Displaying items by tag: Panama Canal

The two key ports at either end of the Panama Canal have been taken over by the Panamanian government. This follows a supreme court ruling last month that the renewed 25-year concession given to Hong Kong conglomerate CK Hutchison to operate the ports was ‘unconstitutional’. The authorities have entered the terminals at Balboa and Cristobal and assumed administrative and operational control. A government decree authorised the Panama Maritime Authority to do this ‘for reasons of urgent social interest’. Beijing described the ruling as ‘absurd’ and ‘shameful’, while warning that the Latin American country would pay ‘heavy prices both politically and economically’; in response, president Jose Raul Mulino defended Panama’s judicial independence and strongly rejected China’s threats. The takeover marks a significant development in the strategic and political debate surrounding one of the world’s most vital shipping routes.

Hundreds of residents in Panama’s Indio River region are opposing a proposed dam project that threatens to flood their homes. The Panama Canal Authority (ACP) plans to build a 4,600-hectare reservoir to supply water to the drought-affected canal, a key passage for 6% of global maritime trade. The $1.6 billion project, slated for completion by 2032, aims to stabilise water levels amid declining rainfall. While ACP pledges $400 million for compensating and relocating roughly 2,500 residents, groups warn that up to 12,000 people may be affected. Many villagers, dependent on farming and fishing, feel their livelihoods are being sacrificed for international shipping interests. Recent protests on the river reflect deep opposition, despite ACP’s commitment to dialogue. President Jose Raul Mulino supports the initiative, which has also stirred geopolitical tensions.

On 31 December Panama celebrated the 25th anniversary of reclaiming the Panama Canal from US control. President José Raúl Mulino has rejected recent comments by Donald Trump suggesting that the USA might try to reclaim it; he commented, ‘(It) will stay in our hands for ever’. The transfer of the canal in 1999, ending 85 years of US administration, was hailed as a landmark moment in Panamanian sovereignty. The canal, which remains a crucial global shipping route, is vital to the country’s economy, accounting for about 20% of its annual revenue. Challenges emerged in 2023 as droughts reduced transit capacity, forcing higher shipping fees. Although operations have normalised since then, price increases are anticipated next year.