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Vote on Panama Canal expansion sparks rich-poor debate By David Carrasco

dpa German Press Agency
Published: Wednesday October 18, 2006

Panama City- The Panama Canal, one of the most ambitious engineering projects in history and the only central passage for ships between the Pacific and the Atlantic oceans, will undergo a major overhaul if proponents have their way in a national referendum Sunday. The proposed expansion of the Panama Canal would nearly double the transport capacity of the thoroughfare and provide a boon for international trade. More than 14,000 ships passed through the canal in 2005.

But locally, the proposal puts Panama at a crossroads that will heavily impact the country's future development. Supporters and opponents of the expansion project disagree over the benefits it would bring the country - and who those benefits would reach.

While a poll last week showed that the expansion is likely to be approved by 79 per cent of voters, political and social elements in Panama have been questioning the impact a larger canal will have on the poor, who number more than 40 per cent of the country's 3.1 million people.

The proposed expansion would consist of a new set of locks to add to the existing two. It would allow two-way traffic through the canal, accommodate larger ships and almost double the tonnage carried. The construction is projected to cost around 5.25 billion dollars and would be scheduled for completion by 2015.

Panama appears divided.

President Martin Torrijos has insisted that the country stands to gain from the initiative because it will spur development and new investment linked to maritime and financial business. He criticized those who oppose the expansion for not providing an alternative.

"Some argue that the canal (expansion) will not create 250,000 jobs, that it will only be 200,000. But how many does the 'no' (vote) create? How many additional jobs will come from the 'no'?" Torrijos asked.

The Panamian president has an approval rating of more than 67 per cent. Earlier this month he said that 833 million dollars of the country's social investment budget for 2007 would come from annual revenue reaped from the canal.

The Panama Canal Authority recently said the canal will close the 2006-2007 fiscal year with revenues of 1.465 billion dollars, 256 million dollars higher than the previous year.

With a campaign full of colour, music and bright hopes, the authorities have sought to convince voters that the expansion will guarantee Panama's future, hoping to paint a vote in favour as an act of patriotism.

The ruling Revolutionary Democratic Party, youth associations and several business and community groups have formed an alliance in favour of expansion.

But several organizations on the left side of the political spectrum have opposed the expansion proposal on the grounds that it will further harm the nation's poorer communities.

The communist People's Party claimed the canal has a "plundering relationship" with the country's natural resources, while trade union leader Saul Mendez said that, contrary to official projections, the initiative would in fact widen the gap between rich and poor and increase the country's debt.

The Peasant Coordinating Body against Dams says the expansion threatens the land of 100,000 people, although Torrijos has stressed that no communities will have to be relocated.

The referendum is being watched closely by the international community, as the exports of countries such as Chile and Ecuador already rely heavily on the waterway. An upswing in trade between the United States and China in the last few years has also prompted greater demand for passage.

The Panama Canal was opened in 1914 by the United States, after 10 years of construction that cost thousands of people their lives.

An engineering milestone, it was welcomed by ships previously forced to take the arduous route passed Cape Horn, the southern tip of South America. Operated by the US for more than 85 years - a condition for US support of Panamian independence from Colombia - Panama regained control of the passage on December 31, 1999.

© 2006 dpa German Press Agency