Karen_A._Mingst,_Ivan_M._Arregu_n-Toft]_Essentia

354 CHAPTER NiNE ■ InternatIonal Po lItI cal economy

t he nicaraguan canal: Good

economics, Bad Politics?

Behind The headlines

While the construction of the Panama Canal to
connect the Pacific and Atlantic Oceans was
hailed in the early 1900s as both a major engi­
neering feat and a facilitator of international com­
merce and trade, a Chinese billionaire’s proposal
to build the Nicaragua intraoceanic Grand Canal
has not been as universally praised. The Nicara­
gua Canal may have some of the same benefits,
but also poses many troubling issues. A headline
in Al Jazeera Amer i ca reads, “Titanic Canal Proj­
ect Divides Nicaragua.” a Why are Nicaraguans
divided about this big infrastructure proj ect?
And why is China even interested in Nicaragua,
which is more than 9,000 miles away?
After the Panama Canal was built, commerce
through the canal expanded, but peoples within
Panama and neighboring countries saw few direct
benefits. Rather, the canal embodied  U.S. hege­
mony in the western hemi sphere. The
United States operated the canal and
even had a long­ term lease of that piece
of American territory. Panamanians and
those from many Latin American coun­
tries saw the canal as a symbol of
American neo co lo nial ism and imperi­
alism— a view often reinforced by U.S.
military interventions in Guatemala,
the Dominican Republic, Cuba, and El
Salvador.
The proposal to build the Nicara­
guan Canal is raising some of the same
issues. President Ortega of Nicaragua
sees the 172­ mile proj ect as an engine
of development, citing the promise that
more than 50  percent of the 50,000
jobs created will go to his country’s

citizens. He proj ects that Nicaragua will be

transformed into a regional economic power,

with annual growth at 15  percent. Ortega’s view

is that the proj ect will serve as a symbol of

national progress and sovereignty.

Skeptics won der about the lack of transpar­

ency surrounding the proj ect. Little is known

about Wang Jing, the telecom magnate who was

granted the 50­ year concession to build the

canal (with another 50­ year option). The com pany

established for the proj ect, the Hong Kong Nica­

ragua Development Group, needs to raise $50

billion in five years, five times the annual eco­

nomic output of Nicaragua. But how and from

whom is unknown, and the final anticipated cost

is $100 billion. The enterprise’s precise relation­

ship with the Chinese government is unknown,

although several Chinese companies are involved

Chinese businessman Wang Jing, promoter of the canal across

Nicaragua, celebrated the inauguration of the canal’s construction

in December 2014.