The Canal of Panama
The Panama Canal is one of the largest cargo projects in the world providing global trade link between USA and trading partners (Authority Panama Canal 21). Currently, the Panama Canal accommodates about 5 percent of the world’s total cargo volume, which is seen to expand further by the close of 2016 because of the growing needs for improved service performance within the shipping industry. The expansion of Panama Canal is projected to play a vital role in U.S. ports and the full range of global island infrastructure, and would possibly lead to future growth in trade. Otherwise, the projections of the U.S. transport and commerce authority is to allow for passage and trading of larger containers through the expansion of the Canal (Authority Panama Canal 21). The strategic plan as presented in this case retails around a final reduction in the cost of trans-ocean shipping, especially for the trade routes/channels linking the East and the West with the Far East, United States of America and the entire Gulf Coast ports. The cost-reduction-effect in areas of containerization is termed relevant to the shipping services that have grown rapidly since the first half of the 21st century, facilitating trade between Asia and Western Economies (Authority Panama Canal 23). This study analyzes the impacts of the expansion of Panama Canal in light of the environmental costs and the amount of wealth trickling down to the working class. The study begins with a brief discussion of the history, major domestic and international issues facing Panama Canal.
The History of Panama Canal and unfolding events
The Construction of the canal began towards the end of 19th Century following the technological advancement and growing pressure for commercial activities in USA. The earliest Central America (Europeans) colonists were attracted to the vast economic potentials of the narrow strip bridge connecting North America with the South America. After conducting a considerable amount of excavation in the region, the USA government, in 1913, completed the Panama Canal and opened it one year later to serve the local and international community with shipping services (Authority Panama Canal 24). The desires to control the Canal project then led to a US-backed revolt, which showed the split and creation of the state of Panama from the state of Columbia in the year 1903. Other than the challenges of environmental costs and wealth accumulation by the rich elites in the region, the Panama Canal continues to offer a viable economic venture to the people of Panama alongside working as a link in world shipping.
The actual construction of the canal began in early 1881 when an enormous number of the labor force, about 20,000 men, from different regions of America were employed to execute the construction plan. Among the groups of workers, a large proportion consisted of afro-Caribbean workers who were mainly from the West Indies. Even though, the French engineers provided the best skills that were required to maintain the prestige of the canal project, the high costs of recruitment made the initial planners concentrate on the minor groups and local workforce (Authority Panama Canal 21). Other than the cost of recruitment, the French workers could only provide short service due to the rising death tolls observed in the region between 1881 and 1889. Precisely, the estimated 22,000 deaths were due to environmental challenges in the construction sites. At that time, majority of investors from Panama raised doubts about the practicality of the initial sea-level canal project and felt that adopting the lock canal could have been the best alternative.
Amidst all the expected economic benefits, the mounting financial, technical and mortality problems in addition to natural calamities like floods and mudslide delayed the progress of the canal project. On May 15 1889, work in the site was suspended in order to reduce the growing social and economic problems. The project planners had to re-engineer their strategies, make necessary financial arrangements and acquire workforce with relevant construction skills and by close of 1898, two-fifths of the project work was completed with a total budget of 234,795,000 dollars. Since then, the Panama Canal has been serving a growing population and economies with shipping services ranging from human transportation to containerization (Authority Panama Canal 27). However, the changing technologies and expanding markets for both imports and exports predicted a future limited space for shipping services. The current expansion of the Panama Canal is, for this reason, one of the strategies to expand the shipping space alongside ensuring growth in trade with the domestic and international markets.
The Issues Facing Panama and its Canal
With the expansion of Panama Canal, the two primary areas of focus predict a future with little impact on global shipping contrary to what were observed some decades ago. The historical developments and the expansion of the Panama Canal concentrate on two areas. They include a doubling capacity following the creation of a third set of locks, which would handle huge container ships, a growing rivalry between the Atlantic-Pacific work and the completion of the new Suez Canal projected to turn the larger portion of the original canal into a two-lane like marine highway. As already mentioned, the plan to expand the Panama Canal aimed at winning more traffic in order to handle more ships close to thirteen thousand boxes from the initial five thousand boxes. However, the canal has been experiencing flooding in its shipping lines handling up to eighteen thousand containers. At the same time, Panama is experiencing a reduction in its business activities since most manufacturing is done in China, which is one of the largest international trading partners and this has led to a rise in wage cost and drift to other competing ports. As Panama Canal enters its second century after establishment, the challenge of competition seems to increase following the introduction of new shipping containers by the rival ports. For example, shipping containers from Shanghai through Panama to New York though expensive is considered easier than breaking at Panama. As a result, firms with the largest ships in the region are losing interest in the services offered by the Panama Canal but instead use Suez. The issue of competition compels Panama Canal to engage in hedging bets in order to facilitate growth through expansion. However, with the thriving port complexes and railway connections currently being constructed, Panama hopes to initiate a duty-free zone with improved global logistics.
The environmental costs of the expansion of Panama Canal
The construction work and the expansion processes of Panama Canal, which aims at adding a third set of locks to the already established infrastructure, has significant environmental impact on the surrounding population (Ogden 11). One great impact on the natural environment took place at the initial stage of construction in early 20th Century. At that time, the development led to a 425 square kilometers flooding and the formation of Gatun Lake as well as the modification of existing downstream and upstream watersheds. Following the incidences of flood due to the rising water levels of certain lakes in the region, the population around Gatun Lake had to relocate to other areas leaving the area around the lake and near coasts isolated. Apart from relocation of population, the floods also led to mass destruction and fragmentation of ecosystems making Panama lose its biodiversity. As noted in this case, the intensive activities taking place in the canal such as increased shipping require regular maintenance and disposal activities along the north and south coasts. Poor disposal activities lead to deterioration of air quality, make water sources unfit for domestic and industrial use and also leading to land pollution (Matsuoka 19). Other environmental costs include higher risks of landslide, increasing chances of soil erosion, noise and vibration levels, changes in microclimate, soil compaction and reductions in water flow regimes. Majority of these cost-elements have negative impacts on the environment and are mostly identified at the construction and operations stages. While the results of the construction phase are seen as temporary and reversible, the impacts of project activities are considered permanent in nature due to the low intensity and inability to respond to the proposed designs or not being able to comply with the set environmental standards.
Apart from the mentioned general environmental costs, studies have shown that both the construction and operation phase of the Panama Canal have a significant impact on the biological environment. From the studies conducted, it is clear that while the construction phase have direct influence but lower intensity on the biological environment since this phase is temporal and once completed the environment have the tendency of reverting to its initial state, the operation phase causes permanent damage due to the state of repeated actions (Matsuoka 9). Such impacts on the biological environment are mainly observed in the marine areas, civil work sites, rivers as well as in lakes. Some of the biological effects of the expansion of the Panama Canal include destruction of the marine coastal ecosystem, higher chances of running over wildlife during the construction phase, and elimination of available aquatic resources especially in rivers and lakes, reduction in land habitats. Others include reductions in vegetation cover, increasing impact on Flora and Fauna, significant alteration of protected areas and poaching activities of locals and tourist.
Just like in the case of biological environmental costs, the expansion of the Panama Canal has several impact on the country’s socioeconomic environment. From the investment point of view (Matsuoka 10), the expansion of the canal remains important because of the projected domestic trade improvements and connections with the outside world. However, the expansion of the canal is considered to have higher socio-economic threats, especially to the growing population who has not yet attained its economic values (Matsuoka 10). While the expansion is projected to stimulate the national economy through improved investment and job creation, instances such as increase in property values, increased migration and population inflows, change in land use, overcrowding of public services, increasing demand for transport services, high crime rates and higher risks of work-related disease are typical (Matsuoka 11). All these impacts negate active social integration and economic performance of the growing population, and if the government remains reluctant in clean policy implementation, there are higher chances that the country would lose its key economic potentials due to trade diversions.
In general, the expansion of the Panama Canal has varied environmental impacts, which range from physical elements, biological elements to socioeconomic elements. At the construction stage, the change in microclimate occurs because of the changes in land use, which has resulted in the loss of vegetation cover (Hricko 12). Otherwise, the loss of vegetation cover is projected to pose further challenges in future project activities such as clearing and grubbing, construction of both permanent and temporary roads, excavation, blasting and disposal of dredged materials. The observed changes in local climate like the rise in temperature or drop in humidity is due to the loss of vegetation covers, which distinctively creates chances for surface refraction conditions (Hricko 12). At the operations stage, the impacts caused due to the construction activities will continue to prevail, making changes in land use from artificial to natural regrowth. Just like in the establishment of the microclimate, loss of carbon capture occurs during both the construction phase and at the implementation stage. At the construction phase, there are significant changes in land use and where there were secondary forests, shrubs and grasslands, and the land has been cleared to allow surface space for project execution (Hricko 16). However, the growing carbon capture and other environmental challenges are by nature cumulative with greater effects at the regional level and international level. The accumulation of carbon gases in the atmosphere could result in global warming and climate change and loss of production capacities due to adverse environmental outcomes, which offers a strong base for natural sources.
Authority, Panama Canal. “A History of the Panama Canal: French and American Construction E orts.” (2012).
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