In a move that may turn out to be a lot more historically important than China’s reported lunar landing this weekend, the Sandinista government of Nicaragua is rapidly moving forward with a plan to allow a Beijing-based Chinese businessman to build a huge canal connecting Nicaragua’s Pacific and Atlantic coasts.
The plan gives telecommunications CEO Wang Jing a very generous set of concessions in exchange for a promise to build an inter-ocean canal three times the length of the Panama Canal, reports the Daily Mail. A bevy of tax-free side projects involved in the deal includes lucrative ports, an international airport, a cargo railway and an oil pipeline across the country.
The deal also lets Wang take private land for his projects—likely for a fraction of market value.
The price tag of the canal alone is estimated at between $40 and $50 billion.
Under the terms of the deal, Nicaragua receives $10 million a year for 10 years as well as a gradually larger portion of ownership of the canal over the course of a century. After 100 years, the country would own the canal. However, the payments and the ownership transfer only occur if the canal actually gets built.
The deal has many critics.
Environmentalists are absolutely up in arms, claiming that the tropical forest-filled, ruggedly gorgeous country will be wrecked by Chinese industry.
Several groups challenging the canal deal in Nicaragua’s Supreme Court expect the Sandinista-dominated Supreme Court to side with the government.
“It’s basically handing over the whole country — water, air and land — without any studies,” opposition congressman Luis Callejas said, according to the Mail.
Callejas was later blackballed from a 10-day trip to China by major Nicaraguan businessmen and politicians. Chinese diplomats refused to grant him a visa.
Shipping experts say that a canal in Nicaragua would need to produce $1 billion in annual revenue to break even, which would mean half of the Panama Canal’s cargo traffic would have to start using it.
Current Nicaraguan president Daniel Ortega – yes, that Daniel Ortega, the 1980s dyed-in-the-wool socialist — strongly supports the canal and Wang’s other projects, particularly ahead of the country’s 2016 presidential elections.
Last month, Ortega’s Sandinista party faction in government proposed a set of constitutional changes that would allow him to be president for life and also would write the canal project into the national constitution.
Ortega’s advisers predict that the new canal in Nicaragua could be completed in as little as five years and cause the country’s $10 billion GDP to double.
Another reason for the big push to start the canal now is that aid from socialist benefactor Venezuela is quickly drying up.
The people of Nicaragua across all social demographics are generally thrilled by the prospect of a new canal in their country and the prosperity they believe it will bring, notes the Mail.
Over the summer, the National Autonomous University of Nicaragua in the capital city of Managua announced that it will establish majors in port management and metallurgy. There will also be Chinese language courses on offer.