The official inauguration of the Panama Canal Expansion last June was the culmination of the most significant upgrade of the world-famous waterway since it originally opened in 1914. The Third Set of Locks has doubled the capacity of the canal, which can now accommodate the larger Post-Panamax vessels with capacities of 13,000 to 14,000 TEUs (twenty-foot equivalent units).
“More than 100 years ago, the Panama Canal connected two oceans. Today, we connect the present and the future. It is an honor to announce that we did this together. We provided this great connection to the world. This is the beginning of a new era,” Panama Canal Administrator and CEO Jorge Quijano told a huge crowd of Panamanians, foreign heads of state and other dignitaries during the opening ceremonies.
Aside from the obvious advantages brought about through the canal expansion, the opening of the new locks also creates new business opportunities for Japan, particularly for the importation of liquefied natural gas (LNG).
“For the first time in the history of the Panama Canal, LNG vessels will be able to transit through this expanded canal. This means that LNG produced on the eastern seaboard of the U.S. will be going to Japan through the canal. This is essential to Japan’s energy security and to our economy,” explained Ambassador of Japan to Panama Hiroaki Isobe.
While the ambitious $5 billion project encountered several challenges that caused years of delay, the completion underlined the determination of the Panamanian government to complete its jobs, something that bodes well for other landmark projects in the pipeline.
In April, Panama President Juan Carlos Varela met with Japanese Prime Minister Shinzo Abe during an official visit to Tokyo, during which the two leaders also announced a $2.7 billion official development assistance loan for the Panama Metropolitan Area Urban Transportation Line-3 Development Project.
“The relationship between Panama and Japan has always been great. Having said this, I believe that we are currently at an all-time high,” said Panama’s Deputy Minister for Foreign Affairs Luis Hincapie.
“Japan’s involvement in the third line of the metro proves that relations are at the highest level,” he added.
The first of its kind in Latin America, the Metro Line 3 project is viewed as a crucial component of Panama’s growth and will be overseen by Japanese engineering firm Nippon Koei LAC, which has decades of experience in the country and the rest of Latin America.
“From the viewpoint of social development, which is the priority of the present administration, this project will ease the burden of time consuming commutes. It will improve the lives of those who live in the suburban area of Panama City. We expect this project will contribute to the economic and social development of Panama and Panama City,” said Nippon Koei LAC President Makoto Nakao.
Additionally, the project is widely seen as an excellent opportunity for Japan to become more involved in infrastructure development not only in Panama, but across Latin America and the Caribbean as well.
“I hope the Metro Line 3 project would be a springboard for other Japanese companies. We would like to see more Japanese companies operate here and contribute to Panama, its economy and its people,” Isobe said.
This momentum in the relationship between Panama and Japan has not gone unnoticed by the private sector.
Japanese companies, such as NTN Sudamericana and Yamaha Music Latin America, have expressed strong confidence in their growth potential as they strengthen their operations and expand their activities in the region through their Panama offices — a move welcomed by Panamanian authorities.
“I hope this is only the beginning of more Japanese companies coming to Panama. One of the other purposes of my visit to Japan early this year was to invite Japanese companies to do business in Panama, not only for infrastructure projects, but also to use Panama as a base for their operations in the Latin American market,” Hincapie said.
Beyond the recent canal expansion and other infrastructure projects, Panama has further solidified its position in the region as a hub not only for goods and people, but also for innovation and ideas as well.
Perhaps unknown to many, Panama has taken huge strides in developing its life sciences and its information and communications technology sectors, having nurtured homegrown successes such as Medistem Panama and software solutions provider Smartbytes.
Panama’s growth clusters — Panama Pacifico and Ciudad del Saber (City of Knowledge) — have contributed significantly in harnessing the country’s intellectual resources and creating an environment conducive to international collaboration and exchanges.
For the long term, the two countries clearly have more opportunities to nurture and strengthen their relationship. With both sides eager to catapult cooperation to new heights, many have raised interesting ideas such as developing Panama as a transport and logistical hub via direct flights to Japan.
“We strongly believe that a direct flight to Asia represents a huge opportunity for that region, Panama and the whole of Latin America. We think that after tackling a few remaining technical issues, this flight can become a reality in a few years,” Hincapie said.