The Specter of Neo-colonialism Returns to Nicaragua

Nicaragua canal

After a long history of imperialism, dictatorship, and revolution in Nicaragua, Daniel Ortega (the same man who led the Sandinista charge against the US) has opened the doors to a new imperialist power. China has been invited to build a canal that would rival the Panama Canal, realizing a Nicaraguan dream put on hold by imperialist powers over a century and a half ago.

In mid 1800s, both the United States and the United Kingdom wanted to build a canal through Nicaragua. It was the logical choice. There was an existing river that ran from the Atlantic Ocean across to a large lake on the western side of the country, leaving only a small stretch of land to carve through to break through to the Pacific. It was relatively close to the United States and close to existing trade routes at the time. However, the two countries could not agree on who would control the canal, with Nicaraguan control never being considered. The US and UK signed the Clayton-Bulwer Treaty in 1850 which  resulted in neither country committing the resources to building the canal, as the treaty prevented either one from claiming sole control over it.

After the US built the Panama Canal, there were fears of competition from a future canal in Nicaragua. The United States negotiated the Bryan-Chamorro treaty in 1914 that granted the US the sole right to build a canal across Nicaragua in perpetuity. In 1970, the treaty was nullified, with neither country seeing a prospect for a Nicaraguan canal as a real possibility.

Fast-forward through civil war in Nicaragua, US backed Contras, a leftist government friendly with Hugo Chavez and Fidel Castro, and the rise of China as a major lender and investor in Latin America. The Chinese have begun construction on a canal across southern Nicaragua. The Nicaraguan government sees this as an opportunity to bring economic prosperity to their struggling country, and a means for making up income lost from dwindling Venezuelan grants and cheap oil. China is seizing on an opportunity to create cheaper and faster shipping routes to bring its manufactured goods to the West. It also significantly increases China’s footprint in Latin America, signaling its ascendency in the region.

Is this new venture just another stage in the colonial history of Nicaragua? I would argue it is. Daniel Ortega’s government guarantees the company building the canal, Hong Kong Nicaragua Canal Development (HKND, widely assumed to be a front for the Chinese government), immunity from any criminal charges or punishment for breach of contract, and a fifty year concession for the canal. There are further concerns being raised about the social and environmental impact of the canal.

Land acquisition for the project has spurred protests and riots, prompting the government to send in riot police and troops. Though HKND has promised to pay “fair market price” for the appropriated lands, peasants and farmers in the region complain that there has been little information on how the process will work, and what that compensation will look like. Indeed, engineers measuring land for the construction company have been accompanied by troops and police, leading many to fear a government seizure of lands, with little compensation.

Adding to these worries are concerns about the environmental impact of the canal. A scientific study carried out by Environmental Resource Management and funded by HKND, has found that there is a strong likelihood of fuel spills affecting freshwater fish. The Lago Nicaragua is the largest tropical lake in Central America, and the scientific community has cautioned that running the canal through the lake will damage the unique ecosystem found there. It also runs afoul of several agreements to protect sensitive wetlands and nature preserves that the Nicaraguan government has previously signed.

Development at all costs is as bad as no development at all. One can only hope the potential pitfalls can be outweighed and overcome through unexpected economic prosperity.  However, taken at face value, Nicaragua is seemingly giving away a vast swath of land, for little return. Recent studies of maritime trade suggest there will be as little as two-percent return on investment in the canal, challenging how useful it will be in creating lasting jobs. Throughout its history, Nicaragua’s various governments have done little outside the major cities to protect its citizens and their rights. This most recent event is replacing one neo-colonial force for another. In an effort to move away from reliance on US aid, Nicaragua has sold its natural resources to the highest bidder, with little regard for the consequences.

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