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These stories were published Monday, Nov. 3, 2003, in Vol. 3, No. 217
Jo Stuart
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This photo was taken last December by reader Bryan Blust. But here it symbolizes the beginning of the end of the rainy season, something we all are awaiting. And November is the transition month!

Photo by Bryan Blust
Are you ready for the changes that are coming?
By the A.M. Costa Rica staff

A string of changes threatens to alter the way expats live in Costa Rica. 

The developments have been reported in news stories, but expats have a way of ignoring troubling news until their personal situation is directly affected. Here is a review: 

THE FISCAL PLAN: The government would like universal taxation. That is, all income from whatever sources would be taxed by Costa Rica. Right now, the only money subject to taxation is income earned in Costa Rica. The plan would have an impact on pensions held elsewhere by persons living here. The Asamblea Nacional has promised to consider foreign pensions, but the matter still is up in the air. 

THE FREE TRADE PACT: Whether or not Costa Rica becomes a member of the Central American Free Trade Agreement, big changes are in the wind. If the country fails to do so, officials predict massive job losses and other economic woes. If the country joins, the economic impact is not clear, but expats may have access to cheaper foreign goods and automobiles. Then again, the full impact might not be seen for 15 years. 

IMMIGRATION: The Dirección General de Migración y Extranjería really is cracking down.  So-called perpetual tourists who think they can stay here by renewing a tourism visa every 90 days are in for major shocks. At the same time, perhaps a thousand or more pensionados and rentistas have flaws in their paperwork because they did business with a handful of lawyers who took shortcuts. They face expensive legal work to correct their files or a quick trip elsewhere. Initial story is HERE! 

THE U.S. INTERNAL REVENUE SERVICE: The U.S. tax-collecting authority is expected to pay more attention to U.S. expats and their prior tax returns after the first of the year. Creditors of failed high-interest borrowing operations are being targeted. Most did not take advantage of an amnesty offer that ended April 15. Some efforts are being made to strike an agreement 

with the I.R.S. because a lot of the persons who owe back taxes now have very little cash. 

REAL ESTATE MARKET: The Costa Rican residential market has endured severe financial shocks over the last year, and some improvement has been noted for sellers. But the market still favors buyers and those sellers who are realistic enough to price their properties correctly and perhaps offer good terms. 

PROPERTY OWNERSHIP: On Nov. 22 all annotations over a year old will expire and be purged at the Registro National, Costa Rica’s national registry of properties.  Anyone who has not cleared up a technical flaw in a deed and ownership paper will lose the property involved.  See our story HERE!

CORPORATIONS: Many expats hold property or vehicles in corporations for that purpose. But under a more aggressive Tributación Directa tax collecting authority and an interim fiscal plan, more filings and taxes are required from corporations. The penalty for not doing so is expensive. Deadlines are Nov. 30 and Dec. 15. 

REVISION TECNICA: The mandatory vehicle inspection program has been a pain because technicians have been very picky. But proof that the vehicle passed inspection will be needed to renew the circulation privileges this year. This is the so-called marchamo that agencies and banks soon will begin collecting. 

SEXUAL EXPLOITATION:  Since an 8-year-old girl was murdered July 4, Costa Rica has been on a crusade against sexual unions by adults with underaged youngsters. Any expat who associates with someone under 18, even if that person is a professional prostitute, runs the risk of being a lightning rod for the nation’s anger. 

INVESTMENTS: Expats who have investment capital face unhappy choices now that the firms and individuals who paid from 3 percent to 5 percent a month have gone out of business. Many expats find that they cannot live here on the low interest from their $100,000 to $200,000 nest egg. Some are being sucked into a new generation of suspect deals.

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Venezuela protests
Ortega’s efforts here

By the A.M. Costa Rica staff

CARACAS, Venezuela — The president of Venezuela said he will file a complaint with the government of Costa Rica because of the activity of a political oponent who has been granted political asylum in San José. 

The man is Carlos Ortega, former president of the powerful Venezuelan Confederation of Trade Unions. 

"We are duty bound to alert the Costa Rican government of Ortega's criminal conspiracy against Venezuela!" Hugo Chavez Frias, the Venzuelan president, said in a Sunday television talk. 

Ortega was taped talking to Manuel Cova, the current leader of the trade union group in which Chavez said Ortega was plotting against the government. Chavez said he would ask his foreign minister, Roy Chaderton Matos, to file a complaint with Costa Rica. 

Ortego was one of the leaders responsible for organizing the two-month strike that attempted to dislodge Chavez from power. The strikes toward that aim were unsuccessful. He sought asylum March 13 at the Costa Rican embassy in Caracas, Venezuela, and came to San José about a week later. 

Chavez and his supporters have been unhappy because Ortega continues to be involved in Venezuela politics, something they say is inappropritate for someone who is a political refugee in a third country. 

Fish kill ravages
Río San Carlos

By the A.M. Costa Rica staff

Fuerza Pública officers confirmed Saturday that a massive fish kill had taken place in the Río San Carlos between Pital de San Carlos and Boca Arenal. 

Officers said from the scene that all types of animals, including fish, shrimp and crabs, seemed to have died. 

Residents of the area began to notice the problem Friday, and police came to the scene Saturday. 

Sometimes cyanide in small quantities is used to kill fish and shrimp by some individuals who then sell the poisoned catch for commercial purposes. Police have arrested persons in this area who fished in this manner. However, the reason for the new fish kill is unknown. Investigations are planned for today. 

Seventh St. muggers
may have returned

By the A.M. Costa Rica staff

An expat resident says he was mugged on Calle 7 between the pedestrian boulevard and Avenida 1 while a guard and passing motorists watched but did not take action. 

The man, who lives in Guadalupe, asked that his name not be used. The mugging happened about 10 p.m. Saturday, said the man. He was walking to a bus stop. 

The man said the crime was carried out by two persons. The first grabbed him around the neck and forced him to the concrete. The second, smaller man arrived to help clean out the victim’s pockets. 

The crime may signal the return of the downtown muggers who robbed perhaps as many as 150 persons before ceasing their activities about eight months ago. Typically they worked the area  between Calle 5 and Calle 9 between Avenida 1 and the pedestrian mall. Police were unable to stop the crimes or even make an arrest. The crimnals’ activities have an effect on tourism in the downtown. 

The latest victim said he was angry because so many people witnessed the event and did nothing to help. 

"It was partially my fault for letting the first guy get the drop on me," said the victim. "I thought he was following me so I crossed the street.  He followed across the street (a big red flag) but considering where we were (50 meters south of BCR bank on the street that runs alongside the Hotel Morazán) and the number of people around, I didn't think he would attack me. 

"People in cars that were stopped next to us and a security guard just watched while the guy almost crushed my larynx.  After he let me go, I could have.caught the second guy (I grabbed his pants leg expecting the security guard to jump in — the thief was a fairly small guy, but the cowardly security guard just stood there. 

"The burglar fell in the street but shook off my grip. I was too dazed by being choked to chase him. Something I will regret forever because I could easily have captured him without harm to myself." 

The man said he filed a police report and has an appointment to look at mug shots. 

Well-known contractor 
dies in United States

By the A.M. Costa Rica staff
Friends have conducted a small memorial service for Patrick W. Tierney, a well known contractor and construction worker who did many commerical jobs in downtown San José. 
Patrick W. Tierney
Tierney died Oct. 13 at the Melisa, Ohio, Medical Center. He went to the hospital there while he was visiting his father, William Tierney, in that state. 

Tierney, 52, suffered from lymphatic cancer, accordng to friends here. 

As a construction worker he was involved in the Horseshoe Casino, La Palma Restaurant, the 

former Sharkey’s and Hemingway Inn, said friends. 

He is survived here by his long-time Costa Rican companion, Olga Calderón. He is survived in the United States by a son, Ryan J. of South Florida University in Orlando, Fla., and a stepmother, Audrey. 

Tierney was graduated by Rockdale College in Toronto, Canada. Burial was in Sharon Center, Sharon, Ohio. 

Crash spectator shot
while viewing wreck

By the A.M. Costa Rica staff

A San Antonio de Desamparados man went outside his home just after noon Sunday because he heard a car crash. 

The driver of the car pulled out a pistol and shot the bystander three times in the chest, investigators said. The victim, identified as Eliécer Aguilar Montoya, died. 

The driver of the car was identified as Eugenio Cascante, said police. He was being held Sunday night, and investigators said they thought that he was either drunk or under the influence of some drug when he crashed his vehicle into a bus stand near where Aguilar lived. 

More flooding on coast

By the A.M. Costa Rica staff

Nearly 200 persons in El Roble de Puntarenas have been forced out of their homes by flooding due to heavy rains. The waist-deep water might be reinforced by more rain predicted for today. 

The main source of the flooding is the Río Naranjito which is out of its banks. The most affected areas are three low income, informal subdivisions. Disaster officials have opened at least one shelter to accommodate the displaced residents. 

Two fishermen are missing

By the A.M. Costa Rica staff

Two fisherman, a man and a woman, are missing after having been swept away by water in the Río Corredores in Bajo Los Indios in the southern zone. The man was identified as Moisés Rodríguez Bejarano, 29, and Edith Ramírez, 24.

Valuable air shots
recovered by paper

By the A.M. Costa Rica staff

Diario Extra, the Spanish-language daily newspaper, said early Monday that a man had surrendered two rolls of infrared typographical exposures to a reporter there. 

The two rolls contain 190 positives taken by the U.S. National Aeronautics and Space Administration as part of a physical study of Costa Rica. In monetary terms, the material stolen is worth thousands of dollars, said officials. Two canisters, each containing a roll of film, vanished last week. 

The material was in the hands of the Instituto Geográfico Nacional to be scanned into digital format for later distribution to individuals and agencies that would need to study the terrain, according to Eduardo Bedoya Benites, director general of the institute. 

The newspaper said that a man appeared at its offices Sunday, told a disconnected story and then fled before he could be taped for television. The man said he was a private investigator and asked the newspaper to turn the rolls over to the Judicial Investigating Organization. 

Girl injured in plane crash

By the A.M. Costa Rica staff

A 6-year-old girl, Stefani Sala, is being treated and is in extremely critical condition at Hospital Nacional de Niños after a crop dusting plane smashed into her home about 8  a.m. Saturday. 

Four other persons, including the pilot, suffered lesser injuries. The Fuerza Pública identified the pilot as José Cavaría Blanco. The home is located in Finca San Juan, Puerto Viejo de Sarapiqui, they said. 
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High court frowns on use of tourist cards
By the A.M. Costa Rica staff

Don’t count on seeing a special deal for U.S. and Canadian citizens in the new immigration law. The Sala IV constitution court says that citizens from those countries should bring passports to Costa Rica just like citizens from any other country. 

The court was issuing an advisory opinion at the request of the Asemblea Nacional where a revision of the immigration laws is being prepared. 

The court’s opinion pretty well dooms tourism cards that many residents of the United States and Canada use now to enter the country. 

The Costa Rican government has decided to require passports from all visitors as of Dec. 9. However, there is pressure from the tourism industry to exempt U.S. and Canadian citizens to encourage them to travel here. 

The situation now is chaotic. Although citizens from the two countries can enter Costa Rica with a tourist card visa based on a birth certificate or even a driving license, some airlines do not have the forms for visitors to use. 

For a period earlier this year, Costa Rica did require passports, and airlines would not let passengers board without them. However, waivers quickly were put into effect. Some passengers were caught without passports and had to change their travel plans. 

The passport provides stronger identification, and one concern of officials is the arrival of persons travelling under false documents. Police officials have voiced the concern privately that one never is sure of the identity of a North American until fingerprints are taken.

The Consejo Nacional de Migración and the Pacheco administration has supported the use of tourist cards in the new law. Such cards have been in use for nearly 20 years. However, now there is more concern about child molesters and others coming to Costa Rica without full identification. 

The Procuraduría General de la República also has expressed concern about tourist cards and called them a danger to the security of the country. 

Tourism officials point out that the cost of a passport might cause visitors to go to a place that does not require them. The U.S. State Department charges adults $85 for a passport valid for 10 years. 

Immigration raid
targets El Pueblo

By the A.M. Costa Rica staff

Immigration officials swept the popular Centro Comercial El Pueblo over the weekend and nabbed nine persons they thought were illegal aliens Among them was a U.S. citizen. The center in North San José is where a number of dance clubs are located. 

Weekend immigration raids also took place in Atenas, San Carlos and Puntarenas from 8 p.m. Friday to 3  a.m. Saturday. 

In all, some 46 persons were detained because they did not have proper documents, The majority were from Nicaragua, but eight were from Vietnam and five were from Indonesia, according to Marco Badilla, director general of Migración y Extranerjía.

Migrants frequently get a raw deal, study finds
By the A.M. Costa Rica wire services

A report from the International Organization for Migration finds that most of the world's 175 million migrants are victims of human rights violations because they are not protected from abuse by their host countries' national laws. 

United Nations statistics show that one in every 34 people in the world is a migrant. In the industrial countries, the ratio is one in 10. 

Despite these huge numbers, the study by the International Organization for Migration finds that the vulnerability of migrants to human rights abuse has failed to receive adequate attention. 

The report said migrants generally have a negative image. It said they are victims of prejudice and discrimination. They are vulnerable to exploitation, and often are blamed for rising crime rates and for taking jobs away from the citizens of their host countries. 

The author of the study, Bimal Ghosh, acknowledged that certain domestic groups, such as the urban and rural poor, also may be subject to abuse. But he said that migrants are more vulnerable because they do not have the protection that exists for citizens under local law. 

"[In] Almost every single country, under its constitutional basic laws, there are certain rights granted to every single citizen. There may be some

exceptions. But at least from the legal point of 
view, they are entitled to these rights. In the case of migrants, the situation is not clear. . . The nation state's main responsibility is toward its citizens, and therefore, the migrants will have to depend on international law," Ghosh said. 

He said the position of migrants is not clear under international law. While it is recognized that migrants are entitled to certain basic rights, he said that in practice these rights are not always enforced. 

He also said the situation for migrants has become worse since the Sept. 11, 2001, terrorist attacks in the United States two years ago. "And that has created a climate, which makes it very difficult for those who are working for human rights for migrants, because as you recall, many — most of the terrorists involved in the attack, happened to be migrants. All migrants are not terrorists, nor are all terrorists migrants. And improved border control, which is a national prerogative and is a need because of terrorism, does not necessarily mean a more repressive migration policy," Ghosh said. 

Ghosh said many countries have imposed restrictions on freedoms and civil liberties in the wake of the Sept. 11 attacks. While everyone is subject to these new rules, he said, migrants suffer the most.  He noted many are arrested on suspicion and subject to detention without trial and forced deportation.

Railroad favored over Río San Juan route
Canal proposals would change face of Nicaragua
By the Nicaragua Network

In the Central American nation of Nicaragua, plans are quietly being hatched for new interoceanic transportation routes, both water routes and rail lines, that would compete with the Panama Canal. While the proponents of these routes claim that their development projects will provide economic salvation for the people of Nicaragua (the second poorest nation in the hemisphere after Haiti), voices from within Nicaragua are asking: Who will truly profit from the proposed megaprojects, and what will the real costs be? 

Throughout most of the 20th century the canal across Panama has served the needs of interoceanic traders and travelers well. Yet as a new century is dawning, the Panama Canal is no longer considered sufficient to satisfy the growing demand for shipment of goods between the Atlantic and Pacific Oceans. This is true for a number of reasons, including: 

• The Panama Canal has been increasingly unable to meet the growing quantity of interoceanic trade. The container trade between Asia, North America, and Europe has been increasing by between 6 percent and 8 percent annually since 1990. As a result the Panama Canal has lost a large share of its potential trade to overland rail and truck routes in the U.S. In addition, congestion in the canal area is increasing, causing frequent bottlenecks and delays. For as long as the global economy continues to grow, the canal will be increasingly unable to meet the demand for trade between the continents. 

• In the modern transport industry, the largest ships are considered the most economical, but the Panama Canal is too small to allow passage of the "post-Panamax" supertankers. It has been predicted that in less than 20 years more than half of the world's ocean-going cargo vessels may be too large to pass through the canal's locks. 

• Widespread doubts have been expressed in international commerce journals about the ability of the Panamanian government to oversee successful operation of the Canal. On Dec. 31, 1999, the Panama Canal was placed fully under Panamanian control. 

During the gradual transfer of control from the U.S. to Panama in the 1990s, the Panamanian government had some problems in effectively managing the Canal Zone. For example, uncontrolled deforestation in the Canal Zone by landless peasants has caused soil erosion and siltation, and is damaging the water supply that is vital to the Canal's operation. Lowered water levels in the canal sets limits on the size of vessels that can pass through. In addition, many fear that Panama will increase the tolls charged for use of the canal. 

Based on the political uncertainties and technical shortcomings of the Panama Canal, in recent years a number of proposals have surfaced for alternative routes from sea to sea. Several of these proposals have targeted Nicaragua for interoceanic routes, both by land and by water. One set of proposals would be based on the historical water route of the Rio San Juan and Lake Nicaragua. The other proposals are variations on a "dry canal," a rail line that would extend between Caribbean and Pacific ports. 

Of all the proposals made for alternatives to the Panama Canal, the proposal for a dry canal in Nicaragua appears to be among the most feasible. Nicaragua's physical features make it a natural choice for an interoceanic canal. 

If one were to travel all along the Continental Divide of the Americas, the mountainous spine that extends from Alaska in the north, down through the Canadian and U.S. Rocky Mountains, into the Sierras of Mexico and Central America, and all along the Andes to the southernmost tip of South America at Tierra del Fuego, the lowest elevation that one would reach along the way would be in southern Nicaragua. 

Approaching the problem from another angle, if one wished to take a shortcut across the Americas, from the Atlantic Ocean or Caribbean Sea to the Pacific Ocean, while having to do a minimum of climbing over hills, the best possible route one could find would be across southern Nicaragua. 

From the Caribbean Sea one can travel 119 miles up the Rio San Juan to Lake Nicaragua, which is only 110 feet above sea level. After a 45-mile lake crossing, all that remains to be done to reach the Pacific shore is a 12-mile jaunt across the Isthmus of Rivas, which rises to only 154 feet above sea level at its lowest point. Thus, although the distance from sea to sea is much shorter across Panama (48 miles), the divide is higher than in Nicaragua (300 feet vs. 154 feet). 

The Nicaragua Route also has other natural advantages, such as being closer to major U.S. ports. Given Nicaragua's geographical advantage, it has faced many canal proposals. The first feasibility study for an interoceanic route in Nicaragua dates back to 1567 and the reign of King Philip II of Spain. Since then Spain, Britain, and the United States have tried to maintain influence in Nicaragua and thereby control over the many proposed interoceanic rail and water routes. This multinational power grab has made Nicaragua the country most invaded by the United States. 

Present day canal proposals

Considering the history of grand plans for a canal or railway across Nicaragua, any new proposals may be looked upon with suspicion as just the latest in a long litany of dead-end schemes. Yet currently the proposals for a Nicaragua Route are being promoted and debated with as much earnestness as ever. 

Given the potential impacts that a canal megaproject could have on Nicaragua's natural environment, indigenous people, and national sovereignty, the latest proposals need to be taken seriously. In the recent dialogue on potential routes across Nicaragua, any proposals for construction of a traditional all-water route like the Panama Canal, in which large ships traverse the isthmus entirely by water, have been discounted as being prohibitively expensive. The leading recent proposals in Nicaragua have been variations on the old theme of a coast-to-coast railway. Yet the idea of a canal that would utilize the Rio San Juan and Lake Nicaragua has not been entirely abandoned either. 

The dry canal

During the 1990s various companies came forth with proposals to build a dry canal across Nicaragua. All of the proposals were variations on the old theme of a cross-country railway with ports at either end. The railways would be modern high-speed lines, and would be used only for shipping standard cargo containers. The Hong Kong-style ports would be able to accommodate the largest "post-Panamax" ocean vessels, and would be fully-equipped with machinery for loading and unloading cargo containers to and from trains and ships. 

The modern proposals would also utilize the natural deepwater harbor at Monkey Point on Nicaragua's Caribbean Coast. Monkey Point is located on an isolated stretch of coastline in a region inhabited by Rama Indians and longtime Creole residents. The entire region currently lacks road access. From the Caribbean rainforest the railway would ascend into the hills that lie to the east of Lake Nicaragua, and would then pass to the north of the lake. 

From this point westward, the recent proposals differ mainly in the routes chosen to reach the Pacific Ocean. One option for the western portion of the route would be to have the railway pass north of Lake Managua and reach the Pacific at the existing port of Corinto. This is the plan being promoted by the company SIT-Global (Sistema Intermodal de Transporte Global), and would include a major renovation of the port at Corinto. 

An alternative route would have a 225-mile (377-km) railway bend around the northern end of Lake Nicaragua and reach the Pacific further to the south along the Isthmus of Rivas. This is the plan being promoted by the consortium Canal Interoceanico de Nicaragua (C.I.N.N.). In addition to proposing to build an entirely new port from scratch on the Caribbean coast, C.I.N.N.'s plan also calls for another entirely new port to be built at a spot on the Pacific coast called Pie de Gigante ("the Giant's foot"). 

Other companies have periodically surfaced with slightly different variations on the Dry Canal proposal, but the two leading proposals have been those of C.I.N.N. and SIT-Global. After a few years of negotiations between Dry Canal promoters and Nicaraguan government officials and a "pre-feasibility" study conducted by the U.S. firm Woodward-Clyde, the leading Dry Canal proposal was reportedly that of the multinational consortium Canal Interoceanico de Nicaragua (C.I.N.N.). 

Alternative proposals for dry canals

The C.I.N.N. proposal was widely reported to have the support of Nicaraguan President Arnoldo Aleman, as well as the Nicaraguan Army, whose officials were rumored to hold at least 15 percent of the company's shares. The retired commander-in-chief of the Nicaraguan armed forces, Gen. Joaquin Cuadra Lacayo, stated in the Nicaraguan press that his father, the prominent Nicaraguan lawyer Joaquin Cuadra, owned a number of shares in C.I.N.N. 

As for the Sandinistas, reportedly Daniel Ortega and Bayardo Arce are associated with SIT/Global while former Head of the Army Joaquin Cuadra is involved with CINN. The U.S. government has also gotten involved, in support of the CINN group. U.S. Ambassador to Nicaragua Oliver Garza wrote a letter to Oscar Moncada, the president of Nicaragua's National Assembly, urging a quick vote on the pending legislation.

Garza reassured Moncada that "the majority of the CINN partners are U.S. citizens and belong to some of the most prestigious construction design companies in the world. CINN promoters have waited patiently for the approval of the law and are ready to move forward as soon as possible." 

Like many of the multinational corporations that operate in Nicaragua, C.I.N.N. is officially based in Managua, and has a small office there, but the money and decision-making power lie abroad. The companies that comprise the consortium are said to be mainly from Asia and Europe. The president of the consortium is a New York lawyer named Donald Mario Bosco who has ties with the law firm Parson and Brown. 

Bosco has prior experience in China, and the greater part of the funding for the project would reportedly come from investors from China, Taiwan, Japan and South Korea. Another key player in C.I.N.N. is reported to be Dr. Juan Manuel Rodriguez, a former World Bank consultant and adviser to the Carter administration. 

Rodriguez is currently the financial advisor to Carlos Lahe, the vice prime minister and coordinator of the Counsel of Ministers of Cuba. The dry canal's construction consortium is said to include the companies Wimpey Construction, Ltd. (England), BESIX (Belgium), Renfe and COMSA (Spain). In the event that the project is actually built, the operations consortium would include Europe Combined Terminals (Netherlands), Port of Tianjin Authority, China Merchants Holding, Ltd., China Marine & Seamen Service Corporation, the Japan Container Association, and the Japan Cargo Handling Equipment Association. 

The role of the major international financial institutions that have typically promoted mega-projects such as the Dry Canal is unclear as of yet. In 1995 Nicaragua's Construction and Transport Minister Pablo Vigil reported the following: "We have officially made a request to the World Bank, which has unofficially told us of its interest in assisting the Nicaraguan government so that steps towards the achievement of this goal will be the most beneficial for the country and the 

Canal Interoceanico de Nicaragua graphic
There have been at least nine serious proposals for a dry canal across Central America.

most advantageous for Nicaragua as well as for the investors." 

Concessions granted

On March 27, 2001, the Nicaraguan National Assembly approved two decrees that 1) authorized a concession for exploration, and 2) established the conditions for a future concession for construction and operation of the high-speed inter-oceanic railroad across Nicaragua. 

Both Sistema Intermodal de Transporte Global (SIT/Global) and Canal Interoceanico de Nicaragua (CINN) were given concessions. Several organizations in Nicaragua, including the Humboldt Center and the Center for Legal Assistance to Indigenous Peoples lobbied hard against the concessions. They were able to achieve the separation of the concessions into two steps: the viability study and the actual construction. They state that they will continue to speak out in support of the interests of Nicaragua's indigenous and of the environment. 

The National Assembly's Communication, Transportation, Energy and Construction Committee noted that between 20,000 and 50,000 jobs would be created but many of these would be temporary jobs that would only last until the construction is completed. Supporters maintain that the "canal" would serve as a catalyst for further investment, especially maquiladoras in the free trade zones that would be established at either end of the railroad line. But, maquiladora jobs have yet to pay workers enough to feed their families, so it is hard to say if those jobs are better than the subsistence agriculture to which rural families have until now dedicated their working lives. 

Other critics of the dry canal are skeptical about its viability. According to Costa Rica-based transport economist Warren Crowther, for example, "These same outfits came here with the idea of selling the Costa Ricans big on this," he said. "My own hypothesis is that these guys are really more interested in getting feasibility studies done and getting consulting fees than in getting any dry canal done." A 1995 report noted that "even if Nicaragua's landbridge could capture all of Panama's $64 million in container traffic, it would not cover half of the annual finance charges on the investment nor operating costs." 

The proposed Dry Canal mega-project is not merely about creating a shortcut between the seas for the global shipping industry. Rather, the project's promoters also see it as the key to intensifying the neoliberal economic development model in Nicaragua. Phrased in another way, international businessmen are seeing the dry canal as a means for facilitating exploitation of the remaining natural resources of Central America, especially of Nicaragua's Atlantic Coast region. 

Among these resources are gold and other minerals, valuable tropical hardwoods, petroleum, and seafood. In addition, the dry canal would make it easier for transnational corporations to exploit the cheap labor of Nicaraguans in "maquiladora" factories. During a January 1999 meeting at the C.I.N.N. office in Managua, consortium representative Francisco De Escoto candidly explained that the dry canal project, if successful, would "completely transform Nicaragua". The entire economic geography of the nation would be shifted, with two focal points at the new ports on either coast. 

Potential environmental impacts

All along the proposed route, and especially at the two ends on the Pacific and Caribbean coasts, the dry canal would cause unavoidable ecological impacts. On the Caribbean side, the associated industrial development would occur on the Miskito Coast, the juncture of two of the most biologically-rich habitats in the world, rainforests and coral reefs. On the Pacific side, the railway and port facilities would threaten one of the largest areas of intact tropical dry forest remaining in Central America, as well as rich coastal areas including sea turtle nesting grounds. Any realistic assessment of the dry canal proposal needs to carefully consider these impacts. 

Nicaragua's Atlantic Coast region contains the largest remaining relatively pristine rainforest in Central America. The Indio-Maiz Biosphere Reserve in southeastern Nicaragua along with the Bosawas Biosphere Reserve in northeastern Nicaragua and adjacent forests in Honduras represent one of the best opportunities in the Americas to protect large intact rainforest habitats north of Amazonia. Yet these forests are rapidly disappearing. 

Of the estimated 3 to 4 million hectares of forest remaining in Nicaragua, deforestation is estimated to be claiming 200,000 hectares per year. (A hectare is 2.47 acres.) Thus the claim is frequently cited that if current rates of deforestation are allowed to continue or worsen, Nicaragua stands to lose its remaining rainforest within 10-15 years. The proposed dry canal would only exacerbate the deforestation that is already rampant on Nicaragua's Atlantic Coast due to commercial logging and the spread of the nation's agricultural frontier. 

Both from the direct need to deforest land for construction of the rail line, port facilities, and associated factories and buildings of the proposed free trade zone, and from the secondary wave of deforestation that would be caused by the influx of settlers that would surely follow, it is realistic to assume that the dry canal would lead to deforestation of a large portion of southeastern Nicaragua. 

Construction of the dry canal would strike a severe blow against efforts to protect a Central American biological corridor. The idea for such a corridor was originally promoted by conservation organizations in 1990 as "Paseo Pantera" (Path of the Panther) and has recently been adopted by the World Bank's Global Environmental Facility  as the Mesoamerican Biological Corridor. 

The goal of the biological corridor is to safeguard a north-south network of protected natural areas that would extend from Mexico to Colombia. The proposal has a social component, in which communities along the corridor would be targeted for assistance in sustainable development initiatives, and an ecological component, in which large intact natural areas would be linked via corridors of protected habitat. 

Certain species need large blocks of intact rainforest habitat to survive, especially large animals such as jaguar and puma, tapir, monkeys, and certain birds such as the harpy eagle. In addition, biological corridors are vitally important in the context of global climate change. Many plant and animal species thrive only in specific climatic conditions, and as regional climates undergo changes these species will presumably need to migrate to regions with hospitable conditions. Without north-south natural corridors, many species will be stranded in islands of habitat that may no longer be hospitable. 

Proposed Dry Canal and Protected Sites.

Nicaragua's intact forests are vital to the success of the Atlantic Biological Corridor. In southeastern Nicaragua the Cerro Silva Forest Reserve and the Rio Indio-Maiz Biosphere Reserve are the keys to protecting the region's endangered forests and biological diversity. Although the precise route of the proposed Dry Canal has not even been disclosed to the public by C.I.N.N., the most likely route would have the rail line pass from Monkey Point on the Caribbean coast, inland across Cane Creek, and to the north of the Rio Punta Gorda. Much of this area is still covered in forest and is included in the Cerro Silva Reserve. The Cerro Silva area has been identified by the World Bank's Global Environmental Facility (GEF) as a "Priority Biodiversity Area", and an essential link in the Atlantic Biological Corridor13 

A north-south corridor of protected natural habitat and an east-west corridor of industrial development would seem to be mutually exclusive. Without even considering the secondary development which would be certain to occur along much of the length of the proposed rail corridor, the minimum 500-meter right-of-way through the forest preserve would in itself compromise the natural corridor and inhibit movement of some wildlife species. 

In addition to impacting southeastern Nicaragua's biological diversity, deforestation caused by the dry canal would also lead to severe soil erosion. Parts of the area are hilly and are dissected by many tiny streams that flow through steep ravines. The deforestation that would occur during and after construction of the dry canal would leave the shallow soils of these steep slopes exposed to the region's torrential rainfall and vulnerable to severe erosion. The resulting soil erosion would not only degrade the landscape, but would also degrade the aquatic environment by burdening the region's streams and rivers (such as Cane Creek, Monte Cristo Creek, and the Rio Punta Gorda) with sediment. 

The bounty and diversity of Nicaragua's rainforest has its marine counterpart in coastal and nearshore habitats. Where land meets sea along the Nicaragua's 450-km.-long (280-mile) Caribbean shore, palm-fringed beaches alternate with a series of mangrove-lined lagoons. The mangroves with their dense web of interlocking roots serve as essential nurseries for the fish and shrimp that make the coastal waters so rich, as well as an important habitat for the largest population of West Indian manatees remaining in the Caribbean. 

Further offshore, the shallow waters of Nicaragua's continental shelf extend for up to 200 km into the Caribbean Sea, and support a mosaic of sea grass beds, coral reefs, and offshore cays. The Miskito Coast sea grass beds serve as the primary feeding grounds for the Caribbean's largest remaining population of green turtles, while the reefs are home to lobster, conch, and countless fish species. 

The impacts of the proposed Dry Canal on the coastal resources of Caribbean Nicaragua are difficult to quantify, but potentially enormous. At the very least, construction of the port facilities would have localized impacts. In order to construct a port that could handle the largest post-Panamax vessels, dredging would be needed to deepen the waters off Monkey Point. In addition, the C.I.N.N. proposal calls for construction of a breakwater that would extend from Monkey Point over a mile into the sea, and would be necessary to protect the port area from the Caribbean surf that normally pounds Monkey Point. The combined effects of the breakwater, dredging, and pollution from ships and port facilities would degrade southeastern Nicaragua's coastal habitats. 

EDITOR’S NOTE: This article is abstracted from a paper prepared by the Nicaragua Network, Washington, D.C. E-mail: nicanet@afgj.org . Web Address: nicanet.org   Materials for this paper came from "Canary for the World: A Nicaragua Environmental Primer" by Jerry Mueller and the Nicaragua News Service. This article is being reproduced with permission

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