New Interoceanic Canal in Nicaragua may compete with Panama’s for Shipping Traffic Business

Inter-oceanic canal in Nicaragua as an alternative to the Panama canal.

Image courtesy of http://nuevaya.com.ni/
Image courtesy of http://nuevaya.com.ni/

Central America is a strategic territory for trade, which all the profit in this moment are taken for Panama and its Canal, other countries of the territory do not want to be outdone, in that sense, all the countries of the region are in a race against time for the construction of alternatives to the panama canal that will be expanded.

Nicaragua will be initiating the construction of the their Inter-oceanic canal starting in 2014 or early 2015 and ending in in 2019, the work will be executed by HKND from china under a figure from grant and exploitation. With this Nicaragua will allow the passage of larger vessels between the Caribbean and the Pacific.

“The canal will be built by the Chinese company HKND Group with an investment that is encrypted by the Government at $40,000 million. The Nicaraguan Government and the Chinese company HKND Group signed on June 14 a framework agreement for the construction of the interoceanic Canal grand project, which envisages the granting and exploitation for 50 years, renewable for another period of the same time”[1]. This Inter-oceanic canal not will bring only benefits and income to Nicaragua as a country, will also improve the economy of this country, possibly this construction not only will reactivate the Nicaraguan economy but also to attract more foreign investment and this will possibly make that Nicaragua will become a business destination as Panama has been in recent years.

Image courtesy of Diario El Mundo http://elmundo.com.sv/
Image courtesy of Diario El Mundo http://elmundo.com.sv/

The President of Nicaragua Daniel Ortega not only aims to be to eradicate poverty in the country, but this will also bring prosperity to businesses and the economy of that country. [2]. And the expectations about the Inter-oceanic canal of Nicaragua are becoming more increased not only the Government but also the population of that country. Because the Nicaraguan canal would have capacity to capture 416 million metric tons, accounting for 3.9% of world shipping. [3], the Government of Nicaragua had calculated that, if the construction of the canal began in May 2014, the country’s economic growth would not between 4% and 5%, but 10.8% this year, figure that it would raise up to 15% in 2015. [4]. Also, Nicaragua hopes that the Inter-oceanic canal will help that year 2018 the gross domestic product (GDP) exceeds 24,700 million dollars, 14.900 billion that it had projected without channel, i.e. more than double of the current GDP. [5]

Not only companies become competitive every day, also the countries and Governments in a region so competitive scramble to create climate of investment to generate jobs in different economies in Central America. Thinking about all these advantages El Salvador, Honduras and Guatemala also have thought to make a dry canal in order to not be outdone and attract foreign investment. Because of these reasons, and the current potential delays at the Panama canal expansion, an investment in Nicaragua at this time could represent a great opportunity for business because of the potential growth opportunity.

 

References

  1. http://www.laprensagrafica.com/2014/01/06/construccion-de-canal-inicia-en-20142015
  2. http://www.eltiempo.com/mundo/latinoamerica/construccion-del-canal-de-nicaragua_13338496-4?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+eltiempo%2Fmundo+(eltiempo.com+–+Mundo)
  3. http://www.elespectador.com/noticias/elmundo/construccion-de-canal-nicaragua-iniciara-finales-de-201-articulo-467012
  4. Ibíd. Ref. 3
  5. Ibíd. Ref. 3

About Jorge Mastrapa

Dr. Jorge Mastrapa is an international author, speaker, executive coach, and entrepreneur. His areas of expertise include cultural diversity, global leadership, organizational culture, and human capital management.

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