Neo-Sandinista File: Red China expands strategic encirclement of USA, inks MoU with Ortega, promises to finance US$30 billion inter-oceanic canal across Nicaragua; Panama Canal already under Beijing’s covert control, Li Ka-shing’s Hutchison Whampoa manages container ports at Balboa and Cristobal since 1999

For several years after Daniel Ortega’s return to the Nicaraguan presidency in 2007, rumours circulated about the possibility of Russia, Venezuela, Brazil, and/or Iran financing the construction of a second inter-oceanic canal across Central America, to rival the Panama Canal which, incidentally, is undergoing upgrades to accommodate larger vessels. Business-savvy Communist China, however, has finally produced the big buckolas needed to finance the building of the “Nicaragua Canal.”

On July 3, the Nicaraguan Congress, which is dominated by President Ortega’s Sandinista National Liberation Front, passed a law authorizing construction of the canal, a joint public/private venture in which the state (meaning the Sandinistas) will have a 51 percent stake and offer the remaining 49 percent to other countries, international organizations, corporations, or individuals.

A memorandum of understanding (MoU) between Managua and Beijing, furthermore, has authorized the HK Nicaragua Development Investment Company to “structure and manage” the financing for the project. The MoU was signed by Manuel Coronel Kautz, Nicaragua’s deputy foreign minister and president of the Grand Interoceanic Canal Authority, and Wing Jang, head of the Hong Kong-based company.

The neo-Sandinista regime predicts that the “Nicaragua Canal” will be partly completed by 2019, when it would have the capacity to accommodate 416 million metric tonnes, or nearly four percent of global maritime cargo. The canal construction zone will be declared “of public use,” with owners of the “affected” (expropriated) properties to be compensated by the Nicaraguan government within a period of no more than one decade. Three Dutch companies are conducting pre-feasibility studies for the construction of the canal.

Nicaragua is considering six potential routes, all of which traverse Lake Nicaragua and one that would require ships to navigate the San Juan River, which forms part of Nicaragua’s hotly disputed border with Costa Rica. However, the canal’s termini will be at Monkey Point, on the Caribbean coast, and Puerto Corinto, on the Pacific coast.

Dredging of the San Juan began in 2010, sparking a row with Costa Rica when Nicaraguan troops were dispatched to a river island claimed by both countries. In response, army-less Costa Rica deployed heavily armed officers of its national police force to protect the country’s northern border from further incursions.

With Red China’s status as chief benefactor behind the “Nicaragua Canal” now public knowledge, coupled with her covert control of numerous port facilities in North America, including the Panama Canal, via Li Ka-shing’s company Hutchison-Whampoa, the Communist Party of China’s strategic encirclement of the USA is obvious, except to the policy makers in Washington DC.

Meanwhile, opponents of the neo-Sandinista regime, reports the Iranian media, which is generally sympathetic with Ortega, are under investigation after they ended a protest by apparently firebombing the headquarters of Nicaragua’s Supreme Electoral Council. The chief electoral officer, Roberto Rivas, is widely perceived as an Ortegista. Rivas complained that the attack “undermines the claims” of the 30 protesters who slept in tents for over two months in their putative campaign for freedom and democracy.

That the FSLN may have sent agents provocateur to carry out this firebombing to discredit the splintered opposition should not be discounted. Nicaraguans are facing municipal elections in November and many critics of Ortega are concerned the ruling party will resort to fraud, as it did in 2008, to secure a majority of the country’s mayoralties.

In a story unrelated to Nicaraguan politics, the army has evacuated 3,000 people living near the erupting volcano San Cristobal, the country’s tallest mountain. On Saturday, San Cristobal coughed up a column of ash and gas 2 1/2 miles high.