Aletho News

Nicaragua’s Canal: A Socialist Project for Economic Change

Tortilla Con Sal | July 29, 2015

The fundamental argument in favor of Nicaragua’s Interoceanic Canal is that it will change the structure of Nicaragua’s economy in such a way as to dramatically reduce poverty and so enable a reversal of the current destructive national and regional trends of impoverishment-driven environmental depredation.

Progressive and radical opinion in North America and Europe tends to skew discussion towards the Canal’s alleged potential environmental effects, generally ignoring both the urgent economic imperative of poverty reduction and the Canal’s wider regional and global significance.

The environmental argument in favor of the Canal is usually met with perplexed scepticism, blank incomprehension or, very often, deliberate misrepresentation.

​Like almost all the articles that have criticized Nicaragua’s Canal, Truth Out’s recent article by Thomas J Scott,“Nicaragua’s Flirtation With Environmental Disaster” focuses largely on the Canal’s environmental aspects while omitting Nicaragua’s fundamental dilemma, one typical of impoverished countries. Namely, Nicaragua’s environmental sustainability requires significant new economic resources in the short term so as to reverse decades of poverty driven deforestation, contamination and inadequate water management.

Only massive structural investment in the economy will provide those resources. Some environmental impact from that level of investment is inevitable. But the resources generated by the investment will more than compensate for the initial limited local environmental impact by generating enough resources to finally enable adequate environmental recovery programs. Addressing environmental concerns, Thomas J. Scott’s account relies narrowly on other ideologically compromised media outlets highly critical of the Canal.

In doing so, Scott not only marginalizes the Canal’s fundamental economic logic, he also gets basic facts wrong.

Environment

Scott’s Truth Out article asserts, for example, that 120,000 people may be displaced by the Canal. That is completely untrue. The actual figure is around 7,000 families amounting to around 35,000 people along the Canal’s 275 kilometre length. Scott also asserts that the indigenous Rama-Kriol group may lose 40% of their land, referring to a negotiation process yet to be completed, a fact which undermines the very basis of the claim brought before the International Commission for Human Rights by the group’s lawyers, alleging lack of consultation. Similarly, Scott cites various environmental and scientific opinions against the Canal but fails to put them in context.

For example, he uncritically quotes a supposedly scientific calculation that up to a million acres of rainforest and wetlands could be destroyed by the Canal. Even a cursory look at that claim shows how nonsensical it is. The Canal is 278 kilometres long of which about 23km run from the Pacific Coast north of San Juan del Sur to Lake Nicaragua, known here as Lake Cocibolca. Then, 105km of the Canal route run across Lake Cocibolca. None of that part of the Canal or its related sub-projects affect any rainforest or wetlands, leaving 150km from the area of San Miguelito on the eastern edge of the lake to Punto Aguilar on the Caribbean coast.

Much of the area between San Miguelito and Punto Aguilar is already intervened by agricultural cultivation and cattle ranching and by often illicit timber activity. Here, the total area affected by the construction of the Canal itself is certainly not greater than about 150 square kilometres, equivalent to 37,500 acres. To guarantee adequate water for the canal and improve the region’s water management, an artificial lake will be created of about 395 square kilometres, equivalent to 98,750 acres. So the total affected land area of the Canal in this part of Nicaragua will be around 136,250 acres.

Even if one overstates that 70%-75% of that affected land area is vulnerable wetlands or forest, the total such area affected will be around 100,000 acres, equivalent to about 40,000 hectares, around one tenth of the area of one million acres mentioned by Scott in his article. The canal runs well south of the hugely important Bosawas reserve and well north of the equally important Indio Maiz reserve. Much smaller reserves like Cerro Silva may be directly affected, but these reserves are already suffering significant deforestation and contamination at the hands of the local population.

The canal projects have to reforest more than the forest it will displace over the five year period of its main construction, because the Canal depends on water conservation to be able to operate.

Currently Nicaragua is losing 65,000 to 70,000 hectares of forest a year to agricultural cultivation, cattle ranching and illicit timber felling. Under-resourced, government promoted reforestation programs only replace around 15,000 hectares a year

None of this information appears in Scott’s account in Truth Out or other similar anti-Canal reports. It puts in context the outrageous, nonsensical claim that a million acres of pristine rainforest may be destroyed by the project. It also highlights the truly urgent nature of Nicaragua’s environmental and economic dilemma.

The same is true in relation to the exaggerated claims that Lake Cocibolca may be destroyed by the huge dredging the project entails. The lake is already contaminated and suffering heavy sedimentation. But that information too is omitted from Truth Out, which alleges “The possibility the HKND environmental protection plan will mitigate the scientists’ concerns is questionable, given the scale and complexity of the project.” In fact, far more questionable is the wild speculation clearly underlying those often ideologically motivated scientists’ concerns and their own misleading interpretations of inadequate data.

The canal’s pre-feasibility studies by a Dutch company began in January 2013 and lasted six months. The complete feasibility studies by international specialist companies lasted 23 months from July 2013 until May 2015. The cost of these studies over almost two and a half years has been well over US$150 million. The canal company HKND puts the figure at around US$200 million.

By contrast, the environmental scientists critical of the canal can marshal no data remotely equivalent to these substantial, large scale, detailed, highly resource intensive and very expensive studies.

In any case, as the planning process for the canal has progressed, legitimate, relevant environmental concerns have indeed been taken into account. For example, the location of the proposed deep water port on the Pacific Coast has been moved so as to minimize damage to local mangroves. The final precise route of the Canal has been subject to similar change. So it is far from true that environmental and other concerns in relation to the Canal have not been heeded. But that fact too is completely missing from Truth Out’s article.

Politics and geopolitics

Shifting from the environment to political analysis, Scott’s article makes the completely ahistorical assertion that “Sandino led an armed resistance movement against US plans to build a canal in 1927.” Sandino campaign was not against US plans to build a canal in 1927. The US government had no plans to build a canal in Nicaragua in 1927. Sandino’s guerrilla was was very clearly and overwhelmingly against the US imperialist military occupation of his country. The US government already controlled and occupied the Panama Canal zone, invading Nicaragua only so as to consolidate its regional political and economic domination.

In his manifesto “The Supreme Dream of Bolivar”, Sandino himself wrote, “nothing is more logical, nothing more decisive and vital than the union of the twenty-one states of our America into a single unique Latin American Nationality, which may make possible, as an immediate consequence, the right to the route of an Inter-oceanic Canal through Central America.” The US military occupation of Nicaragua vetoed that right. In his Truth Out article, Scott himself proceeds to row back from his incorrect, ahistorical assertion ending up suggesting that critics of the canal have legitimate concerns about Chinese imperialism in Nicaragua.

But most of those same critics are people bought and paid for by US government money in one form or another. Right-wing opposition to the Canal comes from politicians who are explicit allies of the United States government. Currently those politicians and their political parties have around 8% support nationally. Social democrat opposition to the Canal comes from ex-Sandinista politicians now closely identified with US government and European Union policy. They currently enjoy under 1% support nationally. These critics have zero credibility when they express their clearly hypocritical concerns about Nicaragua’s sovereignty in relation to growing Chinese influence.

Nicaragua’s sovereignty over the canal and the rights of its population are protected by the legislation for the Canal and its sub- projects which place the overall project under the control of a government Commission. The government’s Minister for National Policy, has explained, “The incentives have to be strong because Nicaragua isn’t giving a sovereign guarantee….. After 50 years Nicaragua will already have 50% of the profits from the Canal. Then in the second 50 years the share goes up 60%, 70%, 80%, 90%. Finally Nicaragua will take over after benefiting by over 50% for 50 years. While considerable, that benefit is tiny compared to doubling the economy, and reducing poverty.”

Not only do decisions in relation to the canal have to be authorized by the government, but ownership of the Canal’s business will pass progressively to the Nicaraguan government on an already agreed schedule.

Scott’s inaccurate and misleading analysis of the canal and of the national context in Nicaragua extends equally to his article’s geopolitical analysis. He manages to write his article without once mentioning ALBA, the Community of Latin American and Caribbean States, or Mercosur. Scott completely ignores the diverse tensions between the Pacific Alliance countries (Chile, Colombia, Mexico and Peru) and their ALBA and Mercosur counterparts. Nor do US sponsored supra-national trade structures like the Trans Pacific Partnership and the Trans Atlantic Trade and Investment Partnership figure in their extremely superficial report.

But all of these are extremely and immediately relevant in any serious discussion of China’s growing world role, especially in Latin America and especially in relation to Nicaragua’s Interoceanic Canal. Perhaps the most astonishing omission in the Truth Out article’s geopolitical sketch of the meaning of Nicaragua’s Canal is the absence of China’s alliance with Russia India, Brazil and South Africa, in building a multipolar world. Scott still seems deeply invested in the long since discredited idea of Western, especially US, political, economic and moral global leadership.

The inaccuracies, falsehoods and omissions of Thomas J. Scott’s article about Nicaragua’s Canal are symptomatic of that intellectual and political narcissism, placing the US and its concerns at the center of every world trend.

In fact, the US government is increasingly losing influence in Latin America and the rest of the world as a result of its absurdly inept, aggressive foreign policy. Neither the US government nor its European Union allies have anything to offer countries like Nicaragua beyond the old neocolonial traps of onerous debt, inequitable trade and meager development aid.

The fundamental question Western progressives never pose, let alone answer, when criticizing the Interoceanic Canal is how Nicaragua will otherwise generate the enormous resources it needs to end looming poverty-driven environmental disaster. The Sandinista government has taken the strategic sovereign decision to prioritize the Interoceanic Canal so as to achieve the massive structural investment it needs in the short term to break out of low wage under-development. The decision itself is grounded in the vision of Simón Bolivar, one explicitly fought for by Sandino, of Latin American integration.

This vision underlies the Sandinistas’ historic program of political pluralism, a mixed economy and a non-aligned foreign policy. Inherently and necessarily, Nicaragua’s Canal is not just a national project but rather one that will multiply benefits in Central America and the Caribbean, generating trade and investment throughout the region. Likewise, in the global environmental picture, the Canal will encourage maritime shipping over air transport by shortening voyages. A study of the Nicaraguan Interoceanic Canal by Hong Kong academics argues, “Maritime transport will become more dominant in international trade by taking over from the air transport. To further take advantage of the low carbon opportunities, the shipping liners will use larger vessels and enjoy economies of scale for both economic and environmental benefits, while the hub and spoke system will be chosen to maximize the operation efficiency.”

In summary, the Nicaraguan Canal is a strategic national, regional and global development project based on the historic socialist program of Nicaragua’s Sandinista government. That program develops in harmony with the anti-imperialist vision of regional integration promoted by Nicaragua’s ALBA partners led by Cuba and Venezuela in the context of developing policy embodied in CELAC, where the US and Canada have neither voice nor vote. Primarily, Nicaragua’s Interoceanic Canal project is designed to resolve the threat posed to national environmental sustainability by the economy’s current slow incremental economic development. But the Canal will also contribute to resolving that wider environmental dilemma regionally and globally. It is an integral part of the changing pattern of global seaborne trade and the infrastructure needed for that change in a multipolar world. This process and its respective outcomes are under way now with or without the say so of the United States and its Western allies and regardless of ill-informed, inaccurate and misleading propaganda from Western neocolonial media.

July 31, 2015 Posted by aletho | Environmentalism | European Union, Latin America, Nicaragua, Nicaraguan Interoceanic Canal, Truth Out, United States | Leave a comment