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(August 27, 2023)

PANAMA. Due to the drought, caused by both climate change and El Niño [1], the Panama Canal, the essential way to pass from the Caribbean Sea to the Pacific Ocean, without circumnavigating the entire South American subcontinent, is clogged.

Since July 30, in fact, the daily amount of ships authorized to cross it’s 30, instead of 42, and their draft drops by 13.4 meters (44 feet).

This restrictive measure will last at least a year, effectively reducing the revenue of the Panamanian treasury which collects the tolls.

In recent weeks, the ships lined up to pass from one sea to another have reached 130 with a peak of 160 in mid-August: waiting times have skyrocketed: in normal situations, you cross the water way within 3-5 days, but in recent weeks the queue has taken 11 to 19 days, obviously increasing transport costs.

For 2024, the Canal Authority expects fewer than 500 million tons of cargo passing through the isthmus, down from 518 million in 2022, with toll revenues down about $200 million. on a turnover that had exceeded 3 billion last year.



Built in the early 20th century by the United States, it crosses lake and mountain areas.

Because the levels of the two seas are different, the Pacific being higher than the Caribbean Sea, during the crossing the ships are progressively raised, through the creation of a series of artificial basins, gradually higher. In addition, ships have to be raised up to 26 meters above sea level to overcome the continental mountain range that crosses the entire isthmus.

Consequence: for each boat it’s necessary to discharge about 200 million liters of fresh water, which the canal draws from a watershed formed by the Gatun and Alajuela lakes. Not only is this basin currently suffering from a lack of rain, but it must continue to supply drinking water to half of Panama’s 4.2 million people.

Unless there’s rain in the months of September to November to restore lake levels, access to the Canal will be restricted and traffic jams will continue unless the different companies transporting goods in both directions manage to better time the their travels.

Currently, 6% of world maritime traffic passes through the Canal: mainly the United States, China and Japan use it.




A small state in Central America, it was born from a secession: throughout the 19th century it was part of Colombia, but on 3 November 1903 it proclaimed independence.

Part of the Viceroyalty of Peru, during the Spanish domination (16th-19th centuries) it was an important commercial hub. The Portobello market was created there, a place of exchange of goods between Spanish America and the metropolis. When Central and South America became independent, Panama chose to detach itself from Madrid peacefully: November 28, 1821 was the day when the elite chose to join Greater Colombia.

However, the geographical position of the territory is coveted by the United States.



The first explicit reference to Washington’s right to intervene militarily in Panama appears in the Mallarino-Bidlak treaty, signed in 1846. The document grants the US authorization to build a trans-isthmic railway whose Atlantic terminus would coincide with the island of Manzanillo, in the bay of Limón: the objective is twofold:

1. have a faster way to connect the east coast with the west;
2. counter the British influence in the Central American area (London is present in Nicaragua).

1 January 1880: the preliminary works for the construction of the Canal are inaugurated, entrusted to the French Universal Company of the Panama Canal, chaired by F. de Lesseps, the same one who built the Suez Canal in Egypt.

1891: a scandal breaks out which overwhelms the Lesseps company: the construction of the Canal is interrupted, although 33 kilometers have already been built.
Three years later a new company was founded which was to continue the work: in mid-1902 the USA acquired the rights to the French company.

January 1903: Washington signs the Hay-Herran treaty with Colombia: with it, he leases a strip 9.5 kilometers wide in perpetuity, undertaking to continue with the construction of the canal.

However, the Bogota Senate didn’t ratify the agreement, considering it harmful to Colombian dignity and sovereignty.

Consequence: rebellion breaks out in Panama: on November 4 of the same year the “revolutionaries” proclaim independence, being immediately recognized by the United States.

The Hay-Buneau Varilla treaty grants full and perpetual sovereignty to the US over a 10-mile-wide strip and over the waters adjacent to the ends of the canal which was inaugurated on August 15, 1914.

82 kilometers long, it’ll remain under American ownership throughout the 20th century.



On January 9, 1964 a group of students displays a Panamanian flag in the Canal area: the Americans react and 9 boys lose their lives. Four years later, on 11 October 1968, the National Guard deposed the newly installed President Arnulfo Arias Madrid in a military putsch. The goal of the new junta that takes power is to regain sovereignty over the Canal by appropriating the revenue it generates to finance the many reforms it has planned.

The dispute goes on for several years until 1977 the strong man of the regime Omar Torrijos Herrera and US President Jimmy Carter sign a treaty which provides that the Canal Zone will become Panamanian on January 1, 2000.

The United States, however, reserve the right to intervene in the country to protect their own interests and their national security.

On July 31, 1981 Torrijos dies in a mysterious plane crash: Manuel Antonio Noriega becomes the strong man of Panama who behind the scenes gets one president after another elected and deposed. Washington, which for years had Noriega as its contact man in Central America, accused him of drug trafficking in 1989 and invaded the country on December 20 of that year.

Noriega is arrested and brought before American justice, while the government established by the United States launches a reform of the armed forces that aims to reduce its influence in politics.

In 2000, the Canal became a panamanian property: in 2006, the citizens approved the proposal for its expansion in a referendum.



The República de Panamá is a state of Central America, located in the narrowest part of the Isthmian region. Diagonally west-east, it borders Colombia (eastern border) and Costa Rica (northwestern border).

Its coasts are washed by the Antilles Sea (north) and by the Pacific (south).

It extends for 75,517 km² and has a population of 4.3 million inhabitants.

The capital is Panama, populated by nearly a million people.

An eminently maritime country, it’s crossed by a mountain range of considerable altitude which divides the territory into two very different plains: the first, on the Caribbean side, is narrow and covered with rainforests; the second, on the Pacific side, is wider and wooded. The main economic resource is navigation on the canal with the related commercial and financial activities. In addition, tropical products are grown and copper is extracted from the large deposits of Cerro Colorado. Air and water pollution in urban areas is considerable, as is that of the Bay of Panama, where 40 million tons of wastewater are discharged each year. The “Cap of Darién” – a large area of forest inhabited by some indigenous ethnic groups, as well as various animal species – is threatened by the construction of a motorway.

Today it’s a place of transit for migrants who from South America try to reach the United States by crossing all of Central America up to the Rio Grande.

The majority of Panamanians (64%) descend from the integration between Spaniards and indigenous peoples. 14% are of African origin. The natives form three main ethnic groups; the cunas, in the island of San Blas in the Caribbean, the chocoles, in the province of Darién and the guaymiés, in the provinces of Chiriquí, Veraguas and Bocas del Toro.

Religions: Catholics (80%); Protestants, mostly Evangelicals (10%); Muslims (5%); Bahai (1%); Jews (0.3%); others (3.7%).

Languages: Spanish (official), English and wari wari, a dialect that blends Spanish and English terms, widespread in the Antilles.

The state is a presidential republic: the President, elected every five years by universal suffrage, also leads the executive.

The legislative is made up of a national assembly, elected at the same time as the first citizen.

It’s one of the three Latin American countries with a dollarised economy: legislation makes it a “fiscal haven” since it allows the creation of anonymous companies and numbered bank accounts.




[1] El Niño is a periodic climatic phenomenon that causes a strong warming of the waters of the Central-Southern and Eastern Pacific Ocean in the months of December and January on average every five years, with a statistically variable period between three and seven years.
The phenomenon causes flooding in the directly affected areas, but also drought in the more distant areas and other perturbations which vary with each of its manifestations. Developing countries that are heavily dependent on agriculture and fisheries, particularly those bordering the Pacific Ocean, are most affected, although it’s thought to have effects on a global scale as well through changes in atmospheric circulation throughout the planet.

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