The World Bank and the Mexican government yesterday signed an agreement to finance $3 billion in pollution cleanup in Mexico. The pact is apparently designed to help win approval in Washington for the North American Free Trade Agreement (NAFTA).
The funds, to be spent in 1994-96, consist of $1.8 billion in World Bank loans and $1.2 billion from the Mexican government.
The agreement includes funds for anti-pollution programs along the U.S.-Mexico border, a region that has been criticized by U.S. environmentalists for substandard environmental conditions.
A total of $700 million in Mexican money and World Bank funds is designated for revamping water supplies, sanitation systems and other environmental facilities in the border regions.
The agreement also contains funds for addressing environmental problems in the interior of Mexico, including solid-waste management, toxic waste control and biodiversity protection.
The agreement was announced against the backdrop of intense debate over NAFTA, fueled in part by charges that the trade accord would be detrimental to the environment. U.S. environmental groups are split over NAFTA. Many environmentalists argue that the agreement would result in increased pollution along the border because it would encourage building more factories in Mexico under comparatively lax regulatory conditions.
The Clinton administration, which is lobbying a reluctant Congress to approve NAFTA, and other environmental groups reject the charges as exaggerated. Administration officials have been pushing the World Bank to fund more environmental projects in Mexico.
Treasury Secretary Lloyd Bentsen praised the new package at yesterday's signing ceremony, held at a World Bank meeting here.
"This series of loans to Mexico will serve as an important complement to the programs we have developed in the North American Free Trade Agreement," Bentsen said. "We are discussing with our Mexican friends joint approaches to improve cooperation and to ensure adequate financing to meet needs in the border area."
World Bank President Lewis Preston and Mexican Finance Minister Pedro Aspe also were present at the signing.
Some environmentalists criticized the agreement as an inadequate cure for Mexico's ecological woes.
"We welcome any effort to tackle the border problems," said Daniel Seligman, a spokesman for the Sierra Club, a national environmental organization that opposes NAFTA. "But the levels of funding under discussion fall way short of what is needed to solve Mexico's problems. In the border area alone, $20 billion in cleanup money is needed, at the very least."
Another concern, Seligman said, is that the World Bank has a reputation among some environmentalists of not working closely enough with recipient countries on how loan money is spent.