The Truth about Trade
Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.
Nicaragua Dreams of Building a Canal for the Ships of Tomorrow
Mar 13, 2014
By Tim Burrack: Arlington, Iowa
The Panama Canal almost was the Nicaragua Canal. A little more than a century ago, the United States came close to building "the path between the seas" to the north of Panama’s narrow isthmus.
If an ambitious Nicaraguan politician and Chinese billionaire have their way, however, a new waterway may yet connect the Atlantic and Pacific Oceans. It would become "the largest civil-engineering and construction project in the world," reports Jon Lee Anderson in the March 10 edition of the New Yorker.
I don’t believe the Panama Canal will face a competitor in Nicaragua anytime soon, if ever. But competition is healthy, and perhaps the mere threat of a massive Nicaragua Canal will lead to the completion of necessary improvements in the Panama Canal. Better yet, maybe it will encourage urgent repairs to our own transportation infrastructure here in the United States.
The Panama Canal is of course a modern marvel and this is its centennial year. An enormous accomplishment, it took a decade to complete. More than 5,000 workers died, mostly from disease. This was a costly toll, but their sacrifice made possible a great hub of global commerce that has served the interests of nations, producers and consumers throughout our hemisphere.
For many years, however, the Panama Canal has required an upgrade—a widening and deepening that will allow it to support the world’s largest ships. The eight-year project began in 2007.
Two months ago, cost overruns of $1.6 billion put the venture at risk. Work actually stopped for a couple of weeks as the builders and the canal authority argued over prices. They appear to have settled their differences, though the final completion of the canal’s new locks may be delayed from 2015 to 2016, according to the Wall Street Journal.
In the world of gargantuan construction projects, that’s not much of a setback—and the success of an upgraded Panama Canal provides a strong inducement to finish. If this isn’t enough of an incentive, the prospect of a brand-new canal in Nicaragua also should keep the canal’s improvements more or less on schedule.
Wang Jing, a secretive Chinese financier, believes he can build a huge canal across Nicaragua in five years and for just $40 billion. That may sound wildly optimistic, but Wang seems pretty serious about the endeavor. He has already spent $100 million on feasibility studies, reports the New Yorker.
Last September, Nicaraguan president Daniel Ortega signed a formal canal concession with Wang’s company. So Wang looks to have cleared the political hurdles, which of course can be as tricky as the technical ones.
A canal across Nicaragua nevertheless poses a number of serious challenges. Although it would take advantage of rivers and a 40-mile-wide lake, it would be more than three times the length of the Panama Canal. Its locks would have to raise vessels 108 feet above sea level, compared to 85 feet for the Panama Canal.
There’s a reason why the Panama Canal is in Panama: It’s a better route.
Yet a fully modern canal across Nicaragua might enjoy certain advantages. Right now, the Panama Canal is expanding to catch up to the current generation of container ships and supertankers. Even bigger ships may be on the way. The Panama Canal’s expensive improvements could turn obsolete shortly after they open for business.
The talk of a Nicaragua Canal is "definitely a call of attention to Panama," says a port-management expert in Anderson’s article.
It should be a call of attention to the United States as well. Our own waterways barely accommodate the ships that take American-made and grown products to customers in other nations. Just as we need an efficient system of highways so that people can drive around the country, we need an efficient system of locks and dams to let us move our goods quickly to their destinations.
It’s hard to imagine the Panama Canal competing against a canal in Nicaragua. Yet American exports compete against the products of other nations everyday—and we must make sure they enjoy every advantage we can give them.
Tim Burrack raises corn, soybeans and pork on a NE Iowa family farm. He serves as Vice-Chairman and volunteers as a Board Member of Truth About Trade & Technology (www.truthabouttrade.org).
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