Cover Photo: “Christmas in the Isthmus”
Volume 6, Number 2: May 2021 | Op-Ed
Despite claims that the canal was constructed by the U.S. to serve benefit for Panamanians, U.S. policies had nothing to do with development, but rather for the investors interests. One might wonder about the true returns to the Panamanians from this exchange.
Immediately after the Hay-Bunau-Varilla Treaty was signed in 1903, Panama received $10,000,000 for the first year and $250,000 for the following 9 years, and guaranteed protection over the newly established country. In exchange, Panama granted full control of the Isthmus of the Panama area to the U.S.. Giving a full control meaning that everything in the area owned by the U.S., all exempted from Panamanian laws and taxes. Just like cutting the possibly highest expected valued land of the country to the U.S. with a fixed undervalued financial in return. We can say that the economic growth can be seen here, but at a lower amount than what they deserve. Surely, no development in any aspect to the other areas in Panama can be recognised.
Before anything, for a country to develop, creation of wealth from which community benefits must be realised. All parties must have equal access to resources. In contrast, the country was then governed by the minority of Panamanians, the elites, which care nothing else but creation of their own personal wealth. For them to remain in power, allying with the U.S. was considered crucial. Promoting the U.S. interests in their views is to exploit Panama’s resources, improving poverty and standard of living were considered pointless. Opening floor for American big corporations to enter may provide jobs for the working class Panamanians, but most of the yield went into investors’ pockets. Low wages were given to the Panamanians. Keeping the lower and middle class unable to truly step up the social ladder.
Correspondingly, the U.S. further took advantage of the canal zone in their hands, locating American Schools, inviting all the elite families in the Central American to send their heir to study at. Creating a stronger bonding between the upper class of North and Central American. Teaching ways to protect their positions and wealth, and had nothing related to inclusivity and development at all. Economic growth of nations governed by the elites would be easily recognised, yet weakly correlated with development or even zero.
In the present day, thanks to the Torrijo treaty that brought back sovereignty of the canal to the Panamanians after nearly 100 years under the U.S. Still, the inequality issue is rooted deep in Panama. The country structure itself in such a way that heavily relies on only a few sectors including construction and financial sectors. It is not enough to sustain socio-economic growth and development in the long run.
Undeniably, it is nothing wrong that the U.S. would want something in return when they invested in such a huge project. Panamanians would not be able to construct the canal given the resources they have at that time. Even so, a fair exchange should be made, and most importantly, the treaty should be signed by the Panamanians as well.
Afterall, to truly see the true yield of Panama, economic development is the most crucial factor in my view. Despite the economic growth obtained, if it is not inclusive, then the country would never develop.
Good article! I agree that it is difficult for development without inclusivity. It quite surprises me that the U.S. built a stronger connection for the elite heirs in Central America, which causes more exclusivity. I also think that Panama Canal was constructed for capitalist interests rather than the development of Panama as a whole.
The Panama canal is an interesting feat of engineering. It is undeniable that the canal has reduced the time and resources necessarily for naval transport between the Atlantic and Pacific oceans thus fostering economic growth. However, where that benefit goes is also important and (as you have discussed) it has not been distributed equally. This raises an interesting question of how these international projects should be conducted (or even regulated). If the benefits the U.S. could get out of the treaty were limited, it is unlikely that they would be willing to spend multiple million dollars on developing the area. Would the area be better off without U.S. intervention? Perhaps.