It seems that Chinese financing will finally make the Nicaraguan dream of building a rival to the Panama Canal a reality. Nicaraguan President Daniel Ortega has long favoured the project as a way to tackle the country´s unemployment and poverty.
Until now, the money to finance such a project has been unavailable. Yet all that has changed, as recent announcements by the government, quoted here from a report in the Argentinian newspaper infobae show.
The legislative leader René Nuñez signalled that the interested company would use funds from investors from various parts of the world to construct the $40 billion project [RMB 240 billion]. ‘The financer for the canal is a consortium of investors brought together by a Chinese firm´, Nuñez said to the local press after Daniel Ortega’s government introduced two initiatives aimed at speeding up the process of the environmental impact assessment (EIA) that will be produced for the project.
Legislators initially approved the project in a law of June 2012, when the cost was estimated to be $30 billion (RMB 180 billion). That cost has risen to $40 billion (RMB 240 billion) as the government has announced that ports and other infrastructure will also need to be built. It is unlikely that all these funds will all come from China, and indeed, Ortega has already been seeking support from other countries. At a meeting of Central American and US presidents in May, he informed President Obama that the project would be going ahead, and said that Nicarauga would also be looking for support from American investors.
Ortega’s government wants to move quickly on the project, which it believes could be the solution to the country´s economic woes. More than 40% of the population currently lives in poverty.
‘We are talking about a project that is very important for the country, that is why it is being processed with urgency’ Nunez has said. ‘It appears to me that the need to resolve problems like unemployment and make Nicaragua more attractive to invest in makes the approval [of law speeding up the EIA] very urgent.’
However, there is a fear that the process is being rushed through by the government, as the article in infobae explains.
‘The opposition congressmen Luis Callejas has asked fellow legislators to submit the proposals for proper discussion this Friday [7th June]. The government plans to give the Chinese company a concession for 100 years’ he added. ‘I don’t understand the hurry, above all for such a delicate topic. We must discuss this openly with the population,’ said Callejas, legislative chief of the Nicaraguan Democratic Party.
The concern about rushing through the process centres on the fact that the project could have a profound environmental impact. The strongest public voice for caution has been Jamie Incer Banquero, former Environment Minister and currently chief presidential adviser for environmental issues.
Incer Banquero has said that a canal constructed through Lake Nicaragua, as is the current plan, would contribute to climate change and would threaten the basin of the lake. In an interview with Nicaraguan paper La Nacion, he said:
‘If the environmental impact studies reveal there would be irreversible damage, we would have to think twice… There are other alternatives to connect one ocean with another, but there are no chances to clean a lake once some types of environmental disasters have occurred, and we do not have another Lake Nicaragua. We could have other interoceanic routes, using a railway for example.’
The involvement of a Chinese company has also prompted further criticism and accusations that the company is unlikely to show concern for Nicaragua’s environment. An editorial also in La Nacion argued:
The judgment of Incer Barquero and other Nicaraguan environmentalists is much more important than the opinion of the Chinese who want to invest millions in the construction of the canal. Communist China has not exactly distinguished itself as a country concerned about safeguarding the environment, not even its own borders and much less in other parts of the world. Quite the opposite, in its desire to overtake economically the USA, Western Europe and Japan, China has been the most polluting country in the world and the worst enemy of nature and environmental protection.
