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Mexico, Central America Plan Bloc

June 28, 2002

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MERIDA, Mexico (AP) _ While leaders of the world’s most developed nations met in Canada to deal with the fallout of globalization, presidents from Mexico and Central America gathered here late Thursday to try and get a foothold in the global economy.

``Today we watch the poverty suffered by many of our communities with pain and indignation,″ Mexican President Vicente Fox told leaders from six Central American countries who gathered with 1,350 business representatives and financiers in the resort city of Merida.

Besides pairing the region’s leaders with potential investors, the two-day summit is designed to further Fox’s ambitious Puebla-Panama Plan to build trade and infrastructure links from southern Mexican states like Puebla, to Central America’s southernmost republic, Panama.

Inaugurating the regional conference Thursday night, Fox said the plan ``would achieve greater regional integration based on a solid collaboration between the public and private sectors.″

A year after Central America inaugurated the plan following a meeting of many of its presidents in El Salvador, some of the hundreds of business people who also gathered here say there it still has a long way to go.

And while critics of Fox’s plan predict it will exploit the region’s heavily Indian population and open the doors for unbridled foreign investment, many here would like a little more globalization.

Juan Carlos Paez, is an example. Paez is the owner of a successful Guatemalan bakery company who exports his products to 16 countries _ but can’t get them across the border to neighboring Mexico because of poor roads and cumbersome customs procedures.

``We believe in the plan,″ Paez said at a regional business conference in this Yucatan state capital, held simultaneously with the leaders’ summit. ``We are right next to Mexico, but we need ways to get to that market. The customs process takes 12 hours.″

That story is repeated across the impoverished region, where bad road, port and rail links, bureaucracy, mistrust and trade barriers exclude businesses from nearby markets.

The Puebla-Panama Plan initially aims for $5.5 billion in infrastructure spending _ $1.5 billion in Mexico, the rest in Central America _ to solve such problems.

The leaders are to sign an agreement for a highway network that calls for three major projects totaling 4,500 miles. Mexico also plans to link its power grid to that of Guatemala this year.

Enrique Iglesias, president of the Inter-American Development Bank, said Thursday night that the program was ``on the right track″ and had already secured nearly $2 billion in financing from public and private sectors.

The plan’s later phases call for development of education, environmental protection, indigenous rights and tourism, as well as cooperation in disaster relief.

But like the G-8 nations _ who gathered at a rural resort in Canada Thursday to discuss giving billions of dollars in aid to Africa _ officials at this regional summit wanted to show they weren’t just concerned about business.

``We are looking for sustainable progress, that will give us development based on sustainability,″ said Florencio Salazar Adame, director of the Puebla-Panama Plan.

But some of the leaders who gathered here said the things the plan wants to accomplish are easier said than done.

``It’s a good idea,″ said Satoshi Kondo, a representative from Japan’s Foreign Trade Organization who attended as an observer. ``But our impression is that it is not yet concrete enough for private companies to participate.″

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