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Home , Coatzacoalcos, Isthmus, Isthmus of Tehuantepec, Pajapan, Salina Cruz, San Mateo del Mar

REPORT 06.12.21 The Interoceanic Corridor of ’s Isthmus of and the North-South Development Gap

Adrian Duhalt, Ph.D., Postdoctoral Fellow in Mexico Energy Studies

fact, three out of the four most important INTRODUCTION infrastructure and development projects of It is broadly acknowledged that Mexico’s his administration are located in the south. economic development in recent decades In López Obrador’s view, the Interoceanic has been uneven: strong in the northern Corridor (IC) in the , and central and weak in the south. along with the Maya Train and Dos Bocas Although previous administrations have refinery in projects, are essential sought to address this socioeconomic to alleviate the pressing socioeconomic divergence through various initiatives problems of the southeastern states3 and, and mechanisms,1 deep-rooted regional ultimately, will allow them to catch up with disparities have made it much harder than the more competitive and industrialized expected to narrow the gap and, as a states in central and . result, require further consideration from The task of setting policymakers. THE INTEROCEANIC CORRIDOR up 10 industrial parks, In its National Development Plan, the whose output can government of Mexico (GOM) presented The Isthmus of Tehuantepec has been and described the public policies and the subject of renewed interest for many take advantage of the projects that it intended to carry out years. First, the administration of President upgraded logistical between 2019 and 2024. Many of these Vicente Fox (2000-2006) developed a infrastructure and can projects, as explained, seek to encourage plan known as the Plan Puebla , be marketed elsewhere regional economic development and which sought to draw special attention 2 tackle subnational inequalities. One of to the development of Mexico’s southern in Mexico or abroad, its most important plans for subnational , along with .4 Not sounds like a policy development is the Program for the much came of it, however. Second, the worth implementing. Development of the Isthmus of Tehuantepec government of President Enrique Peña (PDIT), which centers on a narrow strip Nieto (2012-2018) sought to implement bridging the southern states of a program branded as Special Economic and (Figure 1). This program aims to Zones (SEZ), which included, among other expand the region’s economy on the back of regions, in Veracruz and a logistical platform known as Interoceanic Salinas Cruz in Oaxaca and some of their Corridor (IC). neighboring municipalities. However, little if Since taking office in December 2018, any progress was achieved since Peña Nieto President Andrés Manuel López Obrador, postponed the project until the penultimate a native of the state of Tabasco in the year of his term (2017), and his decrees country’s south, has made this region to lawfully declare both regions as Special a priority in his development agenda. In Economic Zones came too late to act upon. BAKER INSTITUTE REPORT // 06.12.21

FIGURE 1 — LOCATION OF THE ISTHMUS OF TEHUANTEPEC, MEXICO

SOURCE Google Earth

More recently, López Obrador deemed his McLane-Ocampo Treaty—which was never predecessor’s plan unfit and abrogated the truly implemented, as it was replaced by the decrees, unveiling instead as part of his Panama project.6 More recently, the government's National Development Plan Isthmus has been considered strategic, since 2019-2024 the projects mentioned above, it connects economic activities in southern and which are now part of the Program states with consumers in the rest of the for the Development of the Isthmus of country, and vice versa, and boasts Mexico’s Tehuantepec. All such plans have at their shortest distance between the of Mexico core, efforts to strengthen the region’s and the . Other features that logistical (port and railway infrastructure) boost the region’s potential is its production and industrial profile. capabilities, which include one refinery Contrary to the SEZ framework in Minatitlán and another in , proposed by Peña Nieto, whose area an important assembly of petrochemical of influence spanned a handful of firms in Coatzacoalcos and neighboring municipalities flanking Coatzacoalcos and municipalities, wind farms in the Juchitán Salina Cruz, the PDIT appears to be a more area, to name a few examples (Figure 1). comprehensive development strategy in the Thus, from the government’s sense that it seeks to impact a much larger perspective, it makes sense to anchor the territory— 79 municipalities, 33 in the state region's economic and industrial prospects of Veracruz and 46 in the state of Oaxaca— to upgrades in logistical capabilities—namely, and, consequently, encompass a wider the Port of Coatzacoalcos and the Port of range of economic activities (Figure 1).5 Salina Cruz, the Isthmus of Tehuantepec The Isthmus of Tehuantepec has a long railway (which links both ports), and road and important history. It was the object of infrastructure (including in rural areas). a treaty between the U.S. and Mexico—the 2 THE INTEROCEANIC CORRIDOR OF MEXICO’S ISTHMUS OF TEHUANTEPEC AND THE NORTH-SOUTH DEVELOPMENT GAP

In the medium- and long-term, the establish the 10 industrial parks the López overarching goal of the PDIT is to bolster Obrador government plans to create along regional economic growth through the the Isthmus. The reasoning is that, for establishment of 10 industrial parks (also regional economic development in the referred to as “Development Poles for medium- and long-term, it is necessary to Wellbeing”). The means to that objective is expand manufacturing activities—and for the Interoceanic Corridor, which, as noted, that to materialize, the government must is a multimodal logistical platform whose put in place the appropriate conditions underlying principle is to make the most and incentives. This is particularly difficult of the geographical advantages of the given the López Obrador administration’s Isthmus of Tehuantepec and, later, enhance complicated relationship with private and synchronize the region’s productive investors, many of whom are hesitant capabilities, and projected.7 To to pour money into new projects in light achieve this goal, the GOM recognizes the of a perceived unfriendly regulatory need for investments to up existing environment. Even so, a preferential tax logistical infrastructure. scheme under consideration would reduce Fundamental to the Interoceanic the value added tax (IVA) from 16% to Corridor’s objectives is the railroad that 8% and the income tax (ISR) from 30% connects both ports and a handful of to 20%. This, as well as the price of fuels, important cities between them, such which will be offered at a discount, could as Minatitlán in Veracruz and Matías lure investors to the industrial parks.13 Romero in Oaxaca.8 In its Coatzacoalcos- Still, the potential of the region and Medias Aguas section (both in Veracruz), that of the PDTI is limited by the hurdles a private company operates the railroad and unresolved issues that need to be under a concession and it is apparently addressed to reach the GOM’s objectives. in satisfactory working condition. But Tax incentives are not enough if areas where In a region as diverse, in the second half of the rail line, which industrial parks are meant to be located lack unequal, and complex stretches for 206 kilometers from Medias essential services such as water, electricity, as the Isthmus of Aguas to Salina Cruz and is composed of transportation connectivity, and natural Tehuantepec, the five sections, improvements are required gas. Policymakers are conscious of this and to adjust curves and slopes, principally. It intend to provide the zones with last-mile concerns and interests is reported that rehabilitation works are services. That, however, requires enormous of local communities underway in each of the sections and are investment up front and, especially, time. must be considered if estimated to conclude later in 2021.9 Natural gas deserves further attention the goals set by The seaport of Coatzacoalcos has also in this discussion, as the drop in production, the government of received investments to boost its operating principally in the southeast of the country, capacity. In the Pajaritos , which is and infrastructure bottlenecks, which hinder López Obrador are to connected to the region’s petrochemical access to natural gas imports from the U.S., be achieved facilities and is part of the city's port represent important hurdles to clear. Is it infrastructure, the government in March possible to develop a manufacturing base 2021 completed the expansion of a pier in the Isthmus without natural gas? That to enable the mooring of two vessels of is open to debate, but if industrial parks up to 180 meters in length, as well as the are to be competitive in national and even widening of an access road to the port international markets, the supply of natural area from two to four lanes.10 These works gas is an issue yet to be sorted out. The will be complemented by construction government acknowledges that there is and maintenance dredging of port access a direct association between productivity channels11 and the projected construction of and a state’s economic development a container terminal in Coatzacoalcos.12 (measured in GDP per capita) and the While progress appears to be made consumption of natural gas. Hence, as part concerning the logistical component of the Interoceanic Corridor, the López of the Interoceanic Corridor, the most Obrador administration plans to upgrade the challenging task will be to effectively Jaltipán–Salina Cruz natural gas transport 3 BAKER INSTITUTE REPORT // 06.12.21

system14 to serve regional demand, In a region as diverse, unequal, and including that of the Salina Cruz refinery. complex as the Isthmus of Tehuantepec, the Operations are estimated to start in 2022,15 concerns and interests of local communities but most projects are falling behind, partly must be considered if the goals set by the due to the financial constraints caused by government of López Obrador are to be the pandemic. achieved. Mexico’s record on this point The task of setting up 10 industrial is less than optimal. An example on the parks, whose output can take advantage Oaxaca side illustrates the complexity of the of the upgraded logistical infrastructure situation and the importance of engaging and can be marketed elsewhere in Mexico with local groups. Road blockades by various or abroad, sounds like a policy worth stakeholders are more frequent than one implementing. However, the government can imagine. When reaching out to a local faces yet another layer of key challenges. media outlet to find out the number of such As the Interoceanic Corridor could impact incidents, the response was “there are too a region known for the strong presence many at different points that we cannot of indigenous communities and other cover them all and keep count.” stakeholders, such as grassroots social So far, the prior consultation process movements, effective engagement among continues. It appears to have begun on March all of the on-the-ground actors and 30-31, 2019, when the government hosted policymakers, as well as investment firms, is 21 consultative assemblies with indigenous a must. Advance word must be spread with groups in different parts of the Isthmus. the goal of preventing social opposition and However, a report published in February 2021 even conflicts with project development, by the Superior Audit Office of the Federation or in this case, with the establishment of (ASF) revealed that the authorities in charge industrial parks. Mexico’s law has already of the assemblies failed to make public the established prior consultation mechanisms, results and the agreements derived from 17 If the government seeks but these have yet to be tested as a way them. On May 1-2, 2021, the government to prevent social conflict arising from and indigenous communities announced to foster economic infrastructure development projects. that the government resumed the prior progress in the Isthmus Moreover, the degree of social consultation process in three localities in the of Tehuantepec, a top- opposition or consent may vary from one state of Oaxaca.18 down approach must industrial park to another, as stakeholders Thus, as an economic development be complemented with from different localities are likely to strategy, the Interoceanic Corridor is embrace different interests. In the case of faced with numerous challenges, not bottom-up policies the parks to be situated in Coatzacoalcos only in terms of basic services required and initiatives. and Salina Cruz, known as 5 de Mayo and by the potential industrial parks, but also Polígono 14, respectively, the previous in terms of social consent. Moreover, administration included them in the the ASF19 has expressed concerns about Special Economic Zones program, and they “the technical, legal, environmental, were later incorporated by the current and economic feasibility of its projects, administration into the Interoceanic arguing that demand estimates, associated Corridor framework. Of the remaining with the profitability of the projects, did eight industrial parks, it has been reported not consider reasonable assumptions.” that land has been secured for two; one This statement leads us to wonder if the is sited in Coatzacoalcos and the second government is overestimating the general is in , in Veracruz.16 Here, the feasibility of the Interoceanic Corridor point to emphasize is that industrial parks framework and if an adequate due diligence in proximity to or within existing industrial process has been carried out. While areas, such as those in Coatzacoalcos and there is not enough evidence to reach a Salina Cruz, could be confronted with fewer conclusion in that regard, at least for now, social issues compared with industrial it is certainly possible to find plenty of parks whose area of impact includes evidence concerning the socioeconomic indigenous communities. shortcomings of the region. 4 THE INTEROCEANIC CORRIDOR OF MEXICO’S ISTHMUS OF TEHUANTEPEC AND THE NORTH-SOUTH DEVELOPMENT GAP

MEXICO’S NORTH–SOUTH FIGURE 2 — SHARE OF MEXICO’S POPULATION IN POVERTY BY DEVELOPMENT GAP STATE, 201822

As noted earlier, the southern region of Mexico sits at the top of the government’s development policy agenda. And with good reason. When it comes to comparing socioeconomic indicators at the subnational level, southern states—more often than not—lag behind the central and northern regions. Development programs (and policies) such as the Interoceanic Corridor may raise questions such as those expressed by the ASF—all legitimate concerns—but the debates around the Isthmus of Tehuantepec, and the states of Veracruz and Oaxaca, illustrate the extent of the north-south development gap (Figure 2). In this regard, López Obrador appears convinced that the Interoceanic Corridor, which will allegedly equip the region with upgraded logistical infrastructure and productive capabilities, can help boost competitiveness and eventually raise the standard of living. What is yet not clear is how the private sector will participate, as it has been crucial in other region’s development but is under great suspicion by the current administration itself, which would prefer this to be a project entirely directed by the government. What is uncontestable is that residents of southern Mexico are in dire need of a higher standard of living. Not doing so threatens to drag Mexico into a continuous SOURCE CONEVAL state of underdevelopment. For example, when measuring the share of the country’s Mexico, only six states registered poverty population living in poverty, the six states increases as share of population between at the bottom of the list shown in Figure 2 2008 and 2018, and of these, the two worst 20 are all situated within the southern region. performers were Oaxaca and Veracruz.23 Poverty levels shown for Veracruz and These numbers arguably reflect the failure Oaxaca in 2018 are unacceptable, and more of the poverty-fighting public policies so if one considers that these values have implemented in the last decade. risen in comparison to the previous decade. The north-south development gap is also The share of Oaxaca’s population living in clearly evident in terms of income per capita poverty stood at 66.35% in 2018, up from (Figure 3). With the exception of Tabasco and 61.8% in 2008, as reported by Mexico’s ,24 all southern states are found in National Council for the Evaluation of Social the bottom half of the list, while central and 21 Development Policy (CONEVAL). In the northern states dominate the top half. In this case of Veracruz, figures are even more regard, it is instructive to review the size of disturbing, as poverty soared from 51.2% the income gap between a resident of the of its total population in 2008 to 61.8% in Isthmus of Tehuantepec and the country’s 2018. In other words, of the 32 states in 2018 average (expressed in U.S. dollars). 5 BAKER INSTITUTE REPORT // 06.12.21

Oaxaca’s average income, the third-lowest in the informal economy (i.e., those that are in 2018, was 48.4% of Mexico’s average neither taxed nor monitored/protected by income, while Veracruz’s was 68.8% of the the government) and years of education. country’s average. Now, if the same exercise Again, the numbers are stunning. As of the is performed in relation to and fourth quarter of 2020, 72.2% of workers the State of Nuevo León, we see that the in Oaxaca and 61.3% of workers in Veracruz income of each Oaxacan resident is 20.8% participated in the informal economy, and 26.9% of those states’ income per compared to 51.1% in Mexico overall.26 capita, while Veracruz’s average income is The fact that most workers in Oaxaca and 29.6% and 38.3%, respectively. Veracruz take part of the informal economy As discussed, poverty and income hinders any policy effort to increase income per capita statistics are among the lenses and decrease poverty in those states. through which state inequalities in Mexico The government must also consider can be demonstrated. Two additional the issue of the region’s educational levels, indicators that relate to both poverty and which reflect the quality of the available income similarly reveal a large structural labor force. As of 2020, Oaxacans on shortcoming of subnational economies: jobs average received 8.1 years of education; the average in Veracruz is 8.7 years of schooling. This means that in these states, FIGURE 3 — STATE INCOME PER CAPITA IN MEXICO, 2018 the bulk of residents over the age of 15— (EXPRESSED IN U.S. DOLLARS BASED ON 201825 MX PESOS) its workforce—has not completed high school. The educational record in Oaxaca and Veracruz puts them among the top 5 worst performers in Mexico; residents of Mexico City and Nuevo León had the most education, with 11.5 and 10.7 years in school, respectively27 With a labor force in need of training, questions arise. For instance, what kind of companies can Oaxaca and Veracruz attract to the projected industrial parks (principally those outside of Coatzacoalcos and Salina Cruz)? These education levels demonstrate that for the Interoceanic Corridor to reduce intraregional inequalities and the development gap with central and northern states, the government must also formulate and implement complementary policies targeting the social and economic issues that have long held back region. Allegedly, the government has taken notice and additional policies measures are being contemplated. If the government seeks to foster economic progress in the Isthmus of Tehuantepec, López Obrador’s policies must look beyond developing the logistics platform and the creation of industrial parks. A top- down approach must be complemented with bottom-up policies and initiatives. It is also unlikely that development will be accomplished through government SOURCES México ¿Cómo Vamos? and Mexico’s Central Bank investment alone. The private sector must be incentivized to participate. 6 THE INTEROCEANIC CORRIDOR OF MEXICO’S ISTHMUS OF TEHUANTEPEC AND THE NORTH-SOUTH DEVELOPMENT GAP

FIGURE 4 — MHDI OF VERACRUZ MUNICIPALITIES IN THE ISTHMUS OF TEHUANTEPEC, 201528

SOURCES UNDP Mexico, UNDP and Global Data Lab, *2019 and **2018

These points are also relevant to by Minatitlán and , addressing inequalities in the Isthmus of municipalities with a MHDI of 0.766 Tehuantepec itself, as the reach and impact and 0.752, respectively, which house a of projects will not be consistent throughout relatively important industrial base (one the region. Today, the socioeconomic gap refinery and state-owned and private among municipalities is even wider than that petrochemical firms). It is evident that between northern and southern states. To one of the fundamental challenges for the that end, the Municipal Human Development Interoceanic Corridor—and for any other Index (MHDI) is a comprehensive, valuable policy/project for that matter—is not to tool that helps us understand this problem. make these contrasting realities even Of the 79 municipalities targeted by the worse. The question that lingers is if policy Interoceanic Corridor project,29 33 lie on the makers will be capable to avoid such a trap side of the State of Veracruz. And as shown and narrow socioeconomic inequalities in Figure 4, the region boasts cases in which between the more industrialized the MHDI is higher than the national average municipalities and those with a higher and that, at the same time, are surrounded share of indigenous communities. by localities considered highly marginalized. The HDI of Oaxaca (0.703) trails that Coatzacoalcos, where the government of Veracruz (0.738) and both are located is investing to upgrade port facilities beneath the country’s average (0.779). And and planning two industrial parks and in this case, it is worth emphasizing that other energy-related projects, tops disparities between the 46 municipalities the list with an MHDI of 0.796, but it is included in the Interoceanic Corridor project flanked to the west by (0.602), are broader that those found in Veracruz. (0.602) and (0.595), At 0.813, El Espinal’s MHDI tops that of municipalities at the bottom of the list, Mexico and is the municipality with the with important indigenous groups and highest value in both states, whereas San basically with no industrial capabilities. Lucas Camotlán, with an MHDI of 0.534, Coatzacoalcos is also neighbored falls to the bottom as it features the 7 BAKER INSTITUTE REPORT // 06.12.21

lowest value in both states (Figure 5). In Corridor, poses a fundamental question: social and economic terms, the context of Will the potential benefits be captured by Oaxaca appears to be more complex and the more advanced and better-equipped challenging, and it risks widening disparities municipalities/regions? The task of the if, as noted earlier, the Interoceanic Corridor López Obrador administration is to prevent (and other schemes) fail to incorporate and that from happening and to ensure that, address in a successful manner the interests via investments and other complementary and concerns of indigenous communities policies, inner regions of the Isthmus be also and other stakeholders. well positioned to profit. In the absence of On the Oaxaca side of the Isthmus, these, imbalances are likely to persist and the city of Salina Cruz (0.790) is viewed as even grow. the industrial epicenter as it boasts port All in all, with the Isthmus of facilities, a refinery, and a more diversified Tehuantepec exhibiting the consequences of industrial base than its peers. And similar the disregard from previous administrations, to the example of Coatzacoalcos, above, it largely manifested in the rise of poverty levels is flanked by smaller municipalities with a between 2008 and 2018, the Interoceanic lower MHDI, such as Corridor, as a regional development scheme, (0.681) and (0.570).30 deserves the benefit of the doubt. Still, The fact that economic and industrial the challenges are enormous. To develop activities heavily gravitate around the ports Mexico’s south, the country will need a long- of Coatzacoalcos in Veracruz and Salina Cruz term strategy—one that will ensure that in Oaxaca, and that both are being targeted while presidents come and go, the projects with investments linked to the Interoceanic will stay and move forward.

FIGURE 5 — MHDI OF OAXACA MUNICIPALITIES IN THE ISTHMUS OF TEHUANTEPEC, 201531

SOURCES UNDP Mexico, UNDP and Global Data Lab, *2019 and **2018

8 THE INTEROCEANIC CORRIDOR OF MEXICO’S ISTHMUS OF TEHUANTEPEC AND THE NORTH-SOUTH DEVELOPMENT GAP

2. Official Journal of the Federation, CONCLUSION Mexico (DOF), July 12, 2019, in National The Isthmus of Tehuantepec is a complex Development Plan, 2019-2024, https://bit. and diverse region, full of contrasts, but at ly/3gC7AzX. the same time, it is also rich in natural and 3. The influence of said projects cultural resources. Tapping its potential encompasses the states of Veracruz, is a long-awaited national project. The Oaxaca, Tabasco, , Campeche, Interoceanic Corridor is the instrument Yucatan, and Quintana Roo. Frequently, chosen by the López Obrador administration Guerrero and Puebla are also viewed as to spark development in the region, aiming southeastern states, although both lie to boost the economic and social prospects outside the geographical scope of these three of the 79 municipalities. But, as the focus is government-led projects. on the logistical infrastructure as well as the 4. See Government of Mexico (2000- creation of industrial parks, many questions 2006), Puebla-Panama Plan, March 2001, remain as to other important issues where https://bit.ly/2Qpr2oK. both states lag behind. 5. See Government of Mexico (2018- Clearly, developing the south is 2024), Program for the Development of the important to Mexico’s overall social and Isthmus of Tehuantepec, list of municipalities, economic agenda. Without the south https://bit.ly/3dnqp6I. catching up to the north, Mexico’s progress 6. Patricia Galeana, “The McLane- will always be incomplete and unjust. Ocampo Treaty: Interoceanic Communication Several administrations have known this, and Free Trade,” UNAM-Porrúa, 2006, but none has been able to put in place https://bit.ly/3uZwcXB. policies to do so. The challenges, too, are 7. Official Journal of the Federation, enormous. Thus, the key questions are: Mexico (DOF), August 4, 2020, Decree Will the government’s strategy be enough? Approving the Program for the Development Will the right social, fiscal, and political of the Isthmus of Tehuantepec, https://bit. conditions for detonating development in ly/339wfnC. the region be in place in time? Will firms 8. To explore the Isthmus’ railway be attracted by conditions offered by the connections to the rest of the country, see government and invest in the region? The Mexico's Secretariat of Communications and future success of the region, as well for the Transportation (SCT), “National rail system, entire country, depends on the answers to interactive map,” https://bit.ly/3xShovU. these questions. 9. To correct curves and slopes, the intention is for the Isthmus of Tehuantepec train to increase their speed. Progress has ENDNOTES been made on 41% of the project as of March 2021. See Program for the Development of 1. The government of Enrique Peña the Isthmus of Tehuantepec, “Progress of Nieto (2012-2018) issued decrees to declare works of the Interoceanic Corridor, March Coatzacoalcos in Veracruz and Salina Cruz in 29, 2021,” https://bit.ly/33b6CTf. See also Oaxaca as Special Economic Zones, which Mexico’s government, “An investment of were later abrogated by the government of more than MX$20 billion is contemplated López Obrador. See Official Journal of the in the Isthmus of Tehuantepec,” press Federation, Mexico (DOF), September 29, release no. 05, June 7, 2020, https://bit. 2017, “Decree of Declaration of the Special ly/3vBZZWm. Economic Zone of Coatzacoalcos,” https:// 10. See Coatzacoalcos Port Authority bit.ly/2QxeFqM; and Official Journal of the (API), “Port area in Pajaritos lagoon is Federation, Mexico (DOF) December 19, transformed,” March 29, 2021, https://bit. 2017, “Decree of Declaration of the Special ly/338O6e7. Economic Zone of Salina Cruz,” https://bit. ly/3gKzEB5.

9 BAKER INSTITUTE REPORT // 06.12.21

11. As of March 2021, progress has been 19. Superior Audit Office of the Federation made on 42% of the dredging works. See (ASF), “Performance audit of the Interoceanic Coatzacoalcos Port Authority (API), “Port area Corridor of the Isthmus of Tehuantepec,” in Pajaritos lagoon is transformed,” March 29, February 2021, https://bit.ly/3ejsNgj. 2021, https://bit.ly/338O6e7. 20. n this argument, we have considered 12. See Government of Mexico, “President Puebla as being in southern Mexico. Lopez Obrador inaugurates two infrastructure 21. CONEVAL (National Council for the works of the Interoceanic Corridor in Evaluation of Social Development Policy), Coatzacoalcos port,” press release no. 16, Statistical annex of poverty in Mexico 2008- March 19, 2021, https://bit.ly/3udmikV. 2018, https://bit.ly/3d9IvZK. 13. These incentives are yet to be 22. CONEVAL (National Council for the formalized. See Eduardo Romero Fong, Evaluation of Social Development Policy), “Program for the Development of the Isthmus Statistical annex of poverty in Mexico 2008- of Tehuantepec,” conference presentation, 2018, https://bit.ly/3d9IvZK. June 17, 2019, https://bit.ly/3xDbcYx. 23. From 2008 to 2018, the share of 14. Jaltipán is a municipality located in population living in poverty in Campeche the state of Veracruz. grew from 45.9% to 46.2 %, in Mexico 15. The five-year plan for the Expansion City from 27.6% to 30.6%, in Morelos from of the National Integrated Transportation and 48.8% to 50.8%, and in Sonora from 27.1% Storage System of Natural Gas 2020–2024 to 28.2%. See CONEVAL (National Council for underlines that the Jaltipán–Salina Cruz the Evaluation of Social Development Policy), pipeline boasts a transport capacity of 320 Statistical annex of poverty in Mexico 2008- million cubic feet per day (Mmcfd) at a cost 2018, https://bit.ly/3d9IvZK. of $434 million over a span of three to four 24. In terms of income per capita, years. See Mexico’s Secretariat of Energy Campeche and Tabasco are outliers among (Sener), “5-year Plan for the Expansion of southern states, given its hydrocarbon the National Integrated Transportation and production. Storage System of Natural Gas 2020 – 2024,” 25. Figures expressed in dollars are based November 5, 2020, https://bit.ly/2SpMBWY. on 2018 pesos provided by México ¿Cómo 16. Sayda Chiñas Córdova, “Definidos, Vamos? and the monthly average exchange ocho predios para desarrollo de parques rate of the U.S. dollar in that year reported by industriales del Corredor Interoceánico,” Mexico’s Central Bank. See México, ¿Cómo La Jornada Veracruz, December 22, 2020, Vamos? En cifras, ¿cómo vamos? 2020, https://bit.ly/3b4bXQx. https://bit.ly/3u0aody; and Mexico’s Central 17. Superior Audit Office of the Federation Bank (Banxico), Economic information (ASF), “Performance audit of the Interoceanic system, Average exchange rate of the period Corridor of the Isthmus of Tehuantepec,” (2018), https://bit.ly/3rqPWkk. February 2021, https://bit.ly/3ejsNgj 26. See México, ¿Cómo Vamos?, . 18. Assemblies took place in Ixtepec, Subnational informal employment, 4Q2020, Santa María Mixtequilla, and San Blas https://bit.ly/2O2mSlD. Atempa. See National Institute of Indigenous 27. Mexico’s National Institute of Peoples (INPI), “Indigenous communities Statistics and Geography (INEGI), Average of the Isthmus of Tehuantepec asses the years of schooling in Mexico’s states, 2020, Development Poles for Wellbeing scheme,” https://bit.ly/3nZlJc3. blog, May 2, 2021, https://bit.ly/3ejmCsT; and Presidency of the Republic of Mexico, “Indigenous peoples will decide on the Development Poles scheme of the Isthmus of Tehuantepec,” press release, May 2, 2021, https://bit.ly/33fwYDx.

10 THE INTEROCEANIC CORRIDOR OF MEXICO’S ISTHMUS OF TEHUANTEPEC AND THE NORTH-SOUTH DEVELOPMENT GAP

28. Municipal IDH figures correspond AUTHOR to 2015. See UNDP Mexico, “Platform for development analysis. Human development Adrian Duhalt, Ph.D., is the postdoctoral index (2019 study), Veracruz municipalities fellow in Mexico energy studies for the within the Isthmus of Tehuantepec project,” Center for the United States and Mexico https://bit.ly/3fzm7Ml; for Mexico’s HDI in and Center for Energy Studies. His research 2019, see UNDP, “Human Development Report interests include energy dynamics in North 2020. The next frontier: human development America and their effect on petrochemical and the Anthropocene,” https://bit. value chains, agricultural productivity and ly/3u8buE3. For Veracruz HDI in 2018, the food dependency in Mexico. latest value reported, see Global Data Lab. Subnational human development index, Mexico, https://bit.ly/3wmL83l. 29. Government of Mexico, Program for the Development of the Isthmus of Tehuantepec, list of municipalities, https://bit.ly/3dnqp6I. 30. To see an interactive map of Mexico’s municipalities and their MHDI values, see UNDP Mexico, “Platform for development analysis. Human development index (2019 study),” map visualization, https://bit. ly/3fzm7Ml. 31. HDI values are not available for the See more Baker Institute Reports at: municipalities of Matías Romero, Santa www.bakerinstitute.org/baker-reports María Petapa, and Santa María Chimalapa. Municipal IDH figures correspond to 2015. This publication was written by a See UNDP Mexico, “Platform for development researcher (or researchers) who analysis. Human development index,”2019. participated in a Baker Institute project. Wherever feasible, this research is For Oaxaca municipalities within the Isthmus reviewed by outside experts before it is of Tehuantepec project, see https://bit. released. However, the views expressed ly/3fzm7Ml. For Mexico’s HDI in 2019, see herein are those of the individual UNDP, “Human Development Report 2020. author(s), and do not necessarily The next frontier: human development and represent the views of Rice University’s the Anthropocene,” https://bit.ly/3u8buE3. Baker Institute for Public Policy.

For Oaxaca’s HDI in 2018, the latest value © 2021 Rice University’s Baker Institute reported, see Global Data Lab, “Subnational for Public Policy human development index, Mexico,” https://bit.ly/3wmL83l. This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author and Rice University’s Baker Institute for Public Policy.

Cite as: Duhalt, Adrian. 2021. The Interoceanic Corridor of Mexico’s Isthmus of Tehuantepec and the North-South Development Gap. Baker Institute Report no. 06.12.21. Rice University’s Baker Institute for Public Policy, Houston, Texas.

https://doi.org/10.25613/q43f-4m71

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