The Río Sonora SEZ: Formulating a Plan for Rural Economic Development in a Crossborder Context

By Alma Bezares* and Erik Lee

One of our newest initiatives, the Rio Sonora Special Economic Zone Development Plan—commissioned by the North American Development Bank at the request of the state of Sonora—offers valuable perspectives on rural economic development issues that play out on multiple levels in Sonora, the USMBR and Mexico more generally. These include environmental, economic development, governance and civil society issues.

Rural Mexico and the Environment
The August 2014 mine spill near Cananea, Sonora saw the introduction of an enormous amount of copper sulfate and other toxic materials accidentally dumped into a tributary of the Rio Sonora, creating one of the most significant environmental disasters in modern Mexican history. This event serves as a clear example of the fragility of environmental conditions for communities throughout Mexico. Yet it also highlights the importance of generating sustainable economic activities that can generate development going forward. Beyond the threat of environmental disasters such as the August 2014 case, the effects of climate change, particularly changing rainfall patterns and the intensity of drought not only endanger the natural environment but increase the vulnerability of those sectors of the population that live in rural areas under constrained economic conditions. Policy proposals that carefully and comprehensively prepare for the new context are essential to ensure a sustainable future.

No Silver Bullet for Rural Economic Development
Rural economic development encompasses a set of challenges for Mexico that date back to the colonial period. In the case of the Río Sonora region, with critically important cross-border tourism choked off at Agua Prieta by restrictions on foreign vehicles, the region has struggled to emerge from its status as an economic hinterland of Hermosillo, the state’s capital. The development of external markets for regional products has not until recently been given priority. Outmigration has brought remittances but also drained the area of human capital. Critical infrastructure such as highways and bridges can allow an area to flourish or cause it to wither away if not built and maintained properly. From a tourism perspective, the state is a microcosm of broader challenges in Mexico, with relatively well-funded and connected beach resorts outcompeting rural tourism destinations that are critical for rural economies. While there is no one silver bullet to address this issue, our team outlined a multi-level approach to economic development that we hope will be helpful to state agencies and municipal governments as they address these issues.

Governance: New Jurisdictions for Disaster Conditions
The project also shines a spotlight on a range of questions surrounding local-level governance in Mexico. As we note in the development plan, Special Economic Zones are a newer construct in Mexico, and the Río Sonora Special Economic Zone is the first state government-designated SEZ in Mexico. Its location in northern Mexico—and particularly the border region—adds to its uniqueness. The state’s Interagency Commission on the Rio Sonora Special Economic Zone and its Technical Committee will lead the effort to develop the zone for the next 15 years. The larger policy question relating to SEZs is whether they serve as effective mechanisms for focusing government, private-sector and non-profit efforts on addressing economic development challenges.

In addition, the ability of municipal and state government agencies and policymakers to respond to an acutely sensitive issue such as an environmental disaster and all of its ensuing consequences—including the economic consequences—is an important test for citizens who have long questioned the efficacy and responsiveness of government at all levels in Mexico. Bringing in the North American Development Bank for technical assistance on the project shows a clear recognition of the importance of getting the policies, programs and projects right for the Río Sonora. Throughout the project, as we worked with and listened to various policymakers, our team found much in the way of ideas, political will and simple goodwill that promise a strong foundation for the development plan.

Yet there are even more basic governance issues in the Río Sonora region in terms of how budgets for rural communities are managed. Namely, how can policymakers effect the efficient allocation of public resources for small rural communities? Should some municipios join forces in an association of local governments (a mechanism that is relatively rare in Mexico) or should small municipios become absorbed into larger muncipios that can more efficiently manage staff and other public resources? These are questions facing state governments all over Mexico.

The Role of the Private Sector and Civil Society
The private sector and civil society have already played a fundamentally important role in this development plan. On the one hand, the plan highlights opportunities to develop new economic sectors in the region that leverage its current situation and its comparative advantages and potential. On the other hand, the question about the prospect to create spillover effects from the industrial areas across the state remains open. We consider both possibilities in the plan, tailoring economic development according to local needs but also taking into account the potential opportunity to enlarge industrial clusters, especially in sectors such as the textile and the metal-mechanic industries.

Civil society has also played an important role in the development of the plan. During the elaboration of this plan, eight town hall meetings were conducted to better understand the needs and priorities of the region’s population. In addition, input from academic and other civil society organizations was encouraged, and the level of interest and organization that already exist and which helped to generate many well-developed ideas was impressive. In that regard, this plan also serves as a snapshot of the state of the art in local economic development in the region as well as a communication and accountability device between the different level of government and the population.

*Alma Bezares is a PhD candidate in Economics and Politics at the Claremont Graduate School and is co-author of Competitive Border Communities: Mapping and Developing U.S.-Mexico Transborder Industries (2015).