The Panama canal has been significant to the people of the United States, especially in Panama and the international shipping community. Its significance changed when there was a political confrontation between the Noriega regime and the United States in 1980. During this time, the media suggested that the importance and the usefulness of the canal had declined, and it was no longer essential to the global trade. Regarding the situation, the media was misrepresenting the facts. The paper will elucidate more on the Panama canal to gain a better perspective of the actual view of the case and the significance of the Panama canal.
At the beginning of the first world war, the trade volume in the Panama canal was generally small. For example, the total peak for 1929 was 30 million tones in amount.The high d[epression onset resulted in falling of business by over 50% such that by 1932 there were less than 18 million cargo tones that were passed through the locks of the Panama canal. However, the end of the second world war brought changes in that it ushered US economic and tremendous growth. The “economic miracle” of Japan that spurred growth and development in other countries. The canal played a significant part in the recovery of the postwar. As America increasingly became dependent on international trade with South Korea, Taiwan, and Japan, the mushroomed canal indeed became an international waterway since the volume of the cargo that transited through the channel increased from 30 million tones to 150 tones in the year 1992. It, therefore, led to the growth of the united states accounting for more than 8% of the American waterborne trade internationally. Also, the foreign trade in the united states that passed through the canal increased to 100 million. Indeed, if the Panama canal closes, then it means that the broad economy of the united states could not be that great, especially in the long term. However, in a short time, the ports of the united states primarily on the east coast and those that are along the Gulf of Mexico could fell undoubtedly the impact of trade sustaining speculative trading and economic consequences. Numerous ports and particular industries and businesses in the united states would go through significant losses and it could be problematic to recover those losses. The trade volume involved in these state
is extremely large.
The Panama canal is significant to the united states and other countries such as Japan, Taiwan, and South Korea. For example, More than 80% of Ecuador’s international trade passes through the Panama canal, similar to those of Peru and Chile. The casts of Colombia are mostly linked to water compared to land due to the country’s internal land topography, which makes transportation by land difficult and more costly. In these countries, the Panama canal has an added primacy in that the channel offers the effective means of transporting large cargo quantities to the markets across the world. The absence of the largest share of South America’s coast trading and commerce would affect its usual activities, stoping its operations. For example, when we consider Ecuador’s case, a world-leading country in ex[ortation of bananas, almost 99% of the exports move through the canal. The industry of bananas in this country directly claims more than 86,000 workers where more than 500,000 are indirectly connected to the trade. Most of the business will possibly cease o move when the canal is disrupted or if it’s not available.
The Panama canal is still significant and useful to the united states and other countries across the globe. Ther are strategies that have been laid down regarding the future of the canal.
According to the forecast regarding the toll revenues and canal traffic for the last two decades, there is a predicted growth of allowed 1.8% for the cargo average revenue and subsequent growth of the upcoming century of around 1.6%. The financial management department of the Panama Canal Commissions Office projects the payroll, materials, and supplies expense would rise to 5 % on average. It means that the canal requires an increase in tools if the forecast of the traffic tends to be accurate and when the expense is leveled as predicted. However, if there is a rise in the costs of the decline of the truck, then it would be a sharp adjustment of the tool to create a break-even point. However, the international community of shipping would consider the other alternative systems that would be more dependable compared to the canal.
The Panama canal has been signed to the United States and other countries such as South Korea and Japan. Therefore there is a need for maximization of efficiency for the waterway users to benefit from diminution and disruption of service. The future success of the venture depends highly
on the abilities of the benefiting countries to forge new friendships, corporation, and mutual respect.