News reports of a proposed inter-oceanic canal in Nicaragua to be developed with a sizable investment by China have stirred up geopolitical debate not only in Central America but around the world. Costa Rica has every reason to monitor the situation, but the news reports and Nicaraguan President Daniel Ortega’s rhetoric on the matter are also being followed by international news outlets.

An editorial piece in the Register-Guard newspaper of Eugene, Oregon called the canal project “a losing bet.” The Register-Guard points out the issue of the harsh Nicaraguan terrain that the project would encounter as well as the issue of competition. Even though the Panama Canal is close to capacity,

a third set of locks is scheduled to open in 2015, doubling the canal’s freight capacity and allowing it to accommodate larger ships. Even if Nicaragua’s canal gained a monopoly on the very largest freighters, the two canals would compete for most traffic by cutting tolls, making it harder for the newer project’s investors to recover their capital.

Radio Australia has also weighed on the issue from a more practical point of view. The project has been met with a healthy amount of skepticism with regard to funding of the project, citing that the 40-year old Chinese investor whose experience is limited to the telecommunications industry. Mr. Wang Jing says that he has investors lined up to provide the $40 billion in capital that such a canal will require, but the Hong Kong company behind -the HKND group- has only been around for a year after its corporate formation in the Cayman Islands.

One of the most dubious sentiments on the completion of the canal comes from international news bureau Reuters. Journalists Ivan Castro and Lomi Kriel described previous attempts at building such a canal as Quixotic; they also quoted Greg Miller, who is a shipping consultant at maritime intelligence firm IHS Fairplay:

“The Nicaragua canal will never be built and the only people who’ll financially profit from this proposal are the consultants paid to do the feasibility studies.”

The comment above by Mr. Miller is the reason Costa Rica has seldom entertained the idea of a canal in this country. The closest Costa Rica has come to such a project is the “Dry Canal” railway, which has been undergoing painfully slow development since 1998.

Nicaragua’s proposed canal has brought out historians who observe that history is simply repeating itself. Writing for the Semanario Universidad, Gilberto Lopes offers a fascinating look at Nicaragua about 100 years ago:

Sandino rose against the intervention of the United States in Nicaragua in late 1926. Two months later, President Calvin Coolidge deployed 16 warships, 3,900 soldiers and 865 marines for the purpose of putting [puppet president] Adolfo Diaz in power and protecting U.S. interests in the region, particularly the rights to an interoceanic canal as stipulated in the Chamorro-Bryan treaty of 1914.

Mr. Lopes points out that the totality of the proposed project is even more Quixotic than just the canal. There are talks of ports and airports in each of Nicaragua’s coasts in addition to a massive pipeline. Analysts in Costa Rica believe that projects of such magnitude will surely cost more than $40 billion. There is also the more delicate issue of China’s support for the project, which has not been as enthusiastic as expected. In fact, Nicaragua still has diplomatic ties with Taiwan, which Costa Rica’s former President Oscar Arias cut before getting a green light for China’s donation of our National Stadium.