Chinese Billionaire Signs Deal for 100 year Takeover of Nicaragua’s New ‘Grand Canal’ Project OCT31, 2014 BY 21 WIRE Plans are afoot for a new Nicaraguan canal that will dwarf the existing Panama Canal to its south, but the only problem is that the project will effectively partition central America’s largest lake. Although the deal has been fast-tracked by the Ortega government, the local population do not support it at all, not least of all because the project will decimate Lake Nicaragua – and its fresh water that is the region’s most valuable natural resource. Local residents are threatening nothing short of armed insurrection, if (or when) Chinese bulldozers show up: “There is going to be a massacre because we are not leaving our land, our lives, and we’ll fight for it until death.” Critics believe that this deal amounts to a near full foreign Chinese takeover of a large portion of the Nicaraguan economy, and with a cost of at least $40 billion, the project’s value will be four times the size of country’s 2011 gross domestic product. President Ortega handed a 100-year concession to Chinese telecommunications magnet Wang Jing and Wang’s Hong Kong-based HKND Group (registered in the Cayman Islands). In addition to Lake Nicaragua, Wang’s lucrative concession also includes control over giant tracks of Nicaraguan private and public required to build and manage the canal. The Chinese also net a number of other sweeteners in the deal – including two ports, free trade zones, airport, and hotel and resort properties. It’s also highly probable that Nicaragua will become a new off-shore banking center once free trade areas are established within the canal zone becomes built up, as well as a completely deregulated, Chinese-owned and run off-shore gambling destination. The Chinese kingpin has already moved to mitigate any western anti-Chinese, or activist criticism, as Bloomberg reports: “Wang’s closely held HKND has hired Ronald MacLean-Abaroa, the former mayor of La Paz, Bolivia, and member of the advisory board to Transparency International and a consultant with the World Bank.” Aside from the obvious environment destruction which will occur from this unprecedented industrial operation, it will ultimately transform the face of Nicaragua’s business culture – a future in which Chinese financial leverage and connections will become absolutely necessary in order to engage in any commercial property development or enterprise. On the international shipping front, the project will give Chinese interests complete control over a large portion of international manufacturing and shipping distribution. With promises of faster transit for commercial shipping through Central America, Wang’s ‘El Gran’, or Inter-Oceanic Canal in Nicaragua will take away traffic and billions of dollars of annual business away from the Panama Canal, still largely regarded as a US-controlled interest. A century ago, it was US and British billionaire scions who were doing these same deals, amassing power and wealth that would steer over 100 years of Anglo-American dominance across the globe. Now it’s the Chinese who have all the leverage, liquidity – and power… A dozen or so cattle farmers are gathered at a ranch in the isolated community of Quebrada Seca, on the south-east corner of Lake Nicaragua. It is nightfall after a piercingly hot, exhausting day but the farmers are on their feet and fired up about the proposed Inter-Oceanic Canal, which threatens to wash away their entire community. LAKE NICARAGUA: One of the world’s most fertile regions – sold to a Chinese scion for a pittance “This is one of the most fertile regions in Nicaragua, and the government has sold it behind our backs to the Chinese, they’ve sold our heritage, our sovereignty,” says Arnulfo Sequeira, 51, a father of four with 200 acres of land and 100 cattle. “There is going to be a massacre because we are not leaving our land, our lives, and we’ll fight for it until death.” This picturesque setting, where most people still travel on horseback and children play under shady mango trees, is fighting for survival against plans for a 175-mile long shipping canal which would divide Nicaragua in two. From the Pacific to the Caribbean coast, the canal would dissect Central America’s largest lake – the country’s main water source – and force more than 100,000 people from their homes. If the Chinese company tasked with building the canal get the go ahead, it will become the world’s largest engineering project, dwarfing the Panama Canal in size. Along the planned route, it is provoking a blend of anger, fear and defiance not witnessed since the civil war ended in 1988. “I’m not against the canal or development, but this project is brutal, says Roger Garcia Rios, 69, a retired biology professor. It’s inhumane and unpatriotic. Any risk to our lake is unacceptable and we will do everything humanly possible to protect it. Without water, there is no life.” The £32bn mega-project was approved in June 2013 in an unprecedented seven days, by a parliament controlled by President Daniel Ortega and his Sandinista National Liberation Front (FSLN). There was no public consultation, no feasibility or environmental studies, and virtually no parliamentary debate. The deal handed a 100-year concession to Hong Kong telecommunications magnet Wang Jing and his Hong Kong Nicaragua Canal Development Investment Co. (HKND), which is registered in the Cayman Islands. It gives Jing broad control over large swathes of Nicaraguan territory to build and manage the waterway, as well as 10 sub-projects including two ports, a free trade zone, airport, and upmarket hotels. The government says work will begin in December and the canal will be operational by 2020. Map showing the proposed route of the canal and the nature reserves and wetlands that surround it A two-year investigation by Centro Humboldt, an internationally renowned environmental group, recently concluded that the canal was unviable and posed extraordinary environmental risks, especially to the lake. It says there will be insufficient water to maintain the canal by 2039. Dredging the shallow lake to create a 30 metre deep canal will disturb huge amounts of potentially toxic sediment. The canal also risks contaminating the lake, home to fresh water sharks, sawfish, and turtles, with salty sea water, and any oil spill could inflict irreparable damage. Ortega, a guerrilla leader during the 1979 revolution victory, has described the canal as the second phase of the revolution, promising that it will wrench Nicaragua out of poverty and create 250,000 jobs. Nicaragua is the second poorest country in the western hemisphere after Haiti, with half the population surviving on a dollar (60 pence) a day. There have been 72 proposals to build a canal in Nicaragua since the idea was first touted by the Spanish conquistadores 450 years ago. If built, the canal would secure Ortega’s legacy. He has denounced critics as anti-revolutionary and anti-development. The deal, which exempts HKND, its subsidiaries and subcontractors from taxes and allows it to operate outside the Nicaraguan legal system, gives the company carte blanche to expropriate land wherever it wants. Displaced Nicaraguans, under a new Canal Law, will only be compensated the cadastral value of their property which is usually a fraction of the market value, with no right to appeal. This is one of 40 constitutional violations in the concession, according to lawyer Monica Lopez Baltodano. Her legal challenges were rejected by the Supreme Court, which is widely criticised for lacking independence from the ruling party. The government retrospectively rewrote the constitution to put the canal project beyond legal challenge. Nicaraguas President Daniel Ortega (L) and Wang Jing celebrate signing a concession agreement for the construction of an inter-oceanic canal in Nicaragua at the Casa de los Pueblos in Managua (Reuters) From Marxist beginnings, Ortega has moved swiftly to the right in recent years, courting the Catholic Church and business leaders in order to secure victory in the 2006 presidential election after three failed attempts. Subsequent elections victories have been mired by allegations of fraud. His family’s expanding business empire includes TV stations, newspapers, farms, energy companies and hotels. Ortega and Jing first made contact three years ago when Nicaraguan officials, including Ortega’s favourite son Laureano - an Italian trained opera singer and trade envoy - visited China. Jing was among Communist Party leaders at that meeting and asked to speak with Laureano privately, about the canal. Laureano, who Ortega is said to favour as his successor, was also at the airport to welcome President Putin when he visited in July. Russia is understood to have the security contract for the canal. Jing, who ranked 94th on the Forbes China Rich List in 2013 with $1.4bn, has several investments in the Ukraine. “The canal has been part of the Nicaraguan psyche for centuries. If Laureano turns out to be the guy who went to China and made the canal happen, then that would be a great platform [for a presidential election campaign], said Juan Sebastian Chamorro, director of an economic think tank and nephew of former Liberal president Violeta Chamorro. Geopolitically, the canal would further strengthen China’s foothold in Latin America. China is already a major buyer of Venezuelan oil and gas, and its trade with the continent increased from $12bn (£7.5bn) in 2000 to $250bn (£157bn) in 2012. But it has few ports in the region and has been trying to renegotiate canal tariffs with Panama. The Nicaraguan canal would support super-tankers capable of carrying 2.3 million barrels of oil, too big for Panama. It is not clear how much of the £32bn is coming from Beijing. A HKND spokesman said they were negotiating with investors from China, Europe, Asia, Latin and North America, but declined to give any names. The US has so far been remained publicly neutral on the issue. Telemaco Talavera, spokesman for the government’s Canal Commission, told The Telegraph: “The cold war is over. In today’s world, geo-economics are much more important than geo-politics and the US and China are practically inter-dependent in financial and business terms. The canal will benefit the world, and transform Nicaragua. Some people have doubts, but once they understand how every Nicaraguan will benefit, they will get behind it.” Opinion polls suggest around half the population is in favour of the canal. Ortega remains popular, partly because the opposition is so weak. But many still doubt whether the canal will actually happen, amid fears that HKND’s real interests lie in the lucrative sub-projects – which the company denies. The concession indemnifies HKND against any delays caused by protests or legal challenges, but Nicaragua would not be compensated if the canal is abandoned. Victor Campos, deputy director of Centro Humboldt, told The Telegraph: “The big worry is that the canal isn’t built, and the seized land ends up in the hands of private companies.” The government dismisses these fears as scaremongering, and says it will fairly compensate homeowners, so everyone ends up better off. Travelling along the route, the vast majority of people told The Telegraph that they did not want to move. Many said they had been tricked or intimidated into allowing the Chinese Institute census teams, a state owned company, into their homes. The teams, which include Nicaraguan officials and soldiers carrying AK47s, are valuing each home. HKND and Telemaco said the allegations were “groundless”. In Quebrada Seca, farmer Arnulfo Sequeira, like many of the farmers in that region, fought with the US-backed Contra rebels against Ortega’s Sandinista government during the 1980s. But Ortega’s failure to reassure communities facing eviction is fueling unprecedented unrest among even his most loyal supporters. The canal will skirt around the striking volcanoes Concepcion and Maderas on Omotepe Island – a UNESCO biosphere reserve. Opposite the volcanoes on the banks of the lake sits Cruz Verde. Hector Enriquez, 65, a community leader, said: “We are all Sandinistas here, we voted for Daniel, we fought in the revolution, but we feel tricked and disappointed. We fish in the lake and farm the land, that’s our life, that’s all we have to leave to our children and he [Ortega] wants to give it away to the Chinese.” Hector Enriquez, a community leader in the tiny hamlet of Cruz Verde on the banks of Lake Nicaragua The communities along the lake shore have started a neighbourhood watch scheme, so people can mobilize if the census team returns. “The community is organised, we are ready for an armed struggle and we’re ready to die if that’s what it takes to defend our land,” said Enriquez. 21stcenturywire/2014/10/31/chinese-billionaire-signs-deal-for-100-year-takeover-of-nicaraguas-new-grand-canal/
Posted on: Mon, 03 Nov 2014 17:38:32 +0000