Economic Benefits of the Panama Canal to the USA
The Role of the US in the Construction of the Panama Canal
The US had interests in constructing the Panama Canal since the late 19th century. However, there were many obstacles that stalled this ambition. When the French engineer Ferdinand de Lesseps and his team began working on the canal, they faced many challenges. Despite having successfully completed the Suez Canal, de Lesseps ran out of funds and lost many of his workers to malaria, yellow fever, and other tropical diseases which were common in Central America.
The US saw this as its opportunity to achieve its ambition of building the Panama Canal and in effect tried to convince Colombia to sign a treaty permitting it to construct the waterway. When this effort hit a brick wall, the US helped the financially crippled Panama attain independence from Colombia and signed a treaty that paved way for the construction of the Panama Canal. The US brought onboard expert engineers and a good doctor who was able to arrest the menace of the tropical disease. By 1914, the 51mile canal was completed and began operations.
Economic Benefits for the US
There are many benefits that the US has gained from the construction and completion of the Panama Canal. In fact, experts state that the US has benefitted from the Canal even more than Panama itself. The following are some of the main benefits that the US has gotten from the Panama Canal:
- Link of its west and east coast. Upon the discovery of petroleum and gold in California, the US needed easy access between its western and eastern ports. The completion of the Panama Canal helped the US to easily transport these minerals and oil because it shortened the distance between the different states.
- Trade booster. The Panama Canal has greatly boosted trade in America. It is estimated that all trade products including oil that enter or leave America pass through the canal. The canal shortened the distance between the US and Latin America and also made it safer to transport American products to other countries.
- Creation of employment. The construction of the canal brought about many employment opportunities for Americans. This is because they were directly involved in the construction project. Additionally, the increase in trade volumes boosted demand and production for American products. This led to the expansion of different industries and hence creating employment for more Americans.
- Improved access and control of colonies. Colonies such as Hawaii and the Philippines were difficult to access. However, the construction of the Panama Canal shortened the distance to such locations making it easy for America to easily access and control these colonies and their reso
- Since it played a major role in the construction of the canal, the US has always had a share in the control of the canal. This has helped it generate a part of the income from the revenues earned from vessels that use the canal. This is shared between the US and Panama.
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Online sources:
http://wiki.answers.com/Q/The_benefits_from_the_Panama_Canal
http://useconomy.about.com/od/tradepolicy/p/Panama-Canal-Expansion-Impact-On-U-S-Economy.htm