The United States government said it has committed this week to provide public and private funds in the amount of $500 million to create jobs and promote development in Southern Mexico.
The Mexico News Daily reported that the massive investment is part of the agreement the country reached with the Trump administration to step up its efforts to curb the surge of migrants traveling through Mexico to reach the U.S. border.
Ryan Brennan, chief operating officer at the Overseas Private Investment Corporation (OPIC) and Foreign Affairs Secretary Marcelo Ebrard signed two letters of intent in which the U.S. pledged to provide the majority of the money, according to the Mexico News Daily.
The news outlet reported:
In the first letter, OPIC committed to providing U.S. $250 million for the construction of a natural gas liquefaction plant in Salina Cruz, Oaxaca.
The United States’ contribution will lead to additional investment of US $150 million for the plant, the Secretariat of Foreign Affairs (SRE) said in a statement.
In the second letter, OPIC pledged to provide a US $240-million loan for the construction of a wind power plant in southern Mexico. That amount will trigger additional investment of US $80 million, the SRE said. In addition, OPIC said it will work with local banks and microfinance institutions to provide US $52 million in loans for micro, small and medium-sized companies in southern Mexico.
The monetary commitment will also have a “gender” component.
“This money will mobilize an additional investment of US $28 million, which will create jobs and boost prosperity in southern Mexico,” the SRE said. “This total of $80 million will be invested using a gender approach. Priority will be given to financing projects led by women.”
The Mexico News Daily reported that Brennan said he expected the money would be available “soon.”
“These projects will create new economic opportunities in southern Mexico that empower individuals and lift communities,” Brennan said.
Ebrard said in the Mexico News Daily report that the move shows the U.S. wants to help develop southern Mexico.
“A lot of people said that this [the regional development plan] wasn’t going to work, that there would be no investment or it would take years . . . This demonstrates that the relationship with the United States, which is very complex, is a good one, and that good agreements make good sense,” Ebrard said.
The total financial commitment will be even greater — $800 million, because the development of southern Mexico is a “government priority,” the article said.
“The department also said that officials presented “a broad portfolio of investment projects” to OPIC and 12 are being evaluated for financing totaling a combined US $2.5 billion,” the Mexico News Daily reported.
But the article also included information about a post critical of the arrangement on Adam Isacson’s, director for defense oversight at the Washington Office on Latin America, personal website.
“This isn’t an aid package,” Isacson wrote, saying it “is loans, not aid,” and added, “it all has to be paid back.”
Isacson also said that the money won’t fix the problems that lead to mass migration, which would require other actions such as reforming the police, fighting government corruption, fixing justice systems, and protecting people from criminal gangs.
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