Will There Ever Be A Nicaragua Canal?

“Kathleen, what effect in Nicaragua, if any, do you expect to see from China’s recent involvement in attempting to build a canal in that country?”

–Mark B., Panama

Latin America Correspondent Lee Harrison responds:

The “Nicaragua Canal” was first proposed by Napoleon III and was formally mentioned in a treaty signed by President Zachary Taylor in 1850… 31 years before the French started digging the competing Panama Canal. So the idea of a Nica Canal has been out there for a long time.

Today, Nicaragua has obtained investors and is proceeding with preliminary work toward building a canal through this country. Some of the land on the canal’s route is public property, while much of it is being acquired from the current owners through the government’s right to eminent domain. (We use the same process in the United States to take private property, including property wanted for commercial ventures.)

I see one of two things happening from this point forward…

One is that the canal won’t get built in the foreseeable future. There’s some vocal opposition to the idea, but I think the real issue is that it’s a huge engineering feat, even greater than that behind the Panama Canal. With the declining Chinese economy, you have to wonder if the Chinese backers can hang in for the long haul.

The other possible outcome—best case for the developers—is that the canal is finished by the year 2020. If that happens, I believe Nicaragua—one of the poorest countries in the hemisphere—will eventually come to enjoy Panama-style prosperity and wealth.

In the “completion” scenario, I expect today’s property buyers in Nicaragua to be handsomely rewarded.

Quite a few expats have written to express their concerns about seeing heavy ship traffic from Granada or Las Isletas. In fact, the ships will likely pass 72 kilometers to the south of Granada, as they emerge from Puerto Morrito and pass south of the twin islands at Ometepe.

Factoring in the earth’s curvature, you won’t see a ship from Granada unless it were over 100 feet tall… you were viewing it from the second floor… it was a haze-free day… and you’re taller than 6 feet 4 inches.

If completed, the canal will have a significant environmental impact on everything along its route to and from Lake Nicaragua, as well as on the lake itself.

Editor’s Note: Lee Harrison reports weekly on top property investment options and opportunities worldwide in his Overseas Property Alert. If you’re not on the list to receive it yet, get on board here now.

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