News & Insights
A new canal in Nicaragua promises economic prosperity, but who wins and who loses?
A Chinese-funded transoceanic canal in Nicaragua is slated for development but with it comes concerns about whether or not it will help the country, the second-poorest in the Western Hemisphere, after Haiti. A recent article in the New Yorker presents an in-depth look at the $40 billion project which, if successful, would compete with the Panama Canal and promises to help lift the country out of poverty.
While the Nicaraguan government is very optimistic about the economic progress that could be fueled by this project, others offer a much bleaker view in terms of its impact on poor families. It’s not clear who wins and who loses although there is a lot of speculation.
Poverty in Nicaragua is deeply entrenched:
- Nearly 50 percent (3 million) of the population lives below the poverty line.
- Nicaragua is the second-poorest in the Western Hemisphere, after Haiti.
- “In the countryside…one out of two people lives on less than a dollar a day.”
If the project moves forward, the canal construction is predicted to take at least 5 years and there is no guarantee that the 600,000-700,000 jobs expected to be created from the canal project will be given to Nicaraguans. In the meantime, there is a very real need among the poorest population for fundamental things like jobs, health services and electricity.
The changing economic landscape of Nicaragua is important to us as we continue to make impact investments in the region. Global Partnerships (GP), which has an office in the capital city of Managua, currently works with four partner organizations in the country. Through these partnerships, we help connect poor families in rural areas with the services, products and education they need to build better lives for themselves.
For example, our investment in Aldea Global helps farmers gain access to commercial markets. This means that individuals such as Maria can earn a better living by selling their crops to commercial food retailers like Walmart. Our investment in MiCredito helps deliver affordable solar lights to remote communities, providing families with the chance to work and study after dark. Our partnership with Pro Mujer in Nicaragua helped revamp their health services business model to make it more sustainable. Today, more women can access affordable health education, screenings and consults.
With or without the canal, it’s likely that poverty in Nicaragua will persist at least in the short term. We’re committed to ensuring that as many people as possible have access to the right kinds of opportunities to improve their own lives.