PANAMA CITY – Former economy and finance minister Ricaurte Vasquez took office on Thursday as new Panama Canal chief administrator with three main items on his agenda: boosting the interoceanic waterway’s competitiveness, guaranteeing sufficient water for its operation and minimizing the impact of the trade war between the United States and China.
“Just months before marking 20 years since the canal was transferred (from the United States) to Panamanian administration, we face a different world to the one at that time,” Vasquez said at the ceremony.
“Today there’s a resurgence of protectionism, trade flows move along different routes, instantaneousness has replaced predictability and the (trade war) is a daily reality.”
This situation makes it necessary for the Panama Canal Authority (ACP) to redefine its business and adapt, he added.
The canal, which links more than 1,700 ports in 160 countries and employs over 10,000 people, is regarded as one of the country’s most solid companies. In 2017, it earned more than $3.1 billion in revenue and contributed a record $1.7 billion to the country’s coffers.
The canal’s two biggest customers were once the US and China, but their trade war has caused that Asian giant to fall to third place behind Japan.
The tariff conflict has had less impact on the canal’s revenues than expected because Japan has been purchasing the US liquefied natural gas (LNG) that formerly had been shipped to China. The Panama Canal’s revenue shortfall from the US-China trade war has been around $30 million in the current fiscal year.
Water supplies are another of the canal’s main concerns, since a total of 202,000 cubic meters (53 million gallons) of fresh water are required to transport one ship through the canal’s multi-tiered lock system.
Severe, climate change-triggered droughts have affected the two artificial lakes that supply water to both the canal, which handles about 6 percent of world trade, and to increasingly populated Panama City.
These problems “should not be a cause of fear but instead challenge us to face them with intelligence, courage and imagination, since our long-term sustainability” is at stake, Vasquez said.
Vasquez, whom the ACP’s board of directors chose from among 20 candidates to serve a seven-year term, is considered a excellent choice due to his prior experience at the canal and his knowledge of the logistics sector, one of the pillars of Panama’s economy.
He served as economy and finance minister during former President Martin Torrijos’ 2004-2009 administration and has held several management positions at the ACP, including the post of deputy administrator between 2000 and 2004.
Vasquez’s predecessor, Jorge Luis Quijano, presided over a massive expansion project that was concluded in 2016.
The centerpiece of that project was the construction of a third set of locks to enable the canal to accommodate “New Panamax” ships, which hold up to 13,000 20-foot-long containers and are triple the size of the previous generation of Panamax vessels.
The canal’s new deputy administrator will be Ilya Espino de Marotta, an engineer who led the expansion project.
She will become the first woman to hold that senior position when she takes office in December.