| Capacity constraints: Panama's major asset needs modernizing and expanding if it is to take advantage of growing shipping flows |
Panama's economy is set to face the biggest challenge in the Republic's 100-year history. A key decision on whether to press ahead with a project to increase the capacity of the Panama Canal and, more important, to find a way to pay the $5 billion it will cost, is due to be taken shortly.
The newly elected government of Martin Torrijos is close to going public on an expansion proposal following a key meeting of the Panama Canal advisory board, headed by Panama's minister for economy and finance, Ricaurte Vasquez, in Santiago Chile, last month.
As the son of former military strongman Omar Torrijos, who negotiated the transfer of the canal from US to Panamanian control in 1977, it is fitting that the task of defining the future of the waterway should fall on the incumbent president.
If the canal authority (ACP), the government and the national assembly approve the project, Torrijos says, it will be put to the vote of Panamanians.