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LatinNews Regional Monitor: Caribbean & Central America - 14 June 2018

NICARAGUA: Nicaragua’s inter-oceanic canal flounders as China turns its attention to Panama

In 2013, the decision by the Nicaraguan government led by President Daniel Ortega to award the Hong Kong Nicaragua Canal Development (HKND) Group a build-operate contract for a 171-mile canal that would span the country, linking the Pacific and Atlantic oceans, made headlines due to the massive scale of the project and the fact that it presaged greater Chinese involvement in Central America. Due to be completed by 2020, the project envisaged free-trade zones, international ports, tourist resorts, and an international airport, and was trumpeted as Nicaragua’s express ticket out of poverty. Five years on, the project’s future seems increasingly uncertain after the telecoms business owned by Wang Jing, the Chinese tycoon behind the HKND Group, took a plunge on the Chinese stock market and China began to shift the focus of its attention to Panama, with which it initiated diplomatic relations in 2017. Since then reports in April 2018 that HKND had abandoned its offices have further fanned speculation regarding the project’s future.

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