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Puebla-Panama finance committee analyzes outlook for regional integration and development projects

Government delegates from Mexico and Central America, at a meeting hosted by the Inter-American Development Bank, said that the Puebla-Panama Plan for regional integration should be carried out with a strong sense of fiscal realism.

The plan, launched earlier this year by the presidents of Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Panama and the prime minister of Belize, seeks to boost development in their region, which lags the rest of Latin America in key social and economic indicators.

At the closing of Monday’s meeting of the Puebla-Panama Plan’s finance committee and its board of executive commissioners, IDB President Enrique V. Iglesias told delegates the plan presented an ideal opportunity to mobilize private and public investments, attract concessional resources, press ahead with reforms and involve civil society groups in its projects.

Iglesias also noted the progress made so far in designing the plan’s projects. In June, the region’s leaders asked the finance committee -- which includes finance ministers from the eight participating countries -- to draft by September 15 a report on the prospects for financing the Puebla-Panama Plan’s projects.

As part of today’s meeting, IDB officials outlined the results of the first rounds of talks held with multilateral lending and development organizations and bilateral aid agencies on the Puebla-Panama Plan’s projects and their potential fiscal effects.

Finance ministers highlighted the importance of involving the private sector in projects in order to relieve pressure on public sector budgets and free up resources for social programs. They also recommended that new programs build on existing institutions to capitalize lessons learnt and avoid duplication of efforts.

The Puebla-Panama Plan’s portfolio includes a project to connect and improve key highways to reduce the cost of transport and foster trade within the region, another project to interconnect national power grids to promote investment in energy generation and cut the cost of electricity, and several projects on cooperation for natural disaster prevention and mitigation.

On the social side, the plan would involve low-income farmers, indigenous groups and Afro-Caribbean communities in environmental management, sustainable use of natural resources and community development projects. It would also include a regional health program that would foster cooperation on issues like AIDS.

The plan’s sustainable development projects would bolster existing efforts such as the Mesoamerican Biological Corridor, which is supported by several international, regional and bilateral development agencies.

Another initiative will promote tourism projects run by local communities, indigenous groups and Afro-Caribbean groups and link them with other tourism services, such as adventure and ecological tourism.

The trade facilitation initiative will support the participation of small- and medium-size businesses in export deals and encourage the elimination of non-tariff barriers that restrict regional commerce.

The plan’s telecommunications initiative, which is aimed at developing the region’s information technology infrastructure, would be largely financed by private sector investment.

Popular participation and community outreach are expected to be key features of Puebla-Panama Plan projects.

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