Trump alleges that China is trying to indirectly control the Panama Canal.
US President Donald Trump is worried about China’s increasing activities around the Panama Canal. They allege that China is trying to indirectly control this important, strategic waterway. Trump also claims that relatively high fees are being charged from American ships passing through here. Let us try to understand under the pretext of Trump’s concern, who actually has control over the Panama Canal? Who created it and how important is it to the world?
The Panama Canal is an important strategic waterway. It connects the Atlantic and Pacific Oceans. Because of this, ships do not have to circle the entire South America. Five-six percent of the world’s maritime trade takes place through this canal. In this way, this route is like a lifeline for global trade. The idea of the Panama Canal is hundreds of years old. This route was first imagined by the Spaniards. The French failed in their attempt to build it. The United States built it in the beginning of the 20th century. The canal opened in the year 1914. Since then it has remained the center of trade and strategy.
Who controls the Panama Canal?
Under the Tory Hose Carter Agreement signed in 1977, America agreed to hand over this important canal to Panama. On December 31, 1999, Panama got complete control of it. Today Panama is in charge of the operation and maintenance of the canal. The Panama Canal Authority runs it. It is a public institution that manages the canal, collects fees and decides on expansion.
The Panama Canal is approximately 82 kilometers long. Photo: Getty Images
What is its geographical and economic importance?
The Panama Canal provides the shortest route for shipping. It sells not silica or gold but time and fuel savings. Because of this, ships have to travel thousands of kilometers less. This reduces transportation costs. It directly affects the prices of traded goods and access to markets. The canal has historically been important for oil, container shipping, and military shipping.
What is its strategic importance?
The Panama Canal is very important not only for trade but also from security point of view. This route is important in the maritime strategy of any country. During times of war, faster movement of ships becomes possible. That’s why big countries have always kept an eye on it. Control of Panama is considered linked to the world’s balance of maritime power.
Photo: Getty Images
A canal changed Panama’s economy
The Panama Canal has changed the economy of the country. Panama gets revenue from its income. Tourism, port services, and logistics flourished here. Panama is getting money for everything. It also affected the people living near the canal. Many times issues of land use, housing and employment have been raised. Environmental concerns also remain. Because the expansion of the canal is putting pressure on the surrounding ecosystem. The Panama Canal is dependent on fresh water. Lock systems move ships up and down by drawing water. Climate change and drought are threats to this system. If the water source decreases, the capacity of the canal will be affected, hence it is important to pay attention to water conservation and alternative technologies.
Expansion and modernization of the canal also took place
Presently the canal has been expanded. New leaks and larger locks were built in 2016 for large container ships. This expansion provided passage for larger ships and increased trade capacity. But with expansion came complexities of cost, time and environment. Panama has the challenge of dealing with these.
China’s President Jinping and America’s President Trump. (file photo)
Dependence of many countries of the world on Panama Canal
Some parts of the world depend on the Panama Canal. Especially trade between North-South America, Europe and Asia. Alternative routes, such as the round trip to South America or the Cape Horn route, are more expensive and slower. Therefore, most of the big commercial ships use this canal only. It is helpful in maintaining the smooth functioning of the global supply chain.
Political and economic challenges are also no less
The Panama Canal could become a center of security, tariff policies and international pressure. The route may be affected by war, maritime disputes or political instability. Also, a global economic recession or changes in trade policies could affect the canal’s income and use. In the future, the role of the canal may change due to climate change, technological improvements and changes in trade routes.
The pressure on the canal could be reduced if new technology comes to sea routes, more fuel-efficient ships, alternative routes, or larger air shipments are created. However, Panama has taken steps towards modernizing the canal, such as smart logistics and better water management. If Panama invests in water conservation and digital governance, its relevance may remain.
Possible alternatives and competition
Some countries have started looking at alternatives to Arctic routes. Global warming is making shipping on north-eastern sea routes less feasible. But this is not considered a permanent option. Also, large canal projects or multi-modal container hubs could create some degree of competition. But as of now the possibility of any alternative taking the place of the Panama Canal does not appear to be remote.
What is the length and width of the Panama Canal?
The Panama Canal is approximately 82 kilometers long. The width of the canal is not uniform throughout the route. The width of the major portion is generally between 150-300 meters. The internal width of the lock chambers i.e. before and after the new expansion is different. Earlier, the width of the ship was allowed up to about 33.5 meters. After expansion in 2016, ships up to 49 meters wide and 366 meters long are passing easily.
Some Chinese companies have been involved in Panama and surrounding ports, logistics facilities and trade networks. Photo: AP/PTI
How many ships are passing through Panama every day?
Traditionally about 12 to 14 thousand ships are passing through the Panama Canal every year. This means that about 33 to 38 ships are passing every day. In recent years the numbers have fluctuated from year to year. The reason behind this is the difference in numbers due to trade world economy, weather, lock schedule and movement of big ships.
What are China’s activities here?
Many big Chinese ships use the Panama Canal between Asia-Europe-North America. China has increased investment in infrastructure and port projects in Latin America and the Caribbean in recent years. Some Chinese companies have been involved in Panama and surrounding ports, logistics facilities and trade networks. This active presence is part of the strategy to increase the role in logistics channels and global supply chains. Panama established diplomatic relations with China in 2017. Since then, China-Panama relations have grown in trade, investment and diplomatic contacts. Probably due to these reasons Trump’s concern has increased.
In simple words, today control of the Panama Canal is with Panama. This is very important for the world. It directly affects global trade, security, and economic dynamics. Its construction changed maritime trade in the East. Currently it is the economic backbone of Panama. Climate, technology and global policies will determine its role in the future. Therefore, conservation of the canal, smart management and strategic thinking are necessary for the country and the world.
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