Saturday, July 16, 2005

The Millennium Road Building Account

Salvadoran president Tony Saca met with US president George Bush at the White House on Friday, July 15. The two leaders had different agendas. For Bush, it was an occasion to have a photo-op with a Central American leader as Bush campaigns for approval of CAFTA in the House of Representatives. In fact, while Saca held a post-meeting press conference, President Bush lifted off in his helicopter to travel to North Carolina to pressure legislators there to support the treaty.

Saca, however, came to Washington, D.C., seeking to get access to funds from the "Millennium Challenge Account." According to accounts in the Salvadoran press, Saca received assurances that El Salvador will be considered for such a grant in October. Saca stated that the amount will be around $200 million and will be used to build a "dry canal" highway system crossing Central America to compete with the aging Panama Canal.

President Bush originally announced the formation of the Millennium Challenge Account , administered by the Millennium Challenge Corporation (MCC) in 2002. It is part of how the Bush administration plans to fight global poverty. The web site of the MCC lists two of the key principles for the use of its funds:

* Reduce Poverty through Economic Growth: The MCC will focus specifically on promoting sustainable economic growth that reduces poverty through investments in areas such as agriculture, education, private sector development, and capacity building.

* Reward Good Policy: Using objective indicators, countries will be selected to receive assistance based on their performance in governing justly, investing their citizens, and encouraging economic freedom.

Yet in practice, the Millennium Challenge Account looks more like the "Millennium Road Building Account." So far the MCC has made grants to four countries, and two are in Central America -- Honduras and Nicaragua. Looking at the details of those two grants, more than half of the grants to each country is dedicated to building and improving highways. If Saca is right that El Salvador will be a recipient of funds to build a super highway, it will reinforce this trend.

While road building might create jobs during the construction process, a system designed to move shipping containers across the country to the Pacific Ocean does little to create the kind of sustainable development which will improve the prospects of Salvadorans living in poverty. Multi-national corporations seeking to lower transportation costs under CAFTA might benefit, but little is done to help with education, water quality, and health care in the countries.

3 comments:

Curt Hopkins said...

Tim:

Can you tell me how much of the Plan Puebla-Panama is actually going forward? It's roads but also standardizing electrical and phone systems and toll procedures and so forth. Lot of controversy naturally. I'm wondering if it's still on track?

Anonymous said...

The only thing El Salvador's governemtn is good at is building roads (and lowsy ones at that), and creating extremely short term jobs like construction workers etc., and with the ever so low salaries people aren't too eager to go to work if they can just wait for remittances to head their way. Sad, really! The ARENA government doesn't seem to care, or comprehend that people are more and more refusing to be exploited for CHEAP, thing that had always benefitted the ARENA governemtn (cornerstone of the private companies' and elite's control of the government). By seeing Saca's plan to use the money on building the Longetudinal del Norte, I'd say that it will be money terribly spent and more hazards to the country's environment... but who cares about issues like that, right? Education, environemnt and permanent labor options are always secondary to road building. :D

Anonymous said...

Oh, and a little tidbit. Guess what companies the current government ALWAYS hires for their construction business? Those companies controlled by ARENA related people. In my opinion, this huge construction of pasarelas (of which almost all weren't needed and all were poorly designed/constructed) was a means to enrich the pockets of the construction companies. This road system will serve the same purpose! The government would well be better off by doing a far better thing: the reconstruction of the country's old rail-road system. THAT would be something capable of surpassing anything a poorly built road system could provide.