Organic Consumers Association

Plan Puebla Panama Part IV

Chiapas al Día, No. 245
CIEPAC Chiapas, México
May 30, 2001

The Mexican Chapter Diagnostic: South Southeast Region

In the conversations that have taken place between Mexican president Vicente Fox and the American president George W. Bush, the Puebla Panama Plan (PPP) has been a topic of priority.

Natural Resources: The South-Southeast region has a variety of terrains as well as a tremendous biodiversity. The region possesses an abundant water source and important rivers. It also has important coast, forest and jungle land extensions, in addition to hydrocarbon deposits a wealth of metallic and non-metallic minerals. The region houses an important number of natural reserves and has a great variety of climates, physical regions, and terrains. For the official diagnosis of the PPP, the rural poor complement their scarce income by intensifying the use of natural resources at their disposal or on the contrary, by migrating to the cities. Given that wage increases, social spending, and the conversion of the peasants and poor into a competitive market agent are not the objectives of Neoliberal economic politics, the government has three options. 1) to not guarantee their constitutional right to access natural resources (the government rejected the COCOPA law), 2) to privatize natural resources, 3) to displace the impoverished populations from strategic resources towards maquiladora (export processing plants, or sweatshops) hubs or towards the larger agricultural export function which supports the economic model and ultimately benefits finance capital.

The official document does not give mention to the fact that the Panama to Puebla region contains a great number of important bio-piracy projects. Nor does it refer to the Meso-American Biological Corridor, which the World Bank promotes (see and reaffirms that the state of Chiapas is an interesting bio-genetic and bio-diverse experimental camp for firm managers. Within the 879 hectares of the Lacandon jungle, which incidentally is highly militarized and where the EZLN's headquarters is situated, there are more than 50% of all Mexican tree species, 3,500 plant species, 345 bird species, and 114 mammal species; as well as 25% of the country's ground water. Chiapas generates 45% of Mexico's hydroelectric dams in the zone in the past years. However, the problem for transnational capital remains the same: these lands do not belong to them -- they belong to the poor, the indigenous. Subsequently, petroleum, water, electric energy and biodiversity will be the strategic resources that are disputed by the financial powers to the pit of generating wars and world conflicts. In this manner, from the regional petro-militarization and petro-politics, we move on to bio-politics and bio-militarization, to aqua-politics and aqua-militarization and electric politics and electric militarization.

The abundance of natural resources in the South Southeast is characterized by the concentration of the largest and least exploited water plants in the country. It also characterized by important water sources and it is the recipient of over 80% of rain precipitation of the country and has a higher percentage of rainfall than the national average, the states of Tabasco, Chiapas, Oaxaca, and Veracruz stand out. However, with the exception of some regions or during certain seasons, the majority of its river cannot be navigated. Portions of their basins are already have high grades of contamination. The country's largest hydroelectric plants (Angostura, Chicoasen, Mal Paso) are located in the South Southeast region -- ironically, precisely where the least percentage of house have electric energy. In the case of Chiapas, if the electric sector is privatized, transnational firms would eliminate subsidies to poor housing and would encounter civil resistance to electric energy payments that have been in operation for many years in the region.

70% of the nation's biodiversity is located in the South-Southeast. Oaxaca, Chiapas, Veracruz, and Guerrero occupy the first four places and Puebla the sixth. The region also holds half of the fauna protected by Mexican legislation and international treaties, and 60% of endemic flora and protected by the same instances. More than 50% of the region's surface is covered by highland and median jungles. Oaxaca, Chiapas, Veracruz, and Guerrero are the four states with the most biodiversity and richness of animal species and vegetation in the region.

The South-Southeast has 25.2% of the country's forest surface. Quintana Roo, Campeche, Guerrero and Oaxaca are the only places where the woods make up over 50% of their territories. Only Chiapas and Yucatan are above the national average. The remnants of the tropical rain forests are located in the Southeast. Since 1950, over 90% of its surface has been eradicated. There are portions remaining in Puebla (Totonaca zone and Sierra Negra), Oaxaca (Mazateca, Chinanteca, Mixe and Chimalapas), and Chiapas, (Region Norte, Palenque, Selva Lacandona, and Soconusco). The states that are most apt for forest production and that represent a large portion of its corresponding territories are Quintana Roo (86%) and Yucatan (73%). With the exception of Campeche (65%), the rest of the entities that are below the national average (56%) are Oaxaca (55%), Guerrero (53%), Chiapas (39%), Puebla (29%), Veracruz (24%), and Tabasco (21%).

The present quality of natural resources are resumed in the "Ecological Quality of Natural Resources" which takes into consideration ground erosion, the present state of vegetation, and quality of ground and subterranean water. The South-Southeast contains 11.9% of the country's total high quality ecological surface. Six of the nine states of the region present more than 30% of the country's high quality ecological surface: Quintana Roo (90.9%), Campeche (77.5%), Guerrero (54.5%), Oaxaca (50.5%), Yucatan (44.8%), and Chiapas (43.5%). The states of the region that already present low ecological quality are Puebla (52.5%), Tabasco (40%), and Veracruz (28%).

Deforestation is being increased by extensive cattle growers in practically the entire region. By 1997, the South-Southeast contributed 22% of the bovine cattle, 26% of the sheep, and 30% of the pork sacrificed in the country. On another hand, the most extinction-prone species are the large predators and herbivores (jaguars, tapirs, ocelots, pumas, eagles; the ornamental -- macaws, parrots, etc.) and species that regardless of being protected are hunted for meat (quetzal, peacocks). The sum of the categories of high and very high fragility consists of more than 80% of the national territory. The states with the highest level of surface fragility are Quintana Roo (88%) and Campeche (61%). Only Veracruz has a high proportion of surface with a medium level of fragility (43%).

The Economy: The region contributed (1999) 18.1% of the national Gross Domestic Product. Between the two, Veracruz and Puebla generate more than 45% of the region's GDP, but the other states contribute less than 10% of the nations total GDP. Per capita GDP in almost all the region's states has remained beneath the national average. The participation of the primary sector in the GDP's total has always been higher than the national average. The following states demonstrate a higher level of participation in state specialization of primary activities: Oaxaca (13.45%) and Chiapas (11.74%); compared to Quintana Roo (due to tourism developments) and Campeche, Yucatan, and Puebla. The region's interior states, Campeche and Puebla, stand out for their high degree of specialization in the secondary sector. Quintana Roo and Guerrero are the states with the lowest level of industrialization.

The level of participation of the South-Southeast in manufacturing production of the national GDP is very low and has diminished since the inception of the North American Free Trade Agreement (NAFTA). Manufacturing production is associated with primary activities -- demonstrating important advances in branches such as food and beverage and metal and textile products. The highest degree of specialization in the third sector of the economy for 1999 is in Quintana Roo (92.59%) and Guerrero (77.53%), primarily for their tourist activities. In Campeche and Puebla the second sector, with petro-chemical industry, dominates. In Quintana Roo and Guerrero the third sector dominates corresponding with tourism in the cities of Cancun and Acapulco, respectively. Puebla represents more than 40% of the region's GDP and Veracruz represents close to 30%, concentrating more than 70% of the region's manufacturing GDP in both these states. Campeche, Quintana Roo, Chiapas, and Guerrero together, barely contribute 9.3%. In contrast, the region's percentage of food manufacturing production is quite high -- reaching more than 37%, followed by metal products (24.6%) and chemical substances (13.2%). These three branches, along with textiles (8% of the total), sum up 83% of the industrial activities of the region.

The South-Southeast counts on fishing resources (shrimp and other fish species in Campeche and Chiapas) and terrain suitable for moist tropical crop production (bananas, coffee, and sugar cane). Notwithstanding, the contribution to GDP's to the primary sector (farming, jungle goods, and fishing) absorbs 40% of regional employment, in contrast with 18% in the rest of the country. Moreover, the total amount of credit granted by the nation's commercial bank to the South-Southeast is 6.3%. The region also only contributes 7.8% of the national commercial bank savings total. Credit granted per habitant is only one sixth of the average for states outside the region.

Economically Active Population (EAP): The economically active population growth is higher than the region's population growth. Of the 43.3 million economically active persons in Mexico (in the year 2000), 27.2% live in the South-Southeast region. The level of participation of the EAP in the region is 50%, similar to the national average. Even though in Guerrero, Tabasco and Oaxaca, the levels of participation are less -- between 45% and 49.2%. To offer employment to those entering the workforce, in the next five years 333,000 new jobs must be created each year in the South-Southeast region. Notwithstanding, in the first four months of Vicente Fox's administration, the entire country lost more than 255,000 jobs without including bureaucratic jobs.

Farming production per person in the region is only little more than half the national average, which reflects the existence of a large group of growers with very small incomes and a large amount of a large weight of subsistence agriculture and self-consumption. The occupation of the EAP in low aggregate value activities (like the primary sector) limits per capital productivity. The EAP in the region's secondary sector is 18% of the national total, reflecting low levels of industrialization in the South-Southeast where a little more half of the said population is concentrated in Veracruz (30.8%) and Puebla (22.6%). The states with less participation in the secondary sector in the total EAP are Chiapas (11.5%), Quintana Roo (16.5%), Oaxaca (16.8%), and Guerrero (17.6%). This is due to an internal depressed market, a lack of communications and transportation infrastructure, and other productive infrastructure (electric energy, industrial parks), low levels of technological capacity, and the lack of appropriate investment incentives in the region. The EAP of the region's third sector represents 20.7% of the nation's total. Quintana Roo is the only state in the region in which its EAP's total (62.6%) is superior to that of its national total (47.8%). The rest of the states EAP of the South-Southeast have an inferior level of participation in the third sector compared to the national average.

The South-Southeast has an inferior number of professionals than the rest of the Mexican Republic. The professionals in the region have lower incomes than the national average. Only 17.2% of the country's professionals reside in the South-Southeast (according to the region's population they should have 28%). The 52% would be located in Veracruz (31.6%) and Puebla (21%). The number of professionals for every 10,000 inhabitants in the South-Southeast is below the national average (233). Chiapas, Oaxaca, and Guerrero have less than 50% of professionals for each 10,000 inhabitants (88, 89, and 116, respectively). In the all the states of the region, with the exception of Quintana Roo and Tabasco, the percentage of professionals with less income than 2 minimum wages is higher than the national average. At the other extreme, in all the states of the region with the exception of Quintana Roo, the percentage of professionals with higher income to ten minimum wages is inferior to the national level.

Agriculture: 100% of the country's cacao, higuerilla and agave is produced in the South-Southeast. Others include: 97% of pineapple, 93% of coffee, 91% of tejocote, 89% of mamey, 83% of yucca, 78% of papaya, 74% of maradol, 70% of roja, 75% of radishes, 74% of bananas, 73% of grapefruit, 71% of copra, 64% of mandarin, 61% of palay rice, 57% of peanuts, 58% of sugar cane, 55% of mango, and close to 47% of tamarind.

Between 1960 and 1998, the surface harvest yield of the region increased 80%, reaching in the last year 6.14 million hectares, or 32.7% of the total ground harvested in the country (then 18.8 million hectares). 46.2 million tons of agricultural products, or 33.6% of the total national production (137.6 million tons). The total value of the agricultural production of the region (1998) was 41.9 thousand million pesos, or 26.9% of the value of the total national production (155.9 thousand million pesos). This means that the region's production has less commercial value per unit than the national average. Subsistence or self-consuming participation in agriculture is very important in the region. The majority of agriculture in the region is temporal. Additionally, the lack of adequate transportation infrastructure poses a difficulty for the region's producers to access the larger markets of the country (central, eastern, and northern), where they have to compete with producers with that have a physical advantage to these markets. This, in addition to the lack of a strong local agricultural industry, means that the region falls prey to middle men who purchase at prices inferior to the market.

To the interior of the region, Veracruz and Chiapas represented a 45% of the total harvest yield in 1998 (22.8% and 22.5%, respectively). Oaxaca, Puebla, and Guerrero follow closely with little more than a combined 40%. During the second half of the twentieth century, Chiapas was the only state of the region's agricultural states that demonstrated a greater level of ground harvest yield growth (between 1960 and 1998 it multiplied more than 2.5 times; Quintana Roo's growth multiplied more than 5 in the same time lapse -- however, in 1998 it was less than 100,000 hectares). On the other hand, Veracruz and Yucatan currently have less ground harvest yield production than in 1950.

On a national level, 26% of the ground harvest yield corresponds to irrigation lands. The South-Southeast has 7.4% of these even though it captures 80% of the nation's rainfall. 30% of the total irrigated land in the region corresponds to Puebla, 19% to Veracruz and another chunk to Oaxaca, together comprising almost 70% of the region's total. Guerrero and Chiapas, with close to equal portions, have over 20% of the total. In 1998, of the total volume of the agricultural production of the region, 52.7% corresponded to Veracruz. Another third part corresponded in aggregate to Puebla, Oaxaca, and Chiapas, distributed among the three in almost equal parts.

In 1998 the state with the greatest unit output was Veracruz with 17.4 tons per hectare, more than the double of the national output average. Yucatan, Guerrero, and Chiapas have unit outputs that remain beneath the national average (2.1, 2.7, and 3.4 tons per hectare). The value of agricultural production of the South-Southeast region has practically quadrupled during the second half of the twentieth century. Regional participation in the national agricultural production value reached 26.9% in 1998. Of the total national agricultural production value, between the states of Veracruz, Oaxaca, Chiapas, and Puebla, 80% of the total region's worth is distributed with 30.7%, 17.5%, 17.2% and 14.2%, respectively.

Among other riches the PPP does not mention is that in the South-Southeast 85% of the nation's registered greenhouses and the majority of both are situated in Puebla. In this same manner, the region holds 36% of the hotel rooms offered for board in the country, given that the region is also home to 64.24% of the tourist-exploited archeological zones and the list of historic monuments ready to be privatized. That is to say 106 of the 165 (21 in Campeche, 16 in Yucatan, 15 in Veracruz, 13 in Oaxaca, 12 in Chiapas, 12 in Quintana Roo, 7 in Guerrero, 5 in Tabasco, and 5 in Puebla). If that were not enough, the region produces gold, silver, lead, copper, barita, and zinc as well as 90% of the country's sulfur is produced in Tabasco, Chiapas, Veracruz, and Oaxaca, 97.24% of crude petroleum and 75% of gas. The region contributes 35% of the national mining industry's GDP (without including petroleum and gas). In addition, Chiapas by itself produces more than 45% of the country's hydro-electric energy and is incidentally where less is used.

Fishing: The region, except for Puebla, possesses large coast areas encompassing the Gulf of Mexico as well as the Caribbean and the Pacific. Despite this, fishing production in the South-Southeast region represents barely 23.7% of the national total, most of it concentrated in Veracruz (40% of the regional production). Tabasco and Campeche produce another 33%. The low fishing production is a result of, among other reasons, poor industrial infrastructure and the government sacrificing the sector in free trade agreements.

Foreign Trade: Employment in the national maquiladora sector experienced an average annual growth of 10.3% during the last decade. This contrasts with the annual average growth in the formal sector of 3.9%. Foreign trade in the South-Southeast region has been very poor until today. The region's exports for 1999 barely reached 5.7% of the country's export levels, and 3.2% of the country's import levels. The South-Southeast's foreign trade is practically concentrated in Puebla (83% of the region's exports and 66% of imports).

Infrastructure: The South-Southeast region presents serious physical infrastructure deficiencies, even with 40% of the 1999's federal public investment was destined to the region, a larger proportion than would correspond according to their percent of national population (28%) or land (25%). In the South-Southeast, ample zones of Oaxaca and Guerrero are totally disconnected to the national railroad network. The coast connection of Chiapas with the rest of the net exists by an indirect tie. There are no coastal thoroughfares in the northern part of the Gulf of Mexico, which means that any cargo transported from the southeast or the Yucatan Peninsula has to pass through the center of the country to access the U.S. market. In addition, the Coatzacoalcos-Merida road has low specifications and presents severe maintenance problems. This implies that railway transportation for exports from the southeast towards the U.S. and Canada has to climb over 2,500 meters above sea level, only to once again descend to sea level.

There are coastal thoroughfares throughout the Pacific and the Gulf of Mexico, and other transverse ties that communicate the ports of both seaboards. However, the network consisting of highways of high specifications continues to conserve its radial structure in essence and is oriented on north-south corridors (such as the Sonora and Sinaloa coast thoroughfare). Four lane highways do not exist in the northern part of the Gulf of Mexico or the south of the Pacific. The thoroughfares of the coastal zones of the Yucatan Peninsula and the south of the Gulf of Mexico are not integrated. The absence of coastal thoroughfares in the north of the Gulf of Mexico and the south of the Pacific obligates southeast exports to pass through the center of the country (elevating the costs due to the zone's geography and congestion). It also renders the alternate use of the ports of Veracruz, Tampico, and Altamira in the Gulf of Mexico, Manzanillo, Lazaro Cardenas, and Salina Cruz in the Pacific, difficult. It limits the potential of coastal thoroughfares of the south of the Gulf of Mexico and of Chiapas, it results in the coasts of Guerrero and Oaxaca practically without any cargo transport alternatives, and it also limits the tourist development of these ports. Bahias de Huatulco is only accessible by air and Puerto Angel, Puerto Escondido, and Ixtapa are not able to take advantage of their proximity to the Mexico-Acapulco Highway.

Of the country's longitude highway (1999), 31.6% should correspond to the South-Southeast region, a number slightly superior to what would correspond according to their territory or population size. Paradoxically, Chiapas is the entity with the largest longitude highway total (almost 20% corresponds to the region). It is followed by Veracruz and Oaxaca (with 15% of the total longitude highway each one). In this manner, the highway density in the region is in almost all the states (with the exception of Campeche and Quintana Roo) above the national average. In Tabasco and Yucatan, in particular, it is double the national average. Of the total longitude of paved highways in the country, the South-Southeast should have 35.4%.

Towards the interior of the region, 30% of the paved highways are found in Veracruz and Yucatan (each state has 15%). Chiapas, Guerrero, Oaxaca and Tabasco also share another 45% in equal parts. The percentage of paved highways with respect to the total is very high (the double of the 31% that correspond to the national average). Campeche and Yucatan reach more than 67%. Only Chiapas (22%) and Oaxaca (275) have a smaller proportion of paved highways than the national average (32.8%). In the Pacific coastal corridor as well as in the Gulf of Mexico, there are only a few stretches of 4-lane highways that are already constructed. A crosswise highway permitting agile communication does not otherwise exist between the Pacific coast and the Gulf.

The Puerto de Progreso in Yucatan is not equipped with cranes for containers and its remote terminal is not tied to the railway that reaches the city. The port of Salina Cruz is only tied to Chiapas coastal highway through a road with low specifications. In Chiapas, Puerto Madero confronts severe problems that obligated its shutdown in 1996, resulting in having to move exports through Quetzal Port in Guatemala. Additionally, there are monopolistic structures in the rendering of services, the regulatory framework also limits the competency (especially for coastal traffic or trade) and the improvements to port infrastructure depend on public federal investment. Inadequate intermodal to port complements assumes special relevancy since it limits cargo's ability to access zones of influence.

The states of the South-Southeast have 12 international airports which conduct important levels of traffic. Some of them already have programmed flights to many cities of the interior. Recently, the concession of airports towards privatization have modified operational and development conditions.

Note: The complete official document and relevant maps, as well as the Central American diagnosis, may be consulted at our webpage, in the chapter on the Plan Puebla Panamá (PPP).

Gustavo Castro Center for Economic and Political Investigations of Community Action, A.C. CIEPAC is a member of the Movement for Democracy and Life (MDV) of Chiapas, the Mexican Network of Action Against Free Trade (RMALC), Convergence of Movements of the Peoples of the Americas (COMPA), Network for Peace in Chiapas, Week for Biological and Cultural Diversity and of the Clean.

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