A Chinese company is preparing to begin work on the Nicaragua Interoceanic Canal. Once — and if — the canal is ever finished, it will size up to more than 170 miles (about 275 km) and connect the Caribbean Sea to the Pacific Ocean, with Lake Nicaragua in the middle. It’s a major project — larger than any other geo-engineering project underway in the world. Officially, it’s an opportunity for development championed by Nicaraguan President Daniel Ortega. But critics look at the canal as a boondoggle, and a means by which Ortega is developing a long-term relationship with Beijing — and China’s geopolitical interests. The builders of the canal also have important ties with the Chinese People’s Liberation Army (PLA).
SEOUL – If you chase two rabbits at once, the old saying goes, both will escape. And yet this is precisely what many governments are required to do: pursue both growth and distributional fairness. The two objectives, though not incompatible, are entirely different from one another, and few policy tools can simultaneously help to achieve both.This idea matters a lot in trade policy. Much theoretical and empirical research demonstrates that opening trade can spur a country’s GDP growth. But increasing a pie’s size does not guarantee that it will be shared fairly.
Often, the incremental growth that comes with a trade opening is unevenly shared; moreover, in many cases, some receive a smaller share than they did before. Here is where government must intervene using its traditional tools, taxation and redistribution, as well as complementary policies such as social safety nets and adjustment assistance.