November 21, 2019

Mexico amends CentAm, Caribbean infra financing rules

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From BNamericas

The government has amended four articles of a decree governing ’s financing cooperation strategy toward Mesoamerican and the  countries, originally enacted in December 2011.

A notice in the official gazette from Monday said the change comes with “a new vision to enable a better use of the funds included in the Infrastructure Fund for Mesoamerica and the Caribbean.”

Under the amended decree, financing is not restricted to infrastructure anymore. Funding for human capital development, equipping of migration facilities and shelters, the development of migration-related registration, control, and follow-up systems, and for training, assistance, studies and trade exchange, among others, is now possible.

Also, the foreign affairs ministry (SRE) will take over management of the fund – set up as public trust, not a state-owned entity – from the finance ministry (SHCP). 

The makeup of the technical committee managing the fund will also change. From now on, not the finance ministry but the foreign ministry will head the fund and have a majority in the technical committee.

The finance ministry has now 30 days to modify the contract for the fund, after which the technical committee will issue new operating rules.

Created during the Calderón administration, Mexico aimed to use the Mesoamerica and Caribbean infrastructure fund, better known as Yucatán fund, to offer non-recoverable aid and loans, provide partial guarantees or serve as collateral for financing infrastructure projects in Central America and the Caribbean together with the IDB or the Central American Bank for Economic Integration (Cabei). The fund could also be used for hiring technical assistance, engineers, finance experts and project managers for specific initiatives.

After taking office in December, President Andrés Manuel López Obrador (AMLO) pledged to advance a plan for the development of El Salvador, Guatemala, Honduras and Mexico.

Commissioned to the UN Economic Commission for Latin America & the Caribbean (ECLAC), the plan was unveiled in May, with the objective to boost economic development in Central America and curb migration to the US via Mexico. It has a strong infrastructure component.

However, recent tariff threats from the US led Mexico to make concessions on immigration enforcement, which requires strengthening the government’s capacity to process the large flows of migrants that attempt to cross the country on their way north.

For more on this story go to: https://www.bnamericas.com/en/news/mexico-amends-centam-caribbean-infra-financing-rules

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