínez, head of Mexican think tank Lacen, told BNamericas.
During the sixth summit of the community of Latin American and Caribbean states in Mexico City, Eclac's executive secretary, Alicia Bárcena, delivered a development plan to counter migration from El Salvador, Guatemala, Honduras and southeastern Mexico.
The strategy was requested by the four countries in 2019, before the coronavirus pandemic and the migration crisis hit.
It includes 29 political recommendations, 15 programs and 114 projects based on the pillars of economic development, social prosperity, environmental sustainability and climate change, and migration management. The pillars involve public and private investments over the next five years.
But before the plan can be implemented, the countries must “commit to safeguarding democracy and human rights to receive international cooperation,” while Mexico must modify its austerity policy to reduce budget cuts. And corruption in Central America is another problem, Martínez said.
“For example, the brother of Honduran President Juan Orlando Hernández was detained in the US, accused of organized crime. Similarly, the president of Honduras is accused by Washington of being permissive with organized crime,” he said.
“El Salvador’s government President Nayib Bukele, like the government of the president of Honduras, are not governments that promote transparency. This is also the case of the Guatemalan government, and of course, in Nicaragua: There is no respect for human rights and democracy.”
The proposals
The economic development pillar would require US$31bn and includes most infrastructure, logistics, and energy projects.
Eclac aims to focus on 22 projects, one specifically for El Salvador, two for Guatemala, three for Honduras, and the rest for nine southeastern Mexican states.
The entity highlighted these proposals because they are advanced and could be launched within the next five years.
They involve a US$530mn transmission link between Mexico and the Central American electrical interconnection system (Siepac), a US$1.7bn gas pipeline between Mexico and the northern Central American countries, and four logistics corridors via rail lines, highways and sea between Mexico and Central America with a budget of US$6.22mn. A US$4.8bn proposal involves universal access to electricity generated from renewable energy sources.
The plan also lists El Salvador’s US$503mn Plan del Pacífico to develop and expand several airport, port and railway projects. These include launching new ferry operations at Puerto de La Unión port, expanding operations at the Puerto de Acajutla to increase capacity to 818,000TEUs per year, the construction of the Pacific international airport and its connectivity routes to the Pacific train, for which studies are already underway.
For Guatemala, the plan also lists a new north-south regional railway link, estimated at US$7.4bn, and a series of highway construction and modernization projects for US$5mn.
In Honduras, Eclac is proposing a US$90.3mn modernization of the clean water and sewage system, a US$3.7bn logistics highway development plan and a US$2.2bn energy investment plan.
In southeastern Mexico, the commission lists 12 proposals, most of which are already being implemented by the government or considered under the Oaxaca Pact infrastructure program, developed by business association Concamin and nine southeastern states. The program comprises 39 projects requiring 60bn pesos (US$3bn) and several of these proposals involve rail branches and highways to complement the megaprojects.
The list includes the US$3.2bn Tehuantepec isthmus rail corridor, which is a 300km freight line between the ports of Salina Cruz in Oaxaca state and Coatzacoalcos in Veracruz state. Both ports will also be expanded to handle more logistics and compete with the Panama Canal.
In the transport sector, Eclac proposed the construction of the US$154mn Acapulco international airport-Pacific coast highway in Guerrero state, a US$598mn highway between the Papaloapan basin and the Tuxtepec bypass in Oaxaca, a US$145mn access road to the new port of Frontera in Tabasco state, a US$91mn plan for reconstructing interregional feeder roads in Chiapas state and a US$17mn plan for improving connectivity and mobility conditions in low-income areas of Yucatán state.
A US$95mn modernization and expansion of Chiapas port and a new US$62mn multimodal cabotage terminal on Veracruz’s Alvarado coast are also under consideration.
Other proposals are an US$11mn autonomous solar panel infrastructure plan for pumping water in rural communities of Campeche state, a US$3.7bn distributed power generation project in Yucatán, a US$119mn industrial and logistics infrastructure plan for trade with Central America in Tabasco and the US$20mn rehabilitation of the market area of the Margarita Maza de Juárez wholesale market in Oaxaca.
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