PANAMA CITY – Panama celebrated this Tuesday the 20th year since the United States turned over the interoceanic canal to the country it runs through, and hailed the efficiency of the operation and its leading role in world trade and in developing the nation’s economy.
In the two decades of Panamanian management, the Panama Canal “has borne fruit; it has increased our faith in ourselves,” since “we manage the route with greater efficiency so it produces growing returns” to be used in development, Panamanian President Laurentino Cortizo said.
In a brief, solemn ceremony, Cortizo raised the Panamanian flag this Tuesday over the building that houses the Panama Canal Authority (ACP), which operates the waterway through which 6 percent of world trade passes and which connects more than 140 maritime routes and 1,700 ports in 160 countries.
The Panama Canal was built by the United States and operated by it from the time of its inauguration in 1914 to its official transfer under the Torrijos-Carter Treaties signed in 1977, the result of years of negotiations between the two countries.
ACP Administrator Ricaurte Vasquez said that nowadays the Panama Canal is a “modern and more strategic route for world trade,” that its Panamanian management “has fulfilled its duty to operate in a safe, continuous and affordable way,” and that its principal users are the US and China.
Every year the Panama Canal contributes the profits from its operations to the Treasury. In 2019 those funds reached $1.8 billion, another record chalked up following the start of shipping through the newly expanded waterway in June 2016, after almost a decade of work and an investment of at least $5.6 billion.
The widening of the canal was achieved with a third set of locks capable of accepting New Panamax ships, which have triple the cargo capacity of those that have sailed through the canal since its inauguration in 1914. The new locks were built by an international consortium led by Spain’s Sacyr construction company.
Profits in 2019 were “almost 11 times more than the $167 million” earned in 2000, the first year the Panamanian management was in charge, former ACP Administrator Jorge Quijano (2012-2019) told Efe.
He said “the canal drives the Panamanian economy, not only by contributing directly to the Treasury but also by stimulating other areas around its activity,” such as the ports and the nation’s gross domestic product (GDP).
The minister of canal affairs and chair of the ACP board of directors, Aristides Royo, told Efe that “new business possibilities are being developed for the canal” to make the state enterprise “more prosperous,” and that could involve a greater use of its vast assets, which include thousands of hectares (acres) of land.
Former Panamanian President Mireya Moscoso (1999-2004), who accepted the Panama Canal from the US on Dec. 31, 1999, said this Tuesday that the canal’s direct contributions will nourish the national budget with $23.3 billion in 2020, while funding social projects and fighting poverty.
Administrator Ricaurte Vasquez repeated this Tuesday in his brief address that among the new challenges facing the canal is the need to diversify its water sources, given the climate change crisis and its effects.
In 2019 it was necessary to “reduce the cargo tonnage” of ships on “three occasions,” since the canal did not have a sufficient water level due to the lack of rain, which has been 27 percent below the historic average along the waterway according to ACP data, Royo told Efe.
There has been talk of desalinating water from the Atlantic Ocean and of taking water from the Bayano Dam hydroelectric power plant, the minister of canal affairs said, though he added that “in the future other solutions will have to be found, because we don’t know where climate change will take us.”
The Panama Canal is fed by the artificial lakes of Gatun (1913) and Alajuela (1935), but that water also supplies the entire Panama City metropolitan area with its population of close to 1.5 million.
Other challenges that face this interoceanic waterway include “trade wars between the United States and China, the occasional crises in navigation,” and competing with the Suez Canal, Royo said.