Monday, June 27, 2016

Panama Canal reloaded (June 27, 2016)

A Chinese owned ship became the first to pass through the newly expanded Panama Canal locks yesterday. The expansion, which opened with a two year delay, was carried out by the Panamanian government in an attempt to maintain the passage's relevance in an evolving shipping market that involves ever bigger ships, reports the New York Times.

The Associated Press characterizes the $5.25 billion expansion as a "multibillion-dollar bet on a bright economic future despite tough times for global shipping." The 80 km canal has generated about $10 billion in direct income for Panama since it was handed over from U.S. control in 1999, and is responsible for about 40 percent of the country's GDP. But traffic and income have been affected by the drop in oil prices and economic slowdown in China, among other factors.

Yesterday's passage was attended by about 30,000 people and eight heads of state, according to the AP. The event received significant press coverage, though officials feared that the positive news might be overshadowed by the "Panama Papers" scandal earlier this year, reports the Guardian. Still, the country's reputation was affected by the information leak about off-shore accounts earlier this year, one reason why so few heads of state were present. Jill Biden, wife of US vice-president Joe Biden, led the U.S. delegation. (Apparently 70 heads of state had been invited according to a New York Times feature from last week.)

The expansion permits the canal to accommodate a new generation of container ships, known as neo-Panamax. The new locks fit ships carrying almost three times the capacity of those passing through the old locks, notes the Miami Herald. Both old and new locks will continue to be used simultaneously.

"...The changes are critical to Western trade in the long run," argues a Wall Street Journal feature piece from last week that analyzes the project's impact on the shipping industry.

But a New York Times investigation says "the expanded canal’s future is cloudy at best, its safety, quality of construction and economic viability in doubt."

The new project is already attracting new investment and service sector jobs, according to the Washington Post. The International Monetary Fund forecasts that Panama will continue to grow at its current rate of nearly 6 percent a year.

The Washington Post's coverage has colorful factoids for trivia freaks: "Like the channel that opened in 1914, the enlarged Panama Canal is a feat of engineering, albeit one that ran over budget and two years behind schedule. The contractors dredged enough material to fill the Egyptian Great Pyramid at Giza, one of the seven wonders of the ancient world, 25 times over. The amount of steel used could have erected 29 new Eiffel Towers. The Empire State Building could lie down and fit into just one of the three chambers in each of the new channel’s locks."

The project is only part of Panama's massive infrastructure investment, which includes a second metro line costing $2 billion and a projected third. A new bridge over the canal will have six car lanes and two for a metro monorail. Authorities are doubling the airport size and spending $450 million for urban renewal of poor section on the canal's north side, notes the Washington Post piece.

Of course, the total costs remain to be seen, due to unresolved dispute between the canal authority and the construction firm in charge of the expansion over who is responsible for billions of dollars in cost overruns and delays, according to the Miami Herald.

And while the expansion accommodates 98 percent of the ships currently floating, it's a permanent arms race, and by 2019 the percentage will drop to 95 percent. Already Panama Canal authorities are considering a new expansion, reports the Guardian

Miami Herald piece from last week notes how the prominent place accorded to a Chinese ship reflects the changing realities of international trade over the past hundred years since the canal's inauguration.

Lack of water is a permanent threat to the canal, which in recent years has been affected by an El Niño caused draught. A Miami Herald feature looks at how small-scale farmers conserve water in the Panama Canal Watershed.

News Briefs
  • U.S. and Mexican cooperation to intercept Central American refugees in southern Mexico is tantamount to a death sentence for many, including unaccompanied minors fleeing life-threatening gang violence, argues Nicholas Kristoff in a New York Times op-ed column. In the last five years, Mexico and the U.S. have deported 800,000 people to Central America, including 40,000 children. A U.S. official celebrated these numbers, saying it will help dissuade children from undertaking a perilous journey. Instead, many are taking even more dangerous routes as they attempt to reach the U.S., notes Kristoff. (See post for Oct. 13, 2015 on the general situation.) In March a Human Rights Watch report denounced that Mexico is not complying with its own laws of how to treat unaccompanied child migrants. "By law, Mexico offers protection to those who face risks to their lives or safety if returned to their countries of origin. But less than 1 percent of children who are apprehended by Mexican immigration authorities are recognized as refugees, according to Mexican government data." The report notes that the amount of children apprehended by Mexican authorities is on the rise: more than 35,000 children were detained in 2015, nearly 55 percent more than in 2014, and 270 percent more than in 2013.
  • The Mexican state of Oaxaca has been the focal point for protests against a national education overhaul for months. Teachers opposing reforms have already been on the streets for months -- leaving thousands of students without classes. But after clashes with security forces last week left nine dead, students and adults have joined the teachers in protests against the government and the signature policy reform, reports the New York Times. (See last Monday's post.) "The government’s response to the protests has amplified a belief that the education reforms are just the latest effort by Mexico City to marginalize the people here and deprive them of their rights and dignity." But proponents argue that the changes are needed to break a union stranglehold on the OECD's worst-performing school system, rife with favoritism and graft. A piece in Jacobin Magazine takes a deeper look at the Oaxaca teachers' demands and struggle. "The education reform is better understood as an attack on labor," according to the piece.
  • Nicaraguan President Daniel Ortega will likely win a third mandate in November's elections unimpeded, after a recent Supreme Court decision eliminating the opposition candidate from running. Now critics say the government is cracking down on civil liberties -- free speech, opposition parties and foreign diplomats -- in order to maintain one-party rule, reports the Guardian.
  • As Colombia nears a peace with the FARC, the Observer has an interesting in-depth piece on FARC leadership, with an interview with upcoming leader Carlos Antonio Lozada who hopes to lead the guerrilla group into its next phase as a political party. "Embracing the rainbow of Colombians will involve a very wide political project. We are betting on having a space in the political spectrum that runs from the democratic forces to the left. It is not going to be a Marxist movement; it will be a wide offer, where different groups can converge," he says.
  • A loose end amid all the talk of peace in Colombia (see Friday's post) is how to address the criminal earnings that sustain the rebel movement, argues InSight Crime's Jeremy McDermott. The piece looks specifically at the peace deal's "effects on the dynamics of organized crime, particularly the billion-dollar criminal economies that reside in FARC areas of influence."
  • With observers so excited, why are many Colombians still opposed to the deal, asks a Christian Science Monitor piece. "More than half of Colombians say their worst fear is that one or both sides will fail to fully implement the accords, while 37 percent say the government is conceding too much to the guerrillas"
  • Dialogue between Venezuela's government and the opposition could create a platform from which to request international help, said U.S. diplomat Thomas Shannon who was inCaracas last week. He said internationally mediated talks outside Caracas could help address the radically opposed perspectives of the two sides, according to Reuters. Shannon also met with former Spanish Prime Minister Jose Luis Rodriguez Zapatero, who is working along with former presidents Martin Torrijos of Panama and Leonel Fernandez of the Dominican Republic, to facilitate talks between the government and the opposition.
  • Venezuela's MUD opposition coalition said it has validated enough signatures to advance to the next step in the recall referendum process. More than more than 326,000 voters stood in long lines to scan their fingerprints and validate their signatures at government-run voting stations this week, reports the Wall Street Journal. But the the National Electoral Council, said it will take a month to announce if enough signatures were validated. If the opposition passes this hurdle, the next step is to collect nearly 4 million signatures in three days to activate the actual recall. The initial petition handed in last month gathered almost two million signatures but election officials said 600,000 of those were fraudulent, reports the BBC. The opposition is angling to have the recall this year, which would trigger new elections and likely replace the current Socialist government. The government is attempting to delay until next year, when an ouster referendum would result, at most, in the vice president completing President Nicolás Maduro's term.
  • On the issue of the ongoing search for truth in media coverage of Venezuela's crisis, check out the Caracas Chronicles' extremely critical response to The Nation's piece last week, which attempted to balance the cataclysmic perspective of mainstream international media. (See Thursday's post.)
  • Food is the new center of the evolving Venezuela crisis, reports the Miami Herald.
  • New Latin American order: Brazil's Acting President Michel Temer will skip the next Mercosur summit in Montevideo, in which the Venezuelan government will take over the group's chair for the next six months, reports Mercopress.
  • Temer also defended an earlier retirement age for women, arguing they are often responsible for work in the home and caring for family, reports Reuters. Divergent retirement ages by gender are common, but are being phased out by some countries.
  • Poor, young, black men and children in Brazil are far more likely to be victims of homicides and police violence than whites, Al Jazeera has the latest piece on the injustice.
  • Haiti's election redo in October will differ mainly in how poll watchers are accredited, said the new president of the country's Provisional Electoral council. Nearly one million political party representatives charged with monitoring elections last year were given blank accreditation cards that permitted them to vote at any polling station, potentially allowing them to cast multiple ballots. Now they will be assigned to voting centers and polling stations where they are registered to reduce fraud, reports the Miami Herald.
  • Argentina's struggle for post-dictatorship justice is increasingly focused on the 500 newborns stolen from political prisoners by the regime and illegally given for adoption, according to an Associated Press piece. "For the children who have already been found, coming to grips with the past is a painful process."
  • Argentina's cost of living is the highest in Latin America thanks to inflation and a weak dollar, reports El País. Their fairly informal investigation found that a cup of coffee in Buenos Aires costs upwards of $2, nearly four times what it costs in São Paulo.
  • Latin America's latest comeback attempt is Fernando Lugo, Paraguay's ousted president who announced a presidential run for 2018, reports TeleSur.
  • American Airlines is still waiting for final approval for direct commercial flights to the island, but is already selling tickets, reports the Miami Herald. But not everybody is welcome: Members of a U.S. Congressional delegation say they were denied visas for a trip to assess security and passenger screening at Cuban airports.

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