Americas Policy Report
Grassroots Protests Force the Mexican Government to Search for a New PPP Strategy
by Miguel Pickard | March 2003

Americas Program,
Interhemispheric Resource Center (IRC)

During 2002 the Mexican government changed strategies behind one of President Vicente Fox’s most touted schemes, the Plan Puebla Panama (PPP). It now seems undeniable that that a fundamental shift has taken place within the government.
What has happened with the PPP, from flourish and fanfare, when the PPP was announced in September 2000, to barely murmurs 18 months later? Why this 180 degree shift? What has led to the present official silence? Is a new strategy in the works?
One of the reasons behind the government’s silence is the large and growing wave of grassroots rejection of the PPP. Behind the PPP’s thin veneer of rhetoric regarding human development as the supposed motive for the Plan, the real intentions were clear from the beginning. The PPP is one more cog in prevailing neoliberal projects–including the World Trade Organization (WTO) and Free Trade Area of the Americas (FTAA)–backed by large corporations, the U.S. government, and multilateral banks. The PPP is designed to channel billions of dollars in taxpayers’ funds for the construction or improvement of large infrastructure projects, which, the government hopes, will stimulate investments by corporations in an impoverished region covering Mexico’s southeast and the seven Central American countries. The total bill estimated for the PPP is $25 billion over 10 years.
Popular Mobilization
Shortly after the PPP’s inauguration, numerous citizens’ organization in the southeast of Mexico and Central America became informed, then organized and mobilized in order to protest against this megaplan, designed with little regard for the social needs of inhabitants in the area. Protests gave way to actions to stop the construction projects. In 2002 Salvadoran activists and organizations ground to a halt work on the "ring road" in the capital city of San Salvador, which would have displaced thousands of persons. The campesino (small subsistence farmer) communities and organizations of Chiapas located on the banks of the Usumacinta River are on alert for any activity that might signal the start of work on hydroelectric dams. In fact, these shoreline communities have had repeated confrontations with personnel from the Federal Electricity Commission who trespass on their plots, wanting to purchase land or rights of way. In Xalapa, in the state of Veracruz, mobilizations by organizations and activists led to the retracing of the original route of another ring road that would have meant the destruction of a rain forest, an area that supplies half of that city’s drinking water.
In the state of Puebla, mobilizations, demonstrations, and blockades by various social organizations–among them the Unión Campesina Emiliano Zapata Vive with a membership of more than 4,000 ejidatarios (collective land owners) and farmers–were key in forcing the cancellation of Plan Millenium, a local version of the PPP.
On October 12, 2002 tens of thousands of people marched in Mexico and Central America against the PPP, in one of the first coordinated actions on a regional level. The agreement to march that day was taken at the III Conference on the PPP held in Managua, Nicaragua in July 2002, which gathered more than a thousand representatives of hundreds of social and civilian organizations from Central America and Mexico.
In Guatemala and Honduras there have been important victories against the PPP as well.
Then there was the nine-month Atenco mobilization that led to the defeat of the Mexican government by militant peasants. The Atenco campesinos spoiled Fox’s plan to build a new airport for Mexico City on their common lands. For the anti-PPP movement in Mexico and Central America, Atenco was a historic reaffirmation that with determination, organization, and permanent mobilization it is possible to say no to the most important government megaplans. The government had to back off, politically defeated, in the face of this setback to its strategy of making grandiose megaplans the mechanism for "developing" Mexico.
Government and Business Problems
Has the Fox government understood the lesson? It doesn’t seem so, at least not in the executive suites of the General Coordination of the PPP. Surprisingly, this office admits the PPP has failed, but solely in terms of public relations. Ricardo Ramírez, Director of PPP Alliances and Strategies, attributes part of the "suspicion" generated by the PPP to serious problems, especially in their web presence. According to Ramírez, the PPP’s official web page, under previous Coordinator Florencio Salazar, was an "alarming fantasy" of projects (hydroelectric dams, oil wells, and the like), a "profusion of good intentions," but lacking feasibility and financial backing. "We were responsible," confesses Ramírez, "for the attacks on the Plan" due to the "erratic and inaccurate information" disseminated.
For everyone’s peace of mind, the web page is currently under reconstruction and will again be available on the internet in approximately three weeks, and now with "consolidated information," according to Mr. Ramírez. (2)
In any event, because of the defeats to Fox’s corporate-driven policies in the PPP region and at Atenco, the Plan Puebla Panama seems to have entered into deep hibernation, at least in terms of the enthusiasm shown for it by Mexican government authorities. Economist Daniel Villafuerte, who studies the effects of globalization in Chiapas, agrees. "It’s been frozen," says Villafuerte of the PPP, and he dates the start of the Mexican government’s silence at the June 2002 Summit in Mérida, Yucatán, where the presidents from the PPP region met.
In Mérida, Fox might have come up against two obstacles for advancing the PPP. It is well known that at least part of the Central American private sector is ill at ease with, or even against, the PPP. Some entrepreneurs fear that the PPP might be a means to ease the entry of Mexican capital into their area of influence, and the Central American presidents likely carried this message to Fox.
In addition, as part of the Mérida summit, an "opportunities fair" was held, attended by more than 700 companies of all sizes, in order to explore investment opportunities within the PPP framework. No official declaration of results emerged, and the lack of news even later on seems to indicate that commitments, particularly on the part of large corporations, were not forthcoming.
Other signs of a deflated PPP are:

The Mexican federal budget for the PPP has been slashed, from $750 million in 2002, to $210 million in 2003.
Last September, the weekly magazine Cambio reported that President Fox failed to attract low-interest loans for the PPP from the Inter-American Development Bank and the World Bank. Fox’s ruse, according to Cambio, had been for Mexico to ally itself with its Central American neighbors in order to obtain loans from the multilateral banks at 6%, the developing country rate, and thus avoid the rates that Mexico would normally be charged as a "developed country" and member of the Organization for Cooperation and Economic Development (OCED). In the end, the Inter-American Development Bank (IDB) approved $4 billion for the PPP, but with 14% interest rates. (3)
The General Coordination office of the PPP was demoted when it was sent packing from Fox’s inner circle to a relatively minor branch of the Secretary of Foreign Relations. The banishment coincided with the firing of the first Coordinator, Florencio Salazar. The present General Coordinator of the PPP, Herbert Taylor, has been almost totally absent from the Mexican media, in marked contrast to the extroverted and abrasive style of his predecessor Salazar.
There is frustration among high officials at the IDB, according to observers in Washington, due to the lack of initiative regarding the PPP by the Mexican government. The IDB has been left standing in the lurch, according to activists in the U.S. capital, after having bet on President Fox’s megaproject and committing resources (the $4 billion previously mentioned), only to confront the apathy of the Fox government less than 18 months after it was announced. The IDB has scheduled "public consultations" on the PPP in the Mexican states of Veracruz and Puebla, but officials are apprehensive about carrying them out, given the Fox government’s lack of backing for the initiative.
Yet another sign is the "tomb of silence" we observe here in Chiapas from governor Pablo Salazar. His silence on the PPP is almost deafening, especially when he is inaugurating new construction projects in Chiapas, up to now part of the PPP. In recent weeks, Pablo Salazar has inaugurated projects in Puerto Madero, at the Palenque airport, and new stretches of highway in various locations around the state, without adorning his speeches with even so much as a mention of the PPP.
One of the PPP’s main selling points, the creation of a vast maquiladora zone, has bottomed out. Encouraging maquiladoras to set up shop was an important part of the general strategy behind the PPP, in order to "absorb" the rural labor force in Mexico and Central America, now unemployed and migrating because of "free trade" agricultural policies that have destroyed traditional campesino livelihoods. But in 2000 the maquiladoras began fleeing Mexico. Because of a better investment climate in Asia, lower salaries in China, the Chinese economic juggernaut, or because China will soon join the WTO, for these and other reasons the maquiladoras are leaving. (4) From January 2001 to June 2002, 600 maquiladoras left Mexico, leaving 250,000 workers on the street–15% of the labor force. (5) In spite of promoting the virtues of the PPP area, the response of the maquiladoras has been altogether feeble. In the state of Chiapas there are barely 10 maquiladoras installed or planned. Similarly in the other PPP states: in Campeche there are 9 maquiladoras planned, in Veracruz 17, in Oaxaca 24, in Guerrero 6, in Tabasco 5, and none in Quintana Roo, Yucatán, or Puebla. (6)

As usual with projects designed by elites, far from the real needs of the Mexican and Central American people, the PPP is bound to fail, and not solely due to the public-relations problems cited by the General Coordinator’s office.
But although this "conceptual umbrella" is currently in the government’s deep freeze, the projects under it are continuing ahead, to the extent possible given economic and social restraints.
In particular the two large highway corridors continue to be paved, linking north and south Mexico to Central America. The PPP highway projects scheduled to conclude in Mexico with funds appropriated from the 2003 budget are:

Ciudad del Carmen-Champotón
La Ventosa-Salina Cruz
Access to the port of Salina Cruz
The Mérida ring road
Access to the port of Coatzacoalcos
Feliciano-Zihuatanejo (7)

In addition, in Chiapas the San Cristóbal-Tuxtla Gutiérrez highway is due to open during the final quarter of this year.
Another project that is proceeding on schedule is the integration of the area’s electrical grids. Beginning in 2004, Mexico is due to integrate its electrical grid with that of SIEPAC (System of Electrical Integration for the Central American Countries), thus linking the grids of the eight PPP countries. This will make the excess electrical energy generated in the region available to the United States.
The Fox government might be at a crossroads, waiting for the right moment in an election year to announce what’s next with the PPP, but social and civilian organizations are on alert. For example, member organizations of Mexican Alliance for People’s Self-Determination (AMAP) have agreed to systematically trace PPP projects and make their findings public.
Finally, if the Fox government decides not to drive in the final stake, we might shortly have a new "look" for the PPP, a slimmed down and dressed up PPP, containing only its less controversial aspects. As statements from the PPP Coordinating office would seem to indicate, the Fox administration’s diagnosis places emphasis on finding the right "packaging," not on asking the fundamental questions of Who wins?, Who loses?, and Who decides? A new look for the PPP would surely comprise even stronger rhetoric regarding tantalizing social improvements that will supposedly come with the PPP, as well as a new "rural agenda," that the IDB has been pressing for.
Expunged from this new PPP will be the more socially and environmentally damaging aspects, such as the dams on the Usumacinta River, the Tehuantepec trans-isthmus corridor, the Meso-American Biological Corridor, and others. These projects are already causing thousands of people to be displaced, and they open the door to the plundering of natural and biological resources and traditional knowledge in the region.
An example of this are the dams that are planned for the PPP region. Formally, they might not be within the PPP framework. But declarations from the Fox government, and insinuations from the IDB in Washington, point to a decision by the Mexican and Guatemalan governments to build from one to five dams on the Usumacinta River. But in 2003, a year of federal elections in both Mexico and Guatemala, advances will conceivably be limited to feasibility studies, to testing people’s opinion and resistance, especially in locales affected by the dams. This is now occurring in Tenosique, Tabasco, and in various communities along the Usumacinta River in Chiapas, at times with participation of army troops, according the residents in the area.
Even if the PPP should disappear, we can foresee that its agenda will reappear in a different form later on. Something similar occurred with the Multilateral Agreement on Investment (MAI), defeated in 1998 by a worldwide movement of social and civilian organizations. Today its precepts are being incorporated into the WTO and the FTAA, at the behest of the same cast: the U.S. and European governments, the multinational corporations, and the multilateral development banks.
Obviously this isn’t the moment to lower our guard, but rather to strengthen resistance movements and find new ways of struggling against the advance of corporate globalization. This is the logic behind the decision of the Community Defenders Network for Human Rights, and CIEPAC, to seek injunctions at the Inter-American Commission for Human Rights, in order to stop the construction of dams along the Usumacinta and Santo Domingo Rivers in Chiapas.
Miguel Pickard < > is an economist and researcher, cofounder of CIEPAC (Center for Economic and Political Research for Community Action) in San Cristóbal de Las Casas, Chiapas, Mexico. A preliminary version of this report originally appeared as a part of CIEPAC’s "Chiapas al Día" series of bulletins, available at: . Translated by Miguel Pickard. Our thanks to Jessica Roach for her editorial assistance.

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Reference Notes:
1) This seems to be the Fox administration’s line for the moment. Last December, the Undersecretary for the Environment, Carlos Székely stated "The Plan Puebla Panama is a program that has gone badly for us, because there have been bad communications", (Enrique Méndez, "El gobierno de Fox, sin compromiso con la ecología, denuncia Székely", La Jornada , December 5, 2002).
2) Telephone interview, January 31, 2003.
3) Andrés Becerril, "El naufragio de un proyecto", Cambio , September 8, 2002, p.24.
4) A further reason may have to do with the passing of the Permanent Normal Trade Relations Act in the U.S. Congress in 2000.
5) John Ross, "Maq Attack!–How Mexico is Losing the Race to the Bottom", Bárbaro No. 339, November 9-16, 2002.
6) Julio Aranda, "Las maquiladoras: desaparece el espejismo", Proceso , January 2002.
7) Miguel Angel Montoya, "Análisis del proyecto del Presupuesto de Egresos 2003 y su impacto en las obras del Plan Puebla Panamá", December 2002, unpublished.

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Published by the Americas Program of the Interhemispheric Resource
Center (IRC). ©2003. All rights reserved.
Recommended citation:
Miguel Pickard, “Grassroots Protests Force the Mexican Government to Search for a New PPP Strategy,” Americas Program Policy Report (Silver City, NM: Interhemispheric Resource Center, February 17, 2003).
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Production information:
Writer: Miguel Pickard
Editor: Tom Barry, IRC
Layout: Tonya Cannariato, IRC