Monday, October 18, 2004

Growing the economy?

The Japanese International Cooperation Agency (JICA) has released a report, according to today's La Prensa Gráfica, on the development of a land canal that might stretch between La Unión in the far eastern part of the country north to Puerto Cortés in Honduras. Another 100 kilometers of highway needs to be built on the Honduran side to complete the 371 km stretch between the two ports. Construction on the Cutuco port is set to begin next year, and end by 2007. Unlike the Acajutla port (closer to the Guatemalan border), there are plans for large-scale development projects (including tourism) around this port, which would also be able to receive luxury liners. There's also talk of rail lines along this route, as well as elsewhere within Central America.

The JICA report estimates that, in the next fifteen years, the commerce generated by this port and the land canal could double El Salvador's GDP.

This news, along with the weekend news that travelers between Guatemala and El Salvador will no longer have to stop at immigration when crossing the border as of Nov. 15, is heartening for regional trade and development. It remains to be seen how all of this will really play out, however -- i.e., whether there will be sufficient investment capital to make this work. For example, over the past four years, none of the competitive bidding processes for a new ferry between La Unión and Nicaragua have received any takers whatsoever.

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