Central America has few attractions to offer foreign investors. It lacks basic infrastructure. Poor roads hinder domestic trade. The region does not even generate enough electricity to foster large-scale industrialization. It is remote, has a small population and is susceptible to natural disasters such as hurricanes and earthquakes.
Bridging the Divide
Central America and southern Mexico are hoping that together they can achieve what they have failed to do on their own. The omens are not good.
Yet Mexico's President Vicente Fox thinks that there are compelling commercial and political reasons for unifying the region with a $25 billion infrastructure and development project. Fox hopes to pacify Mexico and bring prosperity to its embattled south by bringing economic development to Mexico's most underdeveloped region. Development and infrastructure investments would create new markets by integrating the region's fragmented and isolated markets in southern Mexico's nine states and the seven republics of Central America. Indeed, integrating Central America with southern Mexico would create a market with a population as large as Mexico itself.
So within weeks of his inauguration last...
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