“Canal Fever” grips Central America

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Every country wants one

There’s a new fever sweeping through Central America, but instead of being carried by mosquitoes, it is a “Canal Fever,” whose infection is being caused by envy of the Panama Canal.

The Nicaraguan all out give-away to a Chinese group to build a “wet canal,” is only one facet of the “Canal Fever.”

During a recent visit of a top-level delegation from the People’s Republic of China, the Mexicans rolled out a plan to build a corridor and railway line from one side of the country to the other – a “dry canal”.

Close on the heels of this planned project, Guatemala announced it also wants a “dry canal”.

The president of Guatemala, Otto Pérez Molina, said on an official visit to Taiwan, that his country has the intention to build a dry canal and that their plans are more advanced than those of Nicaragua, which is involved with a Chinese company.

In an interview, Perez said that “there is a difference” between the dry canal of Guatemala and the one Nicaragua plans to build through the concession made on June 13 with the Chinese company HK Nicaragua Canal Development.

“Nicaragua proposes a canal similar to that of Panama”, while that of Guatemala is “a project of 390 kilometers, including a pipeline, road and high-speed rail line,” said the president of Guatemala. The plan, Perez said, “Would cost about $10,000 million.”

The president of Guatemala, Otto Pérez

Molina said his country intends to build

a dry canal

Indicating that it, too, had contracted “Canal Fever,” the Honduran government announced that the Chinese firm Harbour Engineering Company Ltd. is interested in building a railroad in Honduras, linking the Pacific and the Atlantic, with an investment of $ 20,000 million.

“On July 8, we will sign a memorandum of understanding with the company to immediately do a feasibility study,” the presidential palace said in a statement.

“Harbour Engineering and Honduras look forward to building this monumental project,” more than 600 linear kilometers long, moved by electricity and with 10 railway lines, said the Presidency.

The antidote for “Canal Fever” may be not having coasts on two oceans.

In the case of El Salvador, a country with only one coast on the Pacific, high logistics costs in Central America hinder its aspiration to turn into a logistics “hub”. According to an analysis by the World Bank, presented at a forum “El Salvador Logistics 2030”, the country faces several challenges in the regional context.

The principal one, according to Cecilia Briceño, World Bank Chief Economist for Latin America, is the fact that the “neighborhood” of Central America, rather than facilitate trade, hinders it.

“The fact is that the chances for you, as an exporter, are reduced if you make that transaction with the country with which your country shares a border, because it means that the boundary is a barrier,” she said.

“Difficulties at border posts generate increases in times when moving the goods, an aspect that should not be viewed lightly because the products are predominantly agricultural” in the Central American region, said the economist.


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