When the Panama Canal opened one hundred years ago, global trade was instantly revolutionised. The 77km international waterway instantly saved ships 13,000kms from a journey around the southern tip of South America (Cape Horn) by providing simple passage between the Atlantic and Pacific Oceans.
Prior to the opening of the canal in 1914, Panama was granted independence following an uprising in 1903, when the new government negotiated a treaty with the US, supporters of the revolution ultimately because of their desire for the canal development.
The Hay-Bunau-Varilla Treaty allowed the US to build the Panama Canal and provided for perpetual control of a zone 8kms wide on either side of the waterway.
Panama took control of the canal from the US in 2000 with transit fees attracting around €800m a year for the tiny country with a population of just 3.5 million people. When China became a global exporter in the early 2000s, the Panama Canal was strategically placed to link the nation to America’s east coast.
Juan Carlos Varela has made a commitment to bring about change
Since 2007, the Panama Canal expansion project has been underway. The €4.1bn project will allow ships double the size to pass through the canal, dramatically increasing the amount of goods that can pass through the waterway.
Latin American economist Michael Henderson said: " The canal has been such an important driver of growth that the whole domestic industry has been built around that ".
Panama’s business climate recently ranked highest in the World Bank’s Business Survey of Central America and Dominican Republic and is perennially a top retirement destination for many Americans.
However, with around one third of Panamanians living in poverty, the tiny nation has some way to go to address inequality amongst its population.
Newly elected President Juan Carlos Varela has made a commitment to bring about change, introduce more transparency and combat poverty in Panama.
" He seems to have captured the popular mood in Panama, " said Michael Henderson. " His campaign was to clean up politics and it will be what his success is ultimately judged on. "
As a result of the massive canal regeneration project, some of Panama’s poorest neighbourhoods are seeing large-scale transformation. The Casco Viejo in particular, one of the country’s most run-down areas is getting a complete face-lift as properties are renovated and trendy bars, shops and boutique hotels start to appear.
Ultimately, the Panama Canal has been the making of the Central American nation, which despite income disparity and relatively high levels of poverty will continue its growth spurt for many years to come.
Source: Property show rooms