The Nicaragua Canal: scenarios of its future roles

Connections between the Atlantic and Pacific oceans are vital for international trade. Since 1914, the Panama Canal has provided ships with a direct interoceanic canal for crossing the Atlantic and Pacific oceans. The geographical advantage of the Panama Canal allows it to enjoy an exclusive position in international seaborne trade. Passage demand through the canal has increased continuously since its opening, with about 12,000 vessels travelling through it in 2013. However, the Panama Canal’s monopoly in interoceanic canal operations may soon come to an end. In 2012, a memorandum of understanding was signed between the Nicaraguan Government and a Chinese investor to construct the Nicaragua Canal, which will be built about 400 nautical miles from the Panama Canal. It is expected that the Nicaragua Canal will be operational by 2020. The proposed canal will not only provide an alternative route for vessels to pass between the Atlantic and Pacific oceans, but will also trigger dynamic changes in seaborne trade patterns. To assess the long-term benefits of the proposed canal, we use a scenario planning method in this study to provide a framework for constructing several scenarios for 2030, 10 years after the anticipated construction of the canal. To develop the scenarios, we consider three macroscale drivers, namely politics, economics, and environment, and the causal relationships between them. Combinations of pairs of drivers are used to generate dominant scenarios to anticipate the role of the Nicaragua Canal with respect to future international trade. The analysis presented in this study will provide transport geographers and other major stakeholders with alternative mindsets into the future spatial changes in and development of maritime transport.