One thing that most of us, even Aussies like me, learned about Panama in school – was about the global impact of the Panama Canal.
And how the canal made shipping between the Atlantic Ocean and the Pacific Ocean so much easier than having to take a course around the treacherous Cape Horn.
In fact, it was one of the only things we learned about Panama!
[thrive_text_block color=”green” headline=””]I’ve been in Panama for almost a decade now, and I’ve come to learn that Panama has a deep and rich history. Some of which I’ll share in future posts. [/thrive_text_block]
For now, let’s look at how the current canal expansion is going to impact Panama.
It’s been a century since the canal was officially opened. 48-miles of river road carved through the country. And the canal is still considered one of the most difficult engineering projects that’s ever been undertaken.
The Panama Canal Expansion Project
Right now, there are 110 ft locks at each end of the Canal. The expansion project (or the ‘Third Set of Locks Project’) introduces a third lane of traffic, courtesy of a new set of wider locks which will double the Canal’s capacity.
The expansion project commenced in 2007, after a years of planning – including environmental assessments.
This new lane will be able to accommodate the huge 1,200 feet long Post-Panamax 1 ships which can carry 3x the cargo of the current Panamax ships (and I thought the 965 feet long ships were massive!).
These mega vessels have the capacity to carry a whopping 12,500 containers, and even now the U.S. East and Gulf coasts are upgrading port facility infrastructure in order to meet the needs of these vessels.
[thrive_text_block color=”note” headline=””]The Panama Canal expansion project was initially scheduled to be completed by the end of 2015, but construction delays now see it opening in 2016.[/thrive_text_block]
The expansion project has global significance, allowing much more efficient shipping of U.S. and South American commodities, particularly coal and grains, around the world.
What Will This Mean for Panama?
Until 1977, direct financial benefits to Panama were mainly in the form of annual annuity payments from the U.S., which operated the canal and manages the tolls.
After a transition period of American-Panamanian joint control, from 1999 the Canal has been managed by the Panamanian government, through the Panama Canal Authority.
Right from the get-go though, the indirect benefits to Panama were substantial:
- Employment of Panamanians in the Canal Zone,
- The supply of goods and services to the Canal Zone and to ships, and, of course,
- Tourism dollars.
[thrive_text_block color=’note’ headline=”]The Canal is without doubt of great economic importance to Panama; it is its main asset, one that will continue create opportunities for generations to come. [/thrive_text_block]
In the last decade, the country’s economic growth has, according to The World Bank, been one of the fastest in Latin America, with a GDP averaging more than 8% in the period 2006 to 2012.
In 2010 Panama earned $3 billion in revenues from Canal operations, $800 million of which was profit.
This profit figure is expected to jump to $2 billion once the expansion project is opened – a massive injection of funds into the local stable, and well managed economy.
An extra $1.20 billion has the potential to fund a great many social welfare and infrastructure projects that will benefit the lives of every Panamanian.
Tourist Dollars – Yes, Please!
We will be welcoming more tourists to Panama as well – the expansion will allow the largest of the world’s cruise ships to disembark 5,000 passengers who are eager to spend their holiday dollars by shopping or seeing the sights for a day or two in Panama City.
This small taste of Panama is often all the incentive needed for them to return for a longer visit.
First time visitors are amazed at our unique mix of modern infrastructure and Panamanian culture.
[thrive_text_block color=”green” headline=””]And when they have the opportunity to visit the Gold Coast area where I live, it’s little wonder so many return for longer holidays – and, increasingly, to purchase their own condos here. [/thrive_text_block]
Whether you’re looking for an investment property, a snowbird retreat, or to relocate and gain residency—Panama’s got the majority of those “requirement boxes” ticked.
- Panamax and Post-Panamax are the names assigned to the size of ships traveling through the canal, determined by the dimensions of the locks chambers. ↩