Envío Digital
Central American University - UCA  
  Number 408 | Julio 2015



What territories will the canal divide and what populations will be displaced?

In June the Nicaraguan Network for Democracy and Local Development presented the results of an exploratory, participatory and prospective study conducted by an interdisciplinary team on the socioeconomic effects the interoceanic canal and subprojects conceded in the canal law will have on the municipalities to be affected by these Chinese mega-investments. We offer some of their data and thoughts.

Network for Democracy and Local Development

The canal route will directly affect ten of the country’s municipalities: Bluefields, Nueva Guinea, San Miguelito, San Carlos, Rivas, Tola, El Castillo, Altagracia, San Jorge and San Jan del Sur. If we consider the other subprojects proposed by the Chinese company HKND (two airports, two free trade zones, four tourist centers…), three additional municipalities will be affected: Belen, Buenos Aires and Moyogalpa.

The affected territory
and the displaced population

These 13 affected municipalities cover 12,440 square kilometers, 10% of the national territory, with Bluefields standing out at 4,774 square kilometers. The Canal and the sub-projects will occupy a total of 27.5% of the affected municipalities. According to the Nicaraguan Development Institute, 373,225 people or 6% of the Nicaraguan population live there.
The interoceanic canal will cut Nicaragua east to west through these municipalities, leaving them with one larger or smaller zone to the south of the canal and one to the north. The local population cannot cross this 10.2-kilometer-wide strip (the 230 meters of the ditch plus a minimum of 5 kilometers on each side) nor will they be permitted to navigate their boats through the canal. There would only be two communication points between the north and south zones: a bridge in Rivas on the western side and a ferry in San Miguelito on the eastern side. The municipalities of Rivas and Bluefields will be divided in half. The HKND subprojects will occupy almost half of Tola’s territory.

A population of 119,298 people living in these 13 municipalities will be forcibly displaced. They make up some 24,100 families living in 282 populated areas of different sizes and represent 32% of the municipalities’ inhabitants.

They’re agricultural producers

Agriculture and cattle rearing are the main economic activities of much of the population of the municipalities affected by the canal and the subprojects. According to the third National Agricultural Census of 2001 these municipalities have 23,847 agricultural producers, the majority of them small and medium farmers. Corn, beans and rice, the ingredients for the basic Nicaraguan foods—gallopinto and tortilla—are grown in all of these municipalities for both family consumption and the local market. In the municipalities of the department of Rivas large quantities of bananas and fruit are also cultivated.

In Nueva Guinea cassava and quequisque, another root vegetable, are cultivated for both the national and export markets. The 2014 agricultural production of rice, beans, cassava and quequisque in just 22 Nueva Guinea communities represented some 200 million córdobas (roughly US$7.7 million). In only three of the districts studied in Nueva Guinea, an average of 680 cattle, 700 pigs, 15,000 quintals of cassava and quequisque, 160 quintals of cheese and 500 quintals of ginger are taken to the national market weekly, in addition to thousands of quintals of corn and beans at harvest time.

The raising of cows, horses, pigs and chickens for family consumption and sale is common in all of the municipalities. In the communities of the municipality of San Miguelito families average 37 cows, 5 horses or mules, 7 pigs and 29 chickens.

The expropriation of the farms located along the canal route and in the area of the subprojects will affect agricultural production that supplies food not just to the municipality but to the country as a whole. In addition to the farmers, transport operators, collection centers, shopkeepers, distributors, processors and consumers will also be affected. Another economic activity that will be affected in the coastal municipalities of Lake Cocibolca, the Caribbean Sea and the Pacific Ocean is traditional fishing for local and national consumption as well as exporting. There are also foreseeable effects in tourism, which is now an important activity in that whole area.

They live in poverty

Although these 13 municipalities are rich in natural resources and have a large number of people in their productive years, the majority live in poverty. The lack of employment is generalized and pushes men and women to migrate to other areas of Nicaragua or to Costa Rica.

According to the method that measures unmet basic needs (housing, potable water, education, family income), the greatest levels of poverty are observed in San Miguelito, El Castillo, Bluefields, San Carlos and Nueva Guinea, where an average of 7 out of 10 people survive in basic poverty or extreme poverty. The lowest levels are found in Rivas, San Jorge and San Juan del Sur.

The dividing of the municipalities will seriously affect their social, economic, political and cultural life. Social relations between families, friends and organizations on the two sides of the canal will be more difficult. It will also harm the transport of merchandise, agricultural supplies and products, access to education and health centers, electricity and telecommunication transmission lines, municipal services and citizen participation in local government.

The territory occupied by the canal and the HKND sub-projects will be out of the control of the mayor’s office and national government, which means giving up national sovereignty in an extensive part of the country.

Living for months with
uncertainty and anxiety

One immediate effect for the population living in the areas where HKND would build the canal and subprojects is uncertainty and anxiety due to the lack of clear and precise information about where they will go if they are expropriated. These feelings started at the end of 2014 when a technical team sent by the Chinese company, supported by Army and Police officers, went to measure and photograph their land and homes. This unending anxiety has affected their health. They are afraid of forced displacement and the loss of their homes and farms, and they can’t imagine their future anywhere else.

The forced migration of these roughly 120,000 people will affect the family bonds among members who today live in the same community or ones close by. And when the population disperses to live in unknown areas it will also break up their existing community organizations: churches, cooperatives, sports and cultural groups, school boards, family groups, youth organizations, women’s organizations…

Once this population is evicted, it will migrate to the marginal barrios of various cities in Nicaragua or neighboring Costa Rica, or invade natural reserves such as Indio Maiz or Bosawás, which will increase tensions in the indigenous communities that own these territories. Forced displacement also means an important deterioration of these families’ living conditions and rapid impoverishment once they use up whatever money they were given for their properties.

Will there be jobs for them?

Some community residents have expectations that the projects will bring jobs for them, but the real possibilities aren’t great for these people, the majority of whom have little education and work experience only in agricultural tasks. Perhaps some will find employment in unskilled, low-paying manual jobs such as cleaning or weeding. And given that the tourist centers HKND will build will enjoy tax exemption and free equipment imports, privileges not granted to smaller national tourist businesses, the latter could go bankrupt, eliminating whatever jobs they currently offer.

During the construction of the canal thousands of workers from other countries will be brought into these municipalities. This will necessarily increase the risk of unknown illnesses for which the Nicaraguan population will have no defenses and the health centers will be unprepared. The influx of male workers will facilitate the appearance of bars and brothels where alcohol and drugs will be available, which will mean an increase in violence in traditionally calm rural communities.

The three official arguments

Nicaraguan Academy of Sciences President Manuel Ortega has noted three repeated arguments in the official discourse as justification for the interoceanic canal and the expropriations necessary to implement it:

The first is that there are still territories with “state lands” or “empty lands” or “lands without owners” that should be used by those who can make them produce, while not recognizing the concept of indigenous communal property.

The second is the old argument that indigenous people and peasants are an obstacle to progress, bringing to light a racist ethnocentrism that’s normally kept under wraps.
The third argument is the “national interest,” which is presented as more important than that of all those “individuals” who will be expropriated, although we’re expected to accept this national interest as an act of faith given that it has yet to be demonstrated.

An extractive and
contaminating model

An analysis of the canal project necessarily leads to a debate about the most adequate development model for Nicaragua. Without a doubt, the canal falls within a traditional development approach, centered on economic growth based on foreign investment in sectors of the country that offer comparative advantages for the demands of international trade. These suppositions are being questioned in the wake of multiple experiences and theoretically superseded by focuses on human development centered on people’s quality of life and on environmental, social, cultural and economic sus¬tainability.

The increased gross domestic product (GDP) observed in Latin America in the last decade has only marginally benefitted the poorer classes, leaving the region still the most unequal on the planet. In addition, the GDP doesn’t reflect environmental costs or women’s contributions to the economy. Nor does it take into account the population’s health, education, security, equality and human rights situation.

A study done by the Humboldt Center in 2014 reveals that the development model underlying the HKND projects contradicts the principles of true human and sustainable development. “The canal concession strengthens a vision of extractive and polluting development, rooted in the logic of concentrating wealth by cornering the market, privatizing common goods and marketing nature, creating enclaves for the benefit of foreign interests and weakening the possibilities of encouraging forms of sustainable development and alternatives to the dynamic of irreversible deterioration of the natural surroundings.”

“Tumors” of an anti-democratic power

The canal project falls within a cycle of global capitalist expansion that occurred after the 2008-2009 crisis, which was expressed in Latin America in mega-investment projects promoted by transnational corporations in search of raw materials and fuels for the hegemonic powers. It also relates to taking advantage of the cheap labor costs in the region in a context of maximizing profits via labor deregulation and fiscal exonerations.

This is how journalist Mario Osava explains it in analyzing Latin America’s current situation: “A wave of big energy, mining and transportation projects are shaking the region. Large hydroelectric plants, mining and petroleum extraction, refineries, railroads, highways and ever larger ports are threatening indigenous lands in many countries, driving out traditional peoples, flooding or eliminating forests and altering rivers and coastal areas. Everything is justified as a development requirement.”

In addition to the adverse effects on the environment and on the local populations’ living conditions, these big projects also affect the political system, as Australian philosopher John Keane, director of the Institute for Democracy and Human Rights, indicates: “Megaprojects resemble sizeable tumors of arbitrary power within the body politic of democracy. They usually defy the familiar rhythm of elections. Details of their design, financing, construction and operation are typically decided from above. Especially when it comes to military and commercial megaprojects, things are decided in strictest secrecy, with virtually no monitoring by parliaments, outside watchdog groups or voting citizens. Unless they’re subject to strict and independent public monitoring, megaprojects do away with democratic procedures.”

At the service of
Chinese capitalism

China, the new world economic power, is playing a fundamental role in this new cycle of capitalist expansion. Between 2005 and 2011 Chinese companies invested US$378.5 billion internationally, with Asian, African and Latin American countries representing 70% of the investments. The Chinese development banks (Exim Bank and China Development Bank) have outpaced the World Bank in international loans. In the last decade, Chinese businesses have built big projects—highways, railroads, hydroelectric plants, soccer stadiums, hospitals and housing—in dozens of countries around the world.

A study by Juan Pablo Cardenal and Heriberto Araújo titled China’s Silent Army: The Pioneers, Traders, Fixers and Workers Who Are Remaking the World in Beijing’s Image demonstrates a lack of environmental sensibility, deplorable labor conditions and a minimum of technology transfer to the receptor country in the great majority of Chinese investments in the third world countries. Furthermore its tax contribution is small thanks to the complicity of the groups in power that benefit personally from these investments and grant ample tax exonerations. The book’s authors argue that these elites see their deals with the Asian colossus as a short-term transaction, virtually as just a cut for them. Beijing more rapidly achieves its objectives with regimes in which not even minimal attention is paid to the social, environmental or labor standards whose observation is obligatory in other countries. As Cardenal and Araújo note, both China and the elites win, while the reigning opacity permits the mess to be kept under seven keys.

Talking with the people:
Three positions

Our own study included interviews and focus groups with 367 inhabitants from four of the affected municipalities, selected for their demographic and economic relevance: Bluefields, Nueva Guinea, San Miguelito and Tola.

These four municipalities make up 72% of the territory of the municipalities that will be affected and represent 53.15% of those who will be displaced. We also surveyed 487 people who attended six informational forums about the canal project in Juigalpa, Nueva Guinea, Bluefields, Rivas, San Miguelito and Managua. The survey posed ten closed questions on a confidential questionnaire that individuals filled out in writing.

Various proposals and considerations regarding the implementation of the interoceanic canal emerged in these interviews, groups and forums. At the risk of simplifying their richness, we distinguished three distinct positions within the heterogeneity of the proposals.

Those who reject
the canal and the law...

A significant sector of the population expressed an emphatic rejection of the project, including repeal of Law 840. They are the families at risk of being expropriated and others who perceive that the project will benefit the Chinese company, international commerce and a political elite, but not the local population.

In addition to feeling offended by a decision about which they weren’t consulted, this sector, which is basically peasants, aspires to a development model that would strengthen their agricultural production by facilitating credit, technical assistance and markets. It would also include more opportunities for education, health, communication, transportation and recreation for their families, while respecting their values and traditional culture.

Those who think the country needs a sustainable development model that protects the environment and natural resources are joining this proposal to cancel the canal and canal law. Many people who support this position are also historically sensitive to any foreign intervention that threatens national self-determination and pursues its own enrichment with the country’s resources.

...those who propose
reformulating the law…

Another position criticizes the project and legal concession but doesn’t discard the project; instead offering proposals to reformulate it. Some suggest implementing a free and informed prior consultation with the directly affected population. Others propose a national plebiscite such as Panama held regarding the enlargement of its canal. They speak of an inclusive dialogue to hammer out a consensual proposal. Some suggest including them as partners in the project through the contribution of their properties.

A frequently repeated opinion is that prior scientific studies must be done. And assuming the inevitability of the canal as proposed, they argue the need to be informed in a clear and complete manner regarding the expropriations and transfer of the population, that they be paid a fair price for the affected properties, and that the population’s transfer be facilitated to new settlements with decent housing, land to cultivate, employment opportunities, education and health.

…and those who applaud it

The third position considers that the canal will promote the country’s development, help combat poverty and bring employment to many people, which in turn will stimulate the economy and permit the return of families that emigrated due to lack of work in Nicaragua. This position is expressed by political functionaries, people aligned with the governing party and those who have been persuaded by the government mass media’s official propaganda regarding the benefits of the project.

Will there be answers
to these questions?

While investigating the socioeconomic effects the canal construction and HKND subprojects would have on the affected municipalities, questions emerged that merit responses. These are only some:

o Has an assessment been done comparing the costs and benefits between the canal project and other initiatives for the use of Lake Cocibolca (irrigation, fishing, tourism, potable water)?
o Will a dialogue be held and a mutually satisfactory agreement be reached between property owners and HKND before proceeding with expropriation?
o Will the government support the forced appropriation of peasants and indigenous communities who obtained their land through historic struggles and which has a profound significance in their cultural identity?
o Is the government conscious of the risk of recreating violent situations in the territories whose population suffered the war years of the eighties and still have open wounds?
o Are the armed forces prepared to use force to evict peasants and other residents who do not want to sell or leave their properties and see them turned over to a foreign company?
o Would the people living in the area of the canal sell their land if they are offered the highest market price paid in cash dollars?
o Has a plan been developed to relocate the displaced population and reestablish their living conditions according to international norms and good investment practices?
o Have measures been anticipated to address the effects that accompany the uprooting of communities with respect to the displaced population’s physical and psychological health?
o Have the national security risks that the canal may run derived from the actions of international organized crime been considered?
o Does a strategy exist to make up for the lost agricultural production in the areas the canal will occupy to avoid hunger and the decreased supply to the local and national market?
o Where will the government obtain the necessary resources to replace the infrastructure investment that will be lost along the canal route? (energy, communication, water, health, education, cemeteries, recreation, churches, temples…)?
o Who will be willing to work on the canal construction under the conditions already announced by HKND: daily 12-hour shifts for two consecutive weeks and living in closed camps?
o Are the municipal governments prepared to assume the cost of the tax revenue lost due to the producers’ loss of farms and income?
o Have the mayors’ offices thought how they would be able to continue providing services to the population that will be divided by the canal and how citizens will be able to participate in municipal assemblies?
o Are the municipal governments prepared to take on the migration of the displaced populations to the municipal seats that will surely happen?

We hope that other questions will be raised by our study. And we also hope that satisfactory answers will be given by the government authorities and HKND.

The Network for Democracy and Local Development is
an arena for hammering out agreements that strengthen
civil society organizations for inclusive and equal local development, public policy advocacy, knowledge generation and the promotion of an active citizenry.

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