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Nicaragua Poised to Accept Offer from Chinese Businessman to Build Canal

Image via Flickr by davecito

Beijing based CEO Wang Jing has made the Nicaraguan government a proposal that could bring intense competition to traffic along the Panama Canal, as well as drastically change the landscape of the South American country. The plan involves Jing’s company building a $40 to $50 billion canal from the Atlantic coast to the Pacific coast of the tiny country. It would give Jing and his associates the power to buy private property for a fraction of the market value, and would be about three times the length of the Panama Canal. The plan involves multiple ports, an international airport, and an oil pipeline to be built in addition to the canal. Environmentalists are adamantly opposed to the deal, which would involve Jing’s company paying the Nicaraguan government $10 million per year for the next 10 years and gradually turn over ownership of the canal to Nicaragua over the next century. Environmentalists fear that Chinese industry would destroy the rainforests, as well as pollute the land, water, and air.

One Nicaraguan legislator, Luis Callejas, who expressed opposition to the plan was banned from attending a 10 day meeting between Nicaraguan politicians and business people because the Chinese refused to grant him a visa due to his comments against the project. Socialist Nicaraguan president Daniel Ortega is in favor of the proposition, and the supreme court of the country is expected to side with the government on the issue.

The project might be completed in as little as five years, and could double Nicaragua’s GDP of $10 billion. This is attractive to the Nicaraguans as their support from socialist benefactor Venezuela is quickly going away. In order for the project to break even, shipping experts estimate that the canal would have to bring in about $1 billion per year. The canal would have to lure about half of the shipping traffic from the Panama Canal in order to generate this amount of revenue.

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