Page 305 - The Rough Guide to Panama (Travel Guide)

History CONTEXTS 303
THE BILLION–DOLLAR GAMBLE: EXPANDING THE PANAMA CANAL
two years overdue and several – as yet unspecified – billion dollars over budget, the Panama
Canal expansion was finally inaugurated on June 26, 2016 amid much fanfare, fireworks and
flag waving. the bold investment aimed to accommodate Post-Panamax vessels (ships that
don’t currently fit in the Canal) through two larger sets of locks and by widening the Culebra
Cut, thereby tripling the size of the ships it can accommodate and doubling the Canal’s
capacity. initially budgeted at $5.3 billion, with a completion date of 2014, to coincide with the
Canal’s centenary, the project has not been without its setbacks: for a start, the $1.6 billion in
cost overruns are likely to keep the courts busy for years to come, as neither the Panamanian
government nor the spanish and italian contractors are willing to foot the bill. Another
concern is the huge amount of fresh water needed to ensure the smooth passage of the vast
container ships through the Canal. Although the new Cocolí and Agua Clara locks include
water-recycling devices, overall the Canal now needs twice the amount of water than it did
previously, which, given current climatic variability, may prove difficult in the future. Add to
that the economic uncertainty in world shipping, and it remains to be seen whether this
massive investment will ultimately pay off. Unperturbed, the Canal authorities are already
contemplating a fourth set of locks.

Meanwhile, the economic ramifications of the delayed and overbudget Canal
expansion project, which was finally inaugurated in June 2016 (see box above), were
compounded by a series of huge corruption scandals. Involving many of the country’s
elite, they ranged from the “Panama Papers” – a massive leak of Panama’s offshore
financial dealings that implicated numerous world leaders, criminals and celebrities in
tax evasion – to revelations about successive governments’ widespread acceptance of
kickbacks in awarding mega-construction contracts. At the time of writing, former
president Martinelli, for one, had been holed up in Miami since January 2015, evading
charges of bribery, embezzlement, illegal phone-tapping and insider trading. His
continued resistance to extradition seemed to generate greater public interest even than
the death of Manuel Noriega, on May 29, 2017, whose passing President Varela tweeted
“closes a chapter in our [Panama’s] history.”
The long-term, endemic lining of pockets by top government and business officials
has diverted funds and attention away from addressing the Panamanian people’s more
pressing concerns: inadequate health, transport and education services; continued
erosion of indigenous populations’ rights; widening social inequalities; worsening
environmental degradation and rising levels of unemployment and crime. In the wake
of the scandals, 2017 witnessed widespread anticorruption and antigovernment street
protests, but it remains to be seen whether popular opinion will succeed in kick-
starting real social change.

2016 2017
Overbudget and overdue, the new Panama Canal locks are Manuel Noriega dies following
inaugurated while spiralling corruption scandals threaten to unsuccessful brain surgery.
undermine the country’s financial credibility.

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