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My Thoughts on the Nicaragua Canal

From my discussions with people, the majority of Nicaraguans are in favor of the canal project and the majority of expats are against it. Yes, there have been protests but mostly by people owning or living on land that may be affected by the canal or the associated projects. I have tried to remain silent but I cannot find myself in agreement with many of the expats or groups outside of Nicaragua. So allow me to express some thoughts, solely my opinions.

In addition to the canal, the project is expected to include two ports, an airport, a resort and an economic zone for electricity and other companies. The proposed canal would pass through Lake Nicaragua, Central America’s largest lake, and will be 172 miles long, between 230 meters and 520 meters (755 feet to 1,706 feet) wide and 27.6 meters (90 feet) deep. Rumors include a Chinese Disney World park, chains of Chinese food restaurants, military bases, communications satellites overhead and schools teaching the Mandarin language.

My thoughts are based on three givens and if you disagree on these basic points, don’t bother reading the rest of this article.

  1. The number one need in Nicaragua is jobs.
  2. President Ortega will do everything he can to help the poor people here.
  3. The Chinese are not stupid.

Of course, education is important but jobs are even more important. If every Nicaraguan received a Master’s Degree in Business they would still be poor without jobs or they would leave the country to look for the job. The canal project would create a lot of jobs. Yes, I read the report where 50,000 Chinese are coming to Nicaragua to build the canal. What? You thought they could train Nicaraguans in a few weeks? In 1908, the Panama Canal was built by laborers with shovels. It is a little different now. The trickle down from any of these projects will generate a lot of jobs and start a lot of businesses. Just supporting 50,000 Chinese would create a lot of jobs. If you don’t believe ports, airports and other major projects do create prosperity and jobs, what does create wealth and prosperity?

You can have your opinions on President Ortega but he has made it a priority to help raise people out of poverty and has followed through with many projects that have improved health care, improved education, assisted farmers and built affordable homes. He would not have agreed to the canal project if he thought it would not help alleviate poverty. He knows there needs to be a huge investment to move the country ahead and what other prospects does he have? Yes, a few people will be uprooted but there are bigger protests in the states when a WalMart moves into a new area. Never doubt President Ortega loves his country and is trying to do what he hopes is best for Nicaragua. You have to break some eggs to make an omelette.

The Chinese got a good deal, no doubt about it and they know it. I have no idea what their final game plan is and if geo-politics is a major part of it. Is there a connection between HKND and the Chinese government? I don’t know. Was the CIA involved in the Vietnam war? Yup but I did not know it at the time.  Little people like us can only guess what the world leaders are planning. President Ortega gave a good deal to the Chinese because the Chinese would only have interest if they saw profit possibilities. They are not doing this from the goodness of their hearts. It is business and possibly some politics.

And all these ECO groups and green organizations protesting and stating it will be an ecological disaster. We have little detailed information on the canal and associated projects so I don’t think we have enough information to determine the effects on Nicaragua’s ecology and environment. There is no canal route that would have made everyone happy. It is an ecological disaster now without the canal. Thank goodness Granada is finally putting sewer and water systems to stop dumping into Lake Nicaragua. And how was this accomplished? By wealthy countries paying for it i.e. investing in Nicaragua. Lake Managua is dead and pouring into Lake Nicaragua. And where were all these ECO groups and organizations before? I wish they had the same energy for solutions as they have for fighting this project.  Too many outsiders giving their opinions. Guess that includes me.  No, I think the odds are better for improving Nicaragua’s infrastructure and ecology with a major project investment than to just hope for the best.

Does it make economic sense to build the canal? I don’t know since the Panama canal is not that far away and recently improved to handle larger ships. Why do they build ships too large to pass through the only Central American canal? I know that many of the largest shipping companies are Asian and the Chinese may be able to influence those companies to use their canal instead of Panama’s. And the competition may force a lowering of the canal tariffs but that would reduce profits.

Supposedly the canal project commences on December 22nd, 2014. We really don’t know what “commences” means. Does this mean actual digging or a year of planning and logistics? We will know very soon and by Christmas. A project this big will require large companies to participate and there has been little on the world news networks. The next year should be interesting.

Personally I have some doubts that the canal will be built in the near future though I think the associated projects will more likely happen. The ports, airport, tourism projects, improvement of infrastructure such as communications, Internet, etc. have value even without the canal and certainly provide profit motivation. Just putting in good roads or a railroad to the Caribbean coast would be a boon for Nicaragua. The Chinese will not make money selling things to Nicaragua in the short run but by providing ultimately services to other countries pulling Nicaragua up by its bootstraps.

There are still a lot of questions. Will investors step up to the plate or will China fund the whole project? On the world stage, $50 billion isn’t that much money. Will other major countries get involved such as the USA and if so, in what capacity?  Would this create a more dynamic Nicaragua with a brighter future? Will we finally have some good Chinese restaurants?

I also think Nicaragua has the final say in all this. If the project does not go well, there is little to stop President Ortega from putting the kibosh on it regardless of contracts. Yes, I read the reports of China trampling parts of Africa with their projects. It would be difficult for China to force anything on Nicaragua. President Ortega is a scrappy guy who doesn’t take any crap from anyone.

The majority of Nicaraguans are in favor of the canal project because it offers hope and there are few other major prospects on the horizon. Let’s see what happens.

These are just my thoughts and opinions which have the value being charged for them. I just want what is best for Nicaragua.

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