Development Gap

Question 1

Problems with average incomes?

Answer 1

AVERGAE IS NOT THE NORM – look at dispersion and standard deviation

Question 2

PPP?

Answer 2

Adjusts for expense of goods within different countries

Affected by inflation

Question 3

World Bank website?

Answer 3

Information focused around investment
President is American
Headquarters in Washington D.C

Question 4

CIA Website?

Answer 4

Prepared by the Central Intelligence Agency for the use of US Government officials
Information provided by all of the US Departments
No environmental indicators

Question 5

Website data comparison?

Answer 5

Literacy rate (% population aged 15+)
Nicaragua - W.B - 82.5% - CIA - 82.8% - (2015)
Panama - W.B - 95% - CIA - 95% - (2015)
Costa Rica - W.B - 97.6% - CIA - 97.8% - (2015)

Question 6

Panama Canal Expansion Project information

Answer 6

Completed June 2016

Players: Government

Question 7

Panama Canal Expansion Project Economic factors?

Answer 7

+s
30,000 construction jobs (on sheet)
Increased capacity by 9,000 TEUs
Within six months it had registered over 500 transits
Added an extra 490 million dollars to the 2016 fiscal year
Stimulus to the National Economy
The additional economic activity at an aggregate level would provide an additional 26% to the GDP annual growth rate
-s
Opportunity Cost
Cost $5.2 billion (on sheet)
No global shipping growth in 2016 – remained at 2.8% from 2015 (WTO)
About a third of the canal’s traffic is between US East Coast ports and northern Asian ports. But that cargo traffic dropped by 10.2 per cent in 2015

Question 8

Panama Canal Expansion Project Social factors?

Answer 8

+s
76% of Panamanians approved the expansion – national referendum 2006 (on sheet) - public support - more ‘bottom up’ - public ‘buy in’
-s
A small number of people living in 20 buildings on the canal’s property will have to move - 50,000 people were evacuated during the building of the original canal
Increased National Tax

Question 9

Panama Canal Expansion Project Environmental factors?

Answer 9

+s
The project commenced with reforestation of a buffer zone that hugs either side of the 51-mile (82-kilometer) waterway
As a corridor for migrating species of birds and animals, Panama’s habitats are vital for species such as jaguars and eagles that depend on such pathways for survival.
Sixty percent of the water used on each transit through the new locks will be reused - about 7 percent less water than are used with the locks previously
Means no reservoirs will be excavated to supply the new locks with water.
The new forest, meanwhile, will act as a sponge, storing rainfall during Panama’s rainy season and slowly releasing it into the canal during the dry season
-s
Increase in magnitude and occurrence of landslides in slopes from channel deepening and excavation
Increase in Soil Erosion
Loss of vegetation could lead to loss of 54,590 MT of carbon through carbon capture loss
Requires more extraction from the Gutan Lake
Increase in invasive ship species - biodiversity
Potential damage to Mesoamerica Biodiversity hotspot (on sheet)

Question 10

4th Set of Locks Project information?

Answer 10

Players Chinese business, China Harbour Engineering Company - Superpowers

Question 11

4th Set of Locks Project economic factors?

Answer 11

\+s
Would allow ‘Post Panamax’ ships to pass
Canal charges ship per TEU - increase in size accessibility means increase in income
-s
Cost $17 billion (on sheet)

Question 12

4th Set of Locks Project social factors?

Answer 12

-s

Chinese influence in the countries largest economic asset - superpowers - Chinese paid = maybe chinese workers?

Question 13

Nicaragua Canal information?

Answer 13

Players: Financed by Hong Kong based HKND Group – owned by a Chinese billionaire

Question 14

Nicaragua Canal economic factors?

Answer 14

+s
Will provide about 50,000 construction jobs (on sheet)
Will accommodate shipping vessels that the Panama Canal can’t – even after the first Expansion Project - competition
Large potential source of governmental revenue - could bring country GDP closer to that of Panama
-s
Cost US$ 50 billion+ in a country with a GDP per capita of $4670 (PPP)
Wang Jing, the Chinese telecoms tycoon behind the project, lost about 85% of his fortune in a stock market crash

Question 15

Nicaragua Canal social factors?

Answer 15

+s
Engineers have conducted geological surveys and marked up the area, farmers have been paid $3,000 to allow surveys of their land
-s
More than 500 acres have been purchased by the Chinese developer HKND for road-widening = increase in Chinese influence
Protest march against the construction in San Jorge, Nicaragua, on 3 October 2014
Roadblock across the Pan-American Highway on 23 December – protesters worried their land would be taken by government – one report of police beating and illegally imprisoning protestor
The biggest unanswered question is the extent to which the Chinese government is supporting the project - Nicaragua recognises Taiwan

Question 16

Nicaragua Canal environmental factors?

Answer 16

-s
Seismically active area – uncertain if it is technically feasible
Environmental Resources Management – the UK-based company that drew up the impact assessment for HKND – concluded that the project would “have significant environmental and social impacts”
Will pass through the San Miguelito Wetlands – a natural reserve protected region
Blasting of Artificial Lake near Punta Gorda could cause immense damage to ecosystems and freshwater supplies
Will destroy or alter nearly one million acres of rainforest and wetlands
Canal will cut through Lake Nicaragua which is the main source of water for the country, shipping vessels will pollute this water and destroy invasive species
The canal route lies in the middle of a hurricane belt - A storm like Hurricane Mitch, which killed 3,800 people in Nicaragua in 1998, would probably cause the canal to flood, triggering mudslides that would breach locks and dams.

Question 17

‘Casa Cayuco’?

Answer 17

Economic
+ Those employed in the resort support over 100 people in the local village, Salt Creek
- Very small scale – very insignificant economic impact
Social
+ Salt Creek is the local village. Casa Cayuco employs 13 people from Salt Creek.
The children of Salt Creek are enabled to learn English and thus more doors are opened to them.
Environmental
+ Conservation of the local rainforest and the many species which rely upon it.
National Parks currently cover almost 29% of the total area of the country. There are 14 national parks, more then a dozen forest reserves and 10 wildlife refuges.

Question 18

Ecotourism in Costa Rica?

Answer 18

Lapa Rios
Economic
+ It makes an effort to purchase local goods and services.
- Very small scale – very insignificant economic impact
Social
+ Tours in the Lapa Rios Reserve help to support the ongoing maintenance and pay back the land acquisition of the reserve.
It supports education and other community projects within the Osa Peninsula.
Environmental
+ Private nature reserve spread over 1,000 acres of Central America’s last remaining lowland tropical rainforest with 319 bird species.
‘Five-leaf’ (of five) status from the Costa Rica Tourism Board’s (is achieving the maximum level of sustainability).
Lapa Rios reforestation program by transplanting a primary seedling to an area of secondary growth: 1987-2000 they gained about 11% forest cover.

Question 19

Ecotourism in Nicaragua?

Answer 19

Nicaragua
‘Jicaro Island Ecolodge’
(National Geographic Unique lodges of the world)
Economic
+ It sources local produce where ever possible for their restaurant – multiplier effect.
The water project (see right) was funded through the donations of our Jicaro guests.
- Very small scale – very insignificant economic impact
Social
+ In collaboration with US-based ‘Earth Equilibrium’, Jicaro has developed a community-based outreach program focused on the support and implementation of educational projects that encourage sustainable community development.
Approximately 88 children attend the local Padre Nello School.
A water filtration project was created to create safe drinking water for the children who attend Padre Nello School
Environmental
+ Built on the premise of sustainability, they try to minimise the impact of their daily actions.
Built from timber reclaimed from trees blown down by hurricane Felix, the buildings and furniture are made of tropical hardwoods.
The resort minimally impacts the island and with very careful planning in terms of water supply, waste water treatment and electricity usage.

Question 20

Non-eco tourism in Panama?

Answer 20

Largest number of arrivals – not just ecotourism anymore – ‘Sun, Sea and Sand’ 5 Star Resort – TNC Chains such as the Marriott are now located there – ‘leakages’
Tourism generates more revenues than transit fees from the Panama Canal ($1.92bn) or the Colón Free Trade Zone ($1.9bn)
Households reap about 56 percent of the total gains in incomes from tourism expenditures
14.6% of tourism is business

Question 21

‘Biodiversity hotspots’

Answer 21

High species richness
High levels of endemism
Facing severe human threats
Over 50% of world’s plant species and 42% of terrestrial vertebrate species are endemic to 34 biodiversity hotspots

Question 22

Honduras threat?

Answer 22

10 millions tonnes of cargo by 2021
7 million passengers
Union of South American Nations
Threat to transoceanic projects

Question 23

Nicaraguan corruption?

Answer 23

US state department says it is rampant making it difficult for their companies to work in the area
President Ortega intends to implement a socialist form of government
2013 - government gives HKND 100 year concession to build canal - no competition and no public voice
Government said land owners will be paid a “cadastral value” - US companies fear it will be below market value
145/175 on corruption index