Panama Canal monopoly under threat

Nicaragua reveals plans for its Great Interoceanic Canal.

Proletarian writers

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Proletarian writers

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On 11 June, an overwhelming majority in the Nicaraguan national assembly voted in favour of plans to build a canal that will cross the country, connecting the Pacific and Atlantic oceans. Although the final route of the canal is yet to be confirmed, it will travel a distance of some 286km and is likely to pass through Lake Nicaragua.

The ambitious project is being made possible by investment from a Chinese firm, HKDN Group, which was formed a year ago for the purpose. President Daniel Ortega signed the contract with Wang Jing, the owner and CEO of HKDN, on 15 June, granting a 50-year concession to the company to embark on a feasibility study before hopefully starting on the construction of the canal.

Significantly, the contract with HKDN stipulates that a 51 percent share of the project should remain in the hands of the Nicaraguan government.

In addition to a huge shipping canal, the proposed works include a ‘dry canal’ freight railway, an airport and two duty-free zones. For a country that does not have a proper highway connecting its two coasts, this will change everything. It is hoped that the works will begin in 2014.

Rival to Panama

At present, the Panama Canal provides the quickest route between the Atlantic and Pacific oceans in the Americas. A $5bn project to double the canal’s capacity is nearing completion, but it will still be restricted to taking ships of 65,000 tons or less. Thus the new the canal in Nicaragua, which plans to accommodate ships weighing up to 250,000 tons, will be a serious threat to its Panamanian rival.

Crucially, the new canal will not only impact on the Panama Canal’s business, but will remove the control over a significant proportion of the trade and military shipping movements through the Americas that is currently enjoyed by US imperialism. A game changer indeed … and a further step towards independence for much of Latin America.

US imperialists built the Panama Canal in the early 1900s, taking over from a failed French project that had ground to a halt some years earlier, and had outright control of the route for years. Although control of the canal was officially handed over to the Panamanian government in 1999, the US still enjoys indirect control over the strategic waterway, since Panama is very much a client state of US imperialism.

Its importance to the US’s economic and military interests can be seen by the fact that two thirds of the cargo that goes through the canal comes from or is going to US ports, while US warships retain the right to jump the queue of ships waiting to traverse the route.

Control of the fastest route between the two oceans also gives a massive military and political advantage to the US, which it will doubtless be extremely unhappy about losing. We can therefore expect the imperialists to do their best to derail the project. Do not be surprised, for example, to find the US government backing ‘environmental’ protests against Chinese-funded infrastructure in the near future – in Nicaragua and elsewhere!

Regional significance

If it comes to fruition, this is a project that will benefit not only Nicaragua but also the entire region. The largest construction project undertaken in Latin America in a century, it can only bolster the moves of many countries in the region towards self-sufficiency, mutual cooperation and independence from imperialism.

Since Nicaragua is a member of both Alba and Petrocaribe – trade associations that cut out imperialist control – this canal could prove a vital asset to all those Latin-American countries that are attempting to break the stranglehold of US imperialism over their economies and resources.

As President Ortega told Russia Today in an interview in October 2012: “Nicaragua lost all independence after a US invasion … Over a century ago, the Americans themselves looked into building a canal in Nicaragua, but then they decided to invest in the Panama Canal. Once we became independent, we revisited this vision, and now we are working to make it real.”

For our part, we wish our Nicaraguan comrades every success in realising their vision of independence from imperialism and prosperity for the Nicaraguan and Latin-American peoples.