EXPANSION OF PANAMA CANAL

Impact on international trade of the expansion of the Panama Canal

Impact on international trade of the expansion of the Panama Canal

Introduction

The Panama Canal was built by the United States between 1904 and 1914 in order to facilitate the mobility of ships between the Atlantic and the Pacific oceans. This feat of engineering can be considered among the most impressive megaprojects in the history (McCullough 2007, p56). The construction of this waterway established world historical precedents in terms of cost, engineering design, public health practices, amount of human labor employed, and magnitude of transformation of a tropical ecosystem, as well as its amount of casualties.

The construction of the Panama Canal was so transcendental in ecological, human, economic and geopolitical terms, that its existence was crucial in justifying the efforts of making Panama an independent nation by its separation from Colombia in November, 1903 (Diaz Espino 200, p8). The 80- kilometer-long cut through the isthmus made it possible to reduce considerably the time and distance required to travel between the Atlantic and Pacific Oceans. When the canal was inaugurated in 1914, it was intended to respond the needs of expansion of the international markets and military power that required adequate and updated technology and infrastructures of transportation. A ship can save over 7,800 miles between New York and San Francisco by passing through this inter-oceanic route, compared with the alternate route around the southern tip of South America.

After almost one century under the control of the United States, the Panama Canal and its neighboring territories were transferred to Panamanian jurisdiction on December 31st, 1999. Since then, the Panama Canal became an even more important and reliable asset thanks to the direct and indirect economic benefits it has been providing to Panama, a country that, during all its history, has organized its economy mainly around the service activities related to the interoceanic transit through the waterway.

Discussion

Since its construction, between 1904 and 1914, the Panama Canal deepened even more this role by assimilating Panamanian geography into the dynamics of global trade. As soon as Panama got control over the canal on December 31, 1999, the nation got engaged in a complex network of global and local stakeholders interconnected by complementary and even contradictory economic, political and cultural relations linked to the processes of production and distribution of commodities.

These stakeholders are part of a varied cast coming from the international, national, regional and local levels that include retailer stores, international maritime companies, US port authorities, Panamanian government institutions, rural communities, peasants, independent professionals, and even religious representatives. “Stakeholder” has been defined as “any individual or group who can affect -or is affected by- the achievement of organizational objectives” (Freeman 2004, p98).

One way to determine the relevance of a stakeholder could be according to the level of power and legitimacy they enjoy, and the urgency of their claims. In this sense, power could be defined as the stakeholder's ability or potential ability to impose its will on ...