PANAMA:
Campaign to Expand Canal Spares No Expense
María Mercedes de la Guardia

PANAMA CITY, (IPS) - With just a few days to go before the Oct. 22 referendum on the future of the Panama Canal, polls are forecasting a resounding victory for the "Yes" vote in favour of expanding the waterway.

In a voting simulation organised by the Dichter & Neira polling company involving 1,758 people, 79 percent said they would vote for the government's plan to widen the inter-oceanic canal by adding a third set of locks, and 21 percent said "No" to the proposal, according to the La Prensa newspaper.

These results, similar to those published by two other local polling firms, show a rise in the Yes votes, which in September garnered 72 percent, and a decline in the No votes, which amounted at the time to 28 percent.

This trend is a response not only to the highly favourable estimates announced by the Panama Canal Authority (ACP) -- 1.15 billion dollars a year in additional revenues for the first 11 years of operation of the new set of locks -- but also to the scope of the propaganda campaign waged in favour of the project.

The governmental ACP, which has proposed the widening of the canal, has devoted an estimated one million dollars to the campaign, and according to the Ibope Time polling company, groups supporting the Yes vote have contributed a further 315,000 dollars. In addition, private sector companies have used their own ads to back the proposal.

The arguments are repeated over and over again: widening the canal is necessary to keep it competitive; it would substantially increase the Canal's contribution to state coffers, generate more jobs, and bolster growth in the ports, banking sector and Colón Free Zone; and the ACP administrator, Alberto Alemán, and his team deserve the confidence of voters.

As for the No campaign, apart from the red flags spread throughout the streets of the capital by the National Front for the Defence of Social Security, and the printed guidelines issued by the construction workers' union SUNTRACS, its main channels of expression are the opinion pages in the press and the daily debates aired on radio and television.

Among its exponents are economist Julio Manduley, former canal deputy administrator Fernando Manfredo, and former president Jorge Illueca, who jointly released the report "Our Canal: An Unnecessary and Risky Expansion Now, or Alternative National Development for All", in which they called into question everything from projections of future demand to the estimated costs of construction.

The Canal presently has two parallel lock systems to move ships from sea level to the lake waterway and down again. The lock filling process is fed by the waters of Lake Gatún.

The ACP is proposing to add a third set of locks that would allow larger "post-Panamax" ships to use the canal. At present only Panamax ships, up to 32 metres wide, 12 metres deep and 294 metres in length, can transit the canal.

The project would take seven or eight years, and its estimated cost is 5.25 billion dollars, which its promoters say will be paid for by toll increases.

Other critics, such as political scientist Carlos Guevara, base their opposition to the plan on "the project's capacity to boost public debt to disastrous levels."

Guevara believes that Panama's public debt -- 10.27 billion balboas (or dollars) at Dec. 31, 2005 -- could reach 16 billion dollars by 2011, taking into account the ACP's forecast need for up to 2.3 billion dollars in external financing.

Meanwhile, analyst Raúl Leis warned of the risk that "foreign personnel may displace national workers in the construction work, and the canal expansion may affect water quality in Lake Gatún, which is the source of drinking water for the metropolitan area, because the water recycling basins will increase the inflow of salt water."

These concerns arise from a study by the Panamanian association of engineers and architects, Leis explained to IPS.

The leadership of the two main opposition forces, the Panameñista (Arnulfista) Party and the National Liberal Republican Movement (MOLIRENA), have also taken an official stand in favour of the No vote, and said that the government should have reached a consensus on a development strategy for the country before calling the referendum.

Together, these parties have over 300,000 supporters, but their persuasive power is more apparent than real, given that influential personalities such as former president Mireya Moscoso (1999-2004) of the Arnulfista party, and former vice-president Guillermo Ford of MOLIRENA, have come out in favour of the canal expansion plan.

According to the United Nations Development Programme, 40.5 percent of Panamanians live below the poverty line, and 26.5 percent live in extreme poverty. Panama also occupies second place for income inequality in Latin America.

In recent weeks, a new element has been added to the debate in Panama: Nicaraguan President Enrique Bolaños has proposed building an inter-oceanic canal in his country.

This is not a new idea, but the choice of timing to refloat it is curious, coinciding as it does not only with the Panamanian referendum, but also with the approach of the end of Bolaños's term of office in January 2007.

Rodolfo Sabonge, head of the ACP Planning Department, was present at the lunch at the 7th Conference of Defence Ministers of the Americas when Bolaños made his announcement. "In Nicaragua, the issue of an inter-oceanic canal will always be topical," Sabonge told IPS.

Nicaragua is the second poorest country in Latin America, with 80 percent of its five million people living below the poverty line, so its governments are in need of drastic solutions. But it is hard to believe that a Nicaraguan canal will ever become a reality.

Bolaños said that building the canal would cost some 20 billion dollars, according to the Managua newspaper El Nuevo Diario.

"In a far worse economic situation than that of Panama, Nicaragua is hardly in a position to raise that amount of capital," said Guevara.

Furthermore, the proposed canal route includes part of the San Juan River between Nicaragua and Costa Rica, which is the object of a border dispute. Yet another problem is that a study by experts in the U.S. Army Corps of Engineers describes the geology in Nicaragua as high risk because of seismic instability, wrote Carlos Christian Sánchez early this month in the publication Crítica en Línea.

The idea goes back to 1902, when the United States government of Theodore Roosevelt was studying possible routes for a canal joining the Atlantic and Pacific oceans. A congressional committee was on the point of deciding in favour of a route through Nicaragua.

And it would have done so had it not been for Philippe Bunau-Varilla, an engineer with interests in the failed French canal company in the area that would later become Panama, who led an effective lobby and managed to get the United States to buy the French company's rights to build the Panama Canal.

Bunau-Varilla crowned his campaign with a master stroke: he sent letters to the members of the U.S. Congress with Nicaraguan stamps featuring a smoking volcano. The committee voted in favour of Panama, and the proposed Nicaraguan route was buried under the threat of the lava of Momotombo.

Sabonge explained to IPS that "the model proposed by the Nicaraguans is to run the canal as a concession, while in Panama, all profits go straight to the state."

He also said that "if the Panama Canal is widened, the Nicaraguan project will be less viable."

Panama has now entered the publicity blackout period prior to the Oct. 22 referendum, so no further survey results announcing a majority of Yes votes will be published.