Latin Inc
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President Obama's Latin Challenge
By Tim Padgett | Time
Few things have peeved Latin America more than Washington's hypocrisy regarding coups. Overthrowing our friends at gunpoint is bad, the traditional U.S. line seemed to go, but toppling our foes — even the democratically elected ones — is O.K. So it surprised Latin Americans when U.S. President Barack Obama condemned the June 28 military ouster of leftist Honduran President Manuel Zelaya, a critic of the U.S., and called for his return to office. "We respect the universal principle that people should choose their own leaders," Obama said, "whether they are leaders we agree with or not."
Obama got off to a good start in Latin America, engaging leaders and promising a new attitude from Washington. The problem with the shift on coups is that Latin America now expects action to back it up. Honduras is Obama's first hemispheric crisis. There are obviously higher White House priorities right now, and Obama insists he's diligently working for a negotiated solution. But diplomats from Brasília to Mexico City say they fear he's only half-heartedly pressuring Honduras' new government to let Zelaya back in to finish his term, a perception that could squander the trust he's built. That might create problems down the road — for America and the Americas alike.
Obama is stuck in the New World's new paradox. Latin America today is less dependent on Washington, and less tolerant of its interventionism, than it has been for decades, thanks to the counterweight of rising star Brazil and the anti-U.S. gospel of Venezuela's oil-rich leftist President, Hugo Chávez. Yet for all that newfound self-reliance, Latin America still looks to the U.S.'s superpower leadership to put the squeeze on rogues like the Honduran coupsters. No other force in the western hemisphere, not Brazil, and certainly not the Organization of American States, wields the requisite economic and diplomatic clout to resolve the standoff. >>> Go to Full Story >>>
The Widening of the Panama Canal Opens New Doors for the Region
From Universia-Knowledge@Wharton
Considered one of the most important public works projects in the world, the widening of the Panama Canal is much more than a source of national pride for Panama. The Canal is the principal economic engine in the Central American isthmus and a pillar of international trade, connecting the Atlantic and Pacific oceans – and, with them, commerce between Asia and Europe. Its importance explains the high profile that the project has had ever since it was begun in a referendum in 2006, when Panama's population decided that it wanted to carry it out. In 2014, the Canal will open its sluices with a new series of locks, amid events commemorating its centennial. According to experts interviewed by Universia Knowledge@Wharton, a sea of economic numbers and other data support the critical nature of this infrastructure project for Panama and the region.
Vielka Vasquez de Avila, a professor at the University of Panama, notes that currently, "4% of world trade" passes through the Canal, and thanks to its widening, "we will be in optimal condition, starting from 2015, to deal with what could be a possible increase of up to 6% of world trade through the Isthmus of Panama." This increase is a response to various factors. On the one hand, the mere announcement of the widening project has already sparked an increase in the capacity of vessels. Ultimately, authorities expect a doubling in the number of tons that will pass from the Atlantic to the Pacific, to reach 600 million tons a year, compared with 340 million today. According to a report by the Panama Canal Authority (PCA), the governmental entity that runs the Canal, this spectacular increase will come thanks to the new series of locks that have been designed to handle the "Post-Panamax" generation of mega-ships, whose enormous dimensions enable economies of scale and, at the same time, reduce operating costs per ship by from 7% to 17%. ("Panamax" ships are the largest that can fit through the Canal as it currently exists.) Their length of 366 meters is equivalent to more than seven Olympic swimming pools, enabling the vessels to hold up to 12,000 containers.
One of the reasons that Panamanian authorities decided to go ahead with the widening project was the pending loss in the competitiveness of the current infrastructure, which cannot service Post-Panamax ships. Growing demand for these mega-ships will mean they will represent 37% of the global fleet of container ships in 2011, which explains the overwhelming need that the Isthmus had for adapting to them. After hundreds of studies, the Panama Canal Authority concluded that widening the canal would mean its market share in the Northern route from Asia to the Eastern United States would increase from 38% to 41%, compared to the decline that it would suffer if it continued with its current infrastructure. That would have relegated its share of the market to only 23%.
The Suez Canal and the U.S. intermodal system (where ships arrive in port and the cargo is shipped by land across the country) are the main rivals of the Panama Canal. In addition, there could have been new competitors interested in taking the attractive piece of the pie represented by the growing maritime traffic between the Atlantic and the Pacific. Juan Carlos Martínez Lázaro, a professor at the IE Business School who is an expert in macroeconomics, notes, "Mexico and Nicaragua also planned to connect the two oceans through their respective territories." In Mexico's case, the model would have been similar to the current U.S. intermodal network. In the case of Nicaragua, the country analyzed the possibility of connecting the two coasts by river canals, with an infrastructure similar to what Panama has. >>> Go to Full Story >>>
