• The canal curse

    Ben D. Kritz

    Ben D. Kritz

    WITH a demeanor that suggested he is more than a little embarrassed about the situation, the Australian head of a joint Chinese-Nicaraguan project to build a sea-level canal across the country admitted earlier this week that the work was delayed by at least a year, and that major excavation work that should have already been started will not get underway until the end of 2016 at the earliest.

    Bill Wild, the project head for the Hong Kong Nicaragua Development Group (HKND), laid the blame for the delay on the late release of an environmental impact study, which was not completed until last month. Wild might have just as well blamed history, instead.

    A sea-level canal across Central America has been a sort of Holy Grail of engineering since the middle of the 16th century. The earliest known interest in attempting to connect the Atlantic and Pacific Oceans dates back to 1551, when the Spanish colonial government commissioned surveys of the likeliest routes through Panama, Nicaragua, and southern Mexico.

    No further action was taken after this early exploration, but in 1781, the government of Spanish King Charles III took a renewed interest in the idea, and commissioned a new set of surveys, eventually settling on Nicaragua—along a route similar to the one planned for the HKND project—as the location for the canal. A lack of funding and the onset of political turmoil in Europe again pushed the canal project off the crown’s list of priorities; the idea would not be raised again until after the Spanish had been pushed out of Latin America.

    In 1825, the short-lived United Provinces of Central America proposed that the US should build the canal across Nicaragua; the idea had the backing of the influence-minded administration of President James Monroe, but was rejected by the US Congress. US interest in a Nicaraguan canal persisted throughout the 19th century, with attempts to form a project company made in 1849, 1888, 1897, and 1899. America finally dropped the idea in 1904, when it purchased the French concession and partly completed work on a canal across Panama for $40 million.

    The reason a sea-level canal is appealing is that it is—at least on paper—far less challenging to build than a canal like the Panama Canal, which lifts passing ships up and over the Continental Divide. Without the need for complicated lock structures, the sea-level canal can be made much bigger than the Panama Canal, easily accommodating the largest tankers and container ships that currently have to sail all the way around South America because they simply cannot fit through the existing canal. In Nicaragua, much of the proposed canal route passes through existing rivers and Central America’s largest lake, Lake Nicaragua, with the only a relatively short distance west of the lake requiring heavy excavation. By all appearances, building the Nicaragua canal should be relatively easy, certainly much easier than it was to build the Panama Canal farther south.

    So why has building the Nicaraguan canal proved impossible—some historians, only half jokingly, say the Nicaraguan route is cursed—for more than 450 years?  Political uncertainty seems to have been the main culprit throughout history. The potential for instability is muted at present, but there are still hints of it; the relocation of residents along the canal’s proposed route—some 27,000 people—has quickly become a contentious issue, and problems with securing the right-of-way may have more to do with the delayed start of construction than HKND is admitting. The leftist government in Nicaragua—which has recently fallen into disputes with its neighbors over the passage of migrants (mainly Cubans) through Central America—could also find itself isolated by the strong shift rightward in Latin American politics exemplified by changes in government in Argentina and Venezuela and the increasingly tenuous grasp on power by the left-wing government of Dilma Rousseff in Brazil.

    With HKND holding a 50-year concession (which is renewable for 50 more after that) on the canal, a large amount of social or political uncertainty would certainly appear as a risk factor to financiers of the project. Although HKND won’t discuss it, the difficulties it has encountered in securing funding are an open secret; analysts have conjectured that a combination of some degree of political uncertainty and the dubious history of consistent failure of Nicaragua canal projects has made the idea an extremely tough sell for the consortium.

    Whether HKND will actually make any progress this year—or ever—remains to be seen, but history is definitely against the project. If that can be overcome, however, the benefits would be substantial; simply providing some relief for the chronic bottleneck for shipping that the Panama Canal has become will speed up the east-west flow of goods and likely reduce shipping costs as well.



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    1. If we wanted the real reason why the canal is not being dug today,
      it is that US interests on a dozen levels are against it.
      If they were for it, there would be enough money to dig it twice over.

      The US, except for its perpetual bombing campaigns in the Middle East,
      is a lot like the Whig Party of the 1850’s, too busy looking inward to
      be able to grasp economic expansion on a global level.

      The US built a pipeline to Chad, but it is too short-sighted to build a railroad
      across that country and complete a transcontinental railroad. The US
      built one canal across Central America, but it is too short-sighted to build
      two. The US in the 21st century is a country that lacks vision. I suspect
      it is because it is too busy hoarding its wealth to realize that it has begun
      to slip irreversibly backwards.

    2. I think we all know that the real reason for “delay” is funding. Perhaps the AIIB will come to the rescue next year.