NotiCen writers

Document Type

Article

Publication Date

11-10-2005

Abstract

Central America stands to become the beneficiary of an oil-fueled imbroglio between Mexico's President Vicente Fox and President Hugo Chavez of Venezuela. Both are seeking, for reasons economic, philosophical, and political, to ease the strain on non-oil-blessed countries. The two presidents represented opposing sides regarding free trade at the IV Summit of the Americas in Mar del Plata, Argentina, but it was Fox who, on Nov. 5, signed an accord worth US$7 billion with the Central Americans to ease their energy woes. "With this we will have abundant energy in the region, competitive and made into a platform for development," said Fox before a meeting with the presidents of Guatemala, Nicaragua, Costa Rica, El Salvador, and the Dominican Republic, and the vice president of Honduras. The deal includes constructing a refinery somewhere in Central America, presumably with the technical resources of Mexico's state oil monopoly PEMEX. It is part of a larger scheme within Plan Puebla-Panama (PPP), integrating the refinery, construction of a hydroelectric project, a gas pipeline, and plants for the conversion of liquefied natural gas (LNG) (see NotiCen, 2005-06-16). Fox's offer was consistent with an October recommendation of the Economic Commission for Latin America and the Caribbean (ECLAC) for the creation of a regional energy market in Central America. The head of ECLAC's energy and natural-resources department, Fernando Cuevas, said at the presentation of a report on the petroleum industry, Istmo centroamericano: diagnostico de la industria petrolera, that the isthmus is in urgent need of competition in energy-products distribution and that PEMEX would "do the region a great service" if it authorized distribution franchises to Central America. "One important measure Mexico could adopt to help Central America would be to allow PEMEX to come in with its service stations," he said.

Language

English

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