Panama Canal
The Panama Canal is an artificial waterway that connects the Atlantic Ocean to the Pacific Ocean. Completed in 1899, it traverses the isthmus of Panama, cutting through Colombia and the city of Panama. It is one of the two major canals linking the world's two largest oceans, alongside the Boschland Canal. Today, it predominantly serves European and South American vessels.
History
19th century
Race to the pacific
In the latter half of the 19th century, the quest for a shorter maritime route between the Atlantic and Pacific Oceans gained momentum in the Americas. The Dutch sought to find a shorter route through the north, and serious exploration in the arctic as early as 1860. Alarmed by these developments, three other nations emerged as key players in the race to the Pacific seeking to rival the Dutch efforts: the newly independent Empire of Mexico, Colombia, and Genoa.
Construction
In 1887, the three participating nations—Mexico, Colombia, and Genoa—established a joint venture to oversee the construction and management of the Panama Canal. This resulted in the establishment of an entity known as the Panama Canal Commission, with each nation being allocated a one-third share.
Construction of the canal began in 1891, led by a team of Mexican and Colombian engineers, overseen by José María Olmedo. The Genoese contributed with their expertise in financial management and European engineering techniques. The effort mobilized thousands of workers, including laborers from the local communities. The canal was officially completed in 1899. The opening ceremony, held on December 1, 1899, was attended by dignitaries from all over South America.
20th century
Mexican privatization
Following the Republican Revolution in Mexico in 1909, the country faced significant economic challenges and sought to modernize its infrastructure. In 1925, Mexican President Emilio Avila Ortiz signed an act that privatized a portion of its shares in the Panama Canal Commission in order to raise funds for these modernization projects, as well as to help the Mexican government weather through the impact of the European Economic Crisis. Mexico conducted a valuation of its shares and sold a portion through public auctions and private negotiations with international investors. Several private Mexican and few British firms acquired these shares, leading to a reduced national stake in the canal.
Following the Great War (1935-1939), the Genoese economy steeply declined and was plagued by political instability under the ineffective leadership of Dictator Niccolo Chiossone. This turmoil also affected the Genoese territories of Panama and the Genoese Pacific. Colombia exploited the situation and invaded Panama City in 1953, arguing that Genoa was unable to effectively govern or supply them. Colombia justified its intervention as necessary to address the instability and neglect, citing humanitarian reasons. By 1958, Colombia had effectively turned Genoese Panama into a puppet state and had acquired significant shares in the Panama Canal.
Additionally, Colombia began setting up shell companies in Mexico to further purchase and consolidate shares in the canal. By the 1960s, Colombian or Colombian-controlled firms owned a vast majority of the Panama Canal Commission's shares, and the Colombian government exerted significant influence over both the political and economic policies related to the canal.
