IDB-CSI: Plan Puebla Panamá

The IDB, Integration and Plan Puebla Panamá:
An Agenda for Civil Society Advocacy

The full insertion of Latin America into the global economy through trade and regional integration has become the IDB's central policy pillar for achieving the 8th replenishment conditions. The IDB has staked its reputation on the promotion of economic integration of Latin American countries with the global market. Perhaps the most controversial IDB integration initiative is Plan Puebla Panamá (PPP), an ambitious $10 billion, ten-year regional integration program affecting 62 million people living in Southern Mexico and Central America. PPP is a package of eight initiatives and 28 separate "mega-projects" that the region's leaders claim will attract modernizing private investment, accelerate commercial flows, and bring jobs and prosperity to a long-neglected and highly impoverished region. For the IDB, PPP also represents the infrastructural and regulatory prelude to the U.S. goal of achieving a Free Trade Agreement of the Americas and a Central American Free Trade Agreement by 2005. Between 2000-10, the IDB argues that PPP, in addition to a regional trade agreement with the U.S., can be expected to increase trade within Central America by $3 billion, from $5.1 billion to $8.5 billion, and to increase Mexico-Central America trade from $350 million to $600 million.

A growing movement against PPP has criticized its fiscal wisdom and urban priorities, the risk of territorial displacement that it poses to rural and indigenous populations, the threat of U.S. transnational hegemony, and the lack of adequate regulatory oversight. Recent meetings involving broad cross-sections of Meso-American civil society have declared their total rejection of PPP, stating, "The project has in its sights the creation of a service infrastructure for the export of goods, and the exploitation of natural resources, the biodiversity and labor that does not correspond in any way to the social logic of the Meso-American peoples and their communities," (Declaration of Xelajú, November 2001).

At the root of Meso-American civil society concerns with the imposed integration of PPP are the questions: who wins, who loses, and who decides? The most troubling aspect of PPP is that mega-projects have been prioritized and are being designed in a largely non-participatory and highly undemocratic fashion. The initiative is being stewarded by a small group of elites from the region, led by Mexican president Vicente Fox and backed by the IDB. Many civil society representatives are disturbed at the rapid pace at which PPP is moving forward, and there is a feeling that the IDB is not willing to consult with them about the social, cultural, environmental and fiscal implications of these projects.

Plan Puebla Panamá will have unprecedented direct and indirect impacts on the region, some of which are illustrated in the attached maps. For example, the electrical interconnection initiative will be operational by 2005, initiating the direct effect of creating a regional market for energy trading. The indirect effect of a regional energy market is an estimated $700 million annually in investment in new hydroelectric, gas turbine, and thermal power production that is expected to flow into the region. The IDB and regional governments have avoided any public debate about alternative renewable energy sources, dam displacement policy, or consumer vs. industry priorities in new power generation. While the regulatory rules are being pushed through the Central American parliaments, there is little coordinated advocacy between consumer groups, environmental organizations, or indigenous communities that expect to be displaced by major dams (such as Boruca in Costa Rica, El Tigre in Honduras and Boca del Cero, on the Usumancinta River in Chiapas, and the Cocié, Cano Sucio and Indio Rivers that will be flooded to provide electricity and water for the Panamá Canal Expansion). Neither has the social-environmental impact assessment of the proposed route for the new 220 kilovolt transmission line been adequately discussed in public.

The rehabilitation and new construction of a 9,000-kilometer highway system is currently under construction and will establish at least four dry canals linking ports on the Pacific and Atlantic oceans. The indirect effects of the highway interconnection initiative will be intensified land speculation, increased illegal logging, and social conflict in areas expected to provide access to these highways. The IDB and regional governments have avoided public participation in resolving land security problems, rural vs. urban transport needs, and environmental restrictions on new road construction. PPP will directly fund new multi-lane highways that transect fragile and high population density areas-projects which, to date, have not addressed the Social and Economic Protection Programs that have accompanied other controversial infrastructure projects, such as the Santa Cruz-Puerto Suarez Transportation Corridor in Bolivia of the Darien Gap Program in Panamá. Other much more contentious roads that complement the PPP corridors-the Anillo Periferico beltway in San Salvador, the Monkey Point-Corinto dry canal, the Petén Mundo Maya Corridor-are planned by public-private ventures that may escape even the scant social-environmental regulation of the IDB.

The PPP will have the cumulative direct effect of exposing a fragile social, economic, and ecological region to the intense burden of accelerated commercial traffic without the provision of adequate safeguards. Moreover, the IDB and regional governments have promoted no public discussion of the various costs and benefits of this development model.

A growing voice of dissent is echoing these concerns, pointing to the ambivalent economic effects of liberalized trade in Mexico and the world, as well as the need for greater attention to social safeguards that shift the costs of liberalization to the least vulnerable population. These safeguards include mechanisms of continuous, transparent, and meaningful consultation with stakeholders, food security, defense of rights to land, resources and intellectual property, resettlement assistance, social safety nets, and the means for non-violent dispute resolution. These social and environmental elements of PPP have, until now, received far less financial interest than the more lucrative infrastructure and utility projects.

Given the legacy of violence and mutual distrust between civil society and government in the region, the prospect for conflict over PPP is high, but, if mechanisms are created for informed participation by civil society organizations in the planning process, avoidable. Donors, national governments, the private sector, and civil society organizations in Meso-America must cooperate on the design, monitoring, and evaluation of regional development initiatives to ensure that the needs of the affected populations are fully considered.

However, the equity of this cooperation depends upon the strengthened capacity of civil society organizations to advance a locally defined development agenda as an alternative to the top-down, urban-biased design of Plan Puebla Panamá. Our motivation during the first several years of this initiative has been to bring legitimate civil society organizations to dialogue with the Inter-American Bank and the respective Latin American governments. However, our experience has proven the simply opening space for civil society participation in these arenas has suffered from the informational imbalance that favors the multilateral banks. This project has sought to convert opportunities to dialogue with the IDB into mechanisms of information disclosure that can correct this imbalance. InterAction has helped establish a productive, permanent mechanism for dialogue between civil society, government, and IDB representatives from various countries in Central America on Plan Puebla Panamá. These mechanisms have produced concrete improvements in the IDB's information disclosure, participation and accountability practices. From consultations we have recently carried out across Central America, we know that there is tremendous demand for this type of information on the PPP as well as the replication of these types of mechanisms with IDB offices and government officials within Central America.

The proposed work intends to deepen InterAction's role as a facilitator of this de facto information disclosure practice on PPP related areas of research and methodological training. Through commissioned investigations, both in collaboration with Southern partners and through our members, the diffusion of useful mega-project monitoring and evaluation (participatory mapping environmental, economic and engineering literacy tools for large infrastructure projects), promulgation of IDB toolkit resources, collection and publication of mega-project impact and alternative practice case studies, and dissemination of knowledge about IDB policies and projects gained through constant access, InterAction will level the informational playing field for civil society organizations who want to engage the development policy debate. The attached chart suggests potential research alliances and topics. By ensuring that this needed information about PPP travels between affected populations, their governments and the IDB, InterAction will pressure the IDB to adopt these mechanisms as common practice.