Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
Ship passing through Panama Canal
The Panama Canal revolutionized trade between the nations of the Atlantic and the Pacific when it opened in 1914. Now Colombia and China are talking about building an alternative to the Canal. In an interview with The Financial Times, Colombian President Juan Manuel Santos said planning for the project is “quite advanced”.
Rather than a waterway, Colombia and China are discussing a so-called “dry canal.” It would consist of about 150 miles of railroad linking Colombia’s Pacific coast to a new Atlantic port that would be built near the city of Cartagena. The railroad would make it easier for China to import Colombian commodities, like coal, and to export Chinese electronics and other goods to the region.
“This will greatly benefit all the countries in the region,” says Zhou Kwan, commercial attaché at the Chinese Embassy in Bogotá. Kwan points out that the Panama Canal often gets congested and that a ship-to-rail system through Colombia could alleviate bottlenecks.
Just as construction of the Panama Canal a century ago marked US dominance in Latin America, a railroad across Colombia would symbolize China’s rise. China is now the world’s second-largest economy. Over the past decade, trade between China and Latin America has jumped ten-fold.
Yet Colombia has been slow to do business with China due to Bogotá’s strong ties to the US. Since 1999, Washington has provided the Colombian government with $5 billion in military aid to fight guerrillas and drug traffickers.
“This obsession with the United States, which was the main source of support for war against armed groups, shaded out everything else. That’s why the realization that China was important came so late to the country,” says Arlene Tickner, who teaches international relations at Bogotá’s University of the Andes.
But now that Colombia’s guerrilla groups have been weakened and security has improved, Washington is losing interest. The US is trimming aid programs, and for the past four years the US Congress has refused to ratify a free trade agreement with Colombia. “This has been a huge slap in the face to the Colombian government,” says Tickner.
China is mainly concerned with securing Latin America’s minerals, oil and soybeans. Still, conservatives in Washington are alarmed. In fact, there’s been speculation that talk of the Chinese railroad will help pressure US lawmakers to approve the Colombian trade pact.
But Colombia has other motives. Disputes with President Hugo Chavez have led to a steep drop in exports to Venezuela, which used to be Colombia’s number two trade partner after the US. And Colombian highways, railroads and ports have badly deteriorated.
“Colombia has serious problems with its transportation system,” says Alvaro Ballesteros of the Colombian-Chinese Chamber of Commerce. “We need to develop our railroads. And there are Chinese companies and banks that want to carry out these projects.”
For China, there’s an added incentive. Building an alternative to the Panama Canal would send a sharp message to the government of Panama, one of the few countries that still recognizes Taiwan.
But the program remains very much on the drawing board. Though the Chinese Development Bank says it will help fund the $7.6 billion Colombian railroad, no one has carried out feasibility studies.
The tracks would have to be laid across the imposing Darien jungle on the Panamanian border, an area teeming with guerrillas and drug traffickers. In fact, environmental and security concerns have long discouraged Panama and Colombia from building a cross-border highway through the jungle.
Still, Panama was once part of Colombia. And ever since the Panama Canal opened, Colombia has dreamed of its own transoceanic route. In China, Colombia may have finally found a partner able to make it happen.
“These opportunities come out of the blue somehow,” says economist Juan Benavides. “It’s time for us to make a serious cost-benefit analysis, and see if it would be good to explore.”
Discussion
No comments for “An alternative to the Panama Canal?”