4 Dec 2017

Will Nicaragua's intracontinental canal fight poverty?

Gabriela writes*

Nicaragua has developed and implemented pioneering strategies to fight poverty. Thanks to these strategies, the Central-American country has managed to reduce poverty from 42.5% to 29.6% in a record time of five years. Nonetheless, it’s Human Development Index (HDI) it’s lower than the average of Latin America and the Caribbean, ranking 124 out of 188 countries. This is a clear sign that the Nicaraguan government still has a lot to do to foster development in the country.

As an attempt to promote economic growth and fight against poverty, the government of Nicaragua has enacted plans to start the construction of a canal that connects the Caribbean to the Pacific Ocean. The project promises, according to Nicaraguan president Daniel Ortega, to lift around 400 thousand people out of poverty. The canal will extend 278 km across the country through the path shown in the following picture. If the canal is constructed, there are many environmental (in the broad sense of the word) issues that will appear.
Nicaragua Canal route
To begin with, one of the worst impacts comes from long-term water security. The canal will cross the Cocibolca lake, which is the biggest fresh water reserve of Central America. To make up for it, the government affirmed they will include a water project to make up for it, but it is not yet formally proposed. The construction of the canal would negatively impact more than 80,000 people who use the water and will negatively affect the ecosystem of it, too. Out of those, the main issue comes with the people that fish and use the lake as their main source of income and food. In addition to that, it will cause hydrocarbon pollution, salinity and turbidity problems in the lake. The construction of the canal would also translate into deforestation as new land must be cleared for it.

To construct the canal a wide range of forests will be cut down, out of those, the canal will cross through 8 environmentally protected areas.  This causes an increase of vulnerability to disasters such as floods and droughts. Reasons for this is that the land will be less resilient, and there will also be an increased soil erosion. Animals from the protected areas will be forced from their natural habitat to other places, which increases competition in other habitats.

With regards to the people that will be displaced from their lands, there is also an issue of reallocation. The government has not yet proposed a plan of how people are going to be compensated from their lands nor if they are going to be reallocated to other parts of the country. In general, many issues derive from internal rural to urban migration, given that the habitable space that Nicaragua has will be substantially reduced, it might become more complicated.

Bottom line: In a nutshell, Nicaragua remains one of the least developed countries in Latin America. Combined with its geographical and ecological position, marked by heavy deforestation, it remains one of the countries in the region which is most vulnerable to disasters. The construction of a canal that would affect the Nicaraguan environment especially in regard to water security, deforestation which would accentuate the magnitude of natural disasters and with the communities displaced. There is a clear need to assess the environmental costs and benefits of maintaining it and using it as a tourist haven, taking advantage of the beauty of forests and the Ometepe volcano.

* Please help my environmental economics students by commenting on unclear analysis, other perspectives, data sources, etc. (Or you can just say something nice :)