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China’s Embrace of Nicaragua’s Ortega Could Backfire

China’s Embrace of Nicaragua’s Ortega Could Backfire
Demonstrators carry a banner reading “Ortega traitor” during a national protest march against the construction of a transoceanic canal, in Juigalpa, Nicaragua, June 13, 2015 (AP photo by Esteban Felix).

Last week, the Nicaraguan government canceled its deal with a Chinese company to build and manage a canal that stretches across Central America, ending a decade-long saga. Yet, despite this development, China’s influence in Nicaragua has never been greater. Beijing has expanded ties with much of Central America over the past two decades. But the diplomatic isolation of Nicaraguan President Daniel Ortega’s autocratic government has offered China an opportunity to lock down a point of traction in Central America that is less flashy than a brand new canal, but likely more sustainable.

Nicaragua has long had canal ambitions, and foreign powers have long tried to push them along. In the 19th century, Cornelius Vanderbilt built a cross-isthmus transit route in Nicaragua, combining a steamship and stagecoach system to move several thousand passengers per month. The U.S. author Mark Twain was among those who crossed Nicaragua via the Rio San Juan and Lake Nicaragua to get from the East coast to the West coast of the United States. Nicaragua was later considered as a potential site for what ultimately became the Panama Canal.

Several of Ortega’s predecessors in the 20th and 21st centuries, including former President Enrique Bolanos, had plans for a canal and attempted to attract international investors to build an alternative to the Panama Canal. However, none of those previous leaders took their plans as far as Ortega, who in 2013 announced a deal with a practically unknown Chinese businessman, Wang Jing, to build a canal. Ortega then used his control of a rubberstamp legislature to modify Nicaragua’s constitution and grant a 100-year concession to manage the canal to Wang’s HKND company, registered just the year before in Hong Kong, after what appeared to be quiet negotiations between the Ortega family and Chinese investors.

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