A new Latin American channel between Beijing and Washington

100 years after its inauguration, the Panama Canal is suffering from old age and competition.  The first condition was expected, but the second wasn’t.  In fact, Nicaragua is working rapidly to build a newer, longer, wider, and deeper canal.  The Panamanian thoroughfare is narrow and restrictive; modern ships capable of carrying more than 18,000 containers can’t pass through the antiquated system of dams and locks.  Modernization is under way because growth in international commerce—always larger than growth in global GDP—doesn’t tolerate delays.  So, further north, excavations will soon begin for a new waterway, three times longer than the Panama Canal’s 80 km, traversing Lake Nicaragua’s basin.  President Manuel Ortega declared that work would begin in December 2014, giving shape to a project shrouded in mystery until now.  The few data report that Managua’s parliament approved the construction, subsequently signing an agreement with a Chinese firm, HKND, for the building and management of the new canal.  The agreement foresees a span of 50 years, with the option to renew for another 50.  The same increase in construction time is anxiously anticipated for Nicaragua’s entire GDP, one of the poorest countries in Latin America.  Underdevelopment still confines the country to a subsistence economy, whose wealth it can’t manage to increase at rates more than 5%.  Confined by archaic agricultural methods, the production system has given scarce signs of life, limiting itself to a weak textile manufacturing industry.  If the will of the country is understandable, its alliances leave the US feeling worried.  The contracted Chinese company is officially private, but has strong ties to Beijing.  Its president, Wan Jin, has confirmed finding other international partners—from Brazil to Russia and Venezuela—ready to finance an operation estimated to cost USD$40 billion.  In theory, it’s understandable that the country with the largest commercial interchange in the world—China—would secure a protected waterway for its goods and energy supply.  However, all of this is headed for a collision course with the US, who would find the interests of hostile nations, or those outside their influence, in their own backyard.  Despite the canal passing back under Panama’s sovereignty in 2000, US geopolitical control is nearly in full force.  Without question, Washington is alarmed by the new equilibriums and the threat’s novelty.  Manuel Ortega was still young during the Cuban Missile Crisis; instead, he led the Sandinista government during the invasion of Grenada.  He is well aware that the US doesn’t tolerate the presence of enemies in the Caribbean.  After the opposition’s long break, he understood that within the context of globalization, the economy is much more effective than the Cold War’s armaments.  He entrusts China and a series of varied allies, all united by pragmatism to reinforce their own countries, all convinced that the shipping passage will be more insidious than the deployment of missiles for the US.