Impact of the Panama Canal

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First commissioned in August 15, 1914, the Panama Canal measures 77.1 kilometers and connects the Atlantic and the Pacific Oceans, cutting across the Isthmus of Panama. The operation of the canal is currently under the watch of the Panama Canal Authority. Although it has numerous cultural, social, economic and ecological effects, the most notable impact of the Panama Canal is on the global transshipment sector, which it has served for a century. With its recent expansion, the Canal can now handle 14,000 ships per annum. Evidently, because of the Canal, shipping companies have saved costs since they do not have to navigate the southern tip of South America to connect the Atlantic and Pacific Oceans. Eventually, consumers enjoy reduced costs as a result of reduced distance and transportation cost.

 The Economic Impact of the Panama Canal

The economic impact of the Panama Canal is best noted in increased jobs and income for individuals, families, and the entire economy of the United States. The main way by which the canal has impacted the US economy is increased export and import travel and trade. In fact, goods are exchanged through the Panama Canal on a daily basis. It is reported that more than 10% of U.S. shipping passes through the Panama Canal. Besides providing avenues for exchanging import and export goods and services to consumers across the world, the Panama Canal trade creates jobs. Through the Panama Canal, the USA has been able to create and sustain the smooth operations of global economy. By enabling the smooth running of world trade, global economic crises have been reduced to levels that may not have been achieved without the Panama Canal. This goal has been achieved by the Panama Canal offering a channel that prevents the disruption of the flow of goods and services into and out of the Americas and other regions. The canal has also helped keep the prices of commodities under check by allowing the reasonably priced and quick flow of goods and services, without which, prices would increase beyond consumers’ purchasing power. Increased prices would also reduce the purchasing powers of countries and companies, thereby reducing government revenues and spending.

The Socio-cultural Impacts

The Panama Canal also has social and cultural impacts on the USA and Panama. First, since its commissioning in 1914, the canal has made the USA and Panama, as well as other South American countries inevitably bound. Second, the canal has influenced the politics of the regions it connects, especially Panamanian and US politics. It is worth noting that even before its construction and commissioning, the canal had impacts on the politics of the region. Initially, for the US to construct the canal, it had to engineer the separation and independence of Panama from Colombia in 1903.

The Environmental Impacts

The Panama Canal also has numerous environmental and biodiversity impacts. First, about 27,000 people died during the construction of the canal while hundreds of thousands were displaced during the initial construction of the canal. Also, thousands of animal and plant species of the rainforest were either displaced or destroyed, resulting in huge biomass losses. Notably, the construction and operations of the Panama Canal caused terrible destruction of hitherto intact rainforest. The other easily noticeable environmental impacts of the Panama Canal are silting, floods, deforestation and the resultant loss of water in the region around the canal.

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