Panama Canal May Face Competition From Nicaragua

A long talked about alternative to the Panama Canal moved one step closer this week, reports analysts for IHS Global Insights.

The Nicaraguan government proposed legislation that will give a 50-year concession for the construction and operation of a new canal connecting the Atlantic and Pacific oceans to a Chinese operator.

Should the Chinese operator succeed in raising sufficient finance to develop the project, it will profoundly alter operational conditions in Nicaragua, shape global trade pattern, and shift regional relations.

Of several proposed alternatives to the Panama Canal, this proposal seems the most likely yet to get off the ground, partly because of the Nicaraguan government’s dominance of the domestic scenario, partly because of the clear long-term commercial benefits for a plethora of different actors.

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