Maroc - EURASIAREVIEW.COM - A la une - 18/Mar 23:50

The Nicaraguan Canal: A Potentially Revolutionary Maritime Passage – Analysis

After Donald Trump took office in January, the issue of the Panama Canal was once again brought to the forefront. Trump has, on multiple occasions, expressed his intention for the United States to regain control over the canal from Panama. It is worth recalling that under the Panama Canal Treaty of 1977, the U.S. relinquished control of the canal to Panama. The agreement was signed by U.S. President Jimmy Carter and Panamanian dictator Omar Torrijos and came into effect in 1999. According to the treaty, passage through the canal had to remain free, and the U.S. retained the right to defend its neutrality. Disputes Over the Panama Canal However, Trump has expressed a desire for America to take back control of the canal, arguing that U.S. ships are being “heavily” taxed and claiming that China has effectively taken over the canal’s administration. This is not entirely true, as the canal is managed by the Panama Canal Authority (ACP), an agency of the Panamanian government responsible for operating and maintaining the waterway. Nevertheless, China does have significant influence over the canal. Chinese companies, such as Hutchison Ports, control key ports near the canal, increasing China's presence in the region. China is a major trading partner of both Panama and the U.S. The Trump administration, led by Secretary of State Marco Rubio, exerted considerable pressure to exempt U.S. ships from transit fees and to persuade Panama to withdraw from China’s Belt and Road Initiative. The question remains whether any of these proposals will materialize. It is possible that the fees for American ships may be reduced while Panama and China continue their cooperation, even if Panama formally withdraws from China’s grandiose project. Panama is a stable Latin American democracy and an important U.S. partner in the region. This was evident in Panama’s 2024 announcement to curb illegal immigration through the Darién Gap between Panama and Colombia. Additionally, Panama refused to recognize Nicolás Maduro as the president of Venezuela. However, the disputes over the Panama Canal open up the possibility of finally realizing an alternative maritime passage connecting the Pacific and Atlantic Oceans: the Nicaraguan Canal. Nicaragua – A Socialist Dictatorship of One Family Unlike Panama, Nicaragua is its complete opposite. While Panama is a democracy aligned with the U.S., Nicaragua is not. It is essentially a one-party state where absolute power is concentrated in the hands of President Daniel Ortega, who leans towards the East. The leftist president has been in power since 2007, and as of this year, he serves as co-president alongside his wife, Rosario Murillo. Many observers label Ortega a dictator, which he essentially is, given that he has consolidated control over all aspects of governance. The fact that his wife is co-president speaks volumes—it is a de facto family dictatorship. Ortega is a former Sandinista guerrilla who served as president from 1980 to 1985. During that time, he fought against the Contra rebels, who were financed and trained by the United States. In 1990, he lost the elections but returned to power 17 years later, securing a decisive electoral victory. Ortega’s triumph was part of the so-called "Pink Tide," led by Hugo Chávez. Nicaragua aligned itself with the leftist bloc of Latin American nations and joined organizations such as CELAC and ALBA. The positive aspects of Ortega’s regime include advancements in social programs, poverty reduction, and increased access to healthcare and education, which have improved the standard of living for many citizens. Infrastructure projects, such as new road construction and investments in the energy sector, have been key to the country’s development. Ortega has garnered support from parts of the rural population who have benefited from agrarian reforms and subsidies. Ortega’s Repression and Eastern Alliances However, over time, Ortega’s regime has become increasingly repressive. Waves of mass street protests erupted across Nicaragua from 2014 to 2020. The government violently suppressed these demonstrations, resulting in hundreds of deaths and injuries. Dissidents were imprisoned, and it is estimated that more than 30,000 citizens fled to Costa Rica and other countries. Ortega amended the constitution to ensure his political survival, and in 2021, he won another election—one widely condemned internationally for its lack of transparency and suppression of the opposition. Although Ortega frequently invokes socialist ideals, critics accuse him of personal enrichment and close ties to corporate interests. His government maintains strong relationships with Venezuela, Cuba, Russia, and China while distancing itself from traditional Western allies. In foreign policy, Ortega consistently opposes U.S. influence, while domestically, he controls most media outlets and restricts access to independent information. Despite these criticisms, Ortega’s regime continues to enjoy support from the country's poorer populations. Initial Attempts to Build the Canal The idea of a canal through Nicaragua has been considered for centuries but has never materialized. The U.S.-Panama conflict creates new opportunities, especially if Panama succumbs to U.S. pressure and restricts Chinese interests. The concept of constructing a canal through Nicaragua to connect the Pacific and Atlantic Oceans dates back to the colonial era. The earliest proposals for such a canal can be found as early as the 16th century. The Spanish colonial administration recognized that such a canal would facilitate trade between Europe and the western part of South America and strengthen control over colonial territories. Although the Spanish conducted surveys in the mid-16th and 18th centuries, construction never began due to Spain's financial difficulties. In fact, the Spanish crown was in severe financial distress. The Federal Republic of Central America drafted a canal route through Nicaragua in 1825 and sought funding from the United States. However, the U.S. refused due to the region's political instability and concerns that the British might seize control of the passage. In the mid-19th century, French ruler Napoleon III proposed constructing a canal using the San Juan River as an access route to Lake Nicaragua/Cocibolca. Around the same time, American businessman Cornelius Vanderbilt also considered building the canal, but the project was thwarted by civil war and the occupation of Nicaragua by American adventurer William Walker. In the early 1890s, an attempt to construct the Nicaraguan Canal was led by the American company Nicaragua Canal Construction Company. However, as workers cleared the land along the canal’s planned route, many fell ill and were hospitalized due to tropical diseases such as malaria. In 1899, the U.S. government established a Canal Commission to examine two possible routes—one through Nicaragua and the other through Panama. The commission's report, published in 1901, favored the Nicaraguan route. However, the U.S. Senate voted for the Panamanian route, largely due to the declining property value of land owned by the French company New Panama Canal. Additionally, the completion of the railway in Panama between 1904 and 1914 increased Panama’s appeal. Attempts to Build the Canal After 1914 The Panama Canal was opened in 1914, but this did not mark the end of plans for a canal through Nicaragua. It is not surprising, given that a Nicaraguan canal would shorten the maritime route between New York and San Francisco by approximately 800 kilometers compared to the Panama Canal. The geographical location of Nicaragua allows for a more direct route between the Atlantic and Pacific Oceans. The Nicaraguan route would reduce sailing time and fuel costs for ships traveling between the east and west coasts of the United States. By the late 1920s, the U.S. seriously considered constructing the canal, but the Great Depression ended that attempt. Between 1939 and 1940, while World War II was ongoing in Europe, a new study was conducted for the construction of a barge canal. Three variations were considered, with minimum canal depths of 1.8 meters, 3.0 meters, and 3.7 meters. The idea of a large-scale canal, with some excavation to be carried out using atomic bombs, was revived in the 1960s as part of the Plowshare project. However, this attempt was also abandoned. The HKND (Hong Kong Nicaragua Canal Development) project was an ambitious initiative proposed in 2013 under the leadership of Chinese entrepreneur Wang Jing. The plan called for the construction of a 278-kilometer canal connecting the Caribbean Sea to the Pacific Ocean via Lake Cocibolca. The project was also set to include additional infrastructure such as ports, airports, and free trade zones, with an estimated cost exceeding $50 billion. The Nicaraguan government granted HKND a 50-year concession, with the possibility of extending it for another 50 years, sparking controversy. The project faced strong opposition from environmental organizations, which warned of potential ecological devastation. Skeptics questioned the project's feasibility, arguing that Wang Jing lacked both financial resources and political support from Beijing. After years of stagnation, the HKND concession was revoked in May 2024. Although initial work on the route had begun, the canal was never built. The Latest Proposals In mid-November, President Daniel Ortega presented the idea of constructing a transoceanic Nicaraguan Canal at the 17th China-Latin America and Caribbean Business Summit in Managua. The proposed 445-kilometer canal would serve as an alternative to the overburdened and politically strained Panama Canal. Approximately 6% of global maritime trade passes through the Panama Canal, which has been struggling with low water levels and ship congestion. These issues have resulted in significant delays and increased costs. The Panama Canal recorded a 29% drop in traffic in the last fiscal year due to drought. Specifically, from October 2023 to September 2024, only 9,944 vessels passed through the canal, compared to 14,080 in the previous year. At the major summit attended by representatives from 29 countries, Ortega presented the latest version of the canal project. The starting point would be a planned deep-water port in Bluefields on the Caribbean coast. The canal would then pass through northern Nicaragua via Lake Managua/Xolotlán before reaching the port of Puerto Corinto on the Pacific coast. This ambitious project represents a significant departure from the previous initiative, as the HKND company had planned a route through Lake Cocibolca. As part of the new proposal, the Chinese company CAMC signed an agreement with Nicaragua’s Ministry of Transport and Infrastructure to build a port in Bluefields. The canal project would consist of four segments, and Ortega suggested that it could attract investments from both Chinese and American companies. This initiative comes as Nicaragua seeks to position itself as a key link in global maritime trade. Details regarding financing and environmental impact assessments have not yet been disclosed. Obstacles to Construction Skeptics have long questioned the feasibility of the canal due to its uncertain environmental and financial sustainability. Lake Cocibolca, the country's main source of drinking water, would be at risk. The habitats of many plant and animal species would be destroyed. Geological activities, such as earthquakes and volcanic activity, could jeopardize the long-term stability of the infrastructure. Forced displacement of local populations, including indigenous communities, could trigger social unrest and lead to a loss of cultural identity. There is also the risk of financial unsustainability, as the project's cost is enormous (with estimates ranging from $50 billion to even $80 billion), and the return on investment is uncertain due to competition from the Panama Canal. The cost is high due to the construction of ports, roads, bridges, and potential compensation for displaced residents. Therefore, it is clear that only a major financial backer—such as a state like China—could undertake the project. Advantages and Risks of Construction The construction of the Nicaraguan Canal could bring numerous benefits. Nicaragua's economy could significantly profit from transit fee revenues, job creation, and the development of related industries such as tourism and transportation. The Panama Canal would gain a desirable alternative, especially in times of congestion or droughts. The canal would enhance Nicaragua’s geopolitical and maritime significance, positioning it as a key hub for international trade. If China were to build the Nicaraguan Canal, it could significantly increase its geopolitical influence in Central America—a region that the U.S. considers its backyard. Washington would perceive this as a threat to its regional dominance, potentially worsening relations between the two superpowers. This could lead to new forms of trade, maritime, and/or cyber warfare. The Chinese would further strengthen their Belt and Road Initiative, establishing a critical trade route. In response, the U.S. might seek to expand the Panama Canal. Nicaragua would become even more politically and economically aligned with China and BRICS, setting an example for other regional countries with leftist and anti-American governments. It is worth noting that Beijing and Managua only established official diplomatic relations in December 2021. Until then, Nicaragua recognized Taiwan. A completed Nicaraguan Canal could prompt other nations to reassess their regional alliances and determine which partnerships offer the most benefits. Ultimately, in the 21st century, tangible interests prevail over ideology. Ideology largely serves to justify these interests.