Envío Digital
Central American University - UCA  
  Number 284 | Marzo 2005



The Panama Canal, Or the Canal’s Panama?

As long as the canal keeps requiring ever more space and resources for its operation, and nothing is done to ensure that the benefits outweigh the resources consumed or that these benefits are equitably distributed among the population, we will have to talk about the Canal’s Panama rather than the Panama Canal.

Martín Renzo Rosales, sj

Panama has an extraordinary wealth of natural resources. It ranks 19th in the world for the variety of flora and fauna that inhabit its territory: 225 species of mammals, 226 of reptiles, 170 of amphibians and 926 of birds as well as over 9,000 varieties of plants, 1,500 of them native. But the American continent’s thin waist is famous not for this, but rather for a project that many consider to be the eighth wonder of the modern world: the Panama Canal.

The canal has defined Panama ever since the country was established as an independent nation in November 1903. Since then, the country’s historical evolution has centered on the hope of getting some benefits for itself out of that inter-oceanic connection.

A colossal work
with a colossal impact

From the time construction got underway in 1904 until the Panama Canal was inaugurated in 1914, the activities that turned the canal into a reality broke new ground in the areas of engineering, public health, population displacement and the transformation of the ecosystem. The best source of information on the construction of the canal can be found in David McCullough’s book, The Path Between the Seas.

The achievements in health through the control of vector-borne diseases such as yellow fever had a huge impact on public health policies worldwide. In the area of demographics, it is estimated that people from 97 countries came to the isthmus to help build the canal over the course of those ten years, including over 50,000 people from the Caribbean islands and 15,000 Europeans. Many of these workers settled permanently in the country, contributing to the configuration of its current cultural and ethnic mosaic.

The excavations for the canal dramatically transformed the ecosystem of the Panamanian isthmus. Some 219 million cubic meters of land were removed and Gatun Lake, which ranked for a number of years as the largest artificial lake in the world, was created; it covered 423 square kilometers. Thousands of hectares of forests were cleared and several towns were flooded. Islands were connected to the mainland on the Pacific coast, while huge wave breakers were built on the Atlantic to protect the city of Colon, a former island converted into a peninsula in the 19th century.

The 80-kilometer-long cut through the isthmus that is the Panama Canal made it possible to considerably reduce the time and distance required to travel between the Atlantic and Pacific Oceans. A ship can save over 7,800 miles between New York and San Francisco by passing through this inter-oceanic route, compared with the alternate route around the southern tip of South America.

Transit route and
source of resources

The Panama Canal has been much more than a useful, neutral route for ships of all nations. As soon as it was completed, it became an economic, political and military enclave of the United States, with geo-strategic ends. The United States established laws, a language, authorities, an economy and an administrative and military organization in half the territory, altering Panama’s development as an independent country even more than had been anticipated. Some 900,000 ships have passed through the canal since its inauguration in 1914, roughly 13,000 to 14,000 a year. Some 4% of global maritime trade and nearly 23% of the transport between Asia and the east coast of the United States passes through the canal.

Since it was handed over to Panama on December 31, 1999, the canal has been a crucial source of economic resources for the country. In the past four years, Panama has earned nearly a billion dollars from the canal, far more than it earned in the nearly 85 years of US administration.

To ensure that the canal would operate properly and to protect it from the whims of the country’s partisan politics once under Panamanian control, an autonomous agency was established to administer the canal and its watershed through a special constitutional provision. In the past four years, this agency, the Panama Canal Authority, has become the country’s most powerful institution. The income from the canal gives it a budget well above that of any other Panamanian government agency, and its nearly 7,500 officials and employees are among the highest paid in the country.

Considering the efficient service the canal provides its users, with sophisticated technology worthy of any industrialized country, as well as its contribution to the national GDP and the national treasury and its role in generating other directly or indirectly related services, the canal is unquestionably an extremely valuable resource for Panama. The team that administers it in such a businesslike fashion has not only maintained its infrastructure, but in fact improved the quality of the services previously offered by the United States.

Now the Panama Canal is having to respond to recent changes in international maritime trade. Asian economic expansion in general, and particularly the surprising surge of the Chinese economy, has increased the size of the markets on that side of the globe and, consequently, the volume of trade between the Atlantic and Pacific Oceans. As a result, naval companies from Asia are building bigger ships that can carry more cargo per voyage. But these ships are too big to pass through the Panama Canal.

Panama Canal Authority officials argue that if major changes aren’t made in the Canal within a few years, these mega-ships will have to seek alternate routes. For this reason, the Panama Canal Authority is proposing to enlarge the Canal in order to keep up with the new trends in the maritime shipping market.

Painful histories forgotten

In the mid 1980s, “My Name is Panama” was the slogan of an aggressive tourist campaign launched by the Panamanian Tourism Institute and aimed especially at the US market. The campaign debuted with an ostentatious “universal” beauty contest. But the name itself has very different roots: as far as we can tell, Panama is a pre-Columbian term meaning “abundance of butterflies” or “abundance of fish.” It also denotes a majestic tree.

Today, however, beyond any other meaning, the name is inescapably tied to the canal that has conditioned our country’s destiny. And there is another side to this canal-bound Panama that is far less glamorous. For example, the history books say little if anything about the fate, sacrifices and suffering of most of the people who worked on the canal’s construction, or about its victims.

The most widely known stories about the construction of the canal tend to present this engineering feat as a triumph of human ingenuity over unruly nature for the benefit of global trade. And this is true. The stories that have been recorded and become part of posterity in the official literature based on this version of history tend to focus on the figures who administered the project, casting the work of men like Stevens, Gaillard, Goethals and US Presidents Taft and Teddy Roosevelt in an admiring light. But very little information is available about the workers from near and far who were crucial to the success of the enterprise. We have to rely on the historical memory handed down through the Panamanian population and a few literary sources to find any account of the inhuman system of racial discrimination established in the canal, where white workers from the United States received the best salaries, lived in the best houses and obtained better medical care than black or non-US workers.

Even less has been written about the Panamanians who were displaced by the construction, or the rural communities forever submerged under the waters of the canal. To give but a brief summary of little publicized facts, 21 communities disappeared with the flooding of the land along the canal route. Some were reestablished in other places with the same names: Gatún, Limón, Chagres, Miraflores... Others, like Matachín, Bohío Soldado, Gorgona, Frijoles, Bailamonos, Cruces, Cruz de Juan Gallego and Santa Cruz, vanished from the face of the earth leaving no evidence of their existence other than the memories of the aging descendents of some original residents.

In his work, David McCullough mentions thousands of people dispossessed of their land and property by the waters of Gatun Lake. Relocated onto higher ground, these people were left feeling they had not been compensated fairly and had been arbitrarily relocated without consultation and with no place to lodge a complaint.

Military enclave and
population zone

Throughout the 20th century, the Canal Zone provided a site to support US military interventions in the internal politics of Panama that left a large number of victims. The climax was the US invasion of Panama in December 1989. Even now, 15 years later, the real number of dead and wounded from that attack has still to be determined. And if that weren’t enough, the Canal Zone was also home to the Southern Command, notorious throughout Latin America, allowing it to extend its shamefully negative influence throughout the rest of the continent.

The canal has encouraged the intensive populating of the area alongside the transit route between Colon and Panama City. Nearly half the country’s 13 million inhabitants live in the metropolitan area that stretches between these two cities.

The country’s main centers of political decision-making and socioeconomic activity are also located in this area. The main consequence of this concentration has been overpopulation, with all the accompanying organizational and sanitation problems and direct negative repercussions on the ecology of the inter-oceanic region and the quality of life in the two cities.

The state’s failure to implement an organized, comprehensive, consistent and coherent development policy is to blame for the disorderly location of human settlements, industrial plants and commercial establishments along the transit route. Because of this lack of long-term vision, the demographic dynamics encouraged in the areas near the canal threaten its efficient operation, as well as the well-being of the people who live there.

Water: The crucial, vital resource

The population boom and the proliferation of cattle ranching near the canal have led to extensive deforestation in the area. This has in turn contributed to increased sedimentation levels in the Alajuela and Gatun lakes, reducing their capacity to store the water needed to operate the canal. Furthermore, the rivers and streams that feed into these lakes are heavily contaminated, affecting the quality of the water drawn from them to be processed for human consumption. For this and other reasons, water is currently a very important issue in the country.

It takes 52 million gallons of fresh water to move each ship passing through the Canal from one ocean to the other. This is equivalent to the amount of water required to satisfy the needs of nearly half the 1.4 million people who live in the metropolitan area made up of Panama City, Colon, Arraiján and La Chorrera. With an average of 36 ships passing through a day, the Panama Canal uses around 1.8 billion gallons of fresh water every day.

The water in Gatun Lake fell to its lowest level ever in 1998, because of the El Niño phenomenon. In response, restrictions were placed on the depth of vessels allowed to use the canal. Given the anticipated cyclical impact of El Niño, the growing demand for fresh water to meet the needs of the growing metropolitan population and the need to enlarge the canal for bigger ships, the Panama Canal Authority has been looking for ways to ensure the water supply during periods of scarcity. One proposed solution was to expand the canal’s watershed.

The canal watershed:
A controversial project

The canal watershed is the set of rivers, streams, springs and other water sources that feed into it. Up until August 31, 1999, the watershed covered an area of 339,649 hectares. In a quick, unexpected move by the Panamanian legislature on its last day in session that year, the watershed was enlarged by 213,112 hectares, to make a total of over half a million hectares, nearly 7% of the national territory. The curious, paradoxical part of the measure was that the water sources in the newly added areas do not dump a single drop of water into the canal.

The fact that the watershed was extended to include water sources that are in no way connected to the canal and without consulting the peasant communities in the area caused farmers to strongly question the nature of the project. Their suspicions were fueled by the justifications given for the law’s approval during the legislative debate, which suggested that plans were afoot to build dams to feed more water into the new locks proposed for the canal.

Although the legislative record shows that the construction of dams was discussed at the time the law was approved, and although the relevant maps have been drawn up, the Panama Canal Authority has for the last two years denied that it is planning to build dams. In their public statements, Panama Canal Authority officials insist that the region merely forms a “hydraulic reserve” to satisfy the canal’s future needs.

Against the dams, not development

When the small farmers in the western part of the province of Colon learned that a law incorporating their lands into the canal watershed had been approved hastily and in virtual secrecy, they quickly organized several small meetings within and among their communities to discuss the issue.

Out of this series of meetings arose what came to be called the Peasant Coordinator Against the Dams (CCCE), which has brought together peasant farmers from the provinces of Colon, Coclé and Panama representing the inhabitants of the regions that could be affected by new dams. As one CCCE leader argued, “They claim that if they don’t enlarge the canal, it’ll become obsolete. So what? The canal has been obsolete for small farmers like us since the very start, since we haven’t received any benefits from it.”

Because they oppose new dams, the CCCE members have been monitored and hostilely interrogated by Panamanian security agents. In an attempt to incriminate them, officials went to far as to allege in 2001 that Zapatista guerrillas were active in the area of the canal watershed. In 2004, claiming national security concerns, the Panamanian government expelled a Spanish citizen who had been working with the peasants in the CCCE.

The CCCE questions the designation of the main national icon, the Panama Canal, as the backbone of the country’s service economy on the grounds that the Panamanian people receive little or no benefits from it. Questioned by a television interviewer about whether the farmers were willing to sacrifice themselves for the good of the country, CCCE leader Francisco Hernández responded: “I ask the viewers, how and when has the average citizen felt the benefits of the canal? When someone can answer that, or when a group of average working people tell us, ‘We benefit from the canal,’ then we can talk about the kind of sacrifice farmers would be willing to make.”

Dams or holding pools?

The community of Cuipo in the province of Colon, along the shores of Gatun Lake, is an emblematic case. The deplorable condition of the highway leading to the community makes it hard to get there during the rainy season, although it is only a few kilometers from the Gatún locks. The water service in this community and even in the city of Colon itself, the second largest city in the country, can only be described as poor. Other communities near the canal have no electricity, water or health centers, in scandalous contrast with the technological sophistication of the canal and the huge amount of water it uses.

Given their just and reasonable arguments, the peasant farmers in the CCCE have the support of missionaries working in Costa Abajo in the province of Colon; the bishops of the dioceses of Panama, Colon and Penonomé; the national branch of CARITAS; and several student and worker organizations. Thanks in part to this support, the voices of the main people who would be affected by the plans to enlarge the canal can be heard on radio and television stations, in public forums and in the legislature. In all these forums, they have defended their position and explained that they are not against development, but rather against injustice.

It has been rumored recently, and unofficially, that the plans to enlarge the canal do not contemplate building new dams. What is being proposed instead is a series of holding pools running parallel to the locks. These pools would recycle the water used to move the ships, making for a more efficient, rational use of it. If this is true, it will address the central motive behind the peasant farmers’ protests. Other actions taken by the Panama Canal Authority, however, have yet to be explained. For example, the government has been surveying and issuing titles for the lands located in the new watershed with surprising zeal over the past two years, while Panama Canal Authority officials have been visiting the communities in the region, conducting a public relations campaign among the peasant farmers.

Demanding clarification
and repeal of the law

Virtually overnight, international funding has been obtained in the past two years for aid programs and exhaustive research in the area of the enlarged watershed. This has splintered resistance to the project among the peasants and divided many communities. Some farmers believe that the new land titles will ensure their property rights, while others fear that the titling has been done to establish a legal framework for potential relocations or compensation, even against the will of the owners, who see their lands as more than a mere asset with monetary value. Meanwhile, the inhabitants of the original watershed—which provides the water the canal currently uses—complain of a lack of attention from either canal or national authorities.

One source of discontent is the Panama Canal Authority’s secrecy over the information gathered through its studies in the enlarged watershed. The situation has been further aggravated by the announcement that a referendum on the canal enlargement project will be held before the end of this year. With little critical information available to the public, and with a big publicity campaign in favor of the project, the results are predictable.

In this ambiguous context, the members of the CCCE have called for repeal of the law enlarging the canal watershed because it hangs like a sword over their heads. If their lands are defined as a “hydrological reserve for the canal,”
the possibility that they may be used in the future to benefit the canal at the inhabitants’ expense cannot be ruled out.

Dramatic contrasts

While the present leaves little room for peace of mind, fears about the future impact of the canal’s expansion remain. Reality belies the slogan of the media campaign launched by the Panama Canal Authority: “The whole country benefits from the Canal.”

According to the UNDP’s 2002 Human Development Report:
—While the tourists who visit the country put some US$120 million into the national economy every quarter, whole families in the Ngobe-Buglé region survive on less than $25 a month.
—While 52 million gallons of fresh water are channeled into the sea for every ship that passes through the canal, people in many neighborhoods in Panama City and Colon, and in many homes in the district of Las Minas and the provinces of Herrera, Donoso and Coloncan can only wonder when they will have drinking water.
—While studies are done and designs drawn up for new locks to improve transit through the canal, little is being done to plan an adequate road infrastructure to connect Panamanians to each other.

Asking citizens whether the income provided by the canal to the national treasury really helps improve Panama’s standard of living only increases one’s doubts. The nearly US$1 billion that the Panamanian government has earned from the canal over the past four years has done nothing to prevent Panama’s foreign debt from increasing by nearly the same amount. Nor has it lowered the country’s high poverty rate: some 40.5% of Panama’s population. Up there with Brazil, Nicaragua and several other Latin American countries, Panama has one of the most inequitable income distribution rates in the continent.

Peasant farmers question
this development model

The enormous efforts and investments that have been made and are being planned to ensure Panama’s place in the world of international trade contrast strikingly with the lack of initiatives, past and present, to encourage better social and economic integration within Panama and among Panamanians. There are too few highways and rural roads, and those that do exist are poorly maintained; people don’t have the means to get their products to markets; and national health and telephone services remain problematic despite the purported achievements proclaimed by the authorities. There are better airport connections between Panama and Madrid, Miami or New York than between the neighboring Panamanian provinces of Colon and Coclé, or Darién and Panama. And until a few months ago, it was cheaper to make a phone call between Panama and Taiwan than between the Panamanian provinces of Colon and Chiriquí. Paradoxes like these no longer even challenge the imagination of Panamanians.

We hope the canal will ensure better services to Panamanians and not only to global trade. It remains to be seen whether the richly remunerated canal technocrats will listen to the voices of the people who have benefited the least from the canal. Panama’s peasant farmers, who pay little attention to economic doctrines or the technical points of engineering but have an understanding of reality and a great deal of common sense, have dared to question the rationality behind the canal-based development model that has conditioned Panama’s socioeconomic history. It is time to listen to them and give them adequate answers.

The recent history of mega-projects in many parts of the world—such as the European Channel Tunnel or the huge hydroelectric dams in Latin American—has shown that such works are typically promoted through publicity campaigns that exaggerate their potential benefits and understate or cover up negative effects that people discover only later, through their own unhappy experience. The Panama Canal Authority is currently waging an impressive publicity campaign that continues to overstate the canal’s benefits and extol the wisdom of increasing those benefits by enlarging the canal.

Panama’s canal or
the Canal’s Panama?

There is no doubt but that the canal model has conditioned Panama’s perception of itself as a country of transit and services. This has prevented the country from seeing and creating productive alternatives that take advantage of its various potentials not necessarily tied to the canal. The model has had the ideological effect of making Panamanians believe that their country wouldn’t and couldn’t exist without the canal.

A canal that demands ever more water, land and economic resources in order to grow contrasts with the situation of both rural and urban populations that are ever more impoverished, with less access to both land and water. As long as the canal continues to demand ever more space and resources for its operation, and nothing is done to ensure that the ensuing benefits outweigh the resources consumed and that these benefits are fairly distributed among the population, we will have to talk about the canal’s Panama rather than the Panama Canal.

Martín Renzo Rosales, sj, is an envío correspondent in Panama.

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